%PDF-1.5 1 0 obj <> endobj 3 0 obj <> endobj 4 0 obj <> stream BT /F1 22.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 1 0 0 rg BT 54.00 722.75 Td ( ) Tj ET Q /GS0 gs q 292.00 0 0 90.00 160.00 601.35 cm /I1 Do Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 22.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0.2 0.4 rg BT 86.55 490.95 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 16.00 Tf ET q 0 0.2 0.4 rg BT 123.85 442.95 Td (Annual Report for) Tj ET Q q 0 0.2 0.4 rg BT 250.67 442.95 Td ( Fiscal ) Tj ET Q q 0 0.2 0.4 rg BT 298.07 442.95 Td (Y) Tj ET Q q 0 0.2 0.4 rg BT 307.85 442.95 Td (ear) Tj ET Q q 0 0.2 0.4 rg BT 329.76 442.95 Td ( Ended ) Tj ET Q BT /F2 16.00 Tf ET q 0 0.2 0.4 rg BT 382.23 442.95 Td (Mar) Tj ET Q q 0 0.2 0.4 rg BT 412.15 442.95 Td (ch31, 2018) Tj ET Q BT /F2 16.00 Tf ET q 0 0.2 0.4 rg BT 488.15 442.95 Td ( ) Tj ET Q endstream endobj 5 0 obj <> endobj 6 0 obj <> stream 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 123.5 471.6 m 123.5 356.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 471.6 m 487.5 356.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 123.5 471.6 m 487.5 471.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 123.5 356.6 m 487.5 356.6 l s BT /F1 11.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 126.00 460.52 Td (As ) Tj ET Q q 0 0 0 rg BT 140.89 460.52 Td (of ) Tj ET Q q 0 0 0 rg BT 152.71 460.52 Td (the ) Tj ET Q q 0 0 0 rg BT 168.81 460.52 Td (end ) Tj ET Q q 0 0 0 rg BT 187.36 460.52 Td (of ) Tj ET Q q 0 0 0 rg BT 199.18 460.52 Td (the ) Tj ET Q q 0 0 0 rg BT 215.29 460.52 Td (period ) Tj ET Q q 0 0 0 rg BT 246.05 460.52 Td (covered ) Tj ET Q q 0 0 0 rg BT 283.52 460.52 Td (by ) Tj ET Q q 0 0 0 rg BT 297.19 460.52 Td (this ) Tj ET Q q 0 0 0 rg BT 315.74 460.52 Td (report, ) Tj ET Q q 0 0 0 rg BT 347.42 460.52 Td (Cengage ) Tj ET Q q 0 0 0 rg BT 388.56 460.52 Td (Learning ) Tj ET Q q 0 0 0 rg BT 430.93 460.52 Td (Holdings ) Tj ET Q q 0 0 0 rg BT 473.93 460.52 Td (II, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 126.00 449.52 Td (Inc. ) Tj ET Q q 0 0 0 rg BT 146.93 449.52 Td (and ) Tj ET Q q 0 0 0 rg BT 166.95 449.52 Td (its ) Tj ET Q q 0 0 0 rg BT 181.48 449.52 Td (consolidated ) Tj ET Q q 0 0 0 rg BT 241.22 449.52 Td (subsidiaries ) Tj ET Q q 0 0 0 rg BT 297.29 449.52 Td (\(the ) Tj ET Q q 0 0 0 rg BT 318.53 449.52 Td (Company\) ) Tj ET Q q 0 0 0 rg BT 378.87 449.52 Td (were ) Tj ET Q q 0 0 0 rg BT 404.38 449.52 Td (not ) Tj ET Q q 0 0 0 rg BT 422.57 449.52 Td (subject ) Tj ET Q q 0 0 0 rg BT 457.87 449.52 Td (to ) Tj ET Q q 0 0 0 rg BT 470.56 449.52 Td (the ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 126.00 438.52 Td (reporting ) Tj ET Q q 0 0 0 rg BT 169.69 438.52 Td (requirements ) Tj ET Q q 0 0 0 rg BT 230.49 438.52 Td (of ) Tj ET Q q 0 0 0 rg BT 243.02 438.52 Td (Section ) Tj ET Q q 0 0 0 rg BT 279.39 438.52 Td (13 ) Tj ET Q q 0 0 0 rg BT 293.76 438.52 Td (or ) Tj ET Q q 0 0 0 rg BT 306.29 438.52 Td (15\(d\) ) Tj ET Q q 0 0 0 rg BT 333.49 438.52 Td (of ) Tj ET Q q 0 0 0 rg BT 346.03 438.52 Td (the ) Tj ET Q q 0 0 0 rg BT 362.84 438.52 Td (Securities ) Tj ET Q q 0 0 0 rg BT 409.58 438.52 Td (Exchange ) Tj ET Q q 0 0 0 rg BT 455.58 438.52 Td (Act ) Tj ET Q q 0 0 0 rg BT 474.83 438.52 Td (of ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 126.00 427.52 Td (1934, ) Tj ET Q q 0 0 0 rg BT 152.90 427.52 Td (as ) Tj ET Q q 0 0 0 rg BT 164.21 427.52 Td (amended. ) Tj ET Q q 0 0 0 rg BT 208.81 427.52 Td (However) Tj ET Q q 0 0 0 rg BT 248.69 427.52 Td (, ) Tj ET Q q 0 0 0 rg BT 253.58 427.52 Td (the ) Tj ET Q q 0 0 0 rg BT 269.17 427.52 Td (Company ) Tj ET Q q 0 0 0 rg BT 314.10 427.52 Td (does ) Tj ET Q q 0 0 0 rg BT 336.41 427.52 Td (have ) Tj ET Q q 0 0 0 rg BT 359.32 427.52 Td (an ) Tj ET Q q 0 0 0 rg BT 371.85 427.52 Td (obligation ) Tj ET Q q 0 0 0 rg BT 418.61 427.52 Td (to ) Tj ET Q q 0 0 0 rg BT 429.31 427.52 Td (comply ) Tj ET Q q 0 0 0 rg BT 464.45 427.52 Td (with ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 126.00 416.52 Td (the ) Tj ET Q q 0 0 0 rg BT 145.56 416.52 Td (terms ) Tj ET Q q 0 0 0 rg BT 176.12 416.52 Td (of ) Tj ET Q q 0 0 0 rg BT 191.40 416.52 Td (its ) Tj ET Q q 0 0 0 rg BT 207.92 416.52 Td (Shareholder ) Tj ET Q q 0 0 0 rg BT 265.83 416.52 Td (Agreement, ) Tj ET Q q 0 0 0 rg BT 323.57 416.52 Td (dated ) Tj ET Q q 0 0 0 rg BT 353.51 416.52 Td (as ) Tj ET Q q 0 0 0 rg BT 368.79 416.52 Td (of ) Tj ET Q q 0 0 0 rg BT 384.08 416.52 Td (March ) Tj ET Q q 0 0 0 rg BT 418.91 416.52 Td (31, ) Tj ET Q q 0 0 0 rg BT 438.78 416.52 Td (2014 ) Tj ET Q q 0 0 0 rg BT 466.90 416.52 Td (\(the ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 126.00 405.52 Td (Shareholder ) Tj ET Q q 0 0 0 rg BT 187.67 405.52 Td (Agreement\). ) Tj ET Q q 0 0 0 rg BT 252.17 405.52 Td (The ) Tj ET Q q 0 0 0 rg BT 273.94 405.52 Td (Shareholder ) Tj ET Q q 0 0 0 rg BT 330.73 405.52 Td (Agreement ) Tj ET Q q 0 0 0 rg BT 384.26 405.52 Td (includes ) Tj ET Q q 0 0 0 rg BT 425.59 405.52 Td (references ) Tj ET Q q 0 0 0 rg BT 475.44 405.52 Td (to ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 126.00 394.52 Td (certain ) Tj ET Q q 0 0 0 rg BT 159.72 394.52 Td (provisions ) Tj ET Q q 0 0 0 rg BT 209.35 394.52 Td (of ) Tj ET Q q 0 0 0 rg BT 222.31 394.52 Td (the ) Tj ET Q q 0 0 0 rg BT 239.55 394.52 Td (U.S. ) Tj ET Q q 0 0 0 rg BT 262.91 394.52 Td (Securities ) Tj ET Q q 0 0 0 rg BT 310.08 394.52 Td (and ) Tj ET Q q 0 0 0 rg BT 329.76 394.52 Td (Exchange ) Tj ET Q q 0 0 0 rg BT 376.93 394.52 Td (Commission) Tj ET Q q 0 0 0 rg BT 435.61 394.52 Td (s ) Tj ET Q q 0 0 0 rg BT 443.68 394.52 Td (reporting ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 126.00 383.52 Td (requirements ) Tj ET Q q 0 0 0 rg BT 188.81 383.52 Td (with ) Tj ET Q q 0 0 0 rg BT 213.75 383.52 Td (modifications ) Tj ET Q q 0 0 0 rg BT 279.62 383.52 Td (as ) Tj ET Q q 0 0 0 rg BT 294.17 383.52 Td (agreed ) Tj ET Q q 0 0 0 rg BT 328.86 383.52 Td (by ) Tj ET Q q 0 0 0 rg BT 345.25 383.52 Td (all ) Tj ET Q q 0 0 0 rg BT 361.63 383.52 Td (parties. ) Tj ET Q q 0 0 0 rg BT 398.69 383.52 Td (The ) Tj ET Q q 0 0 0 rg BT 421.18 383.52 Td (Company ) Tj ET Q q 0 0 0 rg BT 469.34 383.52 Td (has ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 126.00 372.52 Td (complied ) Tj ET Q q 0 0 0 rg BT 169.94 372.52 Td (with ) Tj ET Q q 0 0 0 rg BT 192.49 372.52 Td (its ) Tj ET Q q 0 0 0 rg BT 205.89 372.52 Td (obligations ) Tj ET Q q 0 0 0 rg BT 257.78 372.52 Td (under ) Tj ET Q q 0 0 0 rg BT 285.83 372.52 Td (the ) Tj ET Q q 0 0 0 rg BT 302.27 372.52 Td (Shareholder ) Tj ET Q q 0 0 0 rg BT 357.76 372.52 Td (Agreement ) Tj ET Q q 0 0 0 rg BT 409.62 372.52 Td (and ) Tj ET Q q 0 0 0 rg BT 428.51 372.52 Td (this ) Tj ET Q q 0 0 0 rg BT 447.40 372.52 Td (report ) Tj ET Q q 0 0 0 rg BT 476.67 372.52 Td (is ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 126.00 361.52 Td (made ) Tj ET Q q 0 0 0 rg BT 152.57 361.52 Td (available ) Tj ET Q q 0 0 0 rg BT 195.02 361.52 Td (pursuant ) Tj ET Q q 0 0 0 rg BT 235.65 361.52 Td (to ) Tj ET Q q 0 0 0 rg BT 246.96 361.52 Td (such ) Tj ET Q q 0 0 0 rg BT 269.87 361.52 Td (obligations.) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 7 0 obj <> endobj 8 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 149.10 758.25 Td (SPECIAL) Tj ET Q q 0 0 0 rg BT 191.89 758.25 Td ( NOTE REGARDING FOR) Tj ET Q q 0 0 0 rg BT 310.72 758.25 Td (W) Tj ET Q q 0 0 0 rg BT 319.61 758.25 Td (ARD-LOOKING ST) Tj ET Q q 0 0 0 rg BT 407.49 758.25 Td (A) Tj ET Q q 0 0 0 rg BT 413.97 758.25 Td (TEMENTS ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 734.25 Td (This report contains both historical and forward-looking statements. ) Tj ET Q q 0 0 0 rg BT 346.11 734.25 Td (All statements other than statements of historical ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 722.25 Td (fact are, or may be deemed to be, forward-looking statements within the meaning of Section27A) Tj ET Q q 0 0 0 rg BT 441.94 722.25 Td ( of the Securities ) Tj ET Q q 0 0 0 rg BT 511.37 722.25 Td (Act of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 710.25 Td (1933, as amended, and Section21E of the Securities Exchange ) Tj ET Q q 0 0 0 rg BT 307.82 710.25 Td (Act of 1934, as amended. ) Tj ET Q q 0 0 0 rg BT 412.14 710.25 Td (Y) Tj ET Q q 0 0 0 rg BT 418.36 710.25 Td (ou can identify forward-looking ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 698.25 Td (statements because they contain words such as believe, expect, may) Tj ET Q q 0 0 0 rg BT 346.84 698.25 Td (, will, should, could, seek, intend, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 686.25 Td (plan, estimate, project, foresee, likely) Tj ET Q q 0 0 0 rg BT 243.24 686.25 Td (, or anticipate or similar expressions that concern our strategies, objectives, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (plans, or goals. ) Tj ET Q q 0 0 0 rg BT 116.50 674.25 Td (Although the forward-looking statements contained in this report reflect management) Tj ET Q q 0 0 0 rg BT 461.11 674.25 Td (s current beliefs based ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 662.25 Td (upon information currently available to management and upon assumptions which management believes to be reasonable, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 650.25 Td (actual results may dif) Tj ET Q q 0 0 0 rg BT 139.63 650.25 Td (fer materially from those stated in or implied by these forward-looking statements. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 632.25 Td (A) Tj ET Q q 0 0 0 rg BT 78.67 632.25 Td ( number of factors could cause actual results or performance to dif) Tj ET Q q 0 0 0 rg BT 344.22 632.25 Td (fer materially from the results expressed or implied ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 620.25 Td (in the forward-looking statements, including those listed in the Risk Factors section of this report. ) Tj ET Q q 0 0 0 rg BT 456.24 620.25 Td (These factors should be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 608.25 Td (considered carefully and readers should not place undue reliance on the forward-looking statements. ) Tj ET Q q 0 0 0 rg BT 457.56 608.25 Td (These risks and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 596.25 Td (uncertainties include, without limitation:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 578.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 578.25 Td (our ability to introduce new products, services or technologies;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 560.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 560.25 Td (the impact of competition from established competitors and new businesses that have not traditionally participated in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 548.25 Td (our markets, including the impact of new and enhanced product and service of) Tj ET Q q 0 0 0 rg BT 403.32 548.25 Td (ferings and technology and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 536.25 Td (competitors) Tj ET Q q 0 0 0 rg BT 139.80 536.25 Td ( ability to adapt more quickly to new or emer) Tj ET Q q 0 0 0 rg BT 320.40 536.25 Td (ging technologies and market conditions; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 518.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 518.25 Td (the impact of used textbook and/or rental textbook programs and our ability to compete with them; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 500.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 500.25 Td (the ef) Tj ET Q q 0 0 0 rg BT 112.30 500.25 Td (fect of increased accessibility of free or relatively inexpensive information and materials on pricing and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 488.25 Td (demand for our products and services;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 470.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 470.25 Td (the ef) Tj ET Q q 0 0 0 rg BT 112.30 470.25 Td (fect of changes in government programs and private lending practices relating to student aid and library ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 458.25 Td (funding; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 440.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 440.25 Td (our ability to successfully implement our business strategy;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 422.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 422.25 Td (the impact of technology developments and our ability to continue to make ef) Tj ET Q q 0 0 0 rg BT 400.29 422.25 Td (fective investments in our technology ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 410.25 Td (infrastructure; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 392.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 392.25 Td (the seasonality of our business; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 374.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 374.25 Td (our ability to adequately protect, maintain and enforce our intellectual property rights and proprietary rights and the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 362.25 Td (adequacy of protections of our intellectual property under applicable laws; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 344.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 344.25 Td (liabilities resulting from, and costs of defending against, litigation including piracy and intellectual property ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 332.25 Td (infringement claims;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 314.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 314.25 Td (the impact of changes to laws and regulations applicable to us and our customers, including rules that could result in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 302.25 Td (decreased programs of) Tj ET Q q 0 0 0 rg BT 180.33 302.25 Td (fered by) Tj ET Q q 0 0 0 rg BT 212.72 302.25 Td (, and limit enrollments in, institutions of higher and continuing education including ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 290.25 Td (for) Tj ET Q q 0 0 0 rg BT 101.46 290.25 Td (-profit schools, as well as the enactment of the ) Tj ET Q q 0 0 0 rg BT 289.56 290.25 Td (T) Tj ET Q q 0 0 0 rg BT 294.97 290.25 Td (ax Cuts and Jobs ) Tj ET Q q 0 0 0 rg BT 364.41 290.25 Td (Act of 2017 \(the T) Tj ET Q q 0 0 0 rg BT 442.58 290.25 Td (ax ) Tj ET Q q 0 0 0 rg BT 453.96 290.25 Td (Act\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 272.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 272.25 Td (our ability to attract and retain content providers and employees;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 254.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 254.25 Td (our ability to attract and retain key authors, rights to our author's works, and avoid disputes with our authors;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 236.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 236.25 Td (our ability and willingness to maintain licensing agreements with third-party content providers; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 218.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 218.25 Td (failures or disruptions of our and our third-party providers) Tj ET Q q 0 0 0 rg BT 325.31 218.25 Td ( hosting facilities and electronic delivery systems for our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 206.25 Td (products and services;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 188.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 188.25 Td (technology failures;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 170.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 170.25 Td (our reliance on third-party providers of outsourced services and any failure of such providers to provide services ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 158.25 Td (ef) Tj ET Q q 0 0 0 rg BT 97.59 158.25 Td (fectively on a timely basis;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 140.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 140.25 Td (our ability to adequately manage and develop our operational and managerial systems and processes including our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 128.25 Td (enterprise resource planning software; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 110.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 110.25 Td (changes in the availability and prices of paper and unanticipated increases in other operating costs;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 92.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 92.25 Td (our ability to expand and conduct our operations outside the United States; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 74.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 74.25 Td (the ef) Tj ET Q q 0 0 0 rg BT 112.30 74.25 Td (fect of fluctuations between foreign currencies and the United States dollar and our ability to ef) Tj ET Q q 0 0 0 rg BT 493.38 74.25 Td (fectively ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 62.25 Td (manage foreign currency exposure;) Tj ET Q endstream endobj 9 0 obj <> endobj 10 0 obj <> stream BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 758.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 758.10 Td (our ability to identify) Tj ET Q q 0 0 0 rg BT 174.61 758.10 Td (, acquire and successfully integrate future acquisition tar) Tj ET Q q 0 0 0 rg BT 400.46 758.10 Td (gets;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 740.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 740.10 Td (adverse changes in domestic and global economic and political conditions, including those related to the availability ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 728.10 Td (of credit, government and private loans for students and consequential decline in consumer demand for our products; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 710.10 Td (reductions in enrollments at colleges and universities;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 692.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 692.10 Td (our ability to win state adoptions;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 674.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 674.10 Td (our dependence on third-party distributors, representatives and retailers;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 656.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 656.10 Td (incurrence of impairment char) Tj ET Q q 0 0 0 rg BT 211.15 656.10 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 72.00 638.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 638.10 Td (the impact of business combinations in the markets in which we compete;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 620.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 620.10 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 72.00 602.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 602.10 Td (our debt agreements, which limit our flexibility in operating our business including, among other things, our ability ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 590.10 Td (under certain circumstances to engage in mer) Tj ET Q q 0 0 0 rg BT 270.85 590.10 Td (gers or consolidations, sell assets and use the proceeds of such sale, pay ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 578.10 Td (distributions to our equity owners and/or buy back debt; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 560.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 560.10 Td (potential security breaches or cyberattacks involving our technology infrastructure, our products and services, or our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 548.10 Td (customers) Tj ET Q q 0 0 0 rg BT 133.13 548.10 Td ( credit and debit card and private data, which could subject us to material claims and additional costs and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 536.10 Td (harm our reputation; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 518.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 518.10 Td (our ability to comply with privacy laws;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 500.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 500.10 Td (termination of at-will contracts to which we are a party could harm our business;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 482.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 482.10 Td (increased availability of lower priced international versions of our products in the domestic market or higher prices ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 470.10 Td (for our products overseas may cause our sales to decline;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 452.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 452.10 Td (changes in our credit ratings or macroeconomic conditions; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 434.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 434.10 Td (the impact of being controlled by Principal Equityholders, whose interests may conflict with other stockholders; and) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 416.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 416.10 Td (our ability to maintain ef) Tj ET Q q 0 0 0 rg BT 189.24 416.10 Td (fective internal controls over financial reporting.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 398.10 Td ( ) Tj ET Q q 0 0 0 rg BT 72.00 398.10 Td (Although we have attempted to identify important risks and factors that could cause actual actions, events or results to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 386.10 Td (dif) Tj ET Q q 0 0 0 rg BT 64.93 386.10 Td (fer materially from those described in or implied by our forward-looking statements, other factors and risks may cause ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 374.10 Td (actions, events or results to dif) Tj ET Q q 0 0 0 rg BT 176.02 374.10 Td (fer materially from those anticipated, estimated or intended. ) Tj ET Q q 0 0 0 rg BT 417.97 374.10 Td (W) Tj ET Q q 0 0 0 rg BT 426.61 374.10 Td (e cannot assure you that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 362.10 Td (forward-looking statements will prove to be accurate, as actual actions, results and future events could dif) Tj ET Q q 0 0 0 rg BT 476.73 362.10 Td (fer materially from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 350.10 Td (those anticipated or implied by such statements. ) Tj ET Q q 0 0 0 rg BT 247.85 350.10 Td (All forward-looking statements included in this report are expressly qualified ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 338.10 Td (in their entirety by the foregoing cautionary statements. ) Tj ET Q q 0 0 0 rg BT 278.47 338.10 Td (These forward-looking statements are made as of the date of this ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 326.10 Td (report and, except as required by law) Tj ET Q q 0 0 0 rg BT 201.34 326.10 Td (, we undertake no obligation to update, amend, clarify or revise them to reflect new ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 314.10 Td (events or circumstances.) Tj ET Q endstream endobj 11 0 obj <><><><><><><><><><><><><><>] /Rotate 0 /Contents 12 0 R>> endobj 12 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 252.65 731.25 Td (T) Tj ET Q q 0 0 0 rg BT 258.58 731.25 Td (ABLE OF) Tj ET Q q 0 0 0 rg BT 301.82 731.25 Td ( CONTENTS) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 489.5 681.75 m 557.5 681.75 l s BT /F1 10.00 Tf ET q 0 0 0 rg BT 504.65 686.42 Td (Page No.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 671.42 Td (Description of Business) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 656.42 Td (Risk Factors) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 641.42 Td (Properties) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 626.42 Td (Legal Proceedings) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 611.42 Td (Market for the Issuer) Tj ET Q q 0 0 0 rg BT 140.32 611.42 Td () Tj ET Q q 0 0 0 rg BT 143.56 611.42 Td (s Equity) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 596.42 Td (Changes in and Disagreement with ) Tj ET Q q 0 0 0 rg BT 198.19 596.42 Td (Accountants on ) Tj ET Q q 0 0 0 rg BT 262.62 596.42 Td (Accounting and Financial Disclosure) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 581.42 Td (Directors and Executive Of) Tj ET Q q 0 0 0 rg BT 165.59 581.42 Td (ficers) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 566.42 Td (Principal Stockholders) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 551.42 Td (Certain Relationships and Related ) Tj ET Q q 0 0 0 rg BT 194.77 551.42 Td (T) Tj ET Q q 0 0 0 rg BT 200.61 551.42 Td (ransactions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 536.42 Td (Principal ) Tj ET Q q 0 0 0 rg BT 94.33 536.42 Td (Accountant) Tj ET Q q 0 0 0 rg BT 143.20 536.42 Td (s Fees and Services) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 521.42 Td (Selected Quarterly Financial Data) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 506.42 Td (Management) Tj ET Q q 0 0 0 rg BT 111.26 506.42 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 180.43 506.42 Td (Analysis of Financial Condition and Results of Operations) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 491.42 Td (Quantitative and Qualitative Disclosures ) Tj ET Q q 0 0 0 rg BT 220.68 491.42 Td (About Market Risk) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 476.42 Td (Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.00 671.42 Td (1) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.50 656.42 Td (12) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.50 641.42 Td (23) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.50 626.42 Td (24) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.50 611.42 Td (24) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.50 596.42 Td (24) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.50 581.42 Td (25) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.50 566.42 Td (30) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.50 551.42 Td (31) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.50 536.42 Td (32) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.50 521.42 Td (33) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.50 506.42 Td (34) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.50 491.42 Td (55) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.50 476.42 Td (56) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 13 0 obj <> endobj 14 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 (- 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 investments in technology and customer services and long-standing customer relationships positions us as the second ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 592.25 Td (lar) Tj ET Q q 0 0 0 rg BT 64.37 592.25 Td (gest provider of learning solutions in the approximately $3.4 billion U.S. higher education learning solutions market. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 580.25 Td (addition, operating under our Gale brand, we are a leading global provider of library reference materials with a vast collection ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 568.25 Td (of primary source content. ) Tj ET Q q 0 0 0 rg BT 161.47 568.25 Td (As Cengage, we enrich the relationship between educators and students by advancing the way ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 556.25 Td (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, 2018) 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 ($1,461.2 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 ($298.5 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 reduced 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 and purchases of used and 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 from both the migration from print textbooks to digital solutions as digital solutions do not ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 352.25 Td (have direct substitution from alternative purchase models, such as rental or used textbooks, as well as our expansion into the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 340.25 Td (rental market by working closely with many channel partners, including two of the lar) Tj ET Q q 0 0 0 rg BT 398.17 340.25 Td (gest rental providers. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 322.25 Td (For the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 173.35 322.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 236.95 322.25 Td (, our total Learning digital product sales comprised approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 504.09 322.25 Td (53%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.42 322.25 Td ( of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 310.25 Td (total Learning ) Tj ET Q q 0 0 0 rg BT 112.32 310.25 Td (Adjusted Revenues compared with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 254.50 310.25 Td (50%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 272.83 310.25 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 374.45 310.25 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 438.05 310.25 Td (. Over the last year) Tj ET Q q 0 0 0 rg BT 513.45 310.25 Td (, core ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 298.25 Td (digital gross sales increased by 8%, while student activation of our digital solutions grew by 17%. ) Tj ET Q q 0 0 0 rg BT 447.82 298.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.26 298.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 535.86 298.25 Td (, our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 286.25 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 54.00 274.25 Td (Management) Tj ET Q q 0 0 0 rg BT 113.42 274.25 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 182.59 274.25 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 54.00 262.25 Td (product sales.) 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 /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 742.10 Td (The segment financial information that is reviewed by our chief operating decision maker to assess performance and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.10 Td (allocate resources changed during the first quarter of fiscal year 2017. ) Tj ET Q q 0 0 0 rg BT 335.55 730.10 Td (As a result, in fiscal year 2017, we revised the prior ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 718.10 Td (period disclosures to align with current presentation. ) Tj ET Q q 0 0 0 rg BT 266.54 718.10 Td (W) Tj ET Q q 0 0 0 rg BT 275.18 718.10 Td (e maintain three reportable segments - Learning, Gale and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 706.10 Td (International. For the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 211.44 706.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 275.04 706.10 Td (, our total ) Tj ET Q q 0 0 0 rg BT 315.59 706.10 Td (Adjusted Revenues were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.50 706.10 Td ($1,461.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 483.89 706.10 Td (. Segment ) Tj ET Q q 0 0 0 rg BT 525.84 706.10 Td (Adjusted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 694.10 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 54.00 462.10 cm /I2 Do Q BT /F1 10.00 Tf ET BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 449.10 Td (Learning) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 90.67 449.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 431.10 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 54.00 419.10 Td (academic, skills and school markets. For the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 303.92 419.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 367.52 419.10 Td (, our Learning segment generated approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.10 Td ($944.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.89 407.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 132.33 407.10 Td ($183.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 191.22 407.10 Td ( of our total ) Tj ET Q q 0 0 0 rg BT 240.10 407.10 Td (Adjusted Revenues and ) Tj ET Q q 0 0 0 rg BT 336.48 407.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 411.19 407.10 Td ( less Pre-Publication Costs, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.10 Td (respectively) Tj ET Q q 0 0 0 rg BT 101.66 395.10 Td (. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 377.10 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 359.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 359.10 Td (e of) Tj ET Q q 0 0 0 rg BT 95.73 359.10 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 54.00 347.10 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 54.00 335.10 Td (ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 80.38 335.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 143.98 335.10 Td (, our Gale segment generated approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.63 335.10 Td ($232.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 382.52 335.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.96 335.10 Td ($66.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.85 335.10 Td ( of our total ) Tj ET Q q 0 0 0 rg BT 504.73 335.10 Td (Adjusted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.10 Td (Revenues and ) Tj ET Q q 0 0 0 rg BT 111.76 323.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 186.48 323.10 Td ( less Pre-Publication Costs, respectively) Tj ET Q q 0 0 0 rg BT 346.08 323.10 Td (.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 305.10 Td (International) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 106.77 305.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 287.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 287.10 Td (e distribute educational solutions across all major academic disciplines, provide English language teaching \(EL) Tj ET Q q 0 0 0 rg BT 529.03 287.10 Td (T\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 275.10 Td (products and adapt our Learning of) Tj ET Q q 0 0 0 rg BT 194.61 275.10 Td (ferings for use in approximately 175 countries and territories around the world. For the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 263.10 Td (fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 124.24 263.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 187.84 263.10 Td (, our International segment generated approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.70 263.10 Td ($283.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.59 263.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 478.03 263.10 Td ($48.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.92 263.10 Td ( of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 251.10 Td (total ) Tj ET Q q 0 0 0 rg BT 73.72 251.10 Td (Adjusted Revenues and ) Tj ET Q q 0 0 0 rg BT 170.09 251.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 244.81 251.10 Td ( less Pre-Publication Costs, respectively) Tj ET Q q 0 0 0 rg BT 404.42 251.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 230.10 Td (Industry Overview ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 209.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 209.10 Td (e compete in three specific markets within our Learning segment: academic, school and skills. Each of these markets as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 197.10 Td (well as our Gale and International segments are discussed separately below) Tj ET Q q 0 0 0 rg BT 354.36 197.10 Td (. ) Tj ET Q q 0 0 0 rg BT 359.18 197.10 Td (W) Tj ET Q q 0 0 0 rg BT 368.21 197.10 Td (ithin Learning, for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 185.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 185.10 Td (, gross sales from each of the academic, school and skills markets comprised ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.68 185.10 Td (73.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.51 185.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.51 185.10 Td (17.6%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 483.34 185.10 Td (, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.27 185.10 Td (9.4%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 526.10 185.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 173.10 Td (respectively) Tj ET Q q 0 0 0 rg BT 101.66 173.10 Td (, of total gross sales. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 155.10 Td (Academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 137.10 Td (The academic market is comprised of students, professors and institutions of higher education, primarily two- and four) Tj ET Q q 0 0 0 rg BT 546.68 137.10 Td (-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 125.10 Td (year colleges and universities, as well as for) Tj ET Q q 0 0 0 rg BT 229.85 125.10 Td (-profit schools. ) Tj ET Q q 0 0 0 rg BT 292.72 125.10 Td (The United States has the lar) Tj ET Q q 0 0 0 rg BT 407.78 125.10 Td (gest higher education system in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 113.10 Td (world with approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.37 113.10 Td (19million students) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 237.04 113.10 Td ( enrolled each year at approximately 4,600 two- and four) Tj ET Q q 0 0 0 rg BT 464.53 113.10 Td (-year post-secondary ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 101.10 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 89.10 Td (growth rate \(CAGR\) of 2%.) 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 72.00 742.10 Td (W) Tj ET Q q 0 0 0 rg BT 81.04 742.10 Td (ithin the academic market, total domestic spending on new learning materials was approximately $3.4 billion in 2017, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.10 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 54.00 718.10 Td (research suggest that approximately 40% of learning solutions purchases are in formats such as rental and used textbooks. ) Tj ET Q q 0 0 0 rg BT 543.96 718.10 Td (W) Tj ET Q q 0 0 0 rg BT 552.60 718.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 706.10 Td (believe that the continued growth in the market of digital solutions, which provide better outcomes and more ef) Tj ET Q q 0 0 0 rg BT 499.25 706.10 Td (ficient learning ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 694.10 Td (solutions for students, enables us to capture a greater share of the total market, given the embedded and gradeable/assessable ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 682.10 Td (orientation of our digital products as well as lack of alternative substitutes. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 664.10 Td (School ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 646.10 Td (The United States K-12 market consists of approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 304.72 646.10 Td (51million students) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.39 646.10 Td ( and is driven by state adoption sales, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 634.10 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 54.00 622.10 Td (school districts determine which educational products to use. ) Tj ET Q q 0 0 0 rg BT 300.15 622.10 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 54.00 610.10 Td (W) Tj ET Q q 0 0 0 rg BT 63.04 610.10 Td (ithin the United States school market, 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 54.00 598.10 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 598.10 Td (fering and have more attractive growth potential, including advanced placement, English language learning and specific ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 586.10 Td (non-common core programs in K-12 where we believe our National Geographic content, brand and technology creates ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 574.10 Td (competitive advantages.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 556.10 Td (Skills ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 538.10 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 54.00 526.10 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 54.00 514.10 Td (education programs. ) Tj ET Q q 0 0 0 rg BT 137.96 514.10 Td (The skills market 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 54.00 502.10 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 54.00 490.10 Td (seeking professional advancement. ) Tj ET Q q 0 0 0 rg BT 195.99 490.10 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 54.00 478.10 Td (employee success in the form of job placement, promotion and productivity) Tj ET Q q 0 0 0 rg BT 356.33 478.10 Td (. ) Tj ET Q q 0 0 0 rg BT 361.15 478.10 Td (The online skills market, which we serve through ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 466.10 Td (MindT) Tj ET Q q 0 0 0 rg BT 81.08 466.10 Td (ap course solutions as well as stand-alone businesses, continues to grow as learners migrate from traditional classrooms ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 454.10 Td (to virtual learning environments.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 436.10 Td (Gale ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 418.10 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 54.00 406.10 Td (databases, primary-source research collections and other reference materials. ) Tj ET Q q 0 0 0 rg BT 363.66 406.10 Td (These materials are principally sold to academic, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 394.10 Td (public, K-12, corporate and government libraries. ) Tj ET Q q 0 0 0 rg BT 254.59 394.10 Td (T) Tj ET Q q 0 0 0 rg BT 260.00 394.10 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 54.00 382.10 Td (nearly ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 81.49 382.10 Td ($1.5 billion) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.60 382.10 Td ( in the U.S. and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 192.32 382.10 Td ($4 billion) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 230.93 382.10 Td ( globally in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 278.98 382.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 298.98 382.10 Td (. ) Tj ET Q q 0 0 0 rg BT 303.80 382.10 Td (The research market has experienced increased demand for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 370.10 Td (digital materials with enhanced functionality and accessibility as well as authoritative content with credibility) Tj ET Q q 0 0 0 rg BT 491.28 370.10 Td (, or) Tj ET Q q 0 0 0 rg BT 504.42 370.10 Td (ganization ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 358.10 Td (and depth that are dif) Tj ET Q q 0 0 0 rg BT 138.79 358.10 Td (ferentiated from free content available on the Internet.) Tj ET Q BT /F1 1.00 Tf ET q 0 0 0 rg BT 54.00 340.10 Td () Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.25 340.10 Td (International) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 107.02 340.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 322.10 Td (In the international market, we adapt and provide U.S. course materials for various local markets. ) Tj ET Q q 0 0 0 rg BT 464.19 322.10 Td (W) Tj ET Q q 0 0 0 rg BT 472.83 322.10 Td (e also publish and sell ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 310.10 Td (course materials produced by local authors and we provide learning and reference solutions in various formats to individuals ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 298.10 Td (and businesses located outside the United States. Individual markets are generally defined by country) Tj ET Q q 0 0 0 rg BT 458.79 298.10 Td (, each with unique ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 286.10 Td (customer needs, distribution channels and sales strategies. International markets have grown rapidly) Tj ET Q q 0 0 0 rg BT 453.51 286.10 Td (, driven primarily by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 274.10 Td (population growth and rising living standards. In higher education, most international markets are at the beginning of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 262.10 Td (digital transformation.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 241.10 Td (Our) Tj ET Q q 0 0 0 rg BT 71.60 241.10 Td ( Str) Tj ET Q q 0 0 0 rg BT 87.25 241.10 Td (engths) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 220.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 220.10 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 54.00 208.10 Td (and profitability: ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 190.10 Td (Market leadership with an evolving brand.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 247.01 190.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 252.57 190.10 Td (W) Tj ET Q q 0 0 0 rg BT 261.21 190.10 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 54.00 178.10 Td (infrastructure designed to serve our clients with a broad array of learning solutions. In higher education, we have leading ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 166.10 Td (market positions in the United States in many of the lar) Tj ET Q q 0 0 0 rg BT 274.89 166.10 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 54.00 154.10 Td (areas such as Business Law and Business Communications, Social ) Tj ET Q q 0 0 0 rg BT 322.67 154.10 Td (W) Tj ET Q q 0 0 0 rg BT 331.31 154.10 Td (ork, Introductory Computing, Nutrition, Calculus, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 142.10 Td (Cosmetology and have the number two position in areas such as Economics, Chemistry) Tj ET Q q 0 0 0 rg BT 403.57 142.10 Td (, Political Science, and Criminal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 130.10 Td (Justice, and Business Statistics. In research, substantially all the reference collections of academic and public libraries in North ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 118.10 Td (America contain one or more of our products, which include the world) Tj ET Q q 0 0 0 rg BT 339.47 118.10 Td (s lar) Tj ET Q q 0 0 0 rg BT 356.23 118.10 Td (gest collection of periodicals and one of the lar) Tj ET Q q 0 0 0 rg BT 543.76 118.10 Td (gest ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 106.10 Td (archives of primary source materials. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 88.10 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 88.10 Td (.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 367.85 88.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 373.41 88.10 Td (Our ability to develop authoritative, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 76.10 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 64.10 Td (outcomes is one of our core competencies. Our content dif) Tj ET Q q 0 0 0 rg BT 287.63 64.10 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 52.10 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 52.10 Td (W) Tj ET Q q 0 0 0 rg BT 492.30 52.10 Td (e have been ) 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 /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 742.10 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 54.00 730.10 Td (leading authors include \(1\) N. Gregory Mankiw) Tj ET Q q 0 0 0 rg BT 244.69 730.10 Td (, former Chairman of the President) Tj ET Q q 0 0 0 rg BT 386.87 730.10 Td (s Council of Economic ) Tj ET Q q 0 0 0 rg BT 480.75 730.10 Td (Advisers and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 718.10 Td (among the most respected authors of texts in the introductory economics market, and \(2\) Carl ) Tj ET Q q 0 0 0 rg BT 430.38 718.10 Td (W) Tj ET Q q 0 0 0 rg BT 439.02 718.10 Td (arren, the author of our well-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 706.10 Td (known accounting franchise now in its 13th edition. ) Tj ET Q q 0 0 0 rg BT 264.06 706.10 Td (W) Tj ET Q q 0 0 0 rg BT 272.70 706.10 Td (e typically own the copyright of the materials our authors produce and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 694.10 Td (our agreements with authors usually include favorable non-compete clauses. ) Tj ET Q q 0 0 0 rg BT 362.05 694.10 Td (W) Tj ET Q q 0 0 0 rg BT 370.69 694.10 Td (e have demonstrated our content development ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 682.10 Td (capabilities across disciplines and product formats, including a deep understanding of, and commitment to, the lengthy process ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 670.10 Td (needed to produce high-quality learning solutions. In the research market, we also maintain long-term agreements for third-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 658.10 Td (party licensed materials from leading content providers, including the British Library) Tj ET Q q 0 0 0 rg BT 394.09 658.10 Td (, ) Tj ET Q q 0 0 0 rg BT 398.91 658.10 Td (The Smithsonian and ) Tj ET Q q 0 0 0 rg BT 486.22 658.10 Td (The Financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 646.10 Td (T) Tj ET Q q 0 0 0 rg BT 59.76 646.10 Td (imes. In the EL) Tj ET Q q 0 0 0 rg BT 120.49 646.10 Td (T) Tj ET Q q 0 0 0 rg BT 126.42 646.10 Td ( and school markets, we operate National Geographic Learning, leveraging the world class National ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 634.10 Td (Geographic brand and content. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 616.10 Td (Innovative technology platforms and digital solutions) Tj ET Q BT /F7 10.00 Tf ET q 0 0 0 rg BT 291.75 616.10 Td (.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 294.52 616.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 300.08 616.10 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 54.00 604.10 Td (our content to improve student engagement and learning outcomes. ) Tj ET Q q 0 0 0 rg BT 325.41 604.10 Td (These digital solutions include courseware solutions, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 592.10 Td (assessment solutions, adaptive tools, and analytics. ) Tj ET Q q 0 0 0 rg BT 260.18 592.10 Td (W) Tj ET Q q 0 0 0 rg BT 268.81 592.10 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 54.00 580.10 Td (are a leader in the development of digital content, pedagogy) Tj ET Q q 0 0 0 rg BT 293.26 580.10 Td (, and tools in our markets. Over the last four years, we have ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 568.10 Td (developed and successfully penetrated the market with our MindT) Tj ET Q q 0 0 0 rg BT 318.22 568.10 Td (ap solution, which is a complete course solution that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 556.10 Td (includes assessment, immediate feedback and analytics for instructors and students, MindApps developed by Cengage or by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 544.10 Td (third-party providers that are customized for dif) Tj ET Q q 0 0 0 rg BT 244.86 544.10 Td (ferent disciplines, and best-in-class customization capabilities that allow ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 532.10 Td (professors to easily build their own digital course by adding their own or third-party media and content. MindT) Tj ET Q q 0 0 0 rg BT 498.20 532.10 Td (ap has grown to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 520.10 Td (1.8 million users, out of our over 4.4 million annual digital users, since being introduced five years ago. Our MindT) Tj ET Q q 0 0 0 rg BT 516.54 520.10 Td (ap ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 508.10 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 508.10 Td (ferings are based on a student-centered approach to the market. Over the past few years, Cengage has distinguished itself ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 496.10 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 450.49 496.10 Td (. ) Tj ET Q q 0 0 0 rg BT 454.94 496.10 Td (As a result, MindT) Tj ET Q q 0 0 0 rg BT 529.79 496.10 Td (ap ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 484.10 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 54.00 472.10 Td (learning tools and proprietary analytics to analyze and help advance each student) Tj ET Q q 0 0 0 rg BT 380.82 472.10 Td (s individual learning. ) Tj ET Q q 0 0 0 rg BT 467.84 472.10 Td (W) Tj ET Q q 0 0 0 rg BT 476.48 472.10 Td (e are able to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 460.10 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 54.00 448.10 Td (outcomes. ) Tj ET Q q 0 0 0 rg BT 96.77 448.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 146.68 448.10 Td (, our student focus in developing MindT) Tj ET Q q 0 0 0 rg BT 307.34 448.10 Td (ap has allowed us to successfully grow MindT) Tj ET Q q 0 0 0 rg BT 492.45 448.10 Td (ap in disciplines ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 436.10 Td (that have been resistant to previous digital of) Tj ET Q q 0 0 0 rg BT 233.49 436.10 Td (ferings \(such as Psychology) Tj ET Q q 0 0 0 rg BT 344.77 436.10 Td (, College Success and ) Tj ET Q q 0 0 0 rg BT 433.92 436.10 Td (Art\) as learning in these ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 424.10 Td (disciplines is not suited for typical assessments and homework solutions of) Tj ET Q q 0 0 0 rg BT 353.79 424.10 Td (fered by competitors. Our MindT) Tj ET Q q 0 0 0 rg BT 486.67 424.10 Td (ap platform ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 412.10 Td (contributed approximately $249.6 million of our gross sales for the fiscal year ended March 31, 2018, an increase of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 400.10 Td (approximately 29% from the fiscal year ended March 31, 2017. Driven by MindT) Tj ET Q q 0 0 0 rg BT 380.43 400.10 Td (ap and our other core digital of) Tj ET Q q 0 0 0 rg BT 504.09 400.10 Td (ferings, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 388.10 Td (higher education core digital gross sales have grown at an approximately 1) Tj ET Q q 0 0 0 rg BT 352.70 388.10 Td (1% CAGR over the last three years. In the fiscal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 376.10 Td (year ended March 31, 2018, MindT) Tj ET Q q 0 0 0 rg BT 195.76 376.10 Td (ap activations alone have increased 39%, demonstrating our success in the digital market.) Tj ET Q /GS0 gs q 300.00 0 0 205.00 167.00 160.10 cm /I3 Do Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 147.10 Td (Additional digital solutions include ) Tj ET Q q 0 0 0 rg BT 215.33 147.10 Td (Aplia \(our web-based solution that enables instructors to incorporate homework and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 135.10 Td (related coursework across many academic disciplines\), SAM \(our proficiency-based assessment and training tool for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 123.10 Td (Computing\), OWL) Tj ET Q q 0 0 0 rg BT 129.73 123.10 Td ( \(our online learning system for Chemistry\) and ) Tj ET Q q 0 0 0 rg BT 322.84 123.10 Td (W) Tj ET Q q 0 0 0 rg BT 331.48 123.10 Td (ebAssign \(assessment and homework solution for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 111.10 Td (STEM disciplines - science, technology) Tj ET Q q 0 0 0 rg BT 212.48 111.10 Td (, engineering and math\).) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 93.10 Td (In the research market, we have digitized virtually all of our reference content and enhanced it with interactive digital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 81.10 Td (tools. ) Tj ET Q q 0 0 0 rg BT 77.90 81.10 Td (As a result, we derive more than 80% of our domestic revenues in this market from digital products. ) Tj ET Q q 0 0 0 rg BT 480.57 81.10 Td (Across the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 69.10 Td (Company) Tj ET Q q 0 0 0 rg BT 92.24 69.10 Td (, we employ approximately 1,800 full-time product development and technology employees to grow our digital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 57.10 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 57.10 Td (ferings and have made approximately 400 new technology hires within the last three years.) 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 BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 742.10 Td (Over the last three years, our higher education core digital business has increased by a CAGR of 1) Tj ET Q q 0 0 0 rg BT 464.84 742.10 Td (1% over the same ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.10 Td (period. ) Tj ET Q q 0 0 0 rg BT 84.37 730.10 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 54.00 718.10 Td (sales, with digital sales constituting 63% of our gross sales in the fiscal year ended March 31, 2018.) Tj ET Q /GS0 gs q 236.00 0 0 178.00 54.00 529.10 cm /I4 Do Q /GS0 gs q 237.00 0 0 177.00 290.00 529.10 cm /I5 Do 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 72.00 516.38 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 512.30 Td (Prior periods may dif) Tj ET Q q 0 0 0 rg BT 166.57 512.30 Td (fer from previously reported amounts due to product classification changes to conform to current year ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 501.50 Td (presentation.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 494.78 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 490.70 Td (Digital classification excludes eBook products, which are included in Print.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 483.98 Td (\(3\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 479.90 Td (FY2017 includes the impact of the acquisition of ) Tj ET Q q 0 0 0 rg BT 268.30 479.90 Td (W) Tj ET Q q 0 0 0 rg BT 276.08 479.90 Td (ebAssign.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 461.90 Td (Additionally) Tj ET Q q 0 0 0 rg BT 121.90 461.90 Td (, the shift away from print has allowed us to improve working capital by increasing cash receipts and deferred ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.90 Td (revenue and steadily reducing levels of physical inventory) Tj ET Q q 0 0 0 rg BT 286.33 449.90 Td (.) Tj ET Q /GS0 gs q 255.00 0 0 148.00 54.00 290.90 cm /I6 Do Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.00 290.90 Td ( ) Tj ET Q /GS0 gs q 244.00 0 0 147.00 311.50 290.90 cm /I7 Do Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 555.50 290.90 Td ( ) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 278.18 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 274.10 Td (Inventory balances exclude adjustments for fresh start accounting in the fiscal year ended March 31, 2016.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 256.10 Td (Industry-leading distribution capabilities and customer relationships) Tj ET Q BT /F7 10.00 Tf ET q 0 0 0 rg BT 354.55 256.10 Td (.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 357.33 256.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 362.88 256.10 Td (Our market positions are driven by a U.S. higher ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 244.10 Td (education sales force of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 151.18 244.10 Td (approximately 500) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 226.44 244.10 Td ( sales consultants who directly interact on a daily basis and maintain long-standing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 232.10 Td (relationships with our adopting instructors and customers. Our sales force scope and relationships allow us to sell multiple ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 220.10 Td (products across our markets and more easily introduce and train customers on our new digital product of) Tj ET Q q 0 0 0 rg BT 472.04 220.10 Td (ferings. In addition, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 208.10 Td (our customer support and services or) Tj ET Q q 0 0 0 rg BT 201.28 208.10 Td (ganization of approximately 400 employees works directly with customers to support ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 196.10 Td (product adoption and implementation. In any given season, we directly interact with customers in thousands of institutions to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 184.10 Td (introduce and explain our products, secure adoptions, ensure product availability through on-site and of) Tj ET Q q 0 0 0 rg BT 467.87 184.10 Td (f-site channel partners, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 172.10 Td (and support implementation and usage of our solutions. Multiple independent studies confirm that we are seen in the market as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 160.10 Td (the best-in-class provider of services to faculty and institutions to help them set-up, customize and grow usage of their adopted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 148.10 Td (digital solutions. Our distribution network and customer relationships are distinct competitive advantages against smaller ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 136.10 Td (content and technology players, who tend to either cover only a sub-set of customers or seek partnerships with us to access the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 124.10 Td (market. Our long-standing relationships with customers additionally provides a source of stability for our business through ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 112.10 Td (repeat business across market and product types.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 248.66 112.10 Td ( ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 94.10 Td (Significant economies of scale.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 199.77 94.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 205.33 94.10 Td (Our market leadership positions facilitate our ability to:) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 427.77 94.10 Td ( ) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 109.00 76.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 76.10 Td (develop publications in a timely and cost-ef) Tj ET Q q 0 0 0 rg BT 300.77 76.10 Td (fective manner;) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 109.00 58.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 58.10 Td (significantly invest in our digital solutions, which are fundamental for our customers and an important ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 109.00 46.10 Td ( ) Tj ET Q q 0 0 0 rg BT 126.00 46.10 Td (competitive advantage over smaller publishers;) Tj ET Q endstream endobj 23 0 obj <> endobj 24 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 (- 6 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 109.00 742.10 Td ( ) Tj ET Q q 0 0 0 rg BT 126.00 742.10 Td (leverage our content and technology over multiple media and markets; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.00 724.10 Td ( ) Tj ET Q q 0 0 0 rg BT 126.00 724.10 Td (use our extensive sales force of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 253.73 724.10 Td (approximately 500) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.99 724.10 Td ( sales consultants to sell multiple products across our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 712.10 Td (markets and more easily introduce new product of) Tj ET Q q 0 0 0 rg BT 326.59 712.10 Td (ferings; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 109.00 694.10 Td ( ) Tj ET Q q 0 0 0 rg BT 126.00 694.10 Td (obtain volume purchasing benefits from our suppliers; ) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 108.00 676.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 676.10 Td (distribute our product at scale, both physically and digitally) Tj ET Q q 0 0 0 rg BT 363.35 676.10 Td (, to ensure we are well-positioned within all ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 664.10 Td (student purchases paths; and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 109.00 646.10 Td ( ) Tj ET Q q 0 0 0 rg BT 126.00 646.10 Td (leverage our fixed costs, including our distribution systems, to enhance profitability) Tj ET Q q 0 0 0 rg BT 460.28 646.10 Td (. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 628.10 Td (Strong operating cash flow and diversified revenues) Tj ET Q BT /F7 10.00 Tf ET q 0 0 0 rg BT 285.90 628.10 Td (.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 288.67 628.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 294.23 628.10 Td (Our leading market positions, the breadth of our products, and our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 616.10 Td (author and customer relationships generate strong, consistent operating cash flow) Tj ET Q q 0 0 0 rg BT 378.81 616.10 Td (. ) Tj ET Q q 0 0 0 rg BT 383.63 616.10 Td (The majority of our sales in the academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 604.10 Td (market 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 54.00 592.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 592.10 Td ( were attributable to titles in their second and later editions. In addition, only approximately 7% of fiscal year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 580.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 580.10 Td ( total Learning gross sales came from for) Tj ET Q q 0 0 0 rg BT 237.91 580.10 Td (-profit schools. In the research market, approximately 70% of our revenues are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 568.10 Td (derived from recurring subscriptions and sales, and approximately 95% of our digital subscription-based revenues are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 556.10 Td (generated from our previous year) Tj ET Q q 0 0 0 rg BT 187.65 556.10 Td () Tj ET Q q 0 0 0 rg BT 190.43 556.10 Td (s customer base. ) Tj ET Q q 0 0 0 rg BT 258.19 556.10 Td (As a result, we have been able to maintain strong operating cash flows ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 544.10 Td (throughout the education industry) Tj ET Q q 0 0 0 rg BT 192.03 544.10 Td (s continuing digital transformation. ) Tj ET Q q 0 0 0 rg BT 335.44 544.10 Td (W) Tj ET Q q 0 0 0 rg BT 344.08 544.10 Td (e also have a diversified revenue stream, which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 532.10 Td (reduces our dependence on any one product, author) Tj ET Q q 0 0 0 rg BT 259.63 532.10 Td (, discipline or market. For example, no single author represented more than ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 520.10 Td (2.5% of our total ) Tj ET Q q 0 0 0 rg BT 123.71 520.10 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 302.81 520.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.41 520.10 Td (. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 502.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.15 502.10 Td (orld-class management team and culture) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 248.49 502.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 250.99 502.10 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 54.00 490.10 Td (hiring a world-class executive team, led by Chief Executive Of) Tj ET Q q 0 0 0 rg BT 305.95 490.10 Td (ficer \(CEO\) Michael Hansen. Mr) Tj ET Q q 0 0 0 rg BT 446.73 490.10 Td (. Hansen previously served ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 478.10 Td (as CEO for Elsevier Health Sciences, a division of Reed Elsevier \(an information services provider operating in the science, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 466.10 Td (medical, legal, risk, and business sectors\). 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 54.00 454.10 Td (Prior to this he was President and CEO of Harcourt ) Tj ET Q q 0 0 0 rg BT 261.19 454.10 Td (Assessment, the educational materials division of Reed Elsevier) Tj ET Q q 0 0 0 rg BT 516.83 454.10 Td (, where he ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 442.10 Td (led a successful turnaround and sale of that business. Mr) Tj ET Q q 0 0 0 rg BT 279.50 442.10 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 54.00 430.10 Td (that values engagement, empowerment and discovery and on that is accountable to and for each other) Tj ET Q q 0 0 0 rg BT 459.41 430.10 Td (. ) Tj ET Q q 0 0 0 rg BT 464.23 430.10 Td (The culture throughout ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 418.10 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 54.00 406.10 Td (and students by advancing the way students learn, in a measurable and repeatable fashion.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 385.10 Td (Our) Tj ET Q q 0 0 0 rg BT 71.60 385.10 Td ( Strategy ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 367.10 Td (During the recent fiscal year) Tj ET Q q 0 0 0 rg BT 185.43 367.10 Td (, our strategy was to:) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 109.00 349.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 349.10 Td (accelerate penetration of our high quality digital courseware;) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 109.00 331.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 331.10 Td (lead the industry in af) Tj ET Q q 0 0 0 rg BT 213.02 331.10 Td (fordability and monetize our print base;) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 109.00 313.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 313.10 Td (nourish our growth engines; and) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 109.00 295.10 Td ( ) Tj ET Q q 0 0 0 rg BT 126.00 295.10 Td (evolve towards a technology first or) Tj ET Q q 0 0 0 rg BT 269.95 295.10 Td (ganization and operating model) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 277.10 Td (Encapsulating many of these strategies, we publicly announced, in the second half of fiscal year 2018, the launch of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 265.10 Td (innovative subscription service called Cengage Unlimited for our US Higher Education business. Cengage Unlimited is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 253.10 Td (the first-of-its-kind subscription service for digital higher education materials. ) Tj ET Q q 0 0 0 rg BT 385.80 253.10 Td (A) Tj ET Q q 0 0 0 rg BT 392.47 253.10 Td ( subscription provides access to more than ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 241.10 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 397.94 241.10 Td (19.99 a semester) Tj ET Q q 0 0 0 rg BT 464.46 241.10 Td (, no matter how many ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 229.10 Td (Cengage products are used. Students using the digital platforms also have the option of free print rentals, paying only a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 217.10 Td ($7.99 shipping fee.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 199.10 Td (Accelerate penetration of our high quality digital courseware. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.39 199.10 Td (W) Tj ET Q q 0 0 0 rg BT 337.03 199.10 Td (e continue to invest in the expansion, development, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 187.10 Td (stability and ef) Tj ET Q q 0 0 0 rg BT 113.25 187.10 Td (fectiveness of our digital products while also focusing our Go-to-Market team on the sales of these digital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 175.10 Td (solutions and services. ) Tj ET Q q 0 0 0 rg BT 146.58 175.10 Td (This has resulted in approximately 9% growth in our core digital gross sales during the fiscal year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 163.10 Td (ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 80.38 163.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 143.98 163.10 Td (. Our digital solutions are based on deep research and understanding of today) Tj ET Q q 0 0 0 rg BT 455.27 163.10 Td (s students and their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 151.10 Td (workflow) Tj ET Q q 0 0 0 rg BT 92.23 151.10 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 473.08 151.10 Td (The growth in our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 139.10 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 54.00 127.10 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 547.32 127.10 Td (W) Tj ET Q q 0 0 0 rg BT 555.95 127.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 115.10 Td (therefore realize revenue from every end user) Tj ET Q q 0 0 0 rg BT 235.56 115.10 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 54.00 103.10 Td (speed-to-market and af) Tj ET Q q 0 0 0 rg BT 146.00 103.10 Td (fording us greater ability to tailor our of) Tj ET Q q 0 0 0 rg BT 305.49 103.10 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 91.10 Td (preferences.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 102.57 91.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 105.07 91.10 Td (W) Tj ET Q q 0 0 0 rg BT 113.71 91.10 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 79.10 Td (focusing and incentivizing our Go-T) Tj ET Q q 0 0 0 rg BT 199.38 79.10 Td (o-Market team in this area.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 61.10 Td (Lead the industry in af) Tj ET Q q 0 0 0 rg BT 165.72 61.10 Td (fordability and monetize our print base. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 331.01 61.10 Td (This fiscal year) Tj ET Q q 0 0 0 rg BT 392.25 61.10 Td (, we launched a number of initiatives to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 49.10 Td (lower the barrier to entry for our products. ) Tj ET Q q 0 0 0 rg BT 225.70 49.10 Td (The key pillar of our af) Tj ET Q q 0 0 0 rg BT 318.54 49.10 Td (fordability strategy was Cengage Unlimited, our ) 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 (subscription service that provides access to our full catalog of digital courseware \(when enrolled in a course\) and eBooks for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.10 Td ($1) Tj ET Q q 0 0 0 rg BT 63.63 730.10 Td (19.99 a semester \($179.99 for annual, $239.99 for two year subscriptions\). In addition to Cengage Unlimited, we pursued a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 718.10 Td (number of other af) Tj ET Q q 0 0 0 rg BT 128.51 718.10 Td (fordability and monetization strategies. ) Tj ET Q q 0 0 0 rg BT 287.45 718.10 Td (W) Tj ET Q q 0 0 0 rg BT 296.09 718.10 Td (e continued to methodically right price key disciplines through ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 706.10 Td (our pricing Center of Excellence. ) Tj ET Q q 0 0 0 rg BT 189.32 706.10 Td (This strategic pricing ef) Tj ET Q q 0 0 0 rg BT 284.38 706.10 Td (fort optimized for af) Tj ET Q q 0 0 0 rg BT 365.56 706.10 Td (fordability and digital solutions, shifting users ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 694.10 Td (towards the most ef) Tj ET Q q 0 0 0 rg BT 132.41 694.10 Td (fective and accessible digital solutions. ) Tj ET Q q 0 0 0 rg BT 291.08 694.10 Td (While we continue to help our customers migrate to digital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 682.10 Td (solutions that provide better learning outcomes, there are certain customers and disciplines that are more embedded in the use ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 670.10 Td (of print products, either as a stand-alone solution or in combination with a digital product. ) Tj ET Q q 0 0 0 rg BT 416.24 670.10 Td (W) Tj ET Q q 0 0 0 rg BT 424.88 670.10 Td (e are actively pursuing new ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 658.10 Td (business and commercial models as well as go-to-market strategies to increase the af) Tj ET Q q 0 0 0 rg BT 392.59 658.10 Td (fordability and access of our print ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 646.10 Td (products for those students that want to purchase print. For example, we now provide students across all our disciplines the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 634.10 Td (option to complement 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 54.00 622.10 Td (discipline. ) Tj ET Q q 0 0 0 rg BT 97.33 622.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 147.23 622.10 Td (, we launched rental partnerships based on a revenue share model with a few of the lar) Tj ET Q q 0 0 0 rg BT 492.19 622.10 Td (gest rental ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 610.10 Td (providers in the higher education market to benefit from the growing rental trend. Following a successful pilot program in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 598.10 Td (fiscal 2017, we operationalized and expanded the program including current year frontlist titles as well as prior year) Tj ET Q q 0 0 0 rg BT 517.33 598.10 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 586.10 Td (backlist, titles. In addition to the rental partnerships, we will continue to of) Tj ET Q q 0 0 0 rg BT 352.36 586.10 Td (fer direct to student rentals on our proprietary e-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 574.10 Td (commerce site, Cengage.com \(formerly) Tj ET Q q 0 0 0 rg BT 211.90 574.10 Td (, Cengage Brain.com\), and will of) Tj ET Q q 0 0 0 rg BT 347.79 574.10 Td (fer these texts for purchase.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 556.10 Td (Nourish our growth engines. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 193.43 556.10 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 54.00 544.10 Td (strategy that provides balance to our higher education business while, more importantly) Tj ET Q q 0 0 0 rg BT 403.81 544.10 Td (, ensuring our high quality learning ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 532.10 Td (materials can be enjoyed by students throughout their educational and career journey) Tj ET Q q 0 0 0 rg BT 392.95 532.10 Td (. Our Cengage Global Businesses ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 520.10 Td (\(CGB\) \(inclusive of English language teaching \(EL) Tj ET Q q 0 0 0 rg BT 272.45 520.10 Td (T\), International and Gale\), National Geographic/ K12 and Online ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 508.10 Td (Skills, businesses have been taking focused approaches to growth and achieving great results.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 490.10 Td (For our Cengage Global Business units, we extend our global reach by adapting Cengage) Tj ET Q q 0 0 0 rg BT 431.92 490.10 Td (s domestic products, services ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 478.10 Td (and technology to local markets and customer requirements. Our EL) Tj ET Q q 0 0 0 rg BT 326.89 478.10 Td (T) Tj ET Q q 0 0 0 rg BT 332.81 478.10 Td ( business, operating as National Geographic Learning, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 466.10 Td (competes in an addressable content market 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 54.00 454.10 Td (year) Tj ET Q q 0 0 0 rg BT 70.66 454.10 Td (. Our National Geographic Learning business focuses on expanding Cengage) Tj ET Q q 0 0 0 rg BT 381.68 454.10 Td (s market share by concentrating investment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 442.10 Td (on flagship products and on go-to-market teams addressing the most profitable segments in Latin ) Tj ET Q q 0 0 0 rg BT 444.47 442.10 Td (America, the Middle East ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 430.10 Td (and ) Tj ET Q q 0 0 0 rg BT 70.39 430.10 Td (Asia. In the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 189.50 430.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 253.10 430.10 Td (, our global EL) Tj ET Q q 0 0 0 rg BT 312.73 430.10 Td (T) Tj ET Q q 0 0 0 rg BT 318.65 430.10 Td ( business grew 20.7% outside the United States. Our higher ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 418.10 Td (education business also saw market-leading growth, and while our revenue remains lar) Tj ET Q q 0 0 0 rg BT 400.93 418.10 Td (gely print-based, digital gross sales now ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 406.10 Td (represent 13% of gross sales and activations of our flagship MindT) Tj ET Q q 0 0 0 rg BT 321.57 406.10 Td (ap product grew 51%. ) Tj ET Q q 0 0 0 rg BT 412.20 406.10 Td (The reach of our International ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 394.10 Td (segment is exemplified through the diversity of its ) Tj ET Q q 0 0 0 rg BT 257.30 394.10 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 436.40 394.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 500.00 394.10 Td (, of which 31% ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 382.10 Td (was derived from ) Tj ET Q q 0 0 0 rg BT 125.92 382.10 Td (Australia, 23% from Europe, the Middle East and ) Tj ET Q q 0 0 0 rg BT 326.43 382.10 Td (Africa \(EMEA\), 20% from ) Tj ET Q q 0 0 0 rg BT 445.55 382.10 Td (Asia, and 13% each from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 370.10 Td (Latin ) Tj ET Q q 0 0 0 rg BT 77.05 370.10 Td (America and North ) Tj ET Q q 0 0 0 rg BT 156.19 370.10 Td (America. Our Gale business, is a global leader in education, learning, and research resources online, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 358.10 Td (with a vast digital archive of research databases, reference books \(both eBook and print\), and more. In fiscal year 2018, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 346.10 Td (returned to growth in Gale, while focusing on improving ef) Tj ET Q q 0 0 0 rg BT 290.99 346.10 Td (ficiencies in operations and cost.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 328.10 Td (Our National Geographic / K12, grew 18% year over year) Tj ET Q q 0 0 0 rg BT 303.73 328.10 Td (, due to a highly focused strategy on ) Tj ET Q q 0 0 0 rg BT 450.65 328.10 Td (Advanced and Elective ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 316.10 Td (\(A&E\) courses at the High School level, which leverages and adapts our Higher Ed content and platforms and is less cyclical ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 304.10 Td (than the K-8 state adoption path. Our focus on and growth in ) Tj ET Q q 0 0 0 rg BT 299.23 304.10 Td (A&E helps to counteract the cyclical nature of the K12 market. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 292.10 Td (W) Tj ET Q q 0 0 0 rg BT 63.04 292.10 Td (ith that being said, we also had strong growth in California and ) Tj ET Q q 0 0 0 rg BT 317.53 292.10 Td (T) Tj ET Q q 0 0 0 rg BT 322.94 292.10 Td (exas state adoption cycles due to our strong National ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 280.10 Td (Geographic brand and content. ) Tj ET Q q 0 0 0 rg BT 179.23 280.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 229.14 280.10 Td (, in fiscal year 2018, we leveraged our strong sales force and agreed on an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 268.10 Td (exclusive distribution deal with Big Ideas Learning and the Larson Math products. ) Tj ET Q q 0 0 0 rg BT 386.24 268.10 Td (This partnership rounded out our K12 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 256.10 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 256.10 Td (fering and put us in play for significantly more Math and STEM type adoptions.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 238.10 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 435.08 238.10 Td (While most students we serve ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 226.10 Td (pursue a two-year or four) Tj ET Q q 0 0 0 rg BT 155.43 226.10 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 54.00 214.10 Td (traditional course set-up. ) Tj ET Q q 0 0 0 rg BT 155.08 214.10 Td (As a result, we are investing in providing learners in dif) Tj ET Q q 0 0 0 rg BT 377.90 214.10 Td (ferent settings our trusted solutions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 202.10 Td (leveraging our content and technology) Tj ET Q q 0 0 0 rg BT 207.19 202.10 Td (. ) Tj ET Q q 0 0 0 rg BT 212.01 202.10 Td (This includes comprehensive program or institutional of) Tj ET Q q 0 0 0 rg BT 436.78 202.10 Td (ferings, online and hybrid ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 190.10 Td (learning formats, competency-based programs, add-on learning and certification and workforce development programs. For ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 178.10 Td (example, we are the lar) Tj ET Q q 0 0 0 rg BT 146.82 178.10 Td (gest provider of learning solutions in the skills area, which allows us to capture the growing market ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 166.10 Td (demand for skills-based training outside traditional course set-ups.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 148.10 Td (Evolve towards a technology first organization and operating model.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 353.41 148.10 Td ( Our revenues are now predominantly derived from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 136.10 Td (our courseware technology) Tj ET Q q 0 0 0 rg BT 161.64 136.10 Td (. Over the past few years, we have been evolving our or) Tj ET Q q 0 0 0 rg BT 384.43 136.10 Td (ganization, operating model and talent to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 124.10 Td (drive this digital growth.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 106.10 Td (Our sales, marketing and services teams have shifted over the last few years from a textbook to a software sales and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 94.10 Td (support model. ) Tj ET Q q 0 0 0 rg BT 116.31 94.10 Td (W) Tj ET Q q 0 0 0 rg BT 124.95 94.10 Td (e redesigned our field sales structure; flattened the or) Tj ET Q q 0 0 0 rg BT 336.91 94.10 Td (ganization; eliminated positions; created new positions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 82.10 Td (focused on digital growth; increased and aligned our variable compensation to better reflect our digital future and evolved key ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 70.10 Td (roles to accelerate our plans. Our go-to-market or) Tj ET Q q 0 0 0 rg BT 251.51 70.10 Td (ganization is focused on helping our institutional and faculty customers ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 58.10 Td (adopt our digital solutions, increase student activation of the adopted solutions and drive customer usage and retention. ) Tj ET Q q 0 0 0 rg BT 532.32 58.10 Td (W) Tj ET Q q 0 0 0 rg BT 540.95 58.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 46.10 Td (have put in place dedicated resources, systems and data tools to monitor and support digital conversion, migration and usage ) 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 54.00 742.10 Td (of customers at an individual faculty and student level. In addition, our best-in-class services or) Tj ET Q q 0 0 0 rg BT 435.38 742.10 Td (ganization supports our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.10 Td (customers through the entire life cycle of their digital purchase throughout the semester: on-boarding, course set-up, trouble-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 718.10 Td (shooting and usage.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 700.10 Td (Our product and technology or) Tj ET Q q 0 0 0 rg BT 195.12 700.10 Td (ganization continues to concentrate on the acceleration of our digital transformation. ) Tj ET Q q 0 0 0 rg BT 535.37 700.10 Td (W) Tj ET Q q 0 0 0 rg BT 544.01 700.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 688.10 Td (continue to optimize the ef) Tj ET Q q 0 0 0 rg BT 161.01 688.10 Td (ficiency and ef) Tj ET Q q 0 0 0 rg BT 220.24 688.10 Td (fectiveness of our product development process, ensuring the product and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 676.10 Td (technology teams work hand-in-hand from inception of product to delivery and ongoing improvement. ) Tj ET Q q 0 0 0 rg BT 467.05 676.10 Td (W) Tj ET Q q 0 0 0 rg BT 475.69 676.10 Td (e have expanded our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 664.10 Td (Learning Science teams to apply the latest in pedagogical approaches to each of our disciplines and courseware platforms. ) Tj ET Q q 0 0 0 rg BT 545.03 664.10 Td (W) Tj ET Q q 0 0 0 rg BT 553.67 664.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 652.10 Td (continue to expand and augment our engineering talent base. ) Tj ET Q q 0 0 0 rg BT 299.29 652.10 Td (W) Tj ET Q q 0 0 0 rg BT 307.93 652.10 Td (e are also implementing an agile development process and full ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 640.10 Td (stack teams that allows us to rapidly develop, release and iterate on our digital solutions. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 622.10 Td (Overall, we have made significant moves in or) Tj ET Q q 0 0 0 rg BT 258.43 622.10 Td (ganization structures, operating model and culture that has shifted us to a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 610.10 Td (true education and technology company) Tj ET Q q 0 0 0 rg BT 213.30 610.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 589.10 Td (Our) Tj ET Q q 0 0 0 rg BT 71.60 589.10 Td ( Pr) Tj ET Q q 0 0 0 rg BT 84.46 589.10 Td (oducts and Services ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 568.10 Td (Academic) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 547.10 Td (Our ) Tj ET Q q 0 0 0 rg BT 89.50 547.10 Td (Academic of) Tj ET Q q 0 0 0 rg BT 140.68 547.10 Td (ferings include:) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 526.10 Td ( ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 90.00 526.10 Td (Digital Solutions. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 165.56 526.10 Td (Cengage is a leader in providing customers with a broad range of digital solutions. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.00 508.10 Td ( ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 126.00 508.10 Td (Course Solutions. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.62 508.10 Td (MindT) Tj ET Q q 0 0 0 rg BT 226.70 508.10 Td (ap is the newest scaled courseware solution in the market. It comprises an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 496.10 Td (interactive suite of digital learning solutions designed to engage students and of) Tj ET Q q 0 0 0 rg BT 444.35 496.10 Td (fer instructors choice in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 484.10 Td (content, platforms, devices and learning tools. Born out of industry demand and developed based on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 472.10 Td (pedagogically sound principles, MindT) Tj ET Q q 0 0 0 rg BT 282.49 472.10 Td (ap incorporates customizable MindApps developed by Cengage ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 460.10 Td (and independent developers that actively encourage students to interact with their course content, as well as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 448.10 Td (their peers and instructors. MindT) Tj ET Q q 0 0 0 rg BT 261.66 448.10 Td (ap combines authoritative content with structured but highly flexible and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 436.10 Td (extensible delivery platform to enable instructors and students to incorporate open content in the context of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 424.10 Td (their coursework. MindT) Tj ET Q q 0 0 0 rg BT 225.56 424.10 Td (ap also allows faculty to see individualized engagement scores per student and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 412.10 Td (areas where students require additional support. ) Tj ET Q q 0 0 0 rg BT 319.37 412.10 Td (W) Tj ET Q q 0 0 0 rg BT 328.01 412.10 Td (e have over 880 MindT) Tj ET Q q 0 0 0 rg BT 421.17 412.10 Td (aps in the market across ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 400.10 Td (disciplines, which covers approximately 75% of our product portfolio, and are able to add platform features ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 388.10 Td (and functionality across all MindT) Tj ET Q q 0 0 0 rg BT 263.60 388.10 Td (aps or develop discipline-specific features as needed. Individual adoption ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 376.10 Td (analytics, as well as comparative white papers performed over the last two years, prove that MindT) Tj ET Q q 0 0 0 rg BT 522.11 376.10 Td (ap leads ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 364.10 Td (to better learner outcomes. For example, in a recent study compiled using qualitative and quantitative data ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 352.10 Td (from over 7,000 students at 100 institutions, MindT) Tj ET Q q 0 0 0 rg BT 332.24 352.10 Td (ap was proven to deliver improved student outcomes ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 340.10 Td (including:) Tj ET Q BT /F1 10.00 Tf ET /GS0 gs q 4.00 0 0 10.09 144.00 319.94 cm /I8 Do Q q 0 0 0 rg BT 148.00 322.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.00 322.10 Td (A) Tj ET Q q 0 0 0 rg BT 168.67 322.10 Td ( 14% improvement in overall course grades for students using MindT) Tj ET Q q 0 0 0 rg BT 446.25 322.10 Td (ap versus students not using ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.00 310.10 Td (MindT) Tj ET Q q 0 0 0 rg BT 189.08 310.10 Td (ap.) Tj ET Q BT /F1 10.00 Tf ET /GS0 gs q 4.00 0 0 10.09 144.00 289.94 cm /I9 Do Q q 0 0 0 rg BT 148.00 292.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.00 292.10 Td (Instructors using MindT) Tj ET Q q 0 0 0 rg BT 258.52 292.10 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 162.00 280.10 Td (their course. ) Tj ET Q BT /F1 10.00 Tf ET /GS0 gs q 4.00 0 0 10.09 144.00 259.94 cm /I10 Do Q q 0 0 0 rg BT 148.00 262.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.00 262.10 Td (71% of students said MindT) Tj ET Q q 0 0 0 rg BT 274.63 262.10 Td (ap increased their confidence in understanding course materials. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.00 244.10 Td ( ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 126.00 244.10 Td (Homework Solutions. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 214.61 244.10 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 126.00 232.10 Td (with digitally assignable and gradeable work for students. Our interactive learning solutions are designed to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 220.10 Td (save instructors time, help students focus on what they need to learn and improve academic performance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 208.10 Td (with demonstrable outcomes. ) Tj ET Q q 0 0 0 rg BT 245.79 208.10 Td (These successful discipline-specific platforms include solutions such as ) Tj ET Q q 0 0 0 rg BT 534.06 208.10 Td (Aplia, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 196.10 Td (SAM and OWL, which are also increasingly integrated into the MindT) Tj ET Q q 0 0 0 rg BT 408.84 196.10 Td (ap platform. ) Tj ET Q q 0 0 0 rg BT 459.66 196.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 509.56 196.10 Td (, during ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 184.10 Td (fiscal year 2017, we acquired ) Tj ET Q q 0 0 0 rg BT 245.77 184.10 Td (W) Tj ET Q q 0 0 0 rg BT 254.40 184.10 Td (ebAssign, whose flagship product is a highly regarded assessment and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 172.10 Td (homework solution for the STEM disciplines \(science, technology) Tj ET Q q 0 0 0 rg BT 390.85 172.10 Td (, engineering and math\).) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.00 154.10 Td ( ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 126.00 154.10 Td (Other Digital Solutions.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 222.39 154.10 Td ( ) Tj ET Q q 0 0 0 rg BT 224.71 154.10 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 126.00 142.10 Td (platforms, online skills solutions and supplementary materials.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 124.10 Td ( ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 90.00 124.10 Td (Cengage Unlimited.) Tj ET Q BT /F3 10.00 Tf ET 1 1 1 rg /GS0 gs 170.54 131.04 2.50 -9.10 re f /GS0 gs q 0 0 0 rg BT 170.54 124.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 173.04 131.03 374.63 -9.10 re f /GS0 gs q 0 0 0 rg BT 173.04 124.10 Td (Cengage is the first to introduce to the market a subscription model, Cengage Unlimited, that ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 90.00 119.03 469.91 -9.09 re f /GS0 gs q 0 0 0 rg BT 90.00 112.10 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 90.00 107.03 467.42 -9.09 re f /GS0 gs q 0 0 0 rg BT 90.00 100.10 Td (one place and for one af) Tj ET Q q 0 0 0 rg BT 186.16 100.10 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 95.03 458.75 -9.09 re f /GS0 gs q 0 0 0 rg BT 90.00 88.10 Td (and provide seamless access to high-quality content for all students. Channel partners are integral to the education ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 90.00 83.03 460.16 -9.09 re f /GS0 gs q 0 0 0 rg BT 90.00 76.10 Td (ecosystem and are embedded in the institutional communities with ready access to students. In launching Cengage ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 90.00 71.03 439.59 -9.09 re f /GS0 gs q 0 0 0 rg BT 90.00 64.10 Td (Unlimited we have engaged with our channel partners that share the student-first vision and are committed to ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 90.00 59.03 178.26 -9.09 re f /GS0 gs q 0 0 0 rg BT 90.00 52.10 Td (delivering core capabilities in data analytics.) Tj ET Q endstream endobj 29 0 obj <> endobj 30 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 (- 9 -) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 742.10 Td ( ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 90.00 742.10 Td (Print textbooks and materials. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 213.60 742.10 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 90.00 730.10 Td (laboratory exercises, instructor editions and supplemental products. ) Tj ET Q q 0 0 0 rg BT 362.25 730.10 Td (These materials are based on best-in-class ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 718.10 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 90.00 706.10 Td (disciplines and maintain leading positions in many major disciplines. ) Tj ET Q q 0 0 0 rg BT 368.67 706.10 Td (W) Tj ET Q q 0 0 0 rg BT 377.30 706.10 Td (e publish textbooks by several of the most ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 694.10 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 90.00 682.10 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 72.00 664.10 Td ( ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 90.00 664.10 Td (Services. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 128.32 664.10 Td (Cengage of) Tj ET Q q 0 0 0 rg BT 173.95 664.10 Td (fers a variety of services to complement our products. Our services include course development, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 652.10 Td (custom content development and direct assistance to instructors and students to support ef) Tj ET Q q 0 0 0 rg BT 449.74 652.10 Td (fective implementation and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 640.10 Td (ongoing use of our digital and print solutions. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 622.10 Td (Sales and Distribution Model) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 604.10 Td (Cengage solutions are sold to instructors, bookstores, institutions, and ultimately students. Cengage and our primary ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 592.10 Td (competitors influence the decisions governing the required solution used for a course by marketing directly to the instructors ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 580.10 Td (responsible for selecting their course materials. ) Tj ET Q q 0 0 0 rg BT 245.14 580.10 Td (The selection of course materials is referred to as an adoption in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 568.10 Td (industry) Tj ET Q q 0 0 0 rg BT 86.13 568.10 Td (. ) Tj ET Q q 0 0 0 rg BT 90.95 568.10 Td (W) Tj ET Q q 0 0 0 rg BT 99.59 568.10 Td (e employ a professional sales force who focuses on securing adoptions as well as helping faculty and students ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 556.10 Td (realize the full potential of the adopted solution.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 538.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 538.10 Td (e also employ a sales force that focuses specifically on institutional sales opportunities. ) Tj ET Q q 0 0 0 rg BT 431.48 538.10 Td (These sales are typically more ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 526.10 Td (complicated and time consuming than adoptions by individual instructors, but often promise greater unit volume and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 514.10 Td (economic value to Cengage. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 496.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 496.10 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 54.00 484.10 Td (directly to students. ) Tj ET Q q 0 0 0 rg BT 134.92 484.10 Td (W) Tj ET Q q 0 0 0 rg BT 143.56 484.10 Td (e also sell directly to students through Cengage.com \(formerly) Tj ET Q q 0 0 0 rg BT 392.56 484.10 Td (, CengageBrain.com\), with gross sales of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 472.10 Td (over $140 million for the fiscal year ended March 31, 2018, of) Tj ET Q q 0 0 0 rg BT 304.02 472.10 Td (fering digital solutions, e-books, textbook rentals, print books, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 460.10 Td (study aids, and supplemental materials, designed to enable students to choose solutions that have been adopted for their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 448.10 Td (specific course and best satisfy their individual needs. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 427.10 Td (Skills) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 406.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 406.10 Td (e provide materials in a wide range of skill areas, often extending our of) Tj ET Q q 0 0 0 rg BT 368.69 406.10 Td (ferings for the education market to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 394.10 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 54.00 382.10 Td (employees. For example, we of) Tj ET Q q 0 0 0 rg BT 179.34 382.10 Td (fer Milady Beauty & ) Tj ET Q q 0 0 0 rg BT 265.25 382.10 Td (W) Tj ET Q q 0 0 0 rg BT 273.88 382.10 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 54.00 370.10 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 54.00 358.10 Td (professionals seeking additional skills training.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 337.10 Td (School) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 316.10 Td (Cengage holds leading positions in select elective disciplines, including advanced placement and EL) Tj ET Q q 0 0 0 rg BT 473.46 316.10 Td (T) Tj ET Q q 0 0 0 rg BT 478.83 316.10 Td (. ) Tj ET Q q 0 0 0 rg BT 483.65 316.10 Td (These disciplines ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 304.10 Td (have more attractive growth fundamentals than the school market as a whole, enabling Cengage to leverage our existing assets ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 292.10 Td (in this market, while avoiding the impact of the cyclicality of the broader school market on our business. In ) Tj ET Q q 0 0 0 rg BT 485.28 292.10 Td (August 201) Tj ET Q q 0 0 0 rg BT 531.30 292.10 Td (1, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 280.10 Td (acquired the National Geographic Society) Tj ET Q q 0 0 0 rg BT 224.49 280.10 Td (s digital and print school publishing unit. ) Tj ET Q q 0 0 0 rg BT 390.97 280.10 Td (Through the acquisition, Cengage) Tj ET Q q 0 0 0 rg BT 529.27 280.10 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 268.10 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 268.10 Td (ferings to the school market have been enhanced by the National Geographic EL) Tj ET Q q 0 0 0 rg BT 383.89 268.10 Td (T) Tj ET Q q 0 0 0 rg BT 389.82 268.10 Td ( products, the National Geographic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 256.10 Td (Science series, elementary school level science curriculum and a vast collection of National Geographic content including ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 244.10 Td (images, video, maps, illustrations, and articles. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 223.10 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 202.10 Td (Gale dif) Tj ET Q q 0 0 0 rg BT 104.30 202.10 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 54.00 190.10 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 54.00 178.10 Td (and an aggregator of one of the lar) Tj ET Q q 0 0 0 rg BT 191.81 178.10 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 54.00 166.10 Td (leading institutions to digitize rare historical content from around the world, af) Tj ET Q q 0 0 0 rg BT 368.18 166.10 Td (fording a truly global product experience and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 154.10 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 54.00 142.10 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 72.00 124.10 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 507.41 124.10 Td (s academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 112.10 Td (products. ) Tj ET Q q 0 0 0 rg BT 93.26 112.10 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 54.00 100.10 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 88.10 Td (workflow) Tj ET Q q 0 0 0 rg BT 92.23 88.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 70.10 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 58.10 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 58.10 Td (Asian markets. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 46.10 Td (addition to selling to libraries, Gale also licenses its proprietary content for integration within ) Tj ET Q q 0 0 0 rg BT 429.56 46.10 Td (W) Tj ET Q q 0 0 0 rg BT 438.20 46.10 Td (eb-based information services. ) Tj ET Q endstream endobj 31 0 obj <> endobj 32 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 (- 10 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 742.10 Td (Gale currently has strategic business distribution arrangements with many leading information services, including ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.10 Td (Amazon.com, Inc., ) Tj ET Q q 0 0 0 rg BT 132.31 730.10 Td (Apple, Inc., Dow Jones & Company) Tj ET Q q 0 0 0 rg BT 277.20 730.10 Td (, Inc., Google, Inc., LexisNexis, ) Tj ET Q q 0 0 0 rg BT 407.54 730.10 Td (Thomson ) Tj ET Q q 0 0 0 rg BT 447.64 730.10 Td (W) Tj ET Q q 0 0 0 rg BT 456.28 730.10 Td (est, Bloomber) Tj ET Q q 0 0 0 rg BT 512.20 730.10 Td (g, ) Tj ET Q q 0 0 0 rg BT 522.02 730.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 718.10 Td (British Library) Tj ET Q q 0 0 0 rg BT 113.06 718.10 Td (, ) Tj ET Q q 0 0 0 rg BT 117.51 718.10 Td (Associated Press, Smithsonian Institution, and National Geographic Society) Tj ET Q q 0 0 0 rg BT 420.98 718.10 Td (.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 697.10 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 676.10 Td (Cengage is a leading international provider in the global market for course materials with operations in ) Tj ET Q q 0 0 0 rg BT 485.76 676.10 Td (Asia, EMEA, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 664.10 Td (Australia and Latin ) Tj ET Q q 0 0 0 rg BT 133.15 664.10 Td (America. Cengage adapts domestic course materials for various local markets internationally) Tj ET Q q 0 0 0 rg BT 504.31 664.10 Td (. ) Tj ET Q q 0 0 0 rg BT 509.13 664.10 Td (W) Tj ET Q q 0 0 0 rg BT 517.76 664.10 Td (e also ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 652.10 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 54.00 640.10 Td (individuals and businesses located outside the United States.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 622.10 Td (Cengage serves the higher education, vocational, K-12, library reference, and EL) Tj ET Q q 0 0 0 rg BT 395.39 622.10 Td (T) Tj ET Q q 0 0 0 rg BT 401.32 622.10 Td ( markets in select geographic areas with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 610.10 Td (a focus on high-growth markets throughout the world. Our business covers four principal regions that serve a number of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 598.10 Td (markets generally through local of) Tj ET Q q 0 0 0 rg BT 191.55 598.10 Td (fices and staf) Tj ET Q q 0 0 0 rg BT 244.12 598.10 Td (f with experience in the markets they serve. Our four major regional markets ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 586.10 Td (are served by physical locations in ) Tj ET Q q 0 0 0 rg BT 193.96 586.10 Td (Asia \(based in Singapore\), EMEA) Tj ET Q q 0 0 0 rg BT 330.32 586.10 Td ( \(based in ) Tj ET Q q 0 0 0 rg BT 371.15 586.10 Td (Andover) Tj ET Q q 0 0 0 rg BT 405.74 586.10 Td (, England\), ) Tj ET Q q 0 0 0 rg BT 451.84 586.10 Td (Australia \(based in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 574.10 Td (Melbourne, ) Tj ET Q q 0 0 0 rg BT 102.33 574.10 Td (Australia\), and Latin ) Tj ET Q q 0 0 0 rg BT 187.30 574.10 Td (America \(based in Mexico City) Tj ET Q q 0 0 0 rg BT 312.73 574.10 Td (, Mexico\).) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 556.10 Td (The business mix and strategic focus of these units dif) Tj ET Q q 0 0 0 rg BT 288.72 556.10 Td (fer based on prevailing local market demand for learning products. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 544.10 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 54.00 532.10 Td (other available content, including research databases. ) Tj ET Q q 0 0 0 rg BT 269.28 532.10 Td (W) Tj ET Q q 0 0 0 rg BT 278.32 532.10 Td (ith of) Tj ET Q q 0 0 0 rg BT 299.53 532.10 Td (fices in more than 20 countries, a sales force in nearly 40 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 520.10 Td (countries, and billings into approximately 175 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 54.00 508.10 Td (take advantage of specific favorable international growth dynamics. ) Tj ET Q q 0 0 0 rg BT 327.88 508.10 Td (W) Tj ET Q q 0 0 0 rg BT 336.92 508.10 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 54.00 496.10 Td (education markets transitioning to digital, and we are beginning to scale our MindT) Tj ET Q q 0 0 0 rg BT 387.38 496.10 Td (ap and other premium platforms. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 475.10 Td (Competition) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 454.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 454.10 Td (e operate in highly competitive markets with established competitors. Dif) Tj ET Q q 0 0 0 rg BT 374.27 454.10 Td (ferentiating factors in our markets include ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 442.10 Td (content quality) Tj ET Q q 0 0 0 rg BT 113.06 442.10 Td (, author reputation, digital platforms, customer service and price. Our two lar) Tj ET Q q 0 0 0 rg BT 420.84 442.10 Td (gest competitors in the U.S. higher ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 430.10 Td (education market are Pearson Education, Inc. and McGraw-Hill Education, Inc., with many additional smaller competitors in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 418.10 Td (the industry including traditional publishers, digital solutions providers, and alternative materials. Competitive positions and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 406.10 Td (players can vary significantly on a discipline-specific basis.In addition, we compete for student share of wallet with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 394.10 Td (alternative options to a new textbook sale, including used and rental options.) Tj ET Q q 0 0 0 rg BT 362.64 394.10 Td (The continued focus on technology and digital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 382.10 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 382.10 Td (ferings may result in additional competition from businesses that have not traditionally participated in our markets, such as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 370.10 Td (technology software companies, Internet service companies and search providers, providers of learning management systems ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 358.10 Td (and distributors. ) Tj ET Q q 0 0 0 rg BT 121.31 358.10 Td (W) Tj ET Q q 0 0 0 rg BT 129.95 358.10 Td (e compete primarily on the basis of the quality of our content and author reputation, the ef) Tj ET Q q 0 0 0 rg BT 489.94 358.10 Td (fectiveness of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 346.10 Td (digital solutions, customers) Tj ET Q q 0 0 0 rg BT 166.30 346.10 Td ( familiarity with our products and, to a lesser extent, price.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 325.10 Td (History ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 304.10 Td (On July 2, 2013, Cengage Learning Holdings II, L.P) Tj ET Q q 0 0 0 rg BT 280.86 304.10 Td (. and all of its domestic wholly-owned subsidiaries \(collectively) Tj ET Q q 0 0 0 rg BT 535.99 304.10 Td (, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 292.10 Td (Predecessor\) filed voluntary petitions for reor) Tj ET Q q 0 0 0 rg BT 245.14 292.10 Td (ganization under Chapter 1) Tj ET Q q 0 0 0 rg BT 353.34 292.10 Td (1 of the United States Bankruptcy Code \(Chapter ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 280.10 Td (1) Tj ET Q q 0 0 0 rg BT 58.63 280.10 Td (1\) in the Bankruptcy Court for the Eastern District of New ) Tj ET Q q 0 0 0 rg BT 299.02 280.10 Td (Y) Tj ET Q q 0 0 0 rg BT 305.25 280.10 Td (ork \(Bankruptcy Court\). Our foreign subsidiaries were not ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 268.10 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 486.47 268.10 Td (ganization from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 256.10 Td (the Bankruptcy Court and emer) Tj ET Q q 0 0 0 rg BT 179.89 256.10 Td (ged from bankruptcy proceedings as of the end of the day on March 31, 2014 \(the Ef) Tj ET Q q 0 0 0 rg BT 523.21 256.10 Td (fective ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 244.10 Td (Date\). Prior to the Ef) Tj ET Q q 0 0 0 rg BT 142.40 244.10 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 54.00 232.10 Td (the Bankruptcy Court and in accordance with the applicable provisions of Chapter 1) Tj ET Q q 0 0 0 rg BT 390.20 232.10 Td (1 and the orders of the Bankruptcy Court. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 220.10 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 54.00 208.10 Td (Ef) Tj ET Q q 0 0 0 rg BT 63.26 208.10 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 54.00 196.10 Td (to Cengage Learning Holdings II, L.P) Tj ET Q q 0 0 0 rg BT 204.25 196.10 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 54.00 184.10 Td (with or designated by ) Tj ET Q q 0 0 0 rg BT 142.32 184.10 Td (Apax Partners, L.P) Tj ET Q q 0 0 0 rg BT 217.31 184.10 Td (, together with OMERS Private Equity) Tj ET Q q 0 0 0 rg BT 371.65 184.10 Td (, Inc. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 163.10 Td (Organization and Operations) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 142.10 Td (Printing and binding; raw materials; fulfillment and distribution) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 124.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 124.10 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 54.00 112.10 Td (within strict buying guidelines and pricing agreements. ) Tj ET Q q 0 0 0 rg BT 276.55 112.10 Td (T) Tj ET Q q 0 0 0 rg BT 281.96 112.10 Td (ogether with leading providers of print-on-demand technology) Tj ET Q q 0 0 0 rg BT 531.24 112.10 Td (, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 100.10 Td (have implemented print-on-demand services that enable us to more ef) Tj ET Q q 0 0 0 rg BT 332.89 100.10 Td (ficiently produce certain print products. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 82.10 Td (The primary raw material we use is paper) Tj ET Q q 0 0 0 rg BT 237.77 82.10 Td (. Paper prices may fluctuate significantly from time to time. ) Tj ET Q q 0 0 0 rg BT 479.18 82.10 Td (W) Tj ET Q q 0 0 0 rg BT 487.82 82.10 Td (e attempt to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 70.10 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 58.10 Td (suppliers and having alternative suppliers available. ) 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 /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 execute our fulfillment and distribution functions primarily from Independence, Kentucky) Tj ET Q q 0 0 0 rg BT 447.38 742.10 Td (. ) Tj ET Q q 0 0 0 rg BT 451.82 742.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 501.73 742.10 Td (, we maintain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.10 Td (small distribution and customer service points \(some outsourced\) to support publishing programs in ) Tj ET Q q 0 0 0 rg BT 454.78 730.10 Td (Australia, Latin ) Tj ET Q q 0 0 0 rg BT 519.49 730.10 Td (America, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 718.10 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 54.00 706.10 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 706.10 Td (ficiencies and reduced operating costs.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 688.10 Td (Employees) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 670.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 670.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 670.10 Td (, we had approximately 4,900 employees. ) Tj ET Q q 0 0 0 rg BT 328.98 670.10 Td (W) Tj ET Q q 0 0 0 rg BT 337.62 670.10 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 54.00 658.10 Td (and that relations with our employees are satisfactory) Tj ET Q q 0 0 0 rg BT 266.89 658.10 Td (.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 640.10 Td (Seasonality and comparability ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 622.10 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 54.00 610.10 Td (fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 124.24 610.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 187.84 610.10 Td (, we derived approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 299.74 610.10 Td (57.9%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 325.57 610.10 Td ( of our ) Tj ET Q q 0 0 0 rg BT 354.18 610.10 Td (Adjusted Revenues and approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.36 610.10 Td (79.7%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.19 610.10 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 598.10 Td (our ) Tj ET Q q 0 0 0 rg BT 69.28 598.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 144.00 598.10 Td ( less Pre-Publication Costs in the second and third fiscal quarters, which coincide with the academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 586.10 Td (calendar) Tj ET Q q 0 0 0 rg BT 87.31 586.10 Td (. ) Tj ET Q q 0 0 0 rg BT 92.13 586.10 Td (This seasonality af) Tj ET Q q 0 0 0 rg BT 166.93 586.10 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 54.00 574.10 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 498.01 574.10 Td (. Changes in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 562.10 Td (our customers) Tj ET Q q 0 0 0 rg BT 112.96 562.10 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 54.00 550.10 Td (year) Tj ET Q q 0 0 0 rg BT 70.81 550.10 Td (, or in a fiscal year with the prior fiscal year) Tj ET Q q 0 0 0 rg BT 245.61 550.10 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 54.00 538.10 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 72.00 520.10 Td (As we continue to migrate our product and service of) Tj ET Q q 0 0 0 rg BT 284.81 520.10 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 54.00 508.10 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 54.00 496.10 Td (excess of revenues recognized reflected as deferred revenue. ) Tj ET Q q 0 0 0 rg BT 298.40 496.10 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 54.00 484.10 Td (revenues are typically recognized upon shipment of the materials to our customer) Tj ET Q q 0 0 0 rg BT 379.17 484.10 Td (. Consequently) Tj ET Q q 0 0 0 rg BT 438.52 484.10 Td (, reported revenues may not be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 472.10 Td (comparable to prior periods as a growing proportion of our revenues are recognized in subsequent periods.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 454.10 Td (Intellectual pr) Tj ET Q q 0 0 0 rg BT 110.56 454.10 Td (operty) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 436.10 Td (Substantially all of our proprietary publications and products, including our proprietary customer facing technology) Tj ET Q q 0 0 0 rg BT 534.01 436.10 Td (, are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 424.10 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 54.00 412.10 Td (throughout the world. ) Tj ET Q q 0 0 0 rg BT 142.88 412.10 Td (As the copyright holder) Tj ET Q q 0 0 0 rg BT 237.18 412.10 Td (, we have the exclusive right to reproduce, distribute, publicly display) Tj ET Q q 0 0 0 rg BT 515.63 412.10 Td (, perform, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 400.10 Td (and create derivative versions of the copyrighted works. ) Tj ET Q q 0 0 0 rg BT 280.68 400.10 Td (W) Tj ET Q q 0 0 0 rg BT 289.32 400.10 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 54.00 388.10 Td (license arrangements with third-party licensors.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 370.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 370.10 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 54.00 358.10 Td (connection with our publishing businesses. ) Tj ET Q q 0 0 0 rg BT 228.25 358.10 Td (W) Tj ET Q q 0 0 0 rg BT 236.89 358.10 Td (e also obtain domain name protection for our Internet domains. ) Tj ET Q q 0 0 0 rg BT 491.91 358.10 Td (W) Tj ET Q q 0 0 0 rg BT 500.55 358.10 Td (e believe we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 346.10 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 54.00 334.10 Td (intellectual property in relevant jurisdictions.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 316.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 316.10 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 54.00 304.10 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 54.00 292.10 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 54.00 280.10 Td (the life of the author plus 70 years \(works first published prior to 1978 generally have a copyright term of 95 years from the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 268.10 Td (date of first publication\). ) Tj ET Q q 0 0 0 rg BT 155.73 268.10 Td (W) Tj ET Q q 0 0 0 rg BT 164.77 268.10 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 54.00 256.10 Td (years from publication or 120 years from creation. For works assigned or licensed on or after January 1, 1978, authors \(or their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 244.10 Td (heirs or estates\) 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 54.00 232.10 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 54.00 220.10 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 54.00 208.10 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 54.00 196.10 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 54.00 184.10 Td (1978, whichever is later) Tj ET Q q 0 0 0 rg BT 149.53 184.10 Td (.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 166.10 Td (Envir) Tj ET Q q 0 0 0 rg BT 75.85 166.10 Td (onmental matters) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 148.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 148.10 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 54.00 136.10 Td (otherwise materially af) Tj ET Q q 0 0 0 rg BT 146.00 136.10 Td (fected by environmental laws and regulations. However) Tj ET Q q 0 0 0 rg BT 369.14 136.10 Td (, as the owner and lessee of real property) Tj ET Q q 0 0 0 rg BT 532.03 136.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 124.10 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 54.00 112.10 Td (properties we own or lease. ) Tj ET Q q 0 0 0 rg BT 166.00 112.10 Td (W) Tj ET Q q 0 0 0 rg BT 174.64 112.10 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 54.00 100.10 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 88.10 Td (or regulations. See Properties for a description of our significant leased premises.) 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 41.20 Td (- 12 -) 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 /F3 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 /F3 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 /F3 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 /F3 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 /F3 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 /F3 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 /F3 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 /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 614.25 Td (Failure to successfully introduce new products, services or technologies could impact our profitability) Tj ET Q q 0 0 0 rg BT 472.24 614.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 593.25 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 395.36 593.25 Td (ferings and new ways to deliver our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.25 Td (products and services. ) Tj ET Q q 0 0 0 rg BT 144.90 581.25 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 54.00 569.25 Td (historically) Tj ET Q q 0 0 0 rg BT 98.34 569.25 Td (. Our failure to successfully introduce new products, services or technologies to the market could have a material ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.25 Td (adverse impact on our results of operations, profitability and financial condition.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 536.25 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 536.25 Td (e operate in highly competitive markets in a rapidly changing industry and competition may reduce our market share, ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 524.25 Td (revenues and profitability) Tj ET Q q 0 0 0 rg BT 159.18 524.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 503.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 503.25 Td (e operate in highly competitive markets with significant established competitors, such as Pearson Education, Inc., ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 491.25 Td (McGraw-Hill Education, Inc., John ) Tj ET Q q 0 0 0 rg BT 197.95 491.25 Td (W) Tj ET Q q 0 0 0 rg BT 206.99 491.25 Td (iley & Sons, Inc., Scholastic Inc., ProQuest-CSA) Tj ET Q q 0 0 0 rg BT 402.81 491.25 Td ( LLC, EBSCO Industries, Inc., and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 479.25 Td (Bedford, Freeman and ) Tj ET Q q 0 0 0 rg BT 146.01 479.25 Td (W) Tj ET Q q 0 0 0 rg BT 154.65 479.25 Td (orth Publishing Group dba Macmillan Education. ) Tj ET Q q 0 0 0 rg BT 354.72 479.25 Td (W) Tj ET Q q 0 0 0 rg BT 363.36 479.25 Td (e compete primarily on the basis of the quality ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 467.25 Td (of our content and author reputation, the ef) Tj ET Q q 0 0 0 rg BT 225.43 467.25 Td (fectiveness of our digital solutions, customers) Tj ET Q q 0 0 0 rg BT 411.31 467.25 Td ( familiarity with our products and, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.25 Td (to a lesser extent, price. Many of our competitors have substantial financial resources, recognized brands, technological ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.25 Td (expertise, and market experience. Our competitors are also continuously enhancing their products and services, developing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.25 Td (new products and services and investing in technology) Tj ET Q q 0 0 0 rg BT 271.91 431.25 Td (. Some of our competitors are acquiring additional businesses in key ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.25 Td (sectors that will allow them to of) Tj ET Q q 0 0 0 rg BT 185.46 419.25 Td (fer a broader array of products and services than either they or we currently provide. Some ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.25 Td (of our competitors have greater resources than us, and therefore, may be able to adapt more quickly to new or emer) Tj ET Q q 0 0 0 rg BT 514.75 407.25 Td (ging ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.25 Td (technologies and changes in customer requirements, or devote greater resources to the development, promotion and sale of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.25 Td (their products than we can. ) Tj ET Q q 0 0 0 rg BT 163.97 383.25 Td (As the market continues to shift towards digital education solutions, we may also face ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 371.25 Td (competition from businesses that have not traditionally participated in our markets, such as Internet service companies and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 359.25 Td (search providers, providers of learning management systems and distributors, that could pose a threat to some of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 347.25 Td (businesses by providing more in-depth of) Tj ET Q q 0 0 0 rg BT 219.63 347.25 Td (ferings, adapting their products and services to meet the demands of our customers ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 335.25 Td (or combining with one of our traditional competitors to enhance their products and services. ) Tj ET Q q 0 0 0 rg BT 424.55 335.25 Td (These competitors potentially ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.25 Td (have the advantage of not needing to transition their business from a print business to a digital business. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 305.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 305.25 Td (e may not be able to compete successfully with our current and future competitors. Competition may require us to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.25 Td (reduce the price of our products and services or make additional capital investments that would adversely af) Tj ET Q q 0 0 0 rg BT 485.89 293.25 Td (fect our profit ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.25 Td (mar) Tj ET Q q 0 0 0 rg BT 69.37 281.25 Td (gins. If we are unable or unwilling to do so, we may lose market share and our business, financial condition and results of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.25 Td (operations may be materially adversely af) Tj ET Q q 0 0 0 rg BT 221.25 269.25 Td (fected.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 248.25 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 436.98 248.25 Td (, obtain rights to our ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 236.25 Td (author's works and avoid disputes with our authors may result in a material adverse ef) Tj ET Q q 0 0 0 rg BT 409.99 236.25 Td (fect on our results of operations. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 215.25 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 54.00 203.25 Td (collaborative relationships with them. ) Tj ET Q q 0 0 0 rg BT 207.39 203.25 Td (W) Tj ET Q q 0 0 0 rg BT 216.03 203.25 Td (e operate in a number of highly visible markets where there is intense competition ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 191.25 Td (for successful, published authors. ) Tj ET Q q 0 0 0 rg BT 189.90 191.25 Td (W) Tj ET Q q 0 0 0 rg BT 198.54 191.25 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 54.00 179.25 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 482.33 179.25 Td (fer authors) Tj ET Q q 0 0 0 rg BT 527.96 179.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 167.25 Td (content are dependent on the authors) Tj ET Q q 0 0 0 rg BT 203.48 167.25 Td ( transfer of copyrights to us. ) Tj ET Q q 0 0 0 rg BT 318.55 167.25 Td (The United States Copyright ) Tj ET Q q 0 0 0 rg BT 435.21 167.25 Td (Act of 1976, as amended, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 155.25 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 346.59 155.25 Td (, to terminate the copyright transfer and thereby ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.25 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 54.00 131.25 Td (window begins 35 years from the date of transfer) Tj ET Q q 0 0 0 rg BT 250.21 131.25 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 54.00 119.25 Td (date of publication or 40 years from the date of transfer) Tj ET Q q 0 0 0 rg BT 275.03 119.25 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 54.00 107.25 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 545.81 107.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 95.25 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 83.25 Td (us or else negotiate more favorable economic or other terms. Further) Tj ET Q q 0 0 0 rg BT 328.22 83.25 Td (, we may become engaged in disputes with our authors ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 71.25 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 59.25 Td (to attract new authors, the loss of certain of our high profile authors, increased costs incurred in attracting or retaining ) 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 /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (authors, changes in our rights to our authors) Tj ET Q q 0 0 0 rg BT 232.67 731.10 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 54.00 719.10 Td (business, results of operations and financial condition.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 698.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 698.10 Td (e face competition from the used textbook market and rental textbook programs for sales of our textbooks. The growth ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 686.10 Td (of the used textbook and/or rental textbook programs may materially adversely af) Tj ET Q q 0 0 0 rg BT 387.96 686.10 Td (fect our business. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 665.10 Td (The academic used textbook market has grown in recent years, driven primarily by more ef) Tj ET Q q 0 0 0 rg BT 436.96 665.10 Td (ficient distribution of used ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 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 54.00 641.10 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 54.00 629.10 Td (increasing number of bookstores and online companies are of) Tj ET Q q 0 0 0 rg BT 299.85 629.10 Td (fering textbook rental programs. Historically) Tj ET Q q 0 0 0 rg BT 478.32 629.10 Td (, the dif) Tj ET Q q 0 0 0 rg BT 508.97 629.10 Td (ficulty in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (making used textbooks available to students limited the growth of the used textbook market. ) Tj ET Q q 0 0 0 rg BT 425.69 617.10 Td (The Internet, however) Tj ET Q q 0 0 0 rg BT 513.86 617.10 Td (, has made ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (the used textbook market more ef) Tj ET Q q 0 0 0 rg BT 187.94 605.10 Td (ficient and has significantly increased student access to used textbooks. ) Tj ET Q q 0 0 0 rg BT 475.73 605.10 Td (The rental market ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 Td (also increases the ef) Tj ET Q q 0 0 0 rg BT 134.06 593.10 Td (ficiency of the used textbook market 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 54.00 581.10 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 54.00 569.10 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 477.61 569.10 Td (W) Tj ET Q q 0 0 0 rg BT 486.25 569.10 Td (e primarily ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.10 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 442.31 557.10 Td (fectively compete with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.10 Td (growing competition presented by the used textbook and rental textbook markets, we could experience a loss in sales and our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.10 Td (business, financial position and results of operations may be materially adversely af) Tj ET Q q 0 0 0 rg BT 388.73 533.10 Td (fected.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 512.10 Td (Increased accessibility of free or relatively inexpensive information and materials may reduce demand for or negatively ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 500.10 Td (impact the pricing of our products and services.) Tj ET Q BT /F8 10.00 Tf ET q 0 0 0 rg BT 250.11 500.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 479.10 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 54.00 467.10 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 495.90 467.10 Td (fered at lower ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.10 Td (pricing than similar products of) Tj ET Q q 0 0 0 rg BT 179.90 455.10 Td (fered in traditional media such as print. ) Tj ET Q q 0 0 0 rg BT 339.12 455.10 Td (W) Tj ET Q q 0 0 0 rg BT 347.75 455.10 Td (e expect these trends to continue. For example, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.10 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 54.00 431.10 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 54.00 419.10 Td (below the price of print books. ) Tj ET Q q 0 0 0 rg BT 179.07 419.10 Td (T) Tj ET Q q 0 0 0 rg BT 184.48 419.10 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 54.00 407.10 Td (materials have also af) Tj ET Q q 0 0 0 rg BT 140.72 407.10 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 54.00 395.10 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 524.48 395.10 Td (ge for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.10 Td (our products and services. ) Tj ET Q q 0 0 0 rg BT 160.73 383.10 Td (T) Tj ET Q q 0 0 0 rg BT 166.14 383.10 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 54.00 371.10 Td (information and materials limit the prices we can char) Tj ET Q q 0 0 0 rg BT 269.85 371.10 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 54.00 359.10 Td (position and results of operations may be materially adversely af) Tj ET Q q 0 0 0 rg BT 312.35 359.10 Td (fected. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 338.10 Td (A) Tj ET Q q 0 0 0 rg BT 60.12 338.10 Td ( reduction in enrollment at colleges and universities may reduce our revenues or profitability) Tj ET Q q 0 0 0 rg BT 441.69 338.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 317.10 Td (A) Tj ET Q q 0 0 0 rg BT 78.67 317.10 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 54.00 305.10 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 54.00 293.10 Td (economy) Tj ET Q q 0 0 0 rg BT 90.01 293.10 Td (, among other factors, can adversely af) Tj ET Q q 0 0 0 rg BT 244.76 293.10 Td (fect demand for higher education. Further) Tj ET Q q 0 0 0 rg BT 411.51 293.10 Td (, enrollment levels at colleges and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.10 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 54.00 269.10 Td (other factors that make predicting foreign enrollment levels dif) Tj ET Q q 0 0 0 rg BT 305.40 269.10 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 54.00 257.10 Td (and universities both within and outside the United States could adversely af) Tj ET Q q 0 0 0 rg BT 360.14 257.10 Td (fect demand for our higher education products ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.10 Td (and, therefore, reduce our revenues or profitability) Tj ET Q q 0 0 0 rg BT 255.48 245.10 Td (.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 224.10 Td (Changes in governmental programs and private lending practices may reduce our revenues or profitability) Tj ET Q q 0 0 0 rg BT 491.69 224.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 203.10 Td (Students comprise a lar) Tj ET Q q 0 0 0 rg BT 165.41 203.10 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 54.00 191.10 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 54.00 179.10 Td (frequent and substantial changes. ) Tj ET Q q 0 0 0 rg BT 189.05 179.10 Td (W) Tj ET Q q 0 0 0 rg BT 198.09 179.10 Td (ithout suf) Tj ET Q q 0 0 0 rg BT 235.97 179.10 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 54.00 167.10 Td (to for) Tj ET Q q 0 0 0 rg BT 75.76 167.10 Td (go higher education opportunities. ) Tj ET Q q 0 0 0 rg BT 214.90 167.10 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 54.00 155.10 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 516.90 155.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 137.10 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 54.00 125.10 Td (local governments, to purchase products and services we of) Tj ET Q q 0 0 0 rg BT 291.80 125.10 Td (fer) Tj ET Q q 0 0 0 rg BT 302.34 125.10 Td (. ) Tj ET Q q 0 0 0 rg BT 306.79 125.10 Td (Accordingly) Tj ET Q q 0 0 0 rg BT 356.13 125.10 Td (, any decreases or delays in government funding ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 113.10 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 54.00 101.10 Td (and our results of operations.) 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 /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (Our failure to win state adoptions could adversely af) Tj ET Q q 0 0 0 rg BT 269.38 731.25 Td (fect our revenue.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (A) Tj ET Q q 0 0 0 rg BT 78.67 710.25 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 54.00 698.25 Td (adoption schedules. Due to the revolving and staggered nature of state adoption schedules, sales ofK-12 instructional ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 686.25 Td (materials have traditionally been cyclical, with some years of) Tj ET Q q 0 0 0 rg BT 299.00 686.25 Td (fering more sales opportunities than others. In each adoption ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (decision for each state, we face significant competition. Our failure to do well in state adoptions could materially and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 662.25 Td (adversely af) Tj ET Q q 0 0 0 rg BT 102.40 662.25 Td (fect our sales revenue for the year of adoption and subsequent years.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 641.25 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 641.25 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 72.00 623.25 Td (In addition to our own sales force, we of) Tj ET Q q 0 0 0 rg BT 233.72 623.25 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 54.00 611.25 Td (retailers. ) Tj ET Q q 0 0 0 rg BT 91.02 611.25 Td (W) Tj ET Q q 0 0 0 rg BT 99.66 611.25 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 54.00 599.25 Td (as required or to our expectations and we do not control these parties) Tj ET Q q 0 0 0 rg BT 332.06 599.25 Td ( actions. In addition, some of our distributors, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.25 Td (representatives or retailers may market other products that compete with our products. ) Tj ET Q q 0 0 0 rg BT 401.20 587.25 Td (The loss of one or more of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.25 Td (distributors, representatives or retailers or their failure to ef) Tj ET Q q 0 0 0 rg BT 290.67 575.25 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 54.00 563.25 Td (functions in the expected manner could adversely af) Tj ET Q q 0 0 0 rg BT 262.35 563.25 Td (fect our ability to bring our products to market and impact our revenues.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 545.25 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 545.25 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 72.00 524.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 524.25 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 54.00 512.25 Td (educational institutions under contracts that are generally terminable at-will. ) Tj ET Q q 0 0 0 rg BT 361.49 512.25 Td (The fact that these customers have at-will ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 500.25 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 54.00 488.25 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 54.00 476.25 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 54.00 464.25 Td (and pricing requirements. ) Tj ET Q q 0 0 0 rg BT 158.79 464.25 Td (W) Tj ET Q q 0 0 0 rg BT 167.42 464.25 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 54.00 452.25 Td (contractual arrangements. ) Tj ET Q q 0 0 0 rg BT 159.23 452.25 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 54.00 440.25 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 365.40 440.25 Td (ge customers, could materially and adversely ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 428.25 Td (af) Tj ET Q q 0 0 0 rg BT 61.59 428.25 Td (fect our business, financial condition and results of operations.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 407.25 Td (If we cannot successfully implement our business strategy) Tj ET Q q 0 0 0 rg BT 292.25 407.25 Td (, then our business, financial condition and results of ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 395.25 Td (operations could be materially adversely af) Tj ET Q q 0 0 0 rg BT 230.18 395.25 Td (fected.) Tj ET Q BT /F8 10.00 Tf ET q 0 0 0 rg BT 257.11 395.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 374.25 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 54.00 362.25 Td (our control, including: ) Tj ET Q BT /F6 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 90.00 343.05 Td (rising development costs due to customers) Tj ET Q q 0 0 0 rg BT 262.28 343.05 Td ( requirements for more customized instructional materials and assessment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 331.05 Td (programs) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 127.77 331.05 Td (, ) 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 (higher technology costs due to the trend toward delivering more educational content in both digital and traditional ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 299.85 Td (print formats, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 280.65 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 280.65 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 280.65 Td (rising advances for popular authors and market pressures to maintain competitive retail pricing,) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 261.45 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 261.45 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 261.45 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 72.00 242.25 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 242.25 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 242.25 Td (regulatory pressure on textbook prices, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 223.05 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 223.05 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 223.05 Td (increased rental of new and used print books,) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 203.85 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 203.85 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 203.85 Td (market acceptance of new technology products, including online or computer) Tj ET Q q 0 0 0 rg BT 399.14 203.85 Td (-based learning, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 184.65 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 184.65 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 184.65 Td (higher education enrollment trends, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 165.45 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 165.45 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 165.45 Td (changing demographics and preferences of college students and professors that may af) Tj ET Q q 0 0 0 rg BT 436.08 165.45 Td (fect product of) Tj ET Q q 0 0 0 rg BT 494.77 165.45 Td (ferings and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 153.45 Td (revenues, and) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 134.25 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 134.25 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 134.25 Td (consolidation in the retail and wholesale book market.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 116.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 116.25 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 54.00 104.25 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 92.25 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 80.25 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 68.25 Td (strategy) Tj ET Q q 0 0 0 rg BT 85.01 68.25 Td (, our business, financial condition and results of operations could be adversely af) Tj ET Q q 0 0 0 rg BT 408.07 68.25 Td (fected. ) 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 /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 731.25 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 /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 719.25 Td (do not make such investments or do not ef) Tj ET Q q 0 0 0 rg BT 227.16 719.25 Td (fectively make such investments, our business, financial condition and results of ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 707.25 Td (operations may be materially adversely af) Tj ET Q q 0 0 0 rg BT 224.62 707.25 Td (fected.) Tj ET Q BT /F8 10.00 Tf ET q 0 0 0 rg BT 251.54 707.25 Td ( ) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 254.32 707.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 686.25 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 54.00 674.25 Td (significant investments in technology) Tj ET Q q 0 0 0 rg BT 203.05 674.25 Td (, including spending on computer hardware, software, electronic systems, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 662.25 Td (telecommunications infrastructure and digitization of our content. ) Tj ET Q q 0 0 0 rg BT 319.29 662.25 Td (W) Tj ET Q q 0 0 0 rg BT 327.93 662.25 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 54.00 650.25 Td (significant levels. If we do not make such investments or do not ef) Tj ET Q q 0 0 0 rg BT 319.59 650.25 Td (fectively make such investments, our business, financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 638.25 Td (condition and results of operations may be materially adversely af) Tj ET Q q 0 0 0 rg BT 317.90 638.25 Td (fected. In addition, we cannot predict whether ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 626.25 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 54.00 614.25 Td (wholly or partially obsolete. If we are unable to identify) Tj ET Q q 0 0 0 rg BT 277.17 614.25 Td (, develop and successfully integrate such technological innovations, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 602.25 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 464.23 602.25 Td (fectively compete, and, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 590.25 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 54.00 578.25 Td (to the changing competitive environment. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 557.25 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 72.00 536.25 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 275.84 536.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.44 536.25 Td (, we derived approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 451.34 536.25 Td (57.9%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.17 536.25 Td ( of our ) Tj ET Q q 0 0 0 rg BT 505.78 536.25 Td (Adjusted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 524.25 Td (Revenues and approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 172.57 524.25 Td (79.7%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 198.40 524.25 Td ( of our ) Tj ET Q q 0 0 0 rg BT 227.01 524.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 301.73 524.25 Td ( less Pre-Publication Costs in our second and third fiscal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 512.25 Td (quarters, which coincide with the academic calendar) Tj ET Q q 0 0 0 rg BT 263.07 512.25 Td (. ) Tj ET Q q 0 0 0 rg BT 267.89 512.25 Td (This seasonality af) Tj ET Q q 0 0 0 rg BT 342.69 512.25 Td (fects our working capital requirements and hence our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 500.25 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 54.00 488.25 Td (fiscal quarters of our fiscal year) Tj ET Q q 0 0 0 rg BT 180.48 488.25 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 54.00 476.25 Td (business, financial condition and results of operations may be adversely af) Tj ET Q q 0 0 0 rg BT 351.24 476.25 Td (fected. ) Tj ET Q q 0 0 0 rg BT 380.11 476.25 Td (As we continue to migrate our product and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 464.25 Td (service of) Tj ET Q q 0 0 0 rg BT 92.96 464.25 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 54.00 452.25 Td (deferred and recognized ratably over the applicable subscription period. ) Tj ET Q q 0 0 0 rg BT 343.70 452.25 Td (This represents a change from traditional print ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 440.25 Td (products where revenues are typically recognized upon shipment of the materials to our customer) Tj ET Q q 0 0 0 rg BT 443.04 440.25 Td (. Consequently) Tj ET Q q 0 0 0 rg BT 502.38 440.25 Td (, reported ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 428.25 Td (revenues may not be comparable to prior periods as a growing proportion of our revenues are deferred and recognized in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 416.25 Td (subsequent periods. In addition, changes in our customers) Tj ET Q q 0 0 0 rg BT 287.93 416.25 Td ( ordering patterns may impact the comparison of our results in a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 404.25 Td (quarter with the same quarter of the previous year) Tj ET Q q 0 0 0 rg BT 252.96 404.25 Td (, in a quarter with the consecutive quarter or in a fiscal year with the prior ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 392.25 Td (fiscal year) Tj ET Q q 0 0 0 rg BT 94.81 392.25 Td (. ) Tj ET Q q 0 0 0 rg BT 99.63 392.25 Td (The results of a quarter may be materially impacted as our customers may shift the timing of material orders for a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 380.25 Td (number of reasons, including, but not limited to, changes in academic semester start dates and changes in their inventory ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 368.25 Td (levels and inventory management practices. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 347.25 Td (Our intellectual property and proprietary rights may not be adequately protected under current laws which could harm ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 335.25 Td (our competitive position and materially adversely af) Tj ET Q q 0 0 0 rg BT 266.57 335.25 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 72.00 314.25 Td (Our success depends, in part, on our proprietary content. Our products are lar) Tj ET Q q 0 0 0 rg BT 380.89 314.25 Td (gely comprised of intellectual property ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 302.25 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 490.37 302.25 Td (W) Tj ET Q q 0 0 0 rg BT 499.01 302.25 Td (e rely on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 290.25 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 54.00 278.25 Td (However) Tj ET Q q 0 0 0 rg BT 90.25 278.25 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 54.00 266.25 Td (United States, the primary jurisdiction in which we conduct business, are well-established. However) Tj ET Q q 0 0 0 rg BT 454.89 266.25 Td (, we also conduct ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 254.25 Td (business in other countries, such as China and India, where the extent of ef) Tj ET Q q 0 0 0 rg BT 352.90 254.25 Td (fective legal protection for intellectual property ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 242.25 Td (rights is uncertain, and this uncertainty could af) Tj ET Q q 0 0 0 rg BT 244.32 242.25 Td (fect our current performance and future growth. Moreover) Tj ET Q q 0 0 0 rg BT 477.15 242.25 Td (, despite copyright ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 230.25 Td (and trademark protection, third parties may be able to copy) Tj ET Q q 0 0 0 rg BT 289.93 230.25 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 54.00 218.25 Td (from our proprietary rights without our authorization. ) Tj ET Q q 0 0 0 rg BT 270.44 218.25 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 54.00 206.25 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 54.00 194.25 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 54.00 182.25 Td (rights. ) Tj ET Q q 0 0 0 rg BT 81.60 182.25 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 54.00 170.25 Td (content or technology) Tj ET Q q 0 0 0 rg BT 140.55 170.25 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 72.00 151.05 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 151.05 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 151.05 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 90.00 139.05 Td (prohibiting it, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 119.85 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 119.85 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 119.85 Td (policing unauthorized use of our intellectual property can be dif) Tj ET Q q 0 0 0 rg BT 345.01 119.85 Td (ficult, expensive and time-consuming \(which may ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 107.85 Td (divert our management from implementing our business strategy\), 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 95.85 Td (any unauthorized use, and ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 76.65 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 76.65 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 76.65 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 76.65 Td (fer little or no ef) Tj ET Q q 0 0 0 rg BT 445.92 76.65 Td (fective protection for our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 64.65 Td (proprietary technologies. ) 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 72.00 731.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 731.10 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 54.00 719.10 Td (maintain our intellectual property) Tj ET Q q 0 0 0 rg BT 187.47 719.10 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 54.00 707.10 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 54.00 695.10 Td (product sales and reduce our revenue, thereby adversely af) Tj ET Q q 0 0 0 rg BT 288.43 695.10 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 54.00 683.10 Td (our competitive position.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 662.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 662.10 Td (e may face intellectual property infringement claims that could be time-consuming and costly to defend and could result ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 650.10 Td (in our loss of significant rights.) Tj ET Q BT /F8 10.00 Tf ET q 0 0 0 rg BT 183.48 650.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 629.10 Td (Litigation regarding copyrights and other intellectual property rights is extensive in the publishing industry) Tj ET Q q 0 0 0 rg BT 499.32 629.10 Td (, including ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 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 54.00 605.10 Td (products. ) Tj ET Q q 0 0 0 rg BT 93.26 605.10 Td (W) Tj ET Q q 0 0 0 rg BT 101.90 605.10 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 54.00 593.10 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 72.00 575.10 Td (Litigation is expensive and time-consuming and could divert management) Tj ET Q q 0 0 0 rg BT 371.37 575.10 Td (s attention from our business and could have ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 Td (an adverse ef) Tj ET Q q 0 0 0 rg BT 106.56 563.10 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 54.00 551.10 Td (against us, our customers or our third-party intellectual property providers, we may be required to pay substantial damages to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.10 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 54.00 527.10 Td (property) Tj ET Q q 0 0 0 rg BT 87.23 527.10 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 483.74 527.10 Td (All of these ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.10 Td (requirements could damage our business. ) Tj ET Q q 0 0 0 rg BT 221.55 515.10 Td (W) Tj ET Q q 0 0 0 rg BT 230.19 515.10 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 54.00 503.10 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 450.36 503.10 Td (fect on our business, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 491.10 Td (financial condition and results of operations. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 470.10 Td (Disputes with our customers regarding infringement and piracy of intellectual property may result in a material adverse ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 458.10 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 458.10 Td (fect on our results of operations.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 440.10 Td (In connection with defending our intellectual property rights and combating piracy) Tj ET Q q 0 0 0 rg BT 402.36 440.10 Td (, we may have disputes with our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 428.10 Td (customers which may require us to institute expensive and time consuming litigation. ) Tj ET Q q 0 0 0 rg BT 397.92 428.10 Td (These disputes could divert our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 416.10 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 54.00 404.10 Td (may have a material adverse ef) Tj ET Q q 0 0 0 rg BT 177.92 404.10 Td (fect on our consolidated results of operations.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 383.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 383.10 Td (e may not be willing or able to maintain the availability of information obtained through licensing arrangements or the ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 371.10 Td (terms of our licensing arrangements may change, which may reduce our profit margins or our market share. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 350.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 350.10 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 54.00 338.10 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 466.18 338.10 Td (gins may be reduced if ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 326.10 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 54.00 314.10 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 54.00 302.10 Td (decline and as a result we may experience a reduction in our market share, and our business, financial condition and results of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 290.10 Td (operations may be materially adversely af) Tj ET Q q 0 0 0 rg BT 221.25 290.10 Td (fected. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 269.10 Td (Our business relies on our hosting facilities and electronic delivery systems and any failures or disruptions may adversely ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 257.10 Td (af) Tj ET Q q 0 0 0 rg BT 62.15 257.10 Td (fect our ability to serve our customers. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 236.10 Td (As we continue to drive our digital business, our dependence on the capacity) Tj ET Q q 0 0 0 rg BT 378.21 236.10 Td (, reliability and security of our hosting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 224.10 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 54.00 212.10 Td (customers continues to grow) Tj ET Q q 0 0 0 rg BT 168.05 212.10 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 54.00 200.10 Td (ins, and similar disruptions from unauthorized tampering or hacking, human error) Tj ET Q q 0 0 0 rg BT 380.74 200.10 Td (, national disasters, power loss, or computer ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 188.10 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 530.53 188.10 Td (Any ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 176.10 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 438.98 176.10 Td (W) Tj ET Q q 0 0 0 rg BT 447.62 176.10 Td (e do not have a back-up ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 164.10 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 54.00 152.10 Td (back-up systems or facilities occur) Tj ET Q q 0 0 0 rg BT 192.44 152.10 Td (, our ability to distribute our products and services ef) Tj ET Q q 0 0 0 rg BT 403.88 152.10 Td (fectively and to serve our customers ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 140.10 Td (may be adversely af) Tj ET Q q 0 0 0 rg BT 134.06 140.10 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 54.00 128.10 Td (customers. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 107.10 Td (T) Tj ET Q q 0 0 0 rg BT 59.19 107.10 Td (echnology failure could result in liability) Tj ET Q q 0 0 0 rg BT 226.88 107.10 Td (, loss of revenue and reputational harm.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 89.10 Td (T) Tj ET Q q 0 0 0 rg BT 77.41 89.10 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 77.10 Td (software functionality) Tj ET Q q 0 0 0 rg BT 141.38 77.10 Td (, hosting and/or business system infrastructure, and connectivity) Tj ET Q q 0 0 0 rg BT 397.62 77.10 Td (.) Tj ET Q q 0 0 0 rg BT 402.44 77.10 Td (T) Tj ET Q q 0 0 0 rg BT 407.85 77.10 Td (o meet the demand for innovation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 65.10 Td (and for us to maintain our competitive advantage in the rapidly changing digital market, we generally deliver and launch ) 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 /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (products more quickly) Tj ET Q q 0 0 0 rg BT 143.33 731.10 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 54.00 719.10 Td (remediation periods or digital product performance issues may result in liability) Tj ET Q q 0 0 0 rg BT 372.71 719.10 Td (, loss of revenue and reputational harm. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 698.10 Td (A) Tj ET Q q 0 0 0 rg BT 60.12 698.10 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 540.22 698.10 Td ( ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 686.10 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 /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 674.10 Td (reputation.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 653.10 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 54.00 641.10 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 457.56 641.10 Td (W) Tj ET Q q 0 0 0 rg BT 466.20 641.10 Td (e are driving more ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 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 54.00 617.10 Td (credit card sales, we transmit and store confidential credit and debit card information. ) Tj ET Q q 0 0 0 rg BT 398.41 617.10 Td (W) Tj ET Q q 0 0 0 rg BT 407.05 617.10 Td (e also have access to, collect or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (maintain private or confidential information regarding our customers, employees, and our business. ) Tj ET Q q 0 0 0 rg BT 453.99 605.10 Td (The complexity of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 Td (information technology systems makes them vulnerable to a cyberattack, malicious intrusion, and other significant ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.10 Td (disruptions. Our information systems require an ongoing commitment of significant resources to maintain, protect, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.10 Td (enhance existing systems and develop new systems that meet our customer's needs while also providing security) Tj ET Q q 0 0 0 rg BT 503.11 569.10 Td (, privacy) Tj ET Q q 0 0 0 rg BT 537.44 569.10 Td (, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.10 Td (compliance with ever) Tj ET Q q 0 0 0 rg BT 139.87 557.10 Td (-changing threats, regulatory landscape, and customer patterns. ) Tj ET Q q 0 0 0 rg BT 394.60 557.10 Td (Third party cyberattacks, malicious ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.10 Td (intrusions, physical or electronic, or other significant disruptions could lead to interruptions and delays in customer ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.10 Td (processing or loss of data. ) Tj ET Q q 0 0 0 rg BT 160.09 533.10 Td (Any such event for which we are, or perceived to be, responsible, in whole or in part, could subject ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.10 Td (us 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 449.93 521.10 Td (. ) Tj ET Q q 0 0 0 rg BT 454.38 521.10 Td (Any imposition of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.10 Td (liability) Tj ET Q q 0 0 0 rg BT 84.46 509.10 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 54.00 497.10 Td (operating results. ) Tj ET Q q 0 0 0 rg BT 125.19 497.10 Td (W) Tj ET Q q 0 0 0 rg BT 133.83 497.10 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 54.00 485.10 Td (breaches or improve our technology infrastructure against further security related incidents. ) Tj ET Q q 0 0 0 rg BT 422.20 485.10 Td (As cyber security related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.10 Td (incidents continue to evolve, and regulatory focus on these issues continues to expand, additional investments may be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.10 Td (required.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 440.10 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 72.00 419.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 419.10 Td (e are subject to a wide array of dif) Tj ET Q q 0 0 0 rg BT 217.06 419.10 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 54.00 407.10 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 54.00 395.10 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 54.00 383.10 Td (are critical assets for our Company) Tj ET Q q 0 0 0 rg BT 193.02 383.10 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 54.00 371.10 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 54.00 359.10 Td (products and adversely af) Tj ET Q q 0 0 0 rg BT 156.28 359.10 Td (fect our relationship with teachers, educators and institutions. ) Tj ET Q q 0 0 0 rg BT 404.37 359.10 Td (This reaction may have an immediate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 347.10 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 /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 326.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 326.10 Td (e have and may continue to outsource certain functions to third parties and these arrangements may not be successful, ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 314.10 Td (thereby resulting in increased costs, or may materially adversely af) Tj ET Q q 0 0 0 rg BT 328.24 314.10 Td (fect service levels, results of operations and our ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 302.10 Td (financial reporting. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 281.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 281.10 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 444.79 281.10 Td (fective basis. ) Tj ET Q q 0 0 0 rg BT 499.31 281.10 Td (These services ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.10 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 54.00 257.10 Td (related to general accounting, fixed asset and accounts payable functions. ) Tj ET Q q 0 0 0 rg BT 349.82 257.10 Td (W) Tj ET Q q 0 0 0 rg BT 358.45 257.10 Td (e do not ultimately control the performance of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.10 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 54.00 233.10 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 539.26 233.10 Td (fect ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 221.10 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 54.00 209.10 Td (timely manner) Tj ET Q q 0 0 0 rg BT 111.49 209.10 Td (.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 188.10 Td (If we do not adequately manage and develop our operational and managerial systems and processes, our ability to manage ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 176.10 Td (and grow our business may be harmed. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 155.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 155.10 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 54.00 143.10 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 143.10 Td (fectively) Tj ET Q q 0 0 0 rg BT 95.92 143.10 Td (. ) Tj ET Q q 0 0 0 rg BT 100.37 143.10 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 54.00 131.10 Td (adversely af) Tj ET Q q 0 0 0 rg BT 102.40 131.10 Td (fect our business, financial condition and results of operations.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 110.10 Td (Increases in the cost of paper and other operating costs could negatively af) Tj ET Q q 0 0 0 rg BT 361.59 110.10 Td (fect our results. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 89.10 Td (Paper is the principal raw material used in our business. ) Tj ET Q q 0 0 0 rg BT 297.22 89.10 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 77.10 Td (increase in paper prices. ) Tj ET Q q 0 0 0 rg BT 152.94 77.10 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 65.10 Td (demand for paper could af) Tj ET Q q 0 0 0 rg BT 159.33 65.10 Td (fect delivery times and prices. Paper suppliers may consolidate and as a result, there may be future ) 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 (shortfalls in supplies necessary to meet the demands of the entire marketplace. ) Tj ET Q q 0 0 0 rg BT 370.10 731.10 Td (W) Tj ET Q q 0 0 0 rg BT 378.74 731.10 Td (e may need to find alternative sources for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (paper from time to time. ) Tj ET Q q 0 0 0 rg BT 153.79 719.10 Td (W) Tj ET Q q 0 0 0 rg BT 162.43 719.10 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 54.00 707.10 Td (material increase in the cost of paper may have an adverse ef) Tj ET Q q 0 0 0 rg BT 297.31 707.10 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 54.00 695.10 Td (operations. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 677.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 677.10 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 501.98 677.10 Td (fect our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (operating mar) Tj ET Q q 0 0 0 rg BT 109.63 665.10 Td (gins. Higher ener) Tj ET Q q 0 0 0 rg BT 178.59 665.10 Td (gy costs and other factors af) Tj ET Q q 0 0 0 rg BT 290.88 665.10 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 54.00 653.10 Td (products could adversely af) Tj ET Q q 0 0 0 rg BT 164.06 653.10 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 54.00 641.10 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 517.57 641.10 Td (fect our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (business, financial condition and results of operations. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 608.10 Td (Increased availability of lower priced international versions of our products in the domestic market or higher prices for ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 596.10 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 72.00 575.10 Td (On March 19, 2013, the United States Supreme Court, in Kirtsaeng v) Tj ET Q q 0 0 0 rg BT 347.97 575.10 Td (. John ) Tj ET Q q 0 0 0 rg BT 374.18 575.10 Td (W) Tj ET Q q 0 0 0 rg BT 383.22 575.10 Td (iley & Sons, Inc. reversed existing case law ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 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 54.00 551.10 Td (\(Foreign-Manufactured ) Tj ET Q q 0 0 0 rg BT 154.61 551.10 Td (V) Tj ET Q q 0 0 0 rg BT 160.72 551.10 Td (ersions\), without the copyright owner) Tj ET Q q 0 0 0 rg BT 315.78 551.10 Td () Tj ET Q q 0 0 0 rg BT 318.56 551.10 Td (s consent. ) Tj ET Q q 0 0 0 rg BT 360.32 551.10 Td (The Kirtsaeng ruling could cause us to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.10 Td (experience a loss in domestic sales if increased units of Foreign-Manufactured ) Tj ET Q q 0 0 0 rg BT 370.10 539.10 Td (V) Tj ET Q q 0 0 0 rg BT 376.22 539.10 Td (ersions and other international versions are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.10 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 431.53 527.10 Td (ferings. Further) Tj ET Q q 0 0 0 rg BT 493.34 527.10 Td (, we may ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.10 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 54.00 503.10 Td (domestically due to increased competition from lower priced Foreign-Manufactured ) Tj ET Q q 0 0 0 rg BT 392.87 503.10 Td (V) Tj ET Q q 0 0 0 rg BT 398.99 503.10 Td (ersions or internationally due to lower ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 491.10 Td (demand in overseas markets 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 54.00 479.10 Td (adversely af) Tj ET Q q 0 0 0 rg BT 102.40 479.10 Td (fected.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 458.10 Td (Conducting and expanding our operations outside the United States involves special challenges that we may not be able to ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 446.10 Td (meet and that may adversely af) Tj ET Q q 0 0 0 rg BT 181.29 446.10 Td (fect our business.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 425.10 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 411.42 425.10 Td (geted certain markets outside North ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 413.10 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 281.70 413.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 345.29 413.10 Td (, approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 410.55 413.10 Td (79%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 428.88 413.10 Td ( of our ) Tj ET Q q 0 0 0 rg BT 457.49 413.10 Td (Adjusted Revenues were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 401.10 Td (from the United States and approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 223.96 401.10 Td (21%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 242.29 401.10 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 54.00 389.10 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 72.00 369.90 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 369.90 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 369.90 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 72.00 350.70 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 350.70 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 350.70 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 72.00 331.50 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 331.50 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 331.50 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 90.00 319.50 Td (markets,) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 300.30 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 300.30 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 72.00 281.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 281.10 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 281.10 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 72.00 261.90 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 261.90 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 261.90 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 72.00 242.70 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 242.70 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 242.70 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 72.00 223.50 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 223.50 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 223.50 Td (lack of recognition of our brands, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 204.30 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 204.30 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 204.30 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 72.00 185.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 185.10 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 185.10 Td (instability of international economies and governments, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 165.90 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 165.90 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 165.90 Td (changes in legal, regulatory and tax requirements, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 146.70 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 146.70 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 146.70 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 72.00 127.50 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 127.50 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 127.50 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 72.00 108.30 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 108.30 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 108.30 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 96.30 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 96.30 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 78.30 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 78.30 Td (e are also subject to the United States Foreign Corrupt Practices ) Tj ET Q q 0 0 0 rg BT 338.07 78.30 Td (Act and the United Kingdom ) Tj ET Q q 0 0 0 rg BT 456.11 78.30 Td (Anti-Bribery ) Tj ET Q q 0 0 0 rg BT 509.71 78.30 Td (Act of 2010 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 66.30 Td (\(the UK ) Tj ET Q q 0 0 0 rg BT 92.88 66.30 Td (Anti-Bribery ) Tj ET Q q 0 0 0 rg BT 146.48 66.30 Td (Act\), which generally prohibit companies and their intermediaries from making payments to foreign ) 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 /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 731.10 Td (ficials, and with respect to the UK ) Tj ET Q q 0 0 0 rg BT 201.00 731.10 Td (Anti-Bribery ) Tj ET Q q 0 0 0 rg BT 254.61 731.10 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 54.00 719.10 Td (keeping business, and similar requirements in other jurisdictions. ) Tj ET Q q 0 0 0 rg BT 316.55 719.10 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 54.00 707.10 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 54.00 695.10 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 54.00 683.10 Td (will depend, in part, on our ability to anticipate and ef) Tj ET Q q 0 0 0 rg BT 269.31 683.10 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 54.00 671.10 Td (outside the United States.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 650.10 Td (Fluctuations between foreign currencies and the United States dollar could have an unfavorable impact on our financial ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 638.10 Td (results. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 617.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 617.10 Td (e derived approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 180.32 617.10 Td (21%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 198.65 617.10 Td ( of our ) Tj ET Q q 0 0 0 rg BT 227.26 617.10 Td (Adjusted Revenues during the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 420.81 617.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.41 617.10 Td ( from our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (international operations. ) Tj ET Q q 0 0 0 rg BT 153.51 605.10 Td (The financial condition and results of operations of our international operations are primarily ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 Td (measured using the foreign currency in the jurisdiction of operation of such business as the functional currency) Tj ET Q q 0 0 0 rg BT 497.66 593.10 Td (. ) Tj ET Q q 0 0 0 rg BT 502.11 593.10 Td (As a result, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.10 Td (we are exposed to currency fluctuations both in receiving cash from our international operations and in translating our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.10 Td (financial results back into United States dollars. ) Tj ET Q q 0 0 0 rg BT 247.29 569.10 Td (Assets and liabilities of our international operations are translated at the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.10 Td (exchange rate in ef) Tj ET Q q 0 0 0 rg BT 129.61 557.10 Td (fect at each balance sheet date. Our income statement accounts are translated at the average rate of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.10 Td (exchange during the period. ) Tj ET Q q 0 0 0 rg BT 167.57 545.10 Td (A) Tj ET Q q 0 0 0 rg BT 174.24 545.10 Td ( strengthening of the United States dollar against the relevant foreign currency reduces the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.10 Td (amount of income we recognize from our international operations.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 515.10 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 54.00 503.10 Td (in currencies other than the United States dollar) Tj ET Q q 0 0 0 rg BT 244.37 503.10 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 54.00 491.10 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 428.85 491.10 Td (. ) Tj ET Q q 0 0 0 rg BT 433.67 491.10 Td (The results of our international ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 479.10 Td (operations may be adversely af) Tj ET Q q 0 0 0 rg BT 178.21 479.10 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 54.00 467.10 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 72.00 449.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 449.10 Td (e cannot predict the ef) Tj ET Q q 0 0 0 rg BT 169.30 449.10 Td (fects of further exchange rate fluctuations on our future operating results. ) Tj ET Q q 0 0 0 rg BT 464.19 449.10 Td (As exchange rates ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.10 Td (vary) Tj ET Q q 0 0 0 rg BT 71.12 437.10 Td (, our results of operations and profitability may be materially adversely impacted. ) Tj ET Q q 0 0 0 rg BT 399.73 437.10 Td (The risks we face in foreign currency ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 425.10 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 54.00 413.10 Td (could adversely af) Tj ET Q q 0 0 0 rg BT 127.12 413.10 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 377.61 413.10 Td ( ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 392.10 Td (If we are unable to identify) Tj ET Q q 0 0 0 rg BT 165.01 392.10 Td (, complete and successfully integrate acquisitions, our ability to grow our business may be ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 380.10 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 72.00 359.10 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 322.23 359.10 Td ( ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 339.90 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 339.90 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 339.90 Td (our ability to find suitable businesses to acquire at af) Tj ET Q q 0 0 0 rg BT 300.60 339.90 Td (fordable valuations or on other acceptable terms, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 320.70 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 320.70 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 320.70 Td (competition for acquisition tar) Tj ET Q q 0 0 0 rg BT 211.18 320.70 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 90.00 308.70 Td (acquisition tar) Tj ET Q q 0 0 0 rg BT 146.75 308.70 Td (gets, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 289.50 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 289.50 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 289.50 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 72.00 270.30 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 270.30 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 270.30 Td (the diversion of management) Tj ET Q q 0 0 0 rg BT 209.13 270.30 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 72.00 251.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 251.10 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 251.10 Td (our inability to realize expected cost savings and syner) Tj ET Q q 0 0 0 rg BT 308.64 251.10 Td (gies, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 231.90 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 231.90 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 231.90 Td (expenses, delays and dif) Tj ET Q q 0 0 0 rg BT 187.01 231.90 Td (ficulties of integrating acquired businesses into our existing business structure, and) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 212.70 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 212.70 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 212.70 Td (dif) Tj ET Q q 0 0 0 rg BT 100.93 212.70 Td (ficulty in retaining key customers and management personnel.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 349.74 212.70 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 194.70 Td (If we are unable to continue to acquire and ef) Tj ET Q q 0 0 0 rg BT 253.12 194.70 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 54.00 182.70 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 476.19 182.70 Td (fect our business, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 170.70 Td (financial condition and results of operations.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 232.29 170.70 Td ( ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 149.70 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 149.70 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 466.61 149.70 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 128.70 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 128.70 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 128.70 Td (, we had goodwill of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 245.03 128.70 Td ($1,633.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 311.42 128.70 Td ( and identifiable intangible assets, net, of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.76 128.70 Td ($1,009.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.15 128.70 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 116.70 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 54.00 104.70 Td (perform impairment tests on our goodwill. ) Tj ET Q q 0 0 0 rg BT 226.29 104.70 Td (W) Tj ET Q q 0 0 0 rg BT 234.93 104.70 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 92.70 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 80.70 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 68.70 Td (Accounting Standards Board \(F) Tj ET Q q 0 0 0 rg BT 184.62 68.70 Td (ASB\), 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 56.70 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 56.70 Td (A) Tj ET Q q 0 0 0 rg BT 498.30 56.70 Td ( goodwill ) 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 (impairment is now the amount by which a reporting unit) Tj ET Q q 0 0 0 rg BT 282.57 731.10 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 54.00 719.10 Td (amount of goodwill. For the fiscal year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 212.85 719.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 232.85 719.10 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 54.00 707.10 Td (exceeded their respective carrying values.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 689.10 Td (The estimated fair value of our Learning reporting unit exceeded its carrying value by 5% and had $1.3 billion of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.10 Td (goodwill as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 113.72 677.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 177.32 677.10 Td (. ) Tj ET Q q 0 0 0 rg BT 182.13 677.10 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 54.00 665.10 Td (revenue growth, selling mar) Tj ET Q q 0 0 0 rg BT 166.01 665.10 Td (gins, other operating expenditures, projected capex, the discount rate used to present value future ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (cash flows and terminal growth rates. ) Tj ET Q q 0 0 0 rg BT 206.28 653.10 Td (The Company performed a sensitivity analysis of its significant assumptions used to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (determine the fair value of the Learning reporting unit and determined that a more than nominal change to its significant ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (assumptions would impact its conclusion. If actual results dif) Tj ET Q q 0 0 0 rg BT 298.50 629.10 Td (fer from the projections and assumptions used in the calculation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (of the Learning reporting unit fair value, we could be required to record future non-cash impairment char) Tj ET Q q 0 0 0 rg BT 473.93 617.10 Td (ges. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 599.10 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 54.00 587.10 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 54.00 575.10 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 54.00 563.10 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 54.00 551.10 Td (down to its estimated fair value. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 533.10 Td (If expectations for revenues and cash flows decline or if market 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 54.00 521.10 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 440.08 521.10 Td (ges for impairment. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.10 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 505.64 509.10 Td (ges, which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.10 Td (could adversely impact our business, financial condition and results of operations.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 476.10 Td (Consolidation in the markets 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 445.40 476.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 455.10 Td (Some of the markets in which we operate have experienced consolidation. In particular) Tj ET Q q 0 0 0 rg BT 420.08 455.10 Td (, the combinations of traditional ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.10 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 54.00 431.10 Td (Similarly) Tj ET Q q 0 0 0 rg BT 90.57 431.10 Td (, the consolidation of book retailers has increased our reliance on certain customers. ) Tj ET Q q 0 0 0 rg BT 428.33 431.10 Td (W) Tj ET Q q 0 0 0 rg BT 436.96 431.10 Td (e cannot predict with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.10 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 500.91 419.10 Td (These ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.10 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 54.00 395.10 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 54.00 383.10 Td (operations) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 95.66 383.10 Td (.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 362.10 Td (Changes in U.S. federal, state and local or foreign tax law) Tj ET Q q 0 0 0 rg BT 292.81 362.10 Td (, interpretations of existing tax law) Tj ET Q q 0 0 0 rg BT 435.79 362.10 Td (, or adverse determinations ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 350.10 Td (by tax authorities, could significantly af) Tj ET Q q 0 0 0 rg BT 217.72 350.10 Td (fect the Company and its shareholders and af) Tj ET Q q 0 0 0 rg BT 404.49 350.10 Td (fect our financial condition or ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 338.10 Td (results of operations.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 317.10 Td (As a global company) Tj ET Q q 0 0 0 rg BT 156.05 317.10 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 54.00 305.10 Td (countries and jurisdictions. ) Tj ET Q q 0 0 0 rg BT 163.99 305.10 Td (As a result, our ef) Tj ET Q q 0 0 0 rg BT 235.17 305.10 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 54.00 293.10 Td (various places in which we operate. Our ef) Tj ET Q q 0 0 0 rg BT 224.86 293.10 Td (fective tax rate, however) Tj ET Q q 0 0 0 rg BT 323.30 293.10 Td (, may be dif) Tj ET Q q 0 0 0 rg BT 370.88 293.10 Td (ferent than experienced in the past due to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.10 Td (numerous factors, including tax reform, such as the recent ) Tj ET Q q 0 0 0 rg BT 288.46 281.10 Td (T) Tj ET Q q 0 0 0 rg BT 293.87 281.10 Td (ax Cuts and Jobs ) Tj ET Q q 0 0 0 rg BT 363.32 281.10 Td (Act \(T) Tj ET Q q 0 0 0 rg BT 393.44 281.10 Td (ax ) Tj ET Q q 0 0 0 rg BT 404.83 281.10 Td (Act\), changes in the mix of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.10 Td (profitability) Tj ET Q q 0 0 0 rg BT 101.12 269.10 Td (, the results of examinations of our tax filings, and changes in accounting for income taxes.) Tj ET Q q 0 0 0 rg BT 467.41 269.10 Td (Any of these factors ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.10 Td (could cause us to experience an ef) Tj ET Q q 0 0 0 rg BT 190.42 257.10 Td (fective tax rate significantly dif) Tj ET Q q 0 0 0 rg BT 315.74 257.10 Td (ferent from previous periods or our current expectations.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 236.10 Td (The specific possible impacts of the ) Tj ET Q q 0 0 0 rg BT 217.89 236.10 Td (T) Tj ET Q q 0 0 0 rg BT 223.30 236.10 Td (ax ) Tj ET Q q 0 0 0 rg BT 234.69 236.10 Td (Act, includes among other things, \(1\) a corporate income tax rate reduction to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 224.10 Td (21%, \(2\) limitations of the tax deduction for interest expense to 30% of adjusted earnings, \(3\) limitations of the deduction for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 212.10 Td (net operating losses to 80% of current year taxable income, \(4\) one time taxation of of) Tj ET Q q 0 0 0 rg BT 398.70 212.10 Td (fshore earnings, \(5\) potential ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 200.10 Td (elimination of U.S. tax on foreign earnings, \(6\) immediate deductions for certain new investments, \(7\) modifies and/or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 188.10 Td (repeals many business deductions and credits and \(8\) puts into ef) Tj ET Q q 0 0 0 rg BT 313.76 188.10 Td (fect the migration from a worldwide system of taxation to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 176.10 Td (a 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 54.00 164.10 Td (law is uncertain and our business and financial condition could be adversely af) Tj ET Q q 0 0 0 rg BT 368.72 164.10 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 54.00 152.10 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 449.89 152.10 Td (. ) Tj ET Q q 0 0 0 rg BT 454.71 152.10 Td (The impact of this tax ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 140.10 Td (reform on holders of our common stock is uncertain and could materially adversely af) Tj ET Q q 0 0 0 rg BT 397.88 140.10 Td (fect our business, financial condition ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 128.10 Td (and results of operations.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 107.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 107.10 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 86.10 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 74.10 Td (employees with the experience and capabilities necessary to support our needs. ) Tj ET Q q 0 0 0 rg BT 372.60 74.10 Td (The loss of any of the key employees or the ) 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 /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (failure to attract and retain suitably skilled new employees could adversely af) Tj ET Q q 0 0 0 rg BT 363.43 731.10 Td (fect our business, financial condition and our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (results of operations.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 137.59 719.10 Td ( ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 698.10 Td (There are risks associated with our indebtedness.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 677.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 677.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 677.10 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 518.52 677.10 Td ($620.0 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 665.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 102.33 665.10 Td ($1,669.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 168.72 665.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 221.38 665.10 Td (, excluding amortization of fees and discount. ) Tj ET Q q 0 0 0 rg BT 406.43 665.10 Td (W) Tj ET Q q 0 0 0 rg BT 415.06 665.10 Td (e also have an asset backed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (revolving credit facility with a maximum availability of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 279.49 653.10 Td ($250.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 338.38 653.10 Td (. ) Tj ET Q q 0 0 0 rg BT 342.83 653.10 Td (A) Tj ET Q q 0 0 0 rg BT 349.31 653.10 Td (vailability is recalculated monthly and equals the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (sum of eligible accounts receivable and inventory) Tj ET Q q 0 0 0 rg BT 252.17 641.10 Td (, as defined in the asset based revolving credit facility agreement. ) Tj ET Q q 0 0 0 rg BT 515.68 641.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 629.10 Td (, we had ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 153.70 629.10 Td ($1) Tj ET Q q 0 0 0 rg BT 163.33 629.10 Td (15.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 212.22 629.10 Td ( of availability) Tj ET Q q 0 0 0 rg BT 269.88 629.10 Td (, net of letters of credit. ) Tj ET Q q 0 0 0 rg BT 365.41 629.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.85 629.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.45 629.10 Td (, no borrowings were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (outstanding under this revolving credit facility) Tj ET Q q 0 0 0 rg BT 239.14 617.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 599.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 599.10 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 511.73 599.10 Td (ferings of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.10 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 54.00 575.10 Td (including, without limitation, any of the following: ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 555.90 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 555.90 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 555.90 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 72.00 536.70 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 536.70 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 536.70 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 90.00 524.70 Td (conditions, as well as to competitive pressure;) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 505.50 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 505.50 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 505.50 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 90.00 493.50 Td (borrowing costs on refinanced or new debt; ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 474.30 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 474.30 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 474.30 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 90.00 462.30 Td (corporate and other purposes may be limited; and) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 443.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 443.10 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 443.10 Td (our flexibility in planning for) Tj ET Q q 0 0 0 rg BT 206.80 443.10 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 72.00 425.10 Td (Our ability to make payments of principal of and interest on our indebtedness depends upon our future performance, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 413.10 Td (which 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 505.35 413.10 Td (fecting our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 401.10 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 54.00 389.10 Td (suf) Tj ET Q q 0 0 0 rg BT 66.04 389.10 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 72.00 369.90 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 369.90 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 369.90 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 72.00 350.70 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 350.70 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 350.70 Td (seek additional financing in the debt markets;) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 331.50 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 331.50 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 331.50 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 72.00 312.30 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 312.30 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 312.30 Td (sell selected assets; or) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 293.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 293.10 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 293.10 Td (reduce or delay planned capital or operating expenditures.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 275.10 Td (Such measures might not be suf) Tj ET Q q 0 0 0 rg BT 199.30 275.10 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 54.00 263.10 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 54.00 251.10 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 54.00 239.10 Td (might not be available on economically favorable terms or at all.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 218.10 Td (Our internal controls over financial reporting are comparable but not identical to the requirements under the Sarbanes-) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 206.10 Td (Oxley ) Tj ET Q q 0 0 0 rg BT 80.01 206.10 Td (Act of 2002.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 185.10 Td (Because we are not a public company) Tj ET Q q 0 0 0 rg BT 222.40 185.10 Td (, we are not subject to the Sarbanes-Oxley ) Tj ET Q q 0 0 0 rg BT 393.18 185.10 Td (Act of 2002, which requires public ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 173.10 Td (companies to have and maintain ef) Tj ET Q q 0 0 0 rg BT 192.94 173.10 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 54.00 161.10 Td (information, and have management review the ef) Tj ET Q q 0 0 0 rg BT 250.13 161.10 Td (fectiveness of those controls on a quarterly basis. ) Tj ET Q q 0 0 0 rg BT 449.06 161.10 Td (The Sarbanes-Oxley ) Tj ET Q q 0 0 0 rg BT 532.92 161.10 Td (Act ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 149.10 Td (also generally requires public companies to have and maintain ef) Tj ET Q q 0 0 0 rg BT 313.45 149.10 Td (fective internal controls over financial reporting to provide ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 137.10 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 54.00 125.10 Td (management review the ef) Tj ET Q q 0 0 0 rg BT 159.60 125.10 Td (fectiveness of those controls on an annual basis \(and have the independent auditor attest to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 113.10 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 113.10 Td (fectiveness of such internal controls\). ) Tj ET Q q 0 0 0 rg BT 213.58 113.10 Td (W) Tj ET Q q 0 0 0 rg BT 222.22 113.10 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 54.00 101.10 Td (have procedures in place at all or that are as ef) Tj ET Q q 0 0 0 rg BT 239.28 101.10 Td (fective as those maintained by public companies.) 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 /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 731.25 Td (e continue to be controlled by ) Tj ET Q q 0 0 0 rg BT 185.66 731.25 Td (Apax Partners, L.P) Tj ET Q q 0 0 0 rg BT 263.81 731.25 Td (., KKR ) Tj ET Q q 0 0 0 rg BT 293.45 731.25 Td (Asset Management, and Searchlight Capital Partners \(together) Tj ET Q q 0 0 0 rg BT 552.65 731.25 Td (, ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 719.25 Td (the Principal Equityholders\), and the interests of the Principal Equityholders may conflict with the interests of other ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 707.25 Td (stockholders.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 686.25 Td (The Principal Equityholders control CL) Tj ET Q q 0 0 0 rg BT 230.49 686.25 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 54.00 674.25 Td (majority of our directors. ) Tj ET Q q 0 0 0 rg BT 156.48 674.25 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 54.00 662.25 Td (transactions such as mer) Tj ET Q q 0 0 0 rg BT 151.29 662.25 Td (gers, tender of) Tj ET Q q 0 0 0 rg BT 208.58 662.25 Td (fers and the sale of all or substantially all of our assets. ) Tj ET Q q 0 0 0 rg BT 430.29 662.25 Td (The interests of the Principal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 650.25 Td (Equityholders and their respective af) Tj ET Q q 0 0 0 rg BT 200.99 650.25 Td (filiates could conflict with or dif) Tj ET Q q 0 0 0 rg BT 330.49 650.25 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 54.00 638.25 Td (example, the concentration of ownership held by the Principal Equityholders could delay) Tj ET Q q 0 0 0 rg BT 409.36 638.25 Td (, defer or prevent a change of control ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 626.25 Td (of our company or impede a mer) Tj ET Q q 0 0 0 rg BT 184.88 626.25 Td (ger) Tj ET Q q 0 0 0 rg BT 197.25 626.25 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 54.00 614.25 Td (encounter financial dif) Tj ET Q q 0 0 0 rg BT 144.33 614.25 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 54.00 602.25 Td (certain of their respective af) Tj ET Q q 0 0 0 rg BT 165.98 602.25 Td (filiates as equityholders might conflict with the interests of holders of our debt. ) Tj ET Q q 0 0 0 rg BT 484.62 602.25 Td (The Principal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 590.25 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 54.00 578.25 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 72.00 560.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 121.90 560.25 Td (, our Principal Equityholders are in the business of making investments in companies and may) Tj ET Q q 0 0 0 rg BT 498.68 560.25 Td (, from time to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 548.25 Td (time, acquire and hold interests in businesses that compete, directly or indirectly with us. ) Tj ET Q q 0 0 0 rg BT 411.79 548.25 Td (The Principal Equityholders may ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 536.25 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 54.00 524.25 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 54.00 512.25 Td (of our equity) Tj ET Q q 0 0 0 rg BT 105.01 512.25 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 500.56 512.25 Td (fectively ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 500.25 Td (control our ability to enter into corporate transactions.) 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 /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 third quarter of fiscal year 2019. ) Tj ET Q q 0 0 0 rg BT 490.39 695.25 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 materially important owned and leased properties as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 353.62 683.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.22 683.25 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 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 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 239.20 402.42 Td (12/31/2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.75 402.42 Td (27,491) 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 10.00 Tf ET q 0 0 0 rg BT 54.00 305.25 Td (* During the third quarter of fiscal year 2018, we signed a 10-year lease for a new corporate headquarters and we expect) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.25 Td ( ) Tj ET Q q 0 0 0 rg BT 63.00 293.25 Td (to vacate our current headquarters by the end of third quarter of fiscal year 2019. ) 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 /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 (W) Tj ET Q q 0 0 0 rg BT 80.64 380.25 Td (e declared a one-time aggregate $200.0 million dividend payable to all common shareholders of record at the close of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 368.25 Td (business on September 16, 2016. ) Tj ET Q q 0 0 0 rg BT 187.97 368.25 Td (W) Tj ET Q q 0 0 0 rg BT 196.61 368.25 Td (e may declare cash dividends in 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 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 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 (57) 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 (40) 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 (46) 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 (54) 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 (43) 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 (59) 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 (43) 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 62.00 532.32 Td (Kevin Stone) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 531.87 Td (50) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 531.42 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.39 531.42 Td (V) Tj ET Q q 0 0 0 rg BT 292.22 531.42 Td (ice President, Chief Sales & Marketing Of) Tj ET Q q 0 0 0 rg BT 461.51 531.42 Td (ficer) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 511.32 Td (Geor) Tj ET Q q 0 0 0 rg BT 81.90 511.32 Td (ge Moore) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 510.87 Td (46) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 510.42 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.39 510.42 Td (V) Tj ET Q q 0 0 0 rg BT 292.22 510.42 Td (ice President, Chief ) Tj ET Q q 0 0 0 rg BT 372.92 510.42 Td (T) Tj ET Q q 0 0 0 rg BT 378.59 510.42 Td (echnology Of) Tj ET Q q 0 0 0 rg BT 432.86 510.42 Td (ficer) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 489.87 Td (Alexander Broich) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 489.87 Td (53) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 489.87 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.39 489.87 Td (V) Tj ET Q q 0 0 0 rg BT 292.22 489.87 Td (ice President, International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 469.32 Td (Sharon Loeb) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 469.32 Td (48) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 468.42 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.30 468.42 Td (V) Tj ET Q q 0 0 0 rg BT 291.92 468.42 Td (ice President, Chief Marketing Of) Tj ET Q q 0 0 0 rg BT 427.54 468.42 Td (ficer) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 449.87 Td (Fernando Bleichmar) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 449.87 Td (41) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 449.87 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.39 449.87 Td (V) Tj ET Q q 0 0 0 rg BT 292.22 449.87 Td (ice President, Chief Product Of) Tj ET Q q 0 0 0 rg BT 417.08 449.87 Td (ficer) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 428.87 Td (T) Tj ET Q q 0 0 0 rg BT 67.76 428.87 Td (odd Markson) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 428.87 Td (42) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 428.87 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.39 428.87 Td (V) Tj ET Q q 0 0 0 rg BT 292.22 428.87 Td (ice President, Chief Strategy Of) Tj ET Q q 0 0 0 rg BT 419.30 428.87 Td (ficer) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 407.87 Td (Gary Fortier) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 407.87 Td (46) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 407.87 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.39 407.87 Td (V) Tj ET Q q 0 0 0 rg BT 292.22 407.87 Td (ice President, Chief People Of) Tj ET Q q 0 0 0 rg BT 413.19 407.87 Td (ficer) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 387.87 Td (Laura Stevens) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 387.87 Td (44) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 387.87 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.30 387.87 Td (V) Tj ET Q q 0 0 0 rg BT 291.92 387.87 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 54.00 362.25 Td (Dir) Tj ET Q q 0 0 0 rg BT 68.26 362.25 Td (ectors) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 341.25 Td (Michael E. Hansen) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 152.83 341.25 Td ( became Chief Executive Of) Tj ET Q q 0 0 0 rg BT 265.94 341.25 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 54.00 329.25 Td (Cengage since March 2014 and he oversees all aspects of the global business. Mr) Tj ET Q q 0 0 0 rg BT 378.91 329.25 Td (. Hansen is focused on the evolution of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 317.25 Td (education industry) Tj ET Q q 0 0 0 rg BT 127.50 317.25 Td (, including the transition the publishing industry is making from print to digital and the development of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 305.25 Td (new product lines for a digital world. He has deep experience in equipping or) Tj ET Q q 0 0 0 rg BT 363.17 305.25 Td (ganizations with the structure necessary to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.25 Td (support these transformations. ) Tj ET Q q 0 0 0 rg BT 176.76 293.25 Td (As a thought leader in the information services sector) Tj ET Q q 0 0 0 rg BT 390.18 293.25 Td (, Mr) Tj ET Q q 0 0 0 rg BT 406.85 293.25 Td (. Hansen has an extensive track ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.25 Td (record in developing successful business models and high-performing executive teams. Prior to joining Cengage, Mr) Tj ET Q q 0 0 0 rg BT 520.56 281.25 Td (. Hansen ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.25 Td (served as CEO of Elsevier Health Sciences, a division of Reed Elsevier) Tj ET Q q 0 0 0 rg BT 338.92 269.25 Td (. During his tenure, he developed and implemented a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.25 Td (successful print-to-digital transition and accelerated new electronic product development. Prior to Elsevier Health Sciences, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.25 Td (Mr) Tj ET Q q 0 0 0 rg BT 65.67 245.25 Td (. Hansen served as President and CEO of Harcourt ) Tj ET Q q 0 0 0 rg BT 270.06 245.25 Td (Assessment, an education arm of Reed Elsevier) Tj ET Q q 0 0 0 rg BT 459.73 245.25 Td (. Early in his career) Tj ET Q q 0 0 0 rg BT 537.34 245.25 Td (, Mr) Tj ET Q q 0 0 0 rg BT 554.01 245.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 233.25 Td (Hansen was Executive ) Tj ET Q q 0 0 0 rg BT 146.84 233.25 Td (V) Tj ET Q q 0 0 0 rg BT 153.46 233.25 Td (ice President of Operational Excellence at Bertelsmann, a $20 billion global media company) Tj ET Q q 0 0 0 rg BT 522.97 233.25 Td (. Prior ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 221.25 Td (to that Mr) Tj ET Q q 0 0 0 rg BT 93.44 221.25 Td (. Hansen was the lead partner and Chairman of the digital conver) Tj ET Q q 0 0 0 rg BT 353.17 221.25 Td (gence practice at the Boston Consulting Group. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.25 Td (addition, Mr) Tj ET Q q 0 0 0 rg BT 103.44 209.25 Td (. Hansen is currently a Board Member of the ) Tj ET Q q 0 0 0 rg BT 283.95 209.25 Td (American Institute for Contemporary German Studies \(AICGS\) and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 197.25 Td (an ) Tj ET Q q 0 0 0 rg BT 65.39 197.25 Td (Advisor to ProPublica. Mr) Tj ET Q q 0 0 0 rg BT 170.94 197.25 Td (. Hansen 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 547.52 197.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 185.25 Td (from Columbia University in New ) Tj ET Q q 0 0 0 rg BT 193.89 185.25 Td (Y) Tj ET Q q 0 0 0 rg BT 200.11 185.25 Td (ork.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 167.25 Td (Kermit Cook ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 130.88 167.25 Td (has) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 144.21 174.18 382.97 -8.93 re f /GS0 gs q 0 0 0 rg BT 144.21 167.25 Td ( been a Director of Cengage since February 2018. Mr) Tj ET Q q 0 0 0 rg BT 357.47 167.25 Td (. Cook joined KKR Capstone in 2007 and ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 162.18 458.64 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 155.25 Td (currently serves as Co-Head of KKR Capstone in the ) Tj ET Q q 0 0 0 rg BT 268.12 155.25 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 54.00 150.18 483.66 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 143.25 Td (Committees for ) Tj ET Q q 0 0 0 rg BT 118.44 143.25 Td (Americas Private Equity and for Special Situations. Mr) Tj ET Q q 0 0 0 rg BT 338.95 143.25 Td (. Cook also leads KKR Capstone's value creation ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 138.18 490.80 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 131.25 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 131.25 Td (forts for KKR's special situations and credit investing platforms. ) Tj ET Q q 0 0 0 rg BT 321.50 131.25 Td (While at KKR Capstone, Mr) Tj ET Q q 0 0 0 rg BT 435.65 131.25 Td (. Cook has worked in New ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 126.18 482.14 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 119.25 Td (Y) Tj ET Q q 0 0 0 rg BT 60.22 119.25 Td (ork, Sydney) Tj ET Q q 0 0 0 rg BT 107.90 119.25 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 54.00 114.18 480.96 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 107.25 Td (develop KKR Capstone in ) Tj ET Q q 0 0 0 rg BT 161.21 107.25 Td (Asia and ) Tj ET Q q 0 0 0 rg BT 198.43 107.25 Td (Australia. Mr) Tj ET Q q 0 0 0 rg BT 251.75 107.25 Td (. Cook has worked with numerous KKR portfolio companies globally) Tj ET Q q 0 0 0 rg BT 529.96 107.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 102.18 488.78 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 95.25 Td (including Genesis Care, Sundrop Farms, Bis Industries, Unisteel, US Foods, Education Management, Chembulk ) Tj ET Q q 0 0 0 rg BT 506.27 95.25 Td (T) Tj ET Q q 0 0 0 rg BT 511.68 95.25 Td (ankers, ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 90.18 495.77 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 83.25 Td (Amedisys, and Cengage. Previously he worked for McKinsey & Company in Boston, and he taught high school physics in ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 78.18 501.55 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 71.25 Td (St. Louis with ) Tj ET Q q 0 0 0 rg BT 112.72 71.25 Td (T) Tj ET Q q 0 0 0 rg BT 118.13 71.25 Td (each for ) Tj ET Q q 0 0 0 rg BT 152.55 71.25 Td (America. Mr) Tj ET Q q 0 0 0 rg BT 203.64 71.25 Td (. Cook holds a B.A) Tj ET Q q 0 0 0 rg BT 279.76 71.25 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 71.25 Td ( Ed from ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 66.18 362.32 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 59.25 Td (Stanford University) Tj ET Q q 0 0 0 rg BT 132.51 59.25 Td (, where he graduated as the Henry Ford Scholar of the business school.) 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 72.00 731.25 Td (W) Tj ET Q q 0 0 0 rg BT 81.45 731.25 Td (ade Davis) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 122.84 731.25 Td ( has been a Director of Cengage since March 2014. Mr) Tj ET Q q 0 0 0 rg BT 341.93 731.25 Td (. Davis is currently the Executive ) Tj ET Q q 0 0 0 rg BT 477.54 731.25 Td (V) Tj ET Q q 0 0 0 rg BT 484.16 731.25 Td (ice President and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.25 Td (Chief Financial Of) Tj ET Q q 0 0 0 rg BT 128.80 719.25 Td (ficer at ) Tj ET Q q 0 0 0 rg BT 159.15 719.25 Td (V) Tj ET Q q 0 0 0 rg BT 165.77 719.25 Td (iacom, Inc. He has represented ) Tj ET Q q 0 0 0 rg BT 291.37 719.25 Td (V) Tj ET Q q 0 0 0 rg BT 297.99 719.25 Td (iacom) Tj ET Q q 0 0 0 rg BT 325.20 719.25 Td (s interests on the Board of Directors of ) Tj ET Q q 0 0 0 rg BT 482.76 719.25 Td (V) Tj ET Q q 0 0 0 rg BT 489.38 719.25 Td (iacom18 \(India\), ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.25 Td (MTV) Tj ET Q q 0 0 0 rg BT 76.04 707.25 Td ( Italia, Bellator and Rhapsody Roku. Mr) Tj ET Q q 0 0 0 rg BT 236.57 707.25 Td (. Davis joined ) Tj ET Q q 0 0 0 rg BT 294.72 707.25 Td (V) Tj ET Q q 0 0 0 rg BT 301.34 707.25 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 54.00 695.25 Td (company) Tj ET Q q 0 0 0 rg BT 90.01 695.25 Td (, served as Executive ) Tj ET Q q 0 0 0 rg BT 176.73 695.25 Td (V) Tj ET Q q 0 0 0 rg BT 183.36 695.25 Td (ice President of Strategy) Tj ET Q q 0 0 0 rg BT 280.73 695.25 Td (, Mer) Tj ET Q q 0 0 0 rg BT 302.21 695.25 Td (gers & ) Tj ET Q q 0 0 0 rg BT 331.10 695.25 Td (Acquisitions. Prior to joining ) Tj ET Q q 0 0 0 rg BT 450.09 695.25 Td (V) Tj ET Q q 0 0 0 rg BT 456.71 695.25 Td (iacom, from 2004 to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.25 Td (2005, Mr) Tj ET Q q 0 0 0 rg BT 90.67 683.25 Td (. Davis was the Co-Founder and Executive ) Tj ET Q q 0 0 0 rg BT 264.34 683.25 Td (V) Tj ET Q q 0 0 0 rg BT 270.96 683.25 Td (ice President of Operations at ) Tj ET Q q 0 0 0 rg BT 391.20 683.25 Td (America) Tj ET Q q 0 0 0 rg BT 428.40 683.25 Td (s Choice Inc., a provider of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.25 Td (research-based school instructional solutions. Mr) Tj ET Q q 0 0 0 rg BT 249.79 671.25 Td (. Davis also founded ) Tj ET Q q 0 0 0 rg BT 333.95 671.25 Td (AdvancePath, which operates in-school academies on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 659.25 Td (high school campuses. Mr) Tj ET Q q 0 0 0 rg BT 158.43 659.25 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 54.00 647.25 Td (W) Tj ET Q q 0 0 0 rg BT 63.04 647.25 Td (illiams College.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 629.25 Td (John D. Dionne) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 138.41 629.25 Td ( has been a Director of Cengage since March 2014. Mr) Tj ET Q q 0 0 0 rg BT 357.50 629.25 Td (. Dionne is a Senior ) Tj ET Q q 0 0 0 rg BT 438.60 629.25 Td (Advisor of the Blackstone ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.25 Td (Group and a Senior Lecturer with the Harvard Business School. He was most recently a Senior Managing Director at ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.25 Td (Blackstone and Global Head of its Private Equity Investor Relations and Business Development Groups. He also served as a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.25 Td (member of Blackstone) Tj ET Q q 0 0 0 rg BT 147.31 593.25 Td (s Private Equity Investment and ) Tj ET Q q 0 0 0 rg BT 277.38 593.25 Td (V) Tj ET Q q 0 0 0 rg BT 283.49 593.25 Td (aluation Committees.Mr) Tj ET Q q 0 0 0 rg BT 383.20 593.25 Td (. Dionne originally joined Blackstone in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.25 Td (2004 as the Founder and Chief Investment Of) Tj ET Q q 0 0 0 rg BT 236.84 581.25 Td (ficer of the Blackstone Distressed Securities Fund, the firm) Tj ET Q q 0 0 0 rg BT 476.50 581.25 Td (s initial entry into ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.25 Td (the single-manager hedge fund practice, with peak assets under management of $2 billion. During this period, he also served ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.25 Td (on the Investment Committees of Blackstone) Tj ET Q q 0 0 0 rg BT 237.02 557.25 Td (s GSO and Kalix investment businesses. Before joining Blackstone, Mr) Tj ET Q q 0 0 0 rg BT 522.82 557.25 Td (. Dionne ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.25 Td (was for several years a Partner and Portfolio Manager for Bennett Restructuring Funds, specializing in investing in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.25 Td (financially troubled companies. Mr) Tj ET Q q 0 0 0 rg BT 194.52 533.25 Td (. Dionne currently serves on the Board of Directors of Momentive Performance Materials, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.25 Td (Pelmorex Media Inc, and Caesar's Entertainment Corporation. He is a Chartered Financial ) Tj ET Q q 0 0 0 rg BT 416.80 521.25 Td (Analyst and Certified Public ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.25 Td (Accountant \(inactive\). Mr) Tj ET Q q 0 0 0 rg BT 157.57 509.25 Td (. Dionne is a graduate of the Harvard Business School and the University of Scranton.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 491.25 Td (Mar) Tj ET Q q 0 0 0 rg BT 90.70 491.25 Td (celo Gigliani) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 144.30 491.25 Td ( has been a Director of Cengage since January 2016. Mr) Tj ET Q q 0 0 0 rg BT 368.40 491.25 Td (. Gigliani is Managing Partner of ) Tj ET Q q 0 0 0 rg BT 502.54 491.25 Td (Apax Digital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 479.25 Td (and focuses on growth buyout and growth equity investments in leading internet, enterprise software, and technology-enabled ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 467.25 Td (services companies. Prior to this position, Mr) Tj ET Q q 0 0 0 rg BT 235.09 467.25 Td (. Gigliani served as a Partner in ) Tj ET Q q 0 0 0 rg BT 362.84 467.25 Td (Apax's Digital practice and its Services Group. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.25 Td (Since joining ) Tj ET Q q 0 0 0 rg BT 109.00 455.25 Td (Apax in 2001, Mr) Tj ET Q q 0 0 0 rg BT 180.11 455.25 Td (. Gigliani has worked in London, Madrid, and New ) Tj ET Q q 0 0 0 rg BT 387.48 455.25 Td (Y) Tj ET Q q 0 0 0 rg BT 393.70 455.25 Td (ork, where he is currently based.Mr) Tj ET Q q 0 0 0 rg BT 538.10 455.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.25 Td (Gigliani has both led and participated in a number of key investments across the Digital, Media, Services, and ) Tj ET Q q 0 0 0 rg BT 496.20 443.25 Td (T) Tj ET Q q 0 0 0 rg BT 501.61 443.25 Td (echnology) Tj ET Q q 0 0 0 rg BT 542.62 443.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.25 Td (sectors throughout North ) Tj ET Q q 0 0 0 rg BT 155.93 431.25 Td (America, Europe, and ) Tj ET Q q 0 0 0 rg BT 245.62 431.25 Td (Asia, including Cengage, idealista, ) Tj ET Q q 0 0 0 rg BT 387.35 431.25 Td (T) Tj ET Q q 0 0 0 rg BT 393.11 431.25 Td (rader Corporation \(AutoT) Tj ET Q q 0 0 0 rg BT 496.06 431.25 Td (rader Canada\), ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.25 Td (Dealer) Tj ET Q q 0 0 0 rg BT 80.09 419.25 Td (.com, Boats Group, ) Tj ET Q q 0 0 0 rg BT 160.46 419.25 Td (W) Tj ET Q q 0 0 0 rg BT 169.50 419.25 Td (izeline, SoY) Tj ET Q q 0 0 0 rg BT 217.93 419.25 Td (oung, ) Tj ET Q q 0 0 0 rg BT 242.38 419.25 Td (ALM, eDreams, and ) Tj ET Q q 0 0 0 rg BT 326.90 419.25 Td (W) Tj ET Q q 0 0 0 rg BT 335.93 419.25 Td (isdom Entertainment/Zed.Mr) Tj ET Q q 0 0 0 rg BT 454.52 419.25 Td (. Gigliani currently also ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.25 Td (serves on the board of directors of idealista, Boats Group, SoY) Tj ET Q q 0 0 0 rg BT 304.05 407.25 Td (oung, and ) Tj ET Q q 0 0 0 rg BT 345.81 407.25 Td (W) Tj ET Q q 0 0 0 rg BT 354.85 407.25 Td (izeline.Prior to joining ) Tj ET Q q 0 0 0 rg BT 449.56 407.25 Td (Apax Partners, Mr) Tj ET Q q 0 0 0 rg BT 523.16 407.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.25 Td (Gigliani was a consultant at Mercer Management Consulting \(now Oliver ) Tj ET Q q 0 0 0 rg BT 350.97 395.25 Td (W) Tj ET Q q 0 0 0 rg BT 359.81 395.25 Td (yman\), a global management consulting firm. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.25 Td (Mr) Tj ET Q q 0 0 0 rg BT 65.67 383.25 Td (. Gigliani received an MBA) Tj ET Q q 0 0 0 rg BT 176.48 383.25 Td ( from Harvard Business School and a BS in Business ) Tj ET Q q 0 0 0 rg BT 390.91 383.25 Td (Administration from Boston University) Tj ET Q q 0 0 0 rg BT 548.31 383.25 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 365.25 Td (Richard Sarnoff ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 144.22 365.25 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 346.64 365.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 349.14 365.25 Td (Mr) Tj ET Q q 0 0 0 rg BT 360.81 365.25 Td (. Sarnof) Tj ET Q q 0 0 0 rg BT 392.29 365.25 Td (f ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 398.12 372.18 154.13 -8.93 re f /GS0 gs q 0 0 0 rg BT 398.12 365.25 Td (is Chairman of Media, Entertainment, ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 360.18 472.71 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 353.25 Td (and Education for KKR's Private Equity platform in the ) Tj ET Q q 0 0 0 rg BT 278.81 353.25 Td (Americas, and serves as a member of the ) Tj ET Q q 0 0 0 rg BT 444.96 353.25 Td (TMT) Tj ET Q q 0 0 0 rg BT 465.88 353.25 Td ( growth equity ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 348.18 440.17 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 341.25 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 1 1 1 rg /GS0 gs 54.00 336.18 475.69 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 329.25 Td (Communications industry group, leading investments in the Media, ) Tj ET Q q 0 0 0 rg BT 326.01 329.25 Td (T) Tj ET Q q 0 0 0 rg BT 331.42 329.25 Td (elecom, Information Services, Digital Media and ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 324.18 504.21 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 317.25 Td (Education sectors in the US. Prior to this position, Mr) Tj ET Q q 0 0 0 rg BT 268.71 317.25 Td (. Sarnof) Tj ET Q q 0 0 0 rg BT 300.19 317.25 Td (f served as a Senior ) Tj ET Q q 0 0 0 rg BT 380.45 317.25 Td (Adviser to KKR, working closely with both ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 312.18 126.64 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 305.25 Td (investment teams and portfolio ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 180.64 305.25 Td (companies. Until 201) Tj ET Q q 0 0 0 rg BT 266.09 305.25 Td (1, Mr) Tj ET Q q 0 0 0 rg BT 287.76 305.25 Td (. Sarnof) Tj ET Q q 0 0 0 rg BT 319.24 305.25 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 54.00 293.25 Td (Bertelsmann Digital Media Investments \(BDMI\). ) Tj ET Q q 0 0 0 rg BT 253.41 293.25 Td (A) Tj ET Q q 0 0 0 rg BT 260.08 293.25 Td ( longstanding senior executive at Bertelsmann, Mr) Tj ET Q q 0 0 0 rg BT 461.42 293.25 Td (. Sarnof) Tj ET Q q 0 0 0 rg BT 492.90 293.25 Td (f served as CFO ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.25 Td (and EVP) Tj ET Q q 0 0 0 rg BT 89.46 281.25 Td ( of Random House beginning in) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 217.50 288.18 319.08 -9.09 re f /GS0 gs q 0 0 0 rg BT 217.50 281.25 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 54.00 276.18 480.19 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 269.25 Td (Bertelsmann ) Tj ET Q q 0 0 0 rg BT 106.49 269.25 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 54.00 264.18 500.46 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 257.25 Td (concurrently served as Chairman of the ) Tj ET Q q 0 0 0 rg BT 213.39 257.25 Td (Association of ) Tj ET Q q 0 0 0 rg BT 273.38 257.25 Td (American Publishers. He was named the publishing industry) Tj ET Q q 0 0 0 rg BT 518.35 257.25 Td (s Person ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 252.18 495.40 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 245.25 Td (of the ) Tj ET Q q 0 0 0 rg BT 79.18 245.25 Td (Y) Tj ET Q q 0 0 0 rg BT 85.40 245.25 Td (ear by Publishers ) Tj ET Q q 0 0 0 rg BT 156.59 245.25 Td (W) Tj ET Q q 0 0 0 rg BT 165.23 245.25 Td (eekly magazine in 2009. Mr) Tj ET Q q 0 0 0 rg BT 277.14 245.25 Td (. Sarnof) Tj ET Q q 0 0 0 rg BT 308.62 245.25 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 54.00 240.18 490.08 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 233.25 Td (1981 with a BA) Tj ET Q q 0 0 0 rg BT 117.06 233.25 Td ( in ) Tj ET Q q 0 0 0 rg BT 129.28 233.25 Td (Art and ) Tj ET Q q 0 0 0 rg BT 161.50 233.25 Td (Archaeology) Tj ET Q q 0 0 0 rg BT 212.50 233.25 Td (, and earned an MBA) Tj ET Q q 0 0 0 rg BT 297.75 233.25 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 54.00 228.18 502.95 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 221.25 Td (Directors of ) Tj ET Q q 0 0 0 rg BT 104.36 221.25 Td (W) Tj ET Q q 0 0 0 rg BT 112.99 221.25 Td (ebMD and Chegg; and of not-for) Tj ET Q q 0 0 0 rg BT 244.71 221.25 Td (-profit or) Tj ET Q q 0 0 0 rg BT 280.90 221.25 Td (ganizations including the Center for Communication, the Bronx Lab ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 216.18 444.05 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 209.25 Td (School, Princeton University) Tj ET Q q 0 0 0 rg BT 172.60 209.25 Td (s Center for Information ) Tj ET Q q 0 0 0 rg BT 272.39 209.25 Td (T) Tj ET Q q 0 0 0 rg BT 277.80 209.25 Td (echnology Policy and New Classrooms/School of One.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 191.25 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 74.50 191.25 Td (Eric Sondag) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.01 191.25 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 54.00 179.25 Td (2014.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 76.50 179.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 79.00 179.25 Td (Mr) Tj ET Q q 0 0 0 rg BT 90.67 179.25 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 302.56 179.25 Td (Prior to joining Searchlight in 201) Tj ET Q q 0.2 0.2 0.2 rg BT 439.13 179.25 Td (1, Mr) Tj ET Q q 0.2 0.2 0.2 rg BT 460.80 179.25 Td (. Sondag worked at ) Tj ET Q BT /F1 10.00 Tf ET q 0.2 0.2 0.2 rg BT 54.00 167.25 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 54.00 155.25 Td (consumer industries. He started his career in investment banking at ) Tj ET Q q 0.2 0.2 0.2 rg BT 324.58 155.25 Td (W) Tj ET Q q 0.2 0.2 0.2 rg BT 333.21 155.25 Td (asserstein Perella in Chicago in 1998. Mr) Tj ET Q q 0.2 0.2 0.2 rg BT 497.91 155.25 Td (. Sondag ) Tj ET Q BT /F1 10.00 Tf ET q 0.2 0.2 0.2 rg BT 54.00 143.25 Td (received a BSc from Geor) Tj ET Q q 0.2 0.2 0.2 rg BT 158.22 143.25 Td (getown University) Tj ET Q q 0.2 0.2 0.2 rg BT 231.72 143.25 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 54.00 131.25 Td (Mr) Tj ET Q q 0 0 0 rg BT 65.67 131.25 Td (. Sondag serves on the Board of Directors for ) Tj ET Q q 0 0 0 rg BT 249.33 131.25 Td (T) Tj ET Q q 0 0 0 rg BT 254.74 131.25 Td (ouchT) Tj ET Q q 0 0 0 rg BT 279.94 131.25 Td (unes Interactive Networks, Inc., M&M Food Market, Global Eagle ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 119.25 Td (Entertainment, and Chairman of the Board of Gymboree, and serves on the Board of ) Tj ET Q q 0 0 0 rg BT 393.90 119.25 Td (Advisors for Geor) Tj ET Q q 0 0 0 rg BT 466.49 119.25 Td (getown University) Tj ET Q q 0 0 0 rg BT 543.42 119.25 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 107.25 Td (McDonough School of Business.) 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 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 1 1 1 rg /GS0 gs 72.00 351.02 51.95 -8.93 re f /GS0 gs q 0 0 0 rg BT 72.00 344.25 Td (Kevin Stone) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 123.95 351.18 221.14 -8.93 re f /GS0 gs q 0 0 0 rg BT 123.95 344.25 Td ( is the Chief Sales and Marketing Of) Tj ET Q q 0 0 0 rg BT 270.13 344.25 Td (ficer for Cengage. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 345.09 344.25 Td (Immediately upon joining Cengage in December ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 332.25 Td (2012, Mr) Tj ET Q q 0 0 0 rg BT 90.67 332.25 Td (. Stone galvanized the or) Tj ET Q q 0 0 0 rg BT 189.63 332.25 Td (ganization by instilling a winning culture and a spirit of collaboration across the sales and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 320.25 Td (marketing team. Over a period when the or) Tj ET Q q 0 0 0 rg BT 225.98 320.25 Td (ganization and industry faced serious challenges, Mr) Tj ET Q q 0 0 0 rg BT 436.19 320.25 Td (. Stone helped Cengage shift ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 308.25 Td (from trailing the competition and set the go-to-market team on a path to market leadership. Compelled by a core belief that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 296.25 Td (developing trusted partnerships with customers is critical, Mr) Tj ET Q q 0 0 0 rg BT 298.95 296.25 Td (. Stone steered the focus of the team from transactional selling ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 284.25 Td (to for) Tj ET Q q 0 0 0 rg BT 75.76 284.25 Td (ging strong customer relationships through specialized, white-glove service a competency that deeply distinguishes ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 272.25 Td (Cengage in the market. Driven by data, Mr) Tj ET Q q 0 0 0 rg BT 225.34 272.25 Td (. Stone restructured the go-to-market team by implementing operational ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 260.25 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 260.25 Td (ficiencies that vastly improved customer experience and reduced costs by $50 million over five years. ) Tj ET Q q 0 0 0 rg BT 471.27 260.25 Td (W) Tj ET Q q 0 0 0 rg BT 480.31 260.25 Td (ith a keen eye ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 248.25 Td (focused on the future, Mr) Tj ET Q q 0 0 0 rg BT 155.36 248.25 Td (. Stone remains an innovation enthusiast, encouraging constructive disruption. ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 470.86 255.18 69.44 -9.09 re f /GS0 gs q 0 0 0 rg BT 470.86 248.25 Td (Mr) Tj ET Q q 0 0 0 rg BT 482.53 248.25 Td (. Stone joined ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 243.18 490.13 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 236.25 Td (Cengage with more than 20 years of experience in the industry) Tj ET Q q 0 0 0 rg BT 304.38 236.25 Td (, most recently serving as Chief Sales Of) Tj ET Q q 0 0 0 rg BT 467.50 236.25 Td (ficer of the Higher ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 231.18 501.83 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 224.25 Td (Education unit at Pearson. In this position, Mr) Tj ET Q q 0 0 0 rg BT 238.15 224.25 Td (. Stone played a strategic role in leading a team of over 900 sales professionals ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 219.18 497.08 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 212.25 Td (that consistently outperformed the industry) Tj ET Q q 0 0 0 rg BT 225.54 212.25 Td (. He played a central role in multiple sales reor) Tj ET Q q 0 0 0 rg BT 412.51 212.25 Td (ganizations and realignments, and ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 207.18 467.59 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 200.25 Td (actively partnered with the CEO and executive team to shape and execute sales strategies and participate in strategic ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 195.18 452.56 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 188.25 Td (planning. Earlier in his career) Tj ET Q q 0 0 0 rg BT 172.16 188.25 Td (, Mr) Tj ET Q q 0 0 0 rg BT 188.83 188.25 Td (. Stone worked at various subsidiaries of Pearson and held positions in product ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 183.18 504.06 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 176.25 Td (management, marketing, technology and sales. He holds an MBA) Tj ET Q q 0 0 0 rg BT 316.44 176.25 Td ( from Boston University) Tj ET Q q 0 0 0 rg BT 416.71 176.25 Td (s Graduate School of Management ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 171.18 273.86 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 164.25 Td (and a BS in Marketing from Oswego State University of New ) Tj ET Q q 0 0 0 rg BT 303.31 164.25 Td (Y) Tj ET Q q 0 0 0 rg BT 309.53 164.25 Td (ork. ) Tj ET Q BT /F2 10.00 Tf ET 1 1 1 rg /GS0 gs 72.00 153.02 61.73 -8.93 re f /GS0 gs q 0 0 0 rg BT 72.00 146.25 Td (George Moor) Tj ET Q q 0 0 0 rg BT 129.29 146.25 Td (e) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 133.73 153.18 400.29 -8.93 re f /GS0 gs q 0 0 0 rg BT 133.73 146.25 Td ( has been the Chief ) Tj ET Q q 0 0 0 rg BT 212.69 146.25 Td (T) Tj ET Q q 0 0 0 rg BT 218.10 146.25 Td (echnology Of) Tj ET Q q 0 0 0 rg BT 272.63 146.25 Td (ficer \(CT) Tj ET Q q 0 0 0 rg BT 313.81 146.25 Td (O\) for Cengage since January 2013. In this role, he is ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 141.18 474.08 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 134.25 Td (responsible for shaping Cengage) Tj ET Q q 0 0 0 rg BT 187.58 134.25 Td (s long-term technology vision and focusing innovation across the Company during a ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 129.18 501.05 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 122.25 Td (transformative time. Prior to joining Cengage, Mr) Tj ET Q q 0 0 0 rg BT 252.85 122.25 Td (. Moore served as CT) Tj ET Q q 0 0 0 rg BT 339.04 122.25 Td (O of Elsevier Health Science, where he was recruited ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 117.18 503.68 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 110.25 Td (to transform the world) Tj ET Q q 0 0 0 rg BT 146.48 110.25 Td (s leading medical publishing company into a medical information company) Tj ET Q q 0 0 0 rg BT 447.70 110.25 Td (. During his tenure, he was ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 105.18 492.28 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 98.25 Td (instrumental in developing ClinicalKey) Tj ET Q q 0 0 0 rg BT 211.37 98.25 Td (, one of the most innovative and successful product introductions in the health-care ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 93.18 456.97 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 86.25 Td (information industry) Tj ET Q q 0 0 0 rg BT 135.84 86.25 Td (. Earlier in his career) Tj ET Q q 0 0 0 rg BT 219.00 86.25 Td (, he was SVP) Tj ET Q q 0 0 0 rg BT 271.97 86.25 Td ( of Product Development for ) Tj ET Q q 0 0 0 rg BT 389.26 86.25 Td (Thomson Reuters) Tj ET Q q 0 0 0 rg BT 462.67 86.25 Td ( Healthcare ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 81.18 475.33 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 74.25 Td (or) Tj ET Q q 0 0 0 rg BT 62.15 74.25 Td (ganization, where he led the consolidation ef) Tj ET Q q 0 0 0 rg BT 241.07 74.25 Td (fort of the company) Tj ET Q q 0 0 0 rg BT 322.99 74.25 Td (s disparate acquisitions into a consolidated product ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 69.18 491.36 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 62.25 Td (development or) Tj ET Q q 0 0 0 rg BT 116.30 62.25 Td (ganization. Mr) Tj ET Q q 0 0 0 rg BT 174.62 62.25 Td (. Moore has also held various roles with a number of commercial software companies. Most ) 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 54.00 738.03 501.74 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 731.10 Td (prominently) Tj ET Q q 0 0 0 rg BT 102.23 731.10 Td (, he was ) Tj ET Q q 0 0 0 rg BT 137.04 731.10 Td (VP) Tj ET Q q 0 0 0 rg BT 149.45 731.10 Td ( of Product Development at Liquent, the industry leader in Pharmaceutical Publishing and Enterprise ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 726.03 483.02 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 719.10 Td (Resource Planning software. ) Tj ET Q q 0 0 0 rg BT 170.64 719.10 Td (At Liquent, he led the company) Tj ET Q q 0 0 0 rg BT 300.05 719.10 Td (s ef) Tj ET Q q 0 0 0 rg BT 314.03 719.10 Td (forts in defining how pharmaceutical companies would ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 714.03 493.48 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 707.10 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 1 1 1 rg /GS0 gs 54.00 702.03 453.33 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 695.10 Td (the sale and integration of Liquent into ) Tj ET Q q 0 0 0 rg BT 211.83 695.10 Td (Thomson Reuters. Mr) Tj ET Q q 0 0 0 rg BT 299.33 695.10 Td (. Moore serves on the Board of Directors for Junior ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 690.03 162.45 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 683.10 Td (Achievement of Northern New England.) Tj ET Q BT /F2 10.00 Tf ET 1 1 1 rg /GS0 gs 72.00 671.87 75.46 -8.93 re f /GS0 gs q 0 0 0 rg BT 72.00 665.10 Td (Alexander) Tj ET Q q 0 0 0 rg BT 116.26 665.10 Td ( Br) Tj ET Q q 0 0 0 rg BT 129.69 665.10 Td (oich) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 147.46 672.03 382.70 -8.93 re f /GS0 gs q 0 0 0 rg BT 147.46 665.10 Td ( has been the President of International for Cengage since July 2013. In ) Tj ET Q q 0 0 0 rg BT 435.16 665.10 Td (April 2017, Mr) Tj ET Q q 0 0 0 rg BT 495.44 665.10 Td (. Broich ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 660.03 493.21 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 653.10 Td (became President of Cengage Global Business which includes International and Gale Global. In this role, he is responsible ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 648.03 504.60 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 641.10 Td (for the growth and development of the Company) Tj ET Q q 0 0 0 rg BT 252.01 641.10 Td (s international operations. Mr) Tj ET Q q 0 0 0 rg BT 369.76 641.10 Td (. Broich brings to Cengage more than 20 years ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 636.03 465.47 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 629.10 Td (of corporate and operational senior) Tj ET Q q 0 0 0 rg BT 193.74 629.10 Td (-level management experience, specializing in building, growing and developing ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 624.03 483.49 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 617.10 Td (businesses in changing environments. He has a successful track record in setting up and growing new technology driven ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 612.03 455.45 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 605.10 Td (businesses, is skilled in strategic planning and marketing, and is familiar with intercultural business practices and ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 600.03 501.50 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 593.10 Td (communications. Prior to joining Cengage, Mr) Tj ET Q q 0 0 0 rg BT 240.37 593.10 Td (. Broich served as the President of International at Pearson Clinical and ) Tj ET Q q 0 0 0 rg BT 528.16 593.10 Td (T) Tj ET Q q 0 0 0 rg BT 533.57 593.10 Td (alent ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 588.03 470.19 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 581.10 Td (Assessment for five years. ) Tj ET Q q 0 0 0 rg BT 161.48 581.10 Td (At Pearson, he drove the international business to double-digit growth, while significantly ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 576.03 475.69 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 569.10 Td (increasing profitability and expanding into new territories. He led the strategy development and implementation of the ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 564.03 505.18 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 557.10 Td (conversion from traditional print assessments into digital solutions, and was a member of Pearson) Tj ET Q q 0 0 0 rg BT 447.82 557.10 Td (s Innovation Board. Earlier ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 552.03 505.05 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 545.10 Td (in his career) Tj ET Q q 0 0 0 rg BT 102.46 545.10 Td (, Mr) Tj ET Q q 0 0 0 rg BT 119.13 545.10 Td (. Broich was the Senior ) Tj ET Q q 0 0 0 rg BT 215.04 545.10 Td (V) Tj ET Q q 0 0 0 rg BT 221.67 545.10 Td (ice President of Corporate Development at Bertelsmann, Inc. for six years where he ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 540.03 503.19 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 533.10 Td (implemented development strategies in China, England, Germany and France, among other duties. He also held management ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 528.03 496.31 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 521.10 Td (positions with Bertelsmann Online Ltd., Health Online Services Multimedica, Bertelsmann ) Tj ET Q q 0 0 0 rg BT 420.88 521.10 Td (AG, and Headwork Consulting. ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 516.03 408.32 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 509.10 Td (Mr) Tj ET Q q 0 0 0 rg BT 65.67 509.10 Td (. Broich holds a PhD in Business ) Tj ET Q q 0 0 0 rg BT 199.57 509.10 Td (Administration from Ludwig Maximilians University in Munich. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 491.10 Td (Shar) Tj ET Q q 0 0 0 rg BT 92.38 491.10 Td (on Loeb) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.11 491.10 Td ( has been the Chief Marketing Of) Tj ET Q q 0 0 0 rg BT 260.78 491.10 Td (ficer for Cengage since January 2016. Since joining the company) Tj ET Q q 0 0 0 rg BT 521.16 491.10 Td (, Ms. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 479.10 Td (Loeb has transformed the marketing function to align with corporate priorities, enabling cost reduction, operational ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 467.10 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 467.10 Td (ficiencies, and greater agility) Tj ET Q q 0 0 0 rg BT 176.99 467.10 Td (. ) Tj ET Q q 0 0 0 rg BT 181.81 467.10 Td (The transformation led to enhanced campaign quality) Tj ET Q q 0 0 0 rg BT 394.98 467.10 Td (, measurable impact on reach, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.10 Td (engagement and pipeline. ) Tj ET Q q 0 0 0 rg BT 158.78 455.10 Td (W) Tj ET Q q 0 0 0 rg BT 167.82 455.10 Td (ith a strong track record of nearly 20 years of proven success in the education industry) Tj ET Q q 0 0 0 rg BT 512.33 455.10 Td (, Ms. Loeb ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.10 Td (brings broad experience across several functional areas. Prior to joining Cengage, Ms. Loeb most recently served as the head ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.10 Td (of McGraw-Hill) Tj ET Q q 0 0 0 rg BT 122.04 431.10 Td (s Higher Ed Marketing group. In this role, she led the development and implementation of customer) Tj ET Q q 0 0 0 rg BT 522.02 431.10 Td (-centric, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.10 Td (data-driven marketing strategies with direct impact on market share and digital revenue growth, as well as customer ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.10 Td (engagement, loyalty) Tj ET Q q 0 0 0 rg BT 134.43 407.10 Td (, and renewal. Previously) Tj ET Q q 0 0 0 rg BT 235.15 407.10 Td (, Ms. Loeb held a succession of leadership positions at both McGraw-Hill ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.10 Td (Education and Pearson Education, both in the U.S. and Canada. Ms. Loeb holds an MA) Tj ET Q q 0 0 0 rg BT 403.66 395.10 Td ( in Philosophy from the University of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.10 Td (T) Tj ET Q q 0 0 0 rg BT 59.41 383.10 Td (oronto and a Bachelor) Tj ET Q q 0 0 0 rg BT 148.36 383.10 Td () Tj ET Q q 0 0 0 rg BT 151.14 383.10 Td (s degree in Philosophy from ) Tj ET Q q 0 0 0 rg BT 266.03 383.10 Td (Y) Tj ET Q q 0 0 0 rg BT 272.25 383.10 Td (ork University) Tj ET Q q 0 0 0 rg BT 329.65 383.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 365.10 Td (Fernando Bleichmar) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.60 365.10 Td ( has been the Executive ) Tj ET Q q 0 0 0 rg BT 257.33 365.10 Td (V) Tj ET Q q 0 0 0 rg BT 263.95 365.10 Td (ice President and Chief Product Of) Tj ET Q q 0 0 0 rg BT 403.46 365.10 Td (ficer since February 2017. In this role, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 353.10 Td (he leads product development and co-heads the continuing evolution of Cengage's product delivery or) Tj ET Q q 0 0 0 rg BT 461.89 353.10 Td (ganization. Prior to this ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 341.10 Td (role, he was the Chief Strategy Of) Tj ET Q q 0 0 0 rg BT 190.17 341.10 Td (ficer and spearheaded Cengage's approach to data-driven decision-making as well as new ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 329.10 Td (student-centered business models. ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 192.86 336.03 356.36 -9.09 re f /GS0 gs q 0 0 0 rg BT 192.86 329.10 Td (Prior to joining Cengage, Mr) Tj ET Q q 0 0 0 rg BT 308.13 329.10 Td (. Bleichmar served as Senior ) Tj ET Q q 0 0 0 rg BT 425.13 329.10 Td (V) Tj ET Q q 0 0 0 rg BT 431.75 329.10 Td (ice President of Strategy and ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 324.03 489.85 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 317.10 Td (Business Development at Elsevier Health Sciences. Earlier in his career) Tj ET Q q 0 0 0 rg BT 340.72 317.10 Td (, Mr) Tj ET Q q 0 0 0 rg BT 357.39 317.10 Td (. Bleichmar worked at ) Tj ET Q q 0 0 0 rg BT 448.57 317.10 Td (The Boston Consulting ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 312.03 485.42 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 305.10 Td (Group, where he specialized in information services and transformation, and also served as COO and ) Tj ET Q q 0 0 0 rg BT 460.82 305.10 Td (Advisor for Centro ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 300.03 490.56 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 293.10 Td (Eleia, a higher education institution in Mexico. Mr) Tj ET Q q 0 0 0 rg BT 256.46 293.10 Td (. Bleichmar holds an MBA) Tj ET Q q 0 0 0 rg BT 363.95 293.10 Td ( from Columbia University and a Bachelor) Tj ET Q q 0 0 0 rg BT 535.39 293.10 Td () Tj ET Q q 0 0 0 rg BT 538.17 293.10 Td (s ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 288.03 182.17 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 281.10 Td (degree from the University of Pennsylvania. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 263.10 Td (T) Tj ET Q q 0 0 0 rg BT 77.75 263.10 Td (odd Markson ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 137.77 263.10 Td (has been the Executive ) Tj ET Q q 0 0 0 rg BT 231.99 263.10 Td (V) Tj ET Q q 0 0 0 rg BT 238.61 263.10 Td (ice President and Chief Strategy Of) Tj ET Q q 0 0 0 rg BT 380.33 263.10 Td (ficer \(CSO\) for Cengage since December ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 251.10 Td (2017. In this role, he is responsible for working closely with the executive team and broader or) Tj ET Q q 0 0 0 rg BT 433.16 251.10 Td (ganization on the continuing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 239.10 Td (evolution of Cengage strategy) Tj ET Q q 0 0 0 rg BT 173.59 239.10 Td (, as well as the oversight of corporate development, mer) Tj ET Q q 0 0 0 rg BT 397.51 239.10 Td (gers & acquisitions \(M&A\), channel ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 227.10 Td (partnerships and pricing. Mr) Tj ET Q q 0 0 0 rg BT 167.31 227.10 Td (. Markson's commitment to advancing the way students learn adds tremendous value by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 215.10 Td (combining rigorous analytics with deep market knowledge to provide solutions that work for today's learners. Previously) Tj ET Q q 0 0 0 rg BT 537.28 215.10 Td (, Mr) Tj ET Q q 0 0 0 rg BT 553.95 215.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 203.10 Td (Markson held the position of Senior ) Tj ET Q q 0 0 0 rg BT 200.47 203.10 Td (V) Tj ET Q q 0 0 0 rg BT 207.09 203.10 Td (ice President of Go-T) Tj ET Q q 0 0 0 rg BT 292.75 203.10 Td (o-Market Strategy and Operations and as such he stepped into this ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 191.10 Td (role at Cengage already boasting a strong track record of driving meaningful and ef) Tj ET Q q 0 0 0 rg BT 387.31 191.10 Td (fective change at Cengage. Prior to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 179.10 Td (joining Cengage, Mr) Tj ET Q q 0 0 0 rg BT 136.49 179.10 Td (. Markson served many years as a management consultant across the United States, Europe and the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 167.10 Td (Middle East, most recently as a Principal at ) Tj ET Q q 0 0 0 rg BT 230.16 167.10 Td (The Boston Consulting Group \(BCG\) where he advised senior clients across ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 155.10 Td (global Financial Services, Private Equity) Tj ET Q q 0 0 0 rg BT 216.92 155.10 Td (, ) Tj ET Q q 0 0 0 rg BT 221.74 155.10 Td (T) Tj ET Q q 0 0 0 rg BT 227.15 155.10 Td (elecom, Media and ) Tj ET Q q 0 0 0 rg BT 305.83 155.10 Td (T) Tj ET Q q 0 0 0 rg BT 311.24 155.10 Td (echnology companies in setting strategic direction as well as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.10 Td (creating or) Tj ET Q q 0 0 0 rg BT 96.85 143.10 Td (ganizational structures and operating models making those strategies a reality) Tj ET Q q 0 0 0 rg BT 406.38 143.10 Td (. His work covered areas such as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 131.10 Td (strategic direction, financial due diligence, sales force ef) Tj ET Q q 0 0 0 rg BT 279.55 131.10 Td (fectiveness, product line strategy) Tj ET Q q 0 0 0 rg BT 410.52 131.10 Td (, operations, and change. Earlier in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 119.10 Td (his career) Tj ET Q q 0 0 0 rg BT 92.18 119.10 Td (, Mr) Tj ET Q q 0 0 0 rg BT 108.85 119.10 Td (. Markson was a technology entrepreneur in Silicon ) Tj ET Q q 0 0 0 rg BT 317.78 119.10 Td (V) Tj ET Q q 0 0 0 rg BT 323.90 119.10 Td (alley and Microfinance volunteer with the Peace Corps in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 107.10 Td (Mali, ) Tj ET Q q 0 0 0 rg BT 77.71 107.10 Td (W) Tj ET Q q 0 0 0 rg BT 86.34 107.10 Td (est ) Tj ET Q q 0 0 0 rg BT 99.40 107.10 Td (Africa. Mr) Tj ET Q q 0 0 0 rg BT 141.61 107.10 Td (. Markson holds an MBA) Tj ET Q q 0 0 0 rg BT 243.00 107.10 Td ( with Distinction from the University of Michigan and a Bachelor's degree ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 95.10 Td (from Brown University) Tj ET Q q 0 0 0 rg BT 147.23 95.10 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 77.10 Td (Gary Fortier) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.25 77.10 Td ( has been the Chief People Of) Tj ET Q q 0 0 0 rg BT 246.48 77.10 Td (ficer for Cengage since March 2018. Mr) Tj ET Q q 0 0 0 rg BT 409.75 77.10 Td (. Fortier brings to Cengage a proven ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 65.10 Td (track record in driving ef) Tj ET Q q 0 0 0 rg BT 153.78 65.10 Td (fective change, with a major focus on people and culture as key ingredients for success. Prior to ) 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 /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (joining Cengage, Mr) Tj ET Q q 0 0 0 rg BT 136.49 731.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 138.99 738.03 381.63 -9.09 re f /GS0 gs q 0 0 0 rg BT 138.99 731.10 Td ( Fortier most recently served as the CEO for ) Tj ET Q q 0 0 0 rg BT 318.48 731.10 Td (V) Tj ET Q q 0 0 0 rg BT 325.10 731.10 Td (ision Government Solutions, Inc. where he led a ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 726.03 470.48 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 719.10 Td (successful financial turnaround and or) Tj ET Q q 0 0 0 rg BT 206.54 719.10 Td (ganizational transformation. Earlier in his career he was COO for Raizlabs and ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 714.03 498.88 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 707.10 Td (managed Culture, Communications and Or) Tj ET Q q 0 0 0 rg BT 225.73 707.10 Td (ganizational Design, along with M&A, and Strategy & Operations. Earlier in his ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 702.03 493.04 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 695.10 Td (career Mr) Tj ET Q q 0 0 0 rg BT 92.58 695.10 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 544.54 695.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 690.03 349.88 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 683.10 Td (Advisor) Tj ET Q q 0 0 0 rg BT 85.82 683.10 Td (, Power ) Tj ET Q q 0 0 0 rg BT 118.32 683.10 Td (Advocate, ) Tj ET Q q 0 0 0 rg BT 161.46 683.10 Td (The Home Depot and his business career started at Deloitte. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.88 683.10 Td (Mr) Tj ET Q q 0 0 0 rg BT 415.55 683.10 Td (. Fortier serves on the Board of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.10 Td (Directors for Harvard Student ) Tj ET Q q 0 0 0 rg BT 175.63 671.10 Td (Agencies. ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 217.84 678.03 321.88 -9.09 re f /GS0 gs q 0 0 0 rg BT 217.84 671.10 Td (Prior to attending business school, he served as an ) Tj ET Q q 0 0 0 rg BT 420.58 671.10 Td (Army Infantry Captain in the ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 666.03 480.76 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 659.10 Td (82nd ) Tj ET Q q 0 0 0 rg BT 75.95 659.10 Td (Airborne at Fort Bragg, NC. Mr) Tj ET Q q 0 0 0 rg BT 203.43 659.10 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 54.00 654.03 329.68 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 647.10 Td (Business School and a Bachelor's degree in Government from Harvard University) Tj ET Q q 0 0 0 rg BT 381.18 647.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 629.10 Td (Laura Stevens) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 133.39 629.10 Td ( has been the Executive ) Tj ET Q q 0 0 0 rg BT 230.12 629.10 Td (V) Tj ET Q q 0 0 0 rg BT 236.74 629.10 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 54.00 617.10 Td (been an integral part of the or) Tj ET Q q 0 0 0 rg BT 172.10 617.10 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 54.00 605.10 Td (business operations, including Cengage's Global Product and ) Tj ET Q q 0 0 0 rg BT 300.58 605.10 Td (T) Tj ET Q q 0 0 0 rg BT 305.99 605.10 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 54.00 593.10 Td (as its Global ) Tj ET Q q 0 0 0 rg BT 105.94 593.10 Td (Anti-Piracy program and Intellectual Property ) Tj ET Q q 0 0 0 rg BT 292.28 593.10 Td (Acquisitions and Granting functions. ) Tj ET Q q 0 0 0 rg BT 441.98 593.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 491.89 593.10 Td (, her team ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.10 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 54.00 569.10 Td (licensing and acquisition activities. Ms. Stevens' forward-thinking approach formed her innovative strategy to realign the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.10 Td (Intellectual Property licensing functions at Cengage, building a flexible or) Tj ET Q q 0 0 0 rg BT 350.40 557.10 Td (ganizational structure that helped enable the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.10 Td (Cengage Unlimited model. She designed and recruited a legal team of over 50 individuals, establishing a legal operations ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.10 Td (function that is aligned to support the company) Tj ET Q q 0 0 0 rg BT 245.35 533.10 Td (s rapid print-to-digital transformation. Ms. Stevens also founded Cengage) Tj ET Q q 0 0 0 rg BT 543.07 533.10 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.10 Td (privacy of) Tj ET Q q 0 0 0 rg BT 94.63 521.10 Td (fice, creating industry-leading preparation and standards for responsible data stewardship. Ms. Stevens joined ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.10 Td (Thomson Learning, now Cengage, in 2003 as Publishing Counsel; she held the position ) Tj ET Q q 0 0 0 rg BT 406.47 509.10 Td (Assistant General Counsel, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.10 Td (Intellectual Property from 2007 to 2014 and Senior ) Tj ET Q q 0 0 0 rg BT 261.00 497.10 Td (V) Tj ET Q q 0 0 0 rg BT 267.62 497.10 Td (ice President, Deputy General Counsel from 2014 until May 2018. Prior ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.10 Td (to joining ) Tj ET Q q 0 0 0 rg BT 94.93 485.10 Td (Thomson Learning, Ms. Stevens was an attorney at Brown Raysman in New ) Tj ET Q q 0 0 0 rg BT 403.39 485.10 Td (Y) Tj ET Q q 0 0 0 rg BT 409.62 485.10 Td (ork City) Tj ET Q q 0 0 0 rg BT 442.02 485.10 Td (. Ms. Stevens holds a J.D. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.10 Td (from Columbia Law School and a Bachelor) Tj ET Q q 0 0 0 rg BT 228.77 473.10 Td () Tj ET Q q 0 0 0 rg BT 231.55 473.10 Td (s degree in Political Science and ) Tj ET Q q 0 0 0 rg BT 363.17 473.10 Td (Art History from the University of Rochester) Tj ET Q q 0 0 0 rg BT 543.14 473.10 Td (.) 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 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, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 707.25 Td (, there were seven 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 (, Contrarian Capital Management, Carval Investors, LLC, and Centerbridge Partners LP) Tj ET Q q 0 0 0 rg BT 415.58 683.25 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 (allows 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 are issued for no consideration and vest in 25% and 20% increments annually) Tj ET Q q 0 0 0 rg BT 463.83 533.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 516.49 533.25 Td (, on the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.25 Td (last day of the first four or five fiscal years, respectively) Tj ET Q q 0 0 0 rg BT 277.43 521.25 Td (, following the grant date. Performance-based RSUs are subject to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.25 Td (two vesting requirements: a service period \(four years\) and a performance condition \(a liquidity event in the form of either a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.25 Td (change of control or an initial public of) Tj ET Q q 0 0 0 rg BT 210.71 497.25 Td (fering, each as defined in the 2014 Equity Incentive Plan\) in order for the awards to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.25 Td (fully vest. ) Tj ET Q q 0 0 0 rg BT 95.94 485.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 120.39 485.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 183.99 485.25 Td (, there were 4,822,035 stock options, performance-based RSUs and RSUs outstanding, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.25 Td (979,123 RSUs vested, but unissued, 193,584 shares issued, and 1,057,808 shares of common stock available for grant under ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.25 Td (the 2014 Equity Incentive Plan. ) Tj ET Q q 0 0 0 rg BT 182.68 461.25 Td (The stock options outstanding as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 327.11 461.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 390.71 461.25 Td ( have a weighted-average exercise price ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.25 Td (per share of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.70 449.25 Td ($18.16) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 131.20 449.25 Td (. For additional information, see Management) Tj ET Q q 0 0 0 rg BT 321.98 449.25 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 391.15 449.25 Td (Analysis of Financial Condition and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.25 Td (Results of Operations, and Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 188.97 437.25 Td (13) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 198.97 437.25 Td (, Equity-Based Compensation.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 419.25 Td (In ) Tj ET Q q 0 0 0 rg BT 82.28 419.25 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 54.00 407.25 Td (Cengage common stock to be made available for purchase by our of) Tj ET Q q 0 0 0 rg BT 326.23 407.25 Td (ficers, employees and directors \(the 2014 Equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.25 Td (Purchase Plan\). 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 391.13 395.25 Td (76,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 418.63 395.25 Td ( common shares to certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.25 Td (directors, of) Tj ET Q q 0 0 0 rg BT 102.13 383.25 Td (ficers and employees for aggregate proceeds of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 293.43 383.25 Td ($1.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.33 383.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 394.99 383.25 Td (. ) Tj ET Q q 0 0 0 rg BT 399.81 383.25 Td (There were no shares issued under the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 371.25 Td (2014 Equity Purchase Plan in the fiscal years ended March 31, 2018, 2017 and 2016. ) Tj ET Q q 0 0 0 rg BT 396.15 371.25 Td (As of March 31, 2018, 24,000 shares ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 359.25 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 72.00 341.25 Td (During the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 187.79 341.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 251.38 341.25 Td (, we repurchased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 321.35 341.25 Td (7,097,974) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 361.35 341.25 Td ( shares of common stock for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.43 341.25 Td ($60.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.33 341.25 Td (. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 329.25 Td (addition, we also repurchase shares from certain employees in order to satisfy employee tax withholding requirements in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 317.25 Td (connection with the vesting of restricted stock units and delivery of shares. During the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.65 317.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 535.25 317.25 Td (, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 305.25 Td (spent ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 77.61 305.25 Td ($5.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.50 305.25 Td ( to acquire shares in connection with net settlement of equity-based awards. ) Tj ET Q q 0 0 0 rg BT 431.13 305.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.57 305.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.17 305.25 Td (, there ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.25 Td (were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.93 293.25 Td (61,009,916) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 120.93 293.25 Td ( shares of Cengage common stock issued and outstanding.) 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 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 339.5 311.75 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 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 /F3 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 (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 316.20 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 316.20 Td (2016) 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 ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 301.42 Td (18.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 301.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 301.42 Td (19.5) 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 (21.3) 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 (1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 286.42 Td (1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 286.42 Td (1.6) 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 /F3 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 (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 516.50 242.20 Td (2017) 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 ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.15 227.42 Td (1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.00 227.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 227.42 Td (2.5) 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 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 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 424.5 620.75 m 489.5 620.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 606.75 m 489.5 606.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 604.75 m 489.5 604.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 620.75 m 558.5 620.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 606.75 m 558.5 606.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 604.75 m 558.5 604.75 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 /F3 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 (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 516.50 655.20 Td (2017) 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 ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.15 640.42 Td (2.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.00 640.42 Td ($) 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 (0.3) 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 (T) Tj ET Q q 0 0 0 rg BT 62.41 610.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 610.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.15 610.42 Td (2.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.00 610.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 610.42 Td (2.8) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 588.25 Td (Audit Fees) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.83 588.25 Td ( were for professional services necessary to perform an audit of the Company) Tj ET Q q 0 0 0 rg BT 430.50 588.25 Td (s annual financial statements, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 576.25 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 54.00 564.25 Td (independent auditors. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 546.25 Td (T) Tj ET Q q 0 0 0 rg BT 77.75 546.25 Td (ax Fees) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 109.13 546.25 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 54.00 534.25 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 54.00 522.25 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 54.00 510.25 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 54.00 498.25 Td (assistance with tax audits.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 480.25 Td (There were no other fees incurred for products and services provided by our independent auditors other than the services ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 468.25 Td (reported under ) Tj ET Q q 0 0 0 rg BT 114.53 468.25 Td (Audit Fees and ) Tj ET Q q 0 0 0 rg BT 177.40 468.25 Td (T) Tj ET Q q 0 0 0 rg BT 182.81 468.25 Td (ax Fees.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 450.25 Td (It is the policy of the ) Tj ET Q q 0 0 0 rg BT 156.99 450.25 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 54.00 438.25 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 54.00 426.25 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 54.00 414.25 Td (engagement. For the fiscal years ended March 31, 2018 and 2017, the ) Tj ET Q q 0 0 0 rg BT 334.75 414.25 Td (Audit Committee approved all fees billed by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 402.25 Td (PricewaterhouseCoopers LLP) Tj ET Q q 0 0 0 rg BT 173.32 402.25 Td ( prior to the engagement.) 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 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, 2018) 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 (2017) 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 (2018) Tj ET Q BT /F3 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 ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.15 454.42 Td (296.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 454.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 454.42 Td (522.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 454.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 454.42 Td (326.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 454.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 454.42 Td (321.5) 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 (1) Tj ET Q q 0 0 0 rg BT 314.15 436.32 Td (13.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 436.32 Td (263.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 436.32 Td (138.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 436.32 Td (135.3) 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 (\(29.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 331.65 418.32 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 418.32 Td (55.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 418.32 Td (25.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 418.37 Td (\(53.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 418.32 Td (\)) 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 (2017) Tj ET Q BT /F3 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 ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.15 360.32 Td (307.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 360.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 360.32 Td (542.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 360.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 360.32 Td (322.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 360.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 360.32 Td (287.6) 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 (120.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 342.32 Td (270.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 342.32 Td (147.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 342.32 Td (68.6) 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 (\(42.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 331.65 324.32 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 324.32 Td (58.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 324.37 Td (\(12.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 324.32 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 324.37 Td (\(48.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 324.32 Td (\)) 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 ($15.2 ) 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 ($14.5 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 ($14.3 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 ($13.9 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, 2017, September 30, 2017, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 278.25 Td (December 31, 2017 and March 31, 2018, 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 ($16.2 ) 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 ($15.1 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 ($15.2 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 ($21.5 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, 2016, September 30, 2016, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 236.25 Td (December 31, 2016 and March 31, 2017, respectively) Tj ET Q q 0 0 0 rg BT 286.28 236.25 Td (.) Tj ET Q endstream endobj 79 0 obj <> endobj 80 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 (- 34 -) 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 /F3 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 /F3 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 /F3 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 /F3 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 /F3 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 /F3 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 markets and or) Tj ET Q q 0 0 0 rg BT 139.90 491.25 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 (Our three operating segments, which are consistent with our reportable business segments are: ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 455.25 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.56 455.25 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 54.00 443.25 Td (for the academic, skills and school markets. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 425.25 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 100.33 425.25 Td (we of) Tj ET Q q 0 0 0 rg BT 122.64 425.25 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 54.00 413.25 Td (source materials and aggregated periodicals to learners at libraries, colleges, universities, schools and businesses.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 73.00 395.25 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 134.67 395.25 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 54.00 383.25 Td (teaching \(EL) Tj ET Q q 0 0 0 rg BT 109.44 383.25 Td (T\) products and adapt our Learning of) Tj ET Q q 0 0 0 rg BT 266.42 383.25 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 72.00 365.25 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 54.00 353.25 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 54.00 341.25 Td (deferral.) Tj ET Q q 0 0 0 rg BT 89.90 341.25 Td (W) Tj ET Q q 0 0 0 rg BT 98.54 341.25 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 54.00 329.25 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 475.88 336.18 24.15 -9.09 re f /GS0 gs q 0 0 0 rg BT 475.88 329.25 Td (core ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 500.02 329.25 Td (digital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 317.25 Td (product sales) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 106.49 324.18 4.44 -9.09 re f /GS0 gs q 0 0 0 rg BT 106.49 317.25 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 110.92 317.25 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 54.00 305.25 Td (digital products. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 287.25 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 54.00 275.25 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 54.00 263.25 Td (using standard internal currency exchange rates held constant for each year) Tj ET Q q 0 0 0 rg BT 353.87 263.25 Td (. ) Tj ET Q q 0 0 0 rg BT 358.69 263.25 Td (This allows us to evaluate underlying current ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 251.25 Td (operating performance in comparison to past operating performance. ) Tj ET Q q 0 0 0 rg BT 330.84 251.25 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 54.00 239.25 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 54.00 227.25 Td (impact of foreign currency exchange fluctuation.) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 72.00 216.18 459.42 -9.09 re f /GS0 gs q 0 0 0 rg BT 72.00 209.25 Td (T) Tj ET Q q 0 0 0 rg BT 77.41 209.25 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 54.00 204.18 500.29 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 197.25 Td (accepted in the United States of ) Tj ET Q q 0 0 0 rg BT 182.85 197.25 Td (America \(GAAP\), we have presented certain non-GAAP) Tj ET Q q 0 0 0 rg BT 418.78 197.25 Td ( financial measures in addition to ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 192.18 472.31 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 185.25 Td (our GAAP) Tj ET Q q 0 0 0 rg BT 96.69 185.25 Td ( results. ) Tj ET Q q 0 0 0 rg BT 130.11 185.25 Td (W) Tj ET Q q 0 0 0 rg BT 138.75 185.25 Td (e believe that these non-GAAP) Tj ET Q q 0 0 0 rg BT 262.79 185.25 Td ( financial measures provide useful information for evaluating our ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 180.18 473.61 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 173.25 Td (business performance. ) Tj ET Q q 0 0 0 rg BT 145.73 173.25 Td (W) Tj ET Q q 0 0 0 rg BT 154.37 173.25 Td (e believe that the presentation of ) Tj ET Q q 0 0 0 rg BT 286.54 173.25 Td (Adjusted Revenues and ) Tj ET Q q 0 0 0 rg BT 382.92 173.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 457.63 173.25 Td ( is appropriate to ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 168.18 485.44 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 161.25 Td (provide additional information to investors about certain material non-cash items and about unusual items that we do not ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 156.18 487.79 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 149.25 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 370.72 149.25 Td (, we believe ) Tj ET Q q 0 0 0 rg BT 420.70 149.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 495.42 149.25 Td ( provides a ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 144.18 497.06 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 137.25 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 54.00 132.18 491.65 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 125.25 Td (certain significant items. ) Tj ET Q q 0 0 0 rg BT 154.90 125.25 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 54.00 120.18 488.74 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 113.25 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 447.76 113.25 Td (.In addition, these non-) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 108.18 428.95 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 101.25 Td (GAAP) Tj ET Q q 0 0 0 rg BT 80.86 101.25 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 90.18 480.79 -9.09 re f /GS0 gs q 0 0 0 rg BT 72.00 83.25 Td (Our definition of ) Tj ET Q q 0 0 0 rg BT 141.71 83.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 216.43 83.25 Td ( allows us to add back certain non-cash and other char) Tj ET Q q 0 0 0 rg BT 432.83 83.25 Td (ges or costs that are deducted ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 78.18 492.90 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 71.25 Td (in calculating net income from continuing operations. However) Tj ET Q q 0 0 0 rg BT 307.41 71.25 Td (, these are expenses that may recur) Tj ET Q q 0 0 0 rg BT 446.11 71.25 Td (, vary greatly and can be ) 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 206.25 772.75 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 (- 35 -) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 738.03 499.29 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 731.10 Td (dif) Tj ET Q q 0 0 0 rg BT 64.93 731.10 Td (ficult to predict. ) Tj ET Q q 0 0 0 rg BT 131.39 731.10 Td (They can represent the ef) Tj ET Q q 0 0 0 rg BT 232.27 731.10 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 54.00 726.03 404.57 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 719.10 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 72.00 708.03 281.81 -9.09 re f /GS0 gs 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 present the following non-GAAP) Tj ET Q q 0 0 0 rg BT 220.24 701.10 Td ( financial measures in this report:) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 57.00 675.33 Td (Measur) Tj ET Q q 0 0 0 rg BT 89.68 675.33 Td (e) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 184.00 675.33 Td (Definition) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 662.17 Td (Adjusted Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 661.27 Td (This measure is defined as revenues before the impact of our adoption of fresh start accounting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 651.27 Td (and the impact of changes in foreign currency exchange rates. ) Tj ET Q q 0 0 0 rg BT 433.61 651.27 Td (As the adoption of fresh start ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 641.27 Td (accounting resulted in a reduction of deferred revenue upon our emer) Tj ET Q q 0 0 0 rg BT 460.92 641.27 Td (gence from) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 631.27 Td (bankruptcy ef) Tj ET Q q 0 0 0 rg BT 239.07 631.27 Td (fective March 31, 2014, there was a reduction of revenues recognized) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 621.27 Td (subsequent to March 31, 2014.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 603.17 Td (Adjusted EBITDA) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 602.27 Td (This measure is defined as net income \(loss\) before: \(benefit from\) provision for income taxes;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 592.27 Td (reor) Tj ET Q q 0 0 0 rg BT 199.92 592.27 Td (ganization items, net; interest expense, net; loss on early extinguishment of debt, net; other) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 582.27 Td (\(income\) expense, net, in operating income \(loss\); amortization of identifiable intangible) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 572.27 Td (assets; depreciation; operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 425.39 572.27 Td (ges; amortization of pre-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 562.27 Td (publication costs; the impact of fresh start accounting; other income \(expense\), net, below) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 552.27 Td (operating income \(loss\); equity-based compensation expense and non-core other operating) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 542.27 Td (expenses. ) Tj ET Q q 0 0 0 rg BT 224.92 542.27 Td (This measure also removes the impact of changes in foreign currency exchange rates) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 532.27 Td (on the items noted above.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 514.17 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 131.72 514.17 Td ( less ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.50 504.17 Td (Pre-Publication Costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 514.17 Td (This measure reflects ) Tj ET Q q 0 0 0 rg BT 271.74 514.17 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 346.46 514.17 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 184.00 504.17 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 184.00 494.17 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 184.00 484.17 Td (review and fact verification, graphic art design and layout and the process of conversion from) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 474.17 Td (print to digital media or within various formats of digital media. In addition, pre-publication) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 464.17 Td (costs include the cost to procure perpetual rights for the use of content which have been) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 454.17 Td (developed by third parties and are to be included in our products. Costs are capitalized when) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 444.17 Td (the title is expected to generate probable future economic benefits and are amortized upon) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 434.17 Td (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 57.00 415.17 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 131.72 415.17 Td ( less) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.50 405.17 Td (Capital Expenditures) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 415.17 Td (This measure reflects ) Tj ET Q q 0 0 0 rg BT 271.47 415.17 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 346.18 415.17 Td ( less additions to pre-publication costs and property) Tj ET Q q 0 0 0 rg BT 551.88 415.17 Td (,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.00 405.17 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 72.00 389.03 473.93 -9.09 re f /GS0 gs q 0 0 0 rg BT 72.00 382.10 Td (See Reconciliations of Non-GAAP) Tj ET Q q 0 0 0 rg BT 216.32 382.10 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 54.00 377.03 183.82 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 370.10 Td (measures prepared in accordance with GAAP) Tj ET Q q 0 0 0 rg BT 235.32 370.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 349.10 Td (Highlights of Our) Tj ET Q q 0 0 0 rg BT 129.39 349.10 Td ( Industry ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 328.10 Td (Academic) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 310.10 Td (Operating performance in the academic market is af) Tj ET Q q 0 0 0 rg BT 279.77 310.10 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 54.00 298.10 Td (amount of courses available. ) Tj ET Q q 0 0 0 rg BT 170.72 298.10 Td (The United States has the lar) Tj ET Q q 0 0 0 rg BT 285.79 298.10 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 54.00 286.10 Td (19million students) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 130.67 286.10 Td ( enrolled at approximately 4,600 two- and four) Tj ET Q q 0 0 0 rg BT 317.64 286.10 Td (-year post-secondary institutions. ) Tj ET Q q 0 0 0 rg BT 452.98 286.10 Td (W) Tj ET Q q 0 0 0 rg BT 462.02 286.10 Td (ithin the academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 274.10 Td (market, total domestic spending on new learning materials was approximately $3.4 billion in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.53 274.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.53 274.10 Td ( \(including spending ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 262.10 Td (relating to for) Tj ET Q q 0 0 0 rg BT 108.78 262.10 Td (-profit schools\). U.S. two- and four) Tj ET Q q 0 0 0 rg BT 249.67 262.10 Td (-year post-secondary enrollments are expected to increase by 13% between ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 250.10 Td (2015, the last year of actual data, and 2026 to 22.6 million, according to the National Center for Education Statistics. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 238.10 Td (international markets, where government funding generally constitutes a lar) Tj ET Q q 0 0 0 rg BT 356.77 238.10 Td (ger percentage of the overall amount spent on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 226.10 Td (education, including on our products, government spending generally decreases during recessionary periods, which can have ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 214.10 Td (an adverse ef) Tj ET Q q 0 0 0 rg BT 106.56 214.10 Td (fect on our revenues in such markets.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 196.10 Td (T) Tj ET Q q 0 0 0 rg BT 77.41 196.10 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 54.00 184.10 Td (content. ) Tj ET Q q 0 0 0 rg BT 87.88 184.10 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 54.00 172.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.64 172.10 Td (e expect these ef) Tj ET Q q 0 0 0 rg BT 128.80 172.10 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 54.00 160.10 Td (number of students and generate new sources of revenues from our existing customers. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 142.10 Td (School) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 124.10 Td (The United States school \(consisting of grade levels of kinder) Tj ET Q q 0 0 0 rg BT 318.70 124.10 Td (garten to the 12th grade, or K-12\) market consists of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 112.10 Td (approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 114.26 112.10 Td (51million students) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 190.93 112.10 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 54.00 100.10 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 88.10 Td (products to use to facilitate teaching of the curriculum. ) Tj ET Q q 0 0 0 rg BT 275.41 88.10 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 76.10 Td (W) Tj ET Q q 0 0 0 rg BT 63.04 76.10 Td (ithin the United States school market, we believe that certain disciplines, such as advanced placement and EL) Tj ET Q q 0 0 0 rg BT 500.31 76.10 Td (T) Tj ET Q q 0 0 0 rg BT 505.67 76.10 Td (, both of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 64.10 Td (which are areas of focus for the Company) Tj ET Q q 0 0 0 rg BT 220.79 64.10 Td (, have more attractive growth potential.) 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 /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td (Resear) Tj ET Q q 0 0 0 rg BT 99.40 731.10 Td (ch) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 713.10 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 54.00 701.10 Td (periodical databases, primary-source research collections and other reference materials. ) Tj ET Q q 0 0 0 rg BT 406.14 701.10 Td (These materials are principally sold ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 689.10 Td (to academic, public, K-12, corporate and government libraries. ) Tj ET Q q 0 0 0 rg BT 307.61 689.10 Td (T) Tj ET Q q 0 0 0 rg BT 313.02 689.10 Td (otal consumer spending in the research market was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.10 Td (approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 114.26 677.10 Td ($1.5 billion) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.37 677.10 Td ( in the U.S. and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 225.09 677.10 Td ($4 billion) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.70 677.10 Td ( globally in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 311.75 677.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 331.75 677.10 Td (. ) Tj ET Q q 0 0 0 rg BT 336.57 677.10 Td (The research market has seen increased demand for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 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 540.70 665.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (or) Tj ET Q q 0 0 0 rg BT 62.15 653.10 Td (ganization and depth that are dif) Tj ET Q q 0 0 0 rg BT 191.08 653.10 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 54.00 632.10 Td (Impact of our) Tj ET Q q 0 0 0 rg BT 112.70 632.10 Td ( ) Tj ET Q q 0 0 0 rg BT 114.65 632.10 Td (Adoption of Fr) Tj ET Q q 0 0 0 rg BT 178.36 632.10 Td (esh Start ) Tj ET Q q 0 0 0 rg BT 218.36 632.10 Td (Accounting on Results of Operations) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 72.00 618.03 479.87 -9.09 re f /GS0 gs q 0 0 0 rg BT 72.00 611.10 Td (In connection with our adoption of fresh start accounting on March 31, 2014, we recognized our assets and liabilities at ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 606.03 485.51 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 599.10 Td (their respective fair values, resulting in material adjustments to inventory) Tj ET Q q 0 0 0 rg BT 346.04 599.10 Td (, pre-publication costs, property) Tj ET Q q 0 0 0 rg BT 472.86 599.10 Td (, equipment and ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 594.03 460.37 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 587.10 Td (capitalized internal-use software, intangible assets, goodwill, deferred taxes and deferred revenue. Certain of these ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 582.03 485.97 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 575.10 Td (adjustments had a material impact on our consolidated and segment results, primarily revenues and cost of revenues, and ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 570.03 271.30 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 563.10 Td (operating \(loss\) income for the fiscal year ended March31, 2016. ) Tj ET Q q 0 0 0 rg BT 318.08 563.10 Td (A) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 325.30 563.10 Td (ll material adjustments were fully recognized by the end ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (of fiscal year 2016. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 94.00 533.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.00 533.10 Td (The decrease to revenues related to the reduction in deferred revenue for the fiscal year ended March31, 2016 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.00 521.10 Td (is presented in the table below:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 484.6 m 500 484.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 484.6 m 500 484.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 470.6 m 500 470.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 470.6 m 500 470.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 425.6 m 500 425.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 411.6 m 500 411.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 409.6 m 500 409.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 440.85 496.00 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 465.43 496.00 Td (Y) Tj ET Q q 0 0 0 rg BT 471.26 496.00 Td (ear) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 428.70 487.05 Td (Ended Mar) Tj ET Q q 0 0 0 rg BT 472.87 487.05 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 115.50 474.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 453.00 475.05 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.50 460.27 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.50 460.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.30 460.32 Td (\(2.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.15 460.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.50 445.27 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.30 445.32 Td (\(0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.15 445.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.50 430.27 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.15 430.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.50 415.27 Td (Decrease to revenues related to FSA) Tj ET Q q 0 0 0 rg BT 260.72 415.27 Td ( impact) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.50 415.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.30 415.32 Td (\(2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.15 415.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 94.00 393.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.00 393.10 Td (The increase to cost of revenues related to the inventory step-up flow-through for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.00 381.10 Td (March31, 2016 is presented in the table below:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 340.6 m 500 340.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 340.6 m 500 340.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 326.6 m 500 326.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 326.6 m 500 326.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 281.6 m 500 281.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 281.6 m 500 281.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 267.6 m 500 267.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 425 265.6 m 500 265.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 440.85 354.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 465.43 354.05 Td (Y) Tj ET Q q 0 0 0 rg BT 471.26 354.05 Td (ear) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 428.70 345.05 Td (Ended Mar) Tj ET Q q 0 0 0 rg BT 472.87 345.05 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 115.50 330.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 453.00 331.05 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.50 316.27 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.50 316.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.65 316.27 Td (168.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.50 301.27 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.15 301.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.50 286.27 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.15 286.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.50 271.27 Td (Increase to cost of revenues related to FSA) Tj ET Q q 0 0 0 rg BT 286.83 271.27 Td ( impact) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.50 271.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.65 271.27 Td (168.9) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 72.00 238.03 442.97 -9.09 re f /GS0 gs q 0 0 0 rg BT 72.00 231.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 231.10 Td (e excluded the impact of fresh start accounting from our ) Tj ET Q q 0 0 0 rg BT 307.22 231.10 Td (Adjusted Revenues and ) Tj ET Q q 0 0 0 rg BT 403.60 231.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 478.31 231.10 Td ( less Pre-) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 226.03 504.25 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 219.10 Td (Publication Costs non-GAAP) Tj ET Q q 0 0 0 rg BT 171.97 219.10 Td ( measures in our discussion of the performance of our operating segments. See Reconciliations ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 214.03 464.78 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 207.10 Td (of Non-GAAP) Tj ET Q q 0 0 0 rg BT 112.24 207.10 Td ( Financial Measures for the total impact of fresh start accounting excluded from our segment results.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 186.10 Td (Sour) Tj ET Q q 0 0 0 rg BT 74.38 186.10 Td (ces of Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 165.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 165.10 Td (e of) Tj ET Q q 0 0 0 rg BT 95.73 165.10 Td (fer a broad portfolio of products, including digital and print solutions. ) Tj ET Q q 0 0 0 rg BT 376.88 165.10 Td (W) Tj ET Q q 0 0 0 rg BT 385.52 165.10 Td (e compete primarily on the basis of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 153.10 Td (quality of our content and author reputation, the ef) Tj ET Q q 0 0 0 rg BT 255.70 153.10 Td (fectiveness of our digital solutions, customers) Tj ET Q q 0 0 0 rg BT 441.59 153.10 Td ( familiarity with our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 141.10 Td (products, and to a lesser extent, price.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 94.50 123.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 123.10 Td (W) Tj ET Q q 0 0 0 rg BT 121.54 123.10 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 112.50 111.10 Td (guides, laboratory exercises, instructor editions and supplemental products.) Tj ET Q q 0 0 0 rg BT 415.85 111.10 Td (W) Tj ET Q q 0 0 0 rg BT 424.49 111.10 Td (e publish textbooks for all major ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 99.10 Td (academic disciplines of two- and four) Tj ET Q q 0 0 0 rg BT 263.08 99.10 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 87.10 Td (education of) Tj ET Q q 0 0 0 rg BT 162.02 87.10 Td (ferings also include a broad range of digital and print-digital hybrid products. ) Tj ET Q q 0 0 0 rg BT 473.70 87.10 Td (W) Tj ET Q q 0 0 0 rg BT 482.34 87.10 Td (e distribute our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 75.10 Td (products primarily through traditional brick and mortar college bookstores and online book retailers which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 63.10 Td (sell directly to students.) 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 q 0 0 0 rg BT 94.50 731.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 731.10 Td (W) Tj ET Q q 0 0 0 rg BT 121.54 731.10 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 112.50 719.10 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 112.50 707.10 Td (professional training programs.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 94.50 689.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 689.10 Td (W) Tj ET Q q 0 0 0 rg BT 121.54 689.10 Td (ithin the school market, we compete in select elective disciplines, including advanced placement and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 677.10 Td (EL) Tj ET Q q 0 0 0 rg BT 123.80 677.10 Td (T) Tj ET Q q 0 0 0 rg BT 129.17 677.10 Td (.) Tj ET Q q 0 0 0 rg BT 133.98 677.10 Td (The school market is composed of state adoption sales, where states approve certain products for use in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 665.10 Td (public schools statewide, and open territory sales, where individual public school districts determine which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 653.10 Td (educational products to use.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 94.50 635.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 635.10 Td (W) Tj ET Q q 0 0 0 rg BT 121.54 635.10 Td (ithin the research market, we operate principally under our Gale brand.) Tj ET Q q 0 0 0 rg BT 407.63 635.10 Td (W) Tj ET Q q 0 0 0 rg BT 416.26 635.10 Td (e sell directly to many libraries and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 623.10 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 112.50 611.10 Td (integration within web-based information services.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 590.10 Td (Operating Expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 569.10 Td (Our ) Tj ET Q q 0 0 0 rg BT 90.05 569.10 Td (operating ) Tj ET Q q 0 0 0 rg BT 130.32 569.10 Td (expenses ) Tj ET Q q 0 0 0 rg BT 168.91 569.10 Td (are ) Tj ET Q q 0 0 0 rg BT 183.62 569.10 Td (principally ) Tj ET Q q 0 0 0 rg BT 229.44 569.10 Td (the ) Tj ET Q q 0 0 0 rg BT 244.16 569.10 Td (following:) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 94.50 548.70 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 548.70 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 112.50 536.70 Td (textbooks and printed proprietary reference materials. ) Tj ET Q q 0 0 0 rg BT 329.73 536.70 Td (This includes fixed and variable costs related to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 524.70 Td (activation fees/royalties on third party technology) Tj ET Q q 0 0 0 rg BT 310.96 524.70 Td (, royalty payments to our authors, cost of paper) Tj ET Q q 0 0 0 rg BT 499.40 524.70 Td (, printing and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 512.70 Td (binding, and distribution costs, all of which vary as revenues increase or decrease. ) Tj ET Q q 0 0 0 rg BT 442.95 512.70 Td (Also included in cost of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 500.70 Td (revenues are fixed direct and indirect costs incurred for the production of our products and services such as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 488.70 Td (occupancy and employee-related costs associated with editorial, product management, and digital content ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 476.70 Td (development. In addition, cost of revenues includes amortization of pre-publication costs, which are costs ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 464.70 Td (related to the development and creation of a book, reference material or other digital and print content, as well ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 452.70 Td (as 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 94.50 432.30 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 432.30 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 112.50 420.30 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 112.50 408.30 Td (operating our business which typically do not vary as revenues increase or decrease;) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 94.50 387.90 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 387.90 Td (Operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 272.81 387.90 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 112.50 375.90 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 112.50 363.90 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 112.50 351.90 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 94.50 331.50 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 331.50 Td (Depreciation and amortization represents the depreciation of our property) Tj ET Q q 0 0 0 rg BT 406.18 331.50 Td (, equipment and capitalized internal-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 319.50 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 54.00 295.50 Td (Seasonality and Comparability) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 274.50 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 54.00 262.50 Td (calendar) Tj ET Q q 0 0 0 rg BT 87.31 262.50 Td (. ) Tj ET Q q 0 0 0 rg BT 92.13 262.50 Td (This seasonality af) Tj ET Q q 0 0 0 rg BT 166.93 262.50 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 54.00 250.50 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 54.00 238.50 Td (March 31. In addition, changes in our customers) Tj ET Q q 0 0 0 rg BT 250.15 238.50 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 54.00 226.50 Td (the same quarter of the previous year) Tj ET Q q 0 0 0 rg BT 201.87 226.50 Td (, or in a fiscal year with the prior fiscal year) Tj ET Q q 0 0 0 rg BT 376.68 226.50 Td (, where our customers may shift the timing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 214.50 Td (of material orders for a number of reasons, including, but not limited to, changes in academic semester start dates or changes ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 202.50 Td (in inventory management practices.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 184.50 Td (As we continue to migrate our service of) Tj ET Q q 0 0 0 rg BT 234.82 184.50 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 54.00 172.50 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 54.00 160.50 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 54.00 148.50 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 534.50 148.50 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 136.50 Td (current portion of deferred revenue was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 215.04 136.50 Td ($178.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 273.93 136.50 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 293.37 136.50 Td ($171.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 352.26 136.50 Td ( as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 376.42 136.50 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.02 136.50 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.45 136.50 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.45 136.50 Td (, respectively) Tj ET Q q 0 0 0 rg BT 532.12 136.50 Td (, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 124.50 Td (the non-current portion of deferred revenue was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 248.08 124.50 Td ($30.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.97 124.50 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 321.41 124.50 Td ($28.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.30 124.50 Td ( as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.46 124.50 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.06 124.50 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.50 124.50 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 502.50 124.50 Td (, respectively) Tj ET Q q 0 0 0 rg BT 555.16 124.50 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 103.50 Td (Dividends) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 82.50 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 70.50 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 58.50 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 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 54.00 731.10 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 54.00 719.10 Td (approximately $2.94 per share. ) Tj ET Q q 0 0 0 rg BT 180.45 719.10 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 54.00 707.10 Td (time of the dividend.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 686.10 Td (Operational Restructuring and Other) Tj ET Q q 0 0 0 rg BT 214.64 686.10 Td ( Charges) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 665.10 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 54.00 653.10 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 54.00 641.10 Td (align our operations to current market conditions. ) Tj ET Q q 0 0 0 rg BT 254.32 641.10 Td (W) Tj ET Q q 0 0 0 rg BT 262.96 641.10 Td (e incurred $2.3 million of severance char) Tj ET Q q 0 0 0 rg BT 426.88 641.10 Td (ges in connection with these ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (programs. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 608.10 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 54.00 596.10 Td (use of space within two of our of) Tj ET Q q 0 0 0 rg BT 185.73 596.10 Td (fices. ) Tj ET Q q 0 0 0 rg BT 209.43 596.10 Td (W) Tj ET Q q 0 0 0 rg BT 218.07 596.10 Td (e recorded restructuring char) Tj ET Q q 0 0 0 rg BT 333.10 596.10 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 54.00 584.10 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 472.30 584.10 Td (f of the related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 572.10 Td (portion of the applicable landlord inducement liability) Tj ET Q q 0 0 0 rg BT 269.96 572.10 Td (. ) Tj ET Q q 0 0 0 rg BT 274.78 572.10 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 54.00 560.10 Td (remaining lease terms. In connection with exiting the existing facility) Tj ET Q q 0 0 0 rg BT 331.05 560.10 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 54.00 548.10 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 72.00 527.10 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 54.00 515.10 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 54.00 503.10 Td (operations, and to further support the shift from a textbook to a software sales and support model. During fiscal year 2018, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 491.10 Td (we incurred $3.4 million of severance related costs. ) Tj ET Q q 0 0 0 rg BT 262.63 491.10 Td (W) Tj ET Q q 0 0 0 rg BT 271.27 491.10 Td (e also incurred $4.6 million and $2.8 million of process reengineering ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 479.10 Td (consulting costs during the fiscal year 2018 and fourth quarter of fiscal year 2017, respectively) Tj ET Q q 0 0 0 rg BT 432.40 479.10 Td (. ) Tj ET Q q 0 0 0 rg BT 437.22 479.10 Td (These char) Tj ET Q q 0 0 0 rg BT 480.62 479.10 Td (ges are expensed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 467.10 Td (as incurred. ) Tj ET Q q 0 0 0 rg BT 102.59 467.10 Td (As of March 31, 2018, this program has been completed. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 446.10 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 54.00 434.10 Td (improve our cost structure. ) Tj ET Q q 0 0 0 rg BT 164.07 434.10 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 54.00 422.10 Td (included streamlining our or) Tj ET Q q 0 0 0 rg BT 167.40 422.10 Td (ganizational structure and spending at the functional, business and geographic levels. ) Tj ET Q q 0 0 0 rg BT 510.18 422.10 Td (W) Tj ET Q q 0 0 0 rg BT 518.81 422.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 410.10 Td (incurred aggregate operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 289.26 410.10 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 54.00 398.10 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 54.00 386.10 Td (approximately $37 million on an annualized basis. ) Tj ET Q q 0 0 0 rg BT 257.85 386.10 Td (As of March 31, 2018, this program has been completed.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 368.10 Td (During the third quarter of fiscal year 2016, 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 54.00 356.10 Td (improve our cost structure. ) Tj ET Q q 0 0 0 rg BT 164.07 356.10 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 54.00 344.10 Td (included outsourcing services where appropriate and streamlining our or) Tj ET Q q 0 0 0 rg BT 343.73 344.10 Td (ganizational structure. ) Tj ET Q q 0 0 0 rg BT 434.90 344.10 Td (W) Tj ET Q q 0 0 0 rg BT 443.54 344.10 Td (e incurred aggregate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 332.10 Td (char) Tj ET Q q 0 0 0 rg BT 71.03 332.10 Td (ges of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.69 332.10 Td ($12.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 151.58 332.10 Td ( of operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 322.99 332.10 Td (ges under this program, which consisted of $7.8 million of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 320.10 Td (severance costs and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 135.35 320.10 Td ($4.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.24 320.10 Td ( of knowledge transfer 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 54.00 308.10 Td (approximately $9 million on an annualized basis. ) Tj ET Q q 0 0 0 rg BT 252.85 308.10 Td (As of March 31, 2018, this program has been completed.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 290.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 290.10 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 54.00 278.10 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 278.10 Td (ficiency and cost ef) Tj ET Q q 0 0 0 rg BT 139.42 278.10 Td (fectiveness of our operations. See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 298.54 278.10 Td (9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 303.54 278.10 Td (, Operational Restructuring and Other Char) Tj ET Q q 0 0 0 rg BT 481.08 278.10 Td (ges, to our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 266.10 Td (consolidated financial statements.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 245.10 Td (Acquisitions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 224.10 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 54.00 212.10 Td (strategic fit with the vision of our Company) Tj ET Q q 0 0 0 rg BT 228.60 212.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 194.10 Td (In September 2016, we acquired all of the outstanding equity of ) Tj ET Q q 0 0 0 rg BT 329.16 194.10 Td (Advanced Instructional Systems, Inc. \(d/b/a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 182.10 Td (W) Tj ET Q q 0 0 0 rg BT 67.08 182.10 Td (ebAssign\), 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 54.00 170.10 Td (consideration of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 121.20 170.10 Td ($50.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 175.09 170.10 Td (, which consisted of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 257.58 170.10 Td ($50.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 311.47 170.10 Td ( of cash paid at closing and the fair value of the ef) Tj ET Q q 0 0 0 rg BT 511.21 170.10 Td (fective ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 158.10 Td (settlement of an accrued liability and other preexisting contractual obligations. ) Tj ET Q q 0 0 0 rg BT 370.66 158.10 Td (The transaction included ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.01 158.10 Td ($29.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.90 158.10 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 146.10 Td (goodwill and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 109.00 146.10 Td ($15.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.89 146.10 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 446.95 146.10 Td (8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 451.95 146.10 Td ( years. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 128.10 Td (In September 2015, we acquired all of the outstanding equity of Learning Objects, LLC, an education technology ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 116.10 Td (company based in ) Tj ET Q q 0 0 0 rg BT 128.52 116.10 Td (W) Tj ET Q q 0 0 0 rg BT 137.16 116.10 Td (ashington D.C., for total consideration of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 304.07 116.10 Td ($28.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 357.96 116.10 Td (. ) Tj ET Q q 0 0 0 rg BT 362.78 116.10 Td (This transaction included ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.37 116.10 Td ($16.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.26 116.10 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 104.10 Td (goodwill and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 109.00 104.10 Td ($13.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.89 104.10 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 446.95 104.10 Td (10) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.95 104.10 Td ( years. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 86.10 Td (See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 110.88 86.10 Td (2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.88 86.10 Td (, Acquisitions, to our consolidated financial statements for additional information.) 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 /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (Financial Performance) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (Consolidated Results of Operations) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 689.25 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.88 689.25 Td (Y) Tj ET Q q 0 0 0 rg BT 104.88 689.25 Td (ear Ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 149.88 689.25 Td (March31, 2018) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 215.16 689.25 Td ( Compared with Fiscal ) Tj ET Q q 0 0 0 rg BT 311.10 689.25 Td (Y) Tj ET Q q 0 0 0 rg BT 316.10 689.25 Td (ear Ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 361.10 689.25 Td (March31, 2017) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 664.75 m 340.5 664.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 340.5 664.75 m 344.5 664.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 664.75 m 420.5 664.75 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 480.5 664.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 480.5 664.75 m 484.5 664.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 664.75 m 540.5 664.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 650.75 m 340.5 650.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 650.75 m 420.5 650.75 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 480.5 650.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 650.75 m 540.5 650.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 650.75 m 340.5 650.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 650.75 m 420.5 650.75 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 480.5 650.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 650.75 m 540.5 650.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 566.75 m 340.5 566.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 566.75 m 420.5 566.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 566.75 m 480.5 566.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 452.75 m 340.5 452.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 452.75 m 420.5 452.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 452.75 m 480.5 452.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 452.75 m 340.5 452.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 437.75 m 340.5 437.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 452.75 m 420.5 452.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 437.75 m 420.5 437.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 437.75 m 480.5 437.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 339.75 m 340.5 339.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 339.75 m 420.5 339.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 339.75 m 480.5 339.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 339.75 m 340.5 339.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 339.75 m 420.5 339.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 309.75 m 340.5 309.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 295.75 m 340.5 295.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 293.75 m 340.5 293.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 309.75 m 420.5 309.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 295.75 m 420.5 295.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 293.75 m 420.5 293.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 309.75 m 480.5 309.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 295.75 m 480.5 295.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 293.75 m 480.5 293.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 286.95 669.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 311.53 669.20 Td (Y) Tj ET Q q 0 0 0 rg BT 317.36 669.20 Td (ear) Tj ET Q q 0 0 0 rg BT 329.27 669.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 375.61 669.20 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 467.20 669.20 Td (Change) Tj ET Q BT /F3 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 293.50 655.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 373.00 655.20 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 449.75 655.20 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 507.50 655.20 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 640.42 Td (Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.00 640.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 306.65 640.42 Td (1,466.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 347.00 640.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.65 640.42 Td (1,460.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 640.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.15 640.42 Td (6.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.80 640.42 Td (0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 640.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 621.42 Td (Cost of revenues, excluding amortization of pre-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.50 611.42 Td (publication costs and identifiable intangible) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.50 601.42 Td (assets and depreciation stated below) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.15 601.42 Td (625.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.15 601.42 Td (632.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.80 601.47 Td (\(6.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 601.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.45 601.42 Td (\(1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 601.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 586.42 Td (Amortization of pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.15 586.42 Td (127.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.15 586.42 Td (150.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 586.47 Td (\(23.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 586.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.45 586.42 Td (\(15.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 586.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 571.42 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 324.15 571.42 Td (4.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.15 571.42 Td (2.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.15 571.42 Td (1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.75 571.42 Td (68.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 571.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 556.42 Td (T) Tj ET Q q 0 0 0 rg BT 74.41 556.42 Td (otal cost of revenues, excluding depreciation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.50 546.42 Td (stated below) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.15 546.42 Td (756.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.15 546.42 Td (785.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 546.47 Td (\(28.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 546.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.45 546.42 Td (\(3.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 546.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 527.42 Td (Selling, general and administrative expenses,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.50 517.42 Td (excluding depreciation stated below) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.15 517.42 Td (462.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.15 517.42 Td (384.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.15 517.42 Td (77.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.75 517.42 Td (20.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 517.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 502.42 Td (Operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 217.40 502.42 Td (ges) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.15 502.42 Td (10.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.15 502.42 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 502.47 Td (\(16.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 502.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.45 502.42 Td (\(60.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 502.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 487.42 Td (Depreciation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.15 487.42 Td (72.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.15 487.42 Td (83.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 487.47 Td (\(1) Tj ET Q q 0 0 0 rg BT 464.13 487.47 Td (1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 487.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.45 487.42 Td (\(13.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 487.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 472.42 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.15 472.42 Td (90.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.15 472.42 Td (90.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.15 472.42 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.80 472.42 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 472.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 457.42 Td (Other \(income\)/expense, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 320.80 457.47 Td (\(0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 336.65 457.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.15 457.42 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.80 457.47 Td (\(0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 457.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 502.45 457.42 Td (\(200.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 457.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 442.42 Td (T) Tj ET Q q 0 0 0 rg BT 74.76 442.42 Td (otal costs and expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 306.65 442.42 Td (1,391.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.65 442.42 Td (1,370.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.15 442.42 Td (20.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.80 442.42 Td (1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 442.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 423.42 Td (Operating income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.15 423.42 Td (74.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.15 423.42 Td (89.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 423.47 Td (\(14.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 423.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.45 423.42 Td (\(16.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 423.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 404.42 Td (Loss on early extinguishment of debt, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 326.65 404.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.80 404.47 Td (\(10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.65 404.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.15 404.42 Td (10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 502.45 404.42 Td (\(100.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 404.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 389.42 Td (Other income \(expense\), net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.15 389.42 Td (10.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 400.80 389.47 Td (\(1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.65 389.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.15 389.42 Td (1) Tj ET Q q 0 0 0 rg BT 464.15 389.42 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.85 389.42 Td (NM) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 374.42 Td (Interest income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 324.15 374.42 Td (2.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.15 374.42 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.15 374.42 Td (1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.75 374.42 Td (145.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 374.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 359.42 Td (Interest expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.80 359.47 Td (\(162.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 336.65 359.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 390.80 359.47 Td (\(157.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.65 359.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.80 359.47 Td (\(5.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 359.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.80 359.42 Td (3.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 359.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 344.42 Td (Reor) Tj ET Q q 0 0 0 rg BT 76.35 344.42 Td (ganization items, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 326.65 344.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 400.80 344.47 Td (\(0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.65 344.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.15 344.42 Td (0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 502.45 344.42 Td (\(100.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 344.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 329.42 Td (Loss before taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.80 329.47 Td (\(74.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 336.65 329.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.80 329.47 Td (\(79.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.65 329.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.15 329.42 Td (4.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.45 329.42 Td (\(5.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 329.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 314.42 Td (Benefit from income taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.15 314.42 Td (73.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.15 314.42 Td (36.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.15 314.42 Td (37.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.75 314.42 Td (103.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 314.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 299.42 Td (Net loss) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.00 299.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 320.80 299.47 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 336.65 299.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 347.00 299.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.80 299.47 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.65 299.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 299.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.15 299.42 Td (41.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.45 299.42 Td (\(95.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 299.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 280.42 Td (Adjusted Revenues) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 134.49 284.95 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.00 280.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 306.65 280.42 Td (1,461.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 347.00 280.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.65 280.42 Td (1,460.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 280.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.15 280.42 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 518.30 280.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 280.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 261.42 Td (Adjusted EBITDA) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 132.27 265.95 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.00 261.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.15 261.42 Td (402.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 347.00 261.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.15 261.42 Td (470.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 261.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 261.47 Td (\(67.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 261.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.45 261.42 Td (\(14.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 261.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 242.42 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 131.72 242.42 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 238.66 246.95 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.00 242.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.15 242.42 Td (298.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 347.00 242.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.15 242.42 Td (350.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 242.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 242.47 Td (\(51.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 242.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.45 242.42 Td (\(14.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 242.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 223.42 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 131.72 223.42 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 235.86 227.95 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.00 223.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.15 223.42 Td (245.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 347.00 223.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.15 223.42 Td (285.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 223.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 223.47 Td (\(40.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 223.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.45 223.42 Td (\(14.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 223.42 Td (\)%) 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 72.00 206.53 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 202.45 Td (See Overview for the definition of this Non-GAAP) Tj ET Q q 0 0 0 rg BT 281.87 202.45 Td ( financial measure, Segment Operating Results for discussion and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 191.65 Td (Reconciliations of Non-GAAP) Tj ET Q q 0 0 0 rg BT 204.64 191.65 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 90.00 180.85 Td (prepared in accordance with GAAP) Tj ET Q q 0 0 0 rg BT 217.45 180.85 Td (.) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 76.50 159.25 Td (NM = Not meaningful) 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 /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Revenues) Tj ET Q BT /F5 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, 2018) 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 (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 311.91 710.25 Td (d by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 331.91 710.25 Td ($6.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 380.80 710.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.63 710.25 Td (0.4%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.46 710.25 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 432.74 710.25 Td ($1,466.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 499.13 710.25 Td (. ) Tj ET Q q 0 0 0 rg BT 503.95 710.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.00 710.25 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 554.75 710.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 698.25 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 54.00 686.25 Td (and International segments. ) Tj ET Q q 0 0 0 rg BT 169.06 686.25 Td (The increase was partially of) Tj ET Q q 0 0 0 rg BT 284.39 686.25 Td (fset by lower new print textbook sales from our lar) Tj ET Q q 0 0 0 rg BT 487.21 686.25 Td (gest segment, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 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 54.00 662.25 Td (million. ) Tj ET Q q 0 0 0 rg BT 87.71 662.25 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 54.00 650.25 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 650.25 Td (forts to address student af) Tj ET Q q 0 0 0 rg BT 164.16 650.25 Td (fordability concerns which traded of) Tj ET Q q 0 0 0 rg BT 309.48 650.25 Td (f higher priced bundle units for lower) Tj ET Q q 0 0 0 rg BT 459.24 650.25 Td (-priced, more ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 638.25 Td (sustainable standalone units that do not feed the secondary market. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 617.25 Td (Costs and Expenses) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 596.25 Td (T) Tj ET Q q 0 0 0 rg BT 77.19 596.25 Td (otal cost of revenues, excluding depreciation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.01 596.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 297.42 596.25 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 304.92 596.25 Td ($28.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 358.81 596.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 374.64 596.25 Td (3.6%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.47 596.25 Td (, primarily due to a $23.3 million ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 584.25 Td (reduction in amortization of prepublication costs. In fiscal 2017, we recorded $17.7 million of accelerated amortization ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 572.25 Td (associated with the abandonment of certain content projects. ) Tj ET Q q 0 0 0 rg BT 297.90 572.25 Td (W) Tj ET Q q 0 0 0 rg BT 306.54 572.25 Td (e incurred $9.4 million of lower royalty expense related to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 560.25 Td (lower revenues and ef) Tj ET Q q 0 0 0 rg BT 141.83 560.25 Td (ficiency initiatives from the Learning segment, an $8.0 million reduction in print, paper and binding ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 548.25 Td (costs reflective of the shift towards digital, and $5.6 million of lower inventory obsolescence expense. ) Tj ET Q q 0 0 0 rg BT 464.82 548.25 Td (These decreases were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 536.25 Td (partially of) Tj ET Q q 0 0 0 rg BT 97.97 536.25 Td (fset by headcount investments in the digital production and infrastructure teams, a $1.8 million increase in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 524.25 Td (technology infrastructure char) Tj ET Q q 0 0 0 rg BT 174.32 524.25 Td (ges, and $1.7 million increase in identifiable intangible amortization costs for the fiscal year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 512.25 Td (ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 80.38 512.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 143.98 512.25 Td (. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 494.25 Td (Selling, general and administrative expenses, excluding depreciation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 357.28 494.25 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 390.03 494.25 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.53 494.25 Td ($77.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 451.42 494.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.25 494.25 Td (20.1%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 493.08 494.25 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 508.36 494.25 Td ($462.0 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 482.25 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 482.25 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.51 482.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 248.11 482.25 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 54.00 470.25 Td (reductions recorded during the third and fourth quarters of fiscal 2017, as well as an increase of approximately $34.0 million ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 458.25 Td (in employee compensation and other related costs associated with our key strategic initiatives including investments in higher ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 446.25 Td (education digital product teams and infrastructure, international, skills and school business, and fleet renewal cost increase of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 434.25 Td ($2.0 million. ) Tj ET Q q 0 0 0 rg BT 107.34 434.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 157.24 434.25 Td (, we recorded a $3.5 million aggregate reduction to our property and sales and use tax reserves as a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 422.25 Td (result of the expiration of the statute of limitations for certain periods during fiscal 2017.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 404.25 Td (Operational restructuring and other charges ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 257.86 404.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 292.28 404.25 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 299.78 404.25 Td ($16.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 353.67 404.25 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.45 404.25 Td ($10.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 420.34 404.25 Td ( in the fiscal year ended) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 392.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 392.25 Td (. ) Tj ET Q q 0 0 0 rg BT 122.42 392.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 140.46 392.25 Td ($10.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 194.36 392.25 Td ( char) Tj ET Q q 0 0 0 rg BT 213.88 392.25 Td (ges, net, in 2018 includes $5.7 million of severance, $4.4 million of process ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 380.25 Td (reengineering consulting fees, and $0.5 million of net lease exit costs. Char) Tj ET Q q 0 0 0 rg BT 354.85 380.25 Td (ges in the prior period of $26.7 million include) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 368.25 Td ($15.9 million related to severance costs and $10.1 million related to process reengineering consulting fees. Refer to Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 540.25 368.25 Td (9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 545.25 368.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 356.25 Td (Operational Restructuring and Other Char) Tj ET Q q 0 0 0 rg BT 226.54 356.25 Td (ges, for additional details on these char) Tj ET Q q 0 0 0 rg BT 387.13 356.25 Td (ges.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 338.25 Td (Depreciation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.83 338.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.24 338.25 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 169.74 338.25 Td ($1) Tj ET Q q 0 0 0 rg BT 179.37 338.25 Td (1.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 223.26 338.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 239.09 338.25 Td (13.8%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 264.92 338.25 Td (, during the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.48 338.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.08 338.25 Td (, compared with the prior ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 326.25 Td (year period primarily due to the cumulative result of accelerated depreciation of $6.3 million in fiscal 2017 associated with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 314.25 Td (the abandonment of certain internally-developed software projects.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 296.25 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 256.46 296.25 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 277.01 296.25 Td ($90.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 330.91 296.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.34 296.25 Td ($90.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.24 296.25 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.85 296.25 Td (March31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 284.25 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 284.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 93.44 284.25 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 113.44 284.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 166.10 284.25 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 263.25 Td (Non-Operating Items) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 242.25 Td (Loss on early extinguishment of debt ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 226.45 242.25 Td (of $10.8 million for the fiscal year ended March 31, 2017 represents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 230.25 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 54.00 218.25 Td (term loan during the first quarter of fiscal year 2017.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 200.25 Td (Other income/\(expense\), net ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 190.87 200.25 Td (for the fiscal year ended March 31, 2018, was income of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.40 200.25 Td ($10.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.29 200.25 Td ( primarily related to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 188.25 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 432.67 188.25 Td (, partially of) Tj ET Q q 0 0 0 rg BT 481.64 188.25 Td (fset by foreign ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 176.25 Td (currency transaction losses. ) Tj ET Q q 0 0 0 rg BT 166.56 176.25 Td (The same prior year period was expense of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.43 176.25 Td ($1.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.33 176.25 Td ( primarily due to an impairment char) Tj ET Q q 0 0 0 rg BT 539.32 176.25 Td (ge ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 164.25 Td (related to an other) Tj ET Q q 0 0 0 rg BT 126.27 164.25 Td (-than-temporary decline in the fair value of a cost method investment, partially of) Tj ET Q q 0 0 0 rg BT 452.36 164.25 Td (fset by foreign currency ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 152.25 Td (transaction gains.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 134.25 Td (Interest expense ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 141.44 134.25 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 174.19 134.25 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.69 134.25 Td ($5.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 230.58 134.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 246.41 134.25 Td (3.2%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.24 134.25 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.52 134.25 Td ($162.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 341.41 134.25 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.03 134.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.63 134.25 Td (, primarily ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 122.25 Td (due to timing and mix of interest rates on debt issuance in the first quarter of fiscal year 2017.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 104.25 Td (Reorganization items, net, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 182.29 104.25 Td (were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 204.22 104.25 Td ($0.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 253.11 104.25 Td ( 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 92.25 Td (administrative fees associated with our Chapter 1) Tj ET Q q 0 0 0 rg BT 250.79 92.25 Td (1 reor) Tj ET Q q 0 0 0 rg BT 274.21 92.25 Td (ganization ef) Tj ET Q q 0 0 0 rg BT 325.95 92.25 Td (forts. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 74.25 Td (Benefit from income taxes) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 180.60 74.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 183.10 74.25 Td (was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.15 74.25 Td ($73.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 255.04 74.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.48 74.25 Td ($36.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.37 74.25 Td ( for the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 433.88 74.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 497.48 74.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 516.92 74.25 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.92 74.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 62.25 Td (respectively) Tj ET Q q 0 0 0 rg BT 101.66 62.25 Td (. ) Tj ET Q q 0 0 0 rg BT 106.48 62.25 Td (The current year benefit from income taxes was almost entirely attributable to tax benefit resulting from the ) 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 (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 54.00 719.10 Td (the U.S from 35% to 21%, and the current year generation of net operating losses. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 698.10 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.88 698.10 Td (Y) Tj ET Q q 0 0 0 rg BT 104.88 698.10 Td (ear Ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 149.88 698.10 Td (March31, 2017) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 215.16 698.10 Td ( Compared with Fiscal ) Tj ET Q q 0 0 0 rg BT 311.10 698.10 Td (Y) Tj ET Q q 0 0 0 rg BT 316.10 698.10 Td (ear Ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 361.10 698.10 Td (March31, 2016) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 426.38 698.10 Td ( ) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 664.6 m 343.5 664.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 343.5 664.6 m 347.5 664.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 664.6 m 427.5 664.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 664.6 m 491.5 664.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 491.5 664.6 m 495.5 664.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 495.5 664.6 m 555.5 664.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 664.6 m 343.5 664.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 650.6 m 343.5 650.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 664.6 m 427.5 664.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 650.6 m 427.5 650.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 650.6 m 491.5 650.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 495.5 650.6 m 555.5 650.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 650.6 m 427.5 650.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 650.6 m 491.5 650.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 495.5 650.6 m 555.5 650.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 566.6 m 343.5 566.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 566.6 m 427.5 566.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 566.6 m 491.5 566.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 566.6 m 343.5 566.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 452.6 m 343.5 452.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 452.6 m 491.5 452.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 452.6 m 343.5 452.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 437.6 m 343.5 437.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 452.6 m 427.5 452.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 437.6 m 427.5 437.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 437.6 m 491.5 437.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 339.6 m 343.5 339.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 339.6 m 427.5 339.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 339.6 m 491.5 339.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 309.6 m 427.5 309.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 309.6 m 491.5 309.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 309.6 m 343.5 309.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 295.6 m 343.5 295.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 293.6 m 343.5 293.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 309.6 m 427.5 309.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 295.6 m 427.5 295.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 293.6 m 427.5 293.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 309.6 m 491.5 309.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 295.6 m 491.5 295.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 293.6 m 491.5 293.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 289.45 669.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 314.03 669.05 Td (Y) Tj ET Q q 0 0 0 rg BT 319.86 669.05 Td (ear) Tj ET Q q 0 0 0 rg BT 331.77 669.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 378.11 669.05 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 478.20 669.05 Td (Change) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 58.00 654.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 294.00 655.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 378.00 655.05 Td (2016) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 458.75 655.05 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 520.50 655.05 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 640.27 Td (Revenues) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 96.88 644.80 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 640.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.65 640.27 Td (1,460.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 640.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 640.27 Td (1,630.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 640.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.80 640.32 Td (\(170.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 640.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 640.27 Td (\(10.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 640.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 621.27 Td (Cost of revenues, excluding amortization of pre-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 71.50 611.27 Td (publication costs and identifiable intangible ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 71.50 601.27 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 216.45 605.80 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 601.27 Td (632.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 601.27 Td (817.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.80 601.32 Td (\(184.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 601.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 601.27 Td (\(22.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 601.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 586.27 Td (Amortization of pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 586.27 Td (150.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 586.27 Td (149.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 586.27 Td (1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 586.27 Td (0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 586.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 571.27 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 327.15 571.27 Td (2.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.15 571.27 Td (0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 571.27 Td (1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.75 571.27 Td (257.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 571.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 556.27 Td (T) Tj ET Q q 0 0 0 rg BT 75.76 556.27 Td (otal cost of revenues, excluding depreciation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 546.27 Td (stated below) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 546.27 Td (785.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 546.27 Td (967.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.80 546.32 Td (\(181.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 546.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 546.27 Td (\(18.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 546.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 527.27 Td (Selling, general and administrative expenses,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 76.00 517.27 Td (excluding depreciation stated below) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 517.27 Td (384.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 517.27 Td (437.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 517.32 Td (\(52.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 517.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 517.27 Td (\(12.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 517.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 502.27 Td (Operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 218.40 502.27 Td (ges) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 502.27 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 502.27 Td (12.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 502.27 Td (14.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.75 502.27 Td (1) Tj ET Q q 0 0 0 rg BT 525.75 502.27 Td (13.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 502.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 487.27 Td (Depreciation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 487.27 Td (83.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 487.27 Td (74.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 487.27 Td (9.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.80 487.27 Td (13.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 487.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 472.27 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 472.27 Td (90.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 472.27 Td (90.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.65 472.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 533.30 472.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 472.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 457.27 Td (Other expense, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 327.15 457.27 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.15 457.27 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.65 457.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 533.30 457.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 457.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 442.27 Td (T) Tj ET Q q 0 0 0 rg BT 75.76 442.27 Td (otal costs and expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.65 442.27 Td (1,370.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 442.27 Td (1,581.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.80 442.32 Td (\(210.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 442.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 442.27 Td (\(13.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 442.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 423.27 Td (Operating income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 423.27 Td (89.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 423.27 Td (49.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 423.27 Td (40.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.80 423.27 Td (81.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 423.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 404.27 Td (Loss on early extinguishment of debt, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.80 404.32 Td (\(10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.65 404.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 413.65 404.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 404.32 Td (\(10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 404.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 535.85 404.27 Td (NM) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 389.27 Td (Other \(expense\) income, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.80 389.32 Td (\(1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.65 389.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.80 389.32 Td (\(1.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.65 389.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 389.27 Td (0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 389.27 Td (\(47.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 389.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 374.27 Td (Interest income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 327.15 374.27 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.15 374.27 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 374.27 Td (0.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.75 374.27 Td (266.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 374.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 359.27 Td (Interest expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.80 359.32 Td (\(157.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.65 359.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.80 359.32 Td (\(151.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.65 359.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.80 359.32 Td (\(5.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 359.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 359.27 Td (3.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 359.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 344.27 Td (Reor) Tj ET Q q 0 0 0 rg BT 77.35 344.27 Td (ganization items, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.80 344.32 Td (\(0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.65 344.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.80 344.32 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.65 344.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 344.27 Td (1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 344.27 Td (\(77.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 344.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 329.27 Td (Loss before taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.80 329.32 Td (\(79.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.65 329.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.80 329.32 Td (\(105.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.65 329.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 329.27 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 329.27 Td (\(25.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 329.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 314.27 Td (Benefit from income taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 314.27 Td (36.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 314.27 Td (33.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 314.27 Td (2.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 314.27 Td (7.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 314.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 299.27 Td (Net loss) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 299.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.80 299.32 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.65 299.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 299.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.80 299.32 Td (\(72.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.65 299.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 299.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 299.27 Td (29.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 299.27 Td (\(40.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 299.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 280.27 Td (Adjusted Revenues) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 135.49 284.80 Td (\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 280.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.65 280.27 Td (1,460.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 280.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 280.27 Td (1,623.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 280.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.80 280.32 Td (\(162.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 280.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 280.27 Td (\(10.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 280.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 261.27 Td (Adjusted EBITDA) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 133.27 265.80 Td (\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 261.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 261.27 Td (470.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 261.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 261.27 Td (566.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 261.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 261.32 Td (\(95.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 261.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 261.27 Td (\(16.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 261.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 242.27 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 132.72 242.27 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 239.66 246.80 Td (\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 242.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 242.27 Td (350.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 242.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 242.27 Td (438.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 242.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 242.32 Td (\(87.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 242.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 242.27 Td (\(20.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 242.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 223.27 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 132.72 223.27 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 236.86 227.80 Td (\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 223.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 223.27 Td (285.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 223.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 223.27 Td (383.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 223.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 223.32 Td (\(97.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 223.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 223.27 Td (\(25.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 223.27 Td (\)%) 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 72.00 206.38 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 202.30 Td (Fiscal year ended March 31, 2016 includes a reduction of revenues related to fresh start accounting of $2.3 million.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 195.58 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 191.50 Td (Fiscal year ended March 31, 2016 includes the impact of inventory step-up related to fresh start accounting of $168.9 million.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 184.78 Td (\(3\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 180.70 Td (See Overview for the definition of this Non-GAAP) Tj ET Q q 0 0 0 rg BT 281.87 180.70 Td ( financial measure, Segment Operating Results for discussion and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 169.90 Td (Reconciliations of Non-GAAP) Tj ET Q q 0 0 0 rg BT 204.64 169.90 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 90.00 159.10 Td (prepared in accordance with GAAP) Tj ET Q q 0 0 0 rg BT 217.45 159.10 Td (.) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 77.00 148.30 Td (NM = Not meaningful) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 130.30 Td (Revenues) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 112.30 Td (Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.44 112.30 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 213.05 112.30 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 276.65 112.30 Td ( decreased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 321.07 112.30 Td ($170.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.96 112.30 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.79 112.30 Td (10.5%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 421.62 112.30 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 436.90 112.30 Td ($1,460.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 503.29 112.30 Td (. ) Tj ET Q q 0 0 0 rg BT 508.11 112.30 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 100.30 Td (decrease was primarily due to lower revenues from our lar) Tj ET Q q 0 0 0 rg BT 287.33 100.30 Td (gest segment, Learning, which decreased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 454.21 100.30 Td ($175.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 513.11 100.30 Td ( compared ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 88.30 Td (with the prior year period and unfavorable foreign currency exchange fluctuations of approximately $10.4 million. ) Tj ET Q q 0 0 0 rg BT 514.50 88.30 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 76.30 Td (decrease in Learning revenues was impacted by lower enrollments and continued pressure on print products. ) Tj ET Q q 0 0 0 rg BT 490.34 76.30 Td (These decreases ) 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 /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (were partially of) Tj ET Q q 0 0 0 rg BT 119.90 731.10 Td (fset by growth in our core digital product sales, and growth in our international businesses within both the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (Gale and International segments.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 698.10 Td (Costs and Expenses) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 677.10 Td (T) Tj ET Q q 0 0 0 rg BT 77.19 677.10 Td (otal cost of revenues, excluding depreciation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.01 677.10 Td (decreased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 304.92 677.10 Td ($181.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.81 677.10 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.64 677.10 Td (18.8%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.47 677.10 Td (, primarily due to the $168.9 million ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (lower inventory step-up adjustment recognized in the prior year in connection with our adoption of fresh start accounting, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td ($21.2 million of lower royalty expense and a $19.2 million reduction in paper) Tj ET Q q 0 0 0 rg BT 364.64 653.10 Td (, print and binding costs related to lower ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (revenues. ) Tj ET Q q 0 0 0 rg BT 94.36 641.10 Td (These decreases were partially of) Tj ET Q q 0 0 0 rg BT 227.44 641.10 Td (fset by increased spending in total of $28.9 million on product development and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (production costs during the fiscal year ended March 31, 2017. In addition, amortization of prepublication costs includes ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (approximately $17.7 million of accelerated amortization associated with the abandonment of certain content projects during ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (the fiscal year ended March 31, 2017.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 587.10 Td (Selling, general and administrative expenses, excluding depreciation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 357.28 587.10 Td (decreased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.19 587.10 Td ($52.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.08 587.10 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.91 587.10 Td (12.1%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 494.74 587.10 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.02 587.10 Td ($384.7 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.10 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 575.10 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.51 575.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 248.11 575.10 Td ( primarily due to a $42.9 million reduction in employee compensation and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 Td (related costs, associated with our strategic cost savings initiative to reduce headcount and other costs as well as a reduction in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (employee incentive compensation. ) Tj ET Q q 0 0 0 rg BT 194.51 551.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 244.42 551.10 Td (, sales and marketing were $4.5 million lower in the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 539.10 Td ( compared with the prior year period and during the fiscal year ended March 31, 2017, we recorded a $3.5 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.10 Td (million aggregate reduction to our property and sales and use tax reserves as a result of the expiration of statute of limitations ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.10 Td (for certain periods.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 497.10 Td (Operational restructuring and other charges ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 257.86 497.10 Td (increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 298.12 497.10 Td ($14.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 352.01 497.10 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.79 497.10 Td ($26.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 418.68 497.10 Td ( in the fiscal year ended) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 485.10 Td (. ) Tj ET Q q 0 0 0 rg BT 122.42 485.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 140.46 485.10 Td ($26.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 194.36 485.10 Td ( includes $15.9 million of severance costs and $10.1 million related to process ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.10 Td (reengineering consulting fees, which were both primarily incurred under the 2017 Program. Char) Tj ET Q q 0 0 0 rg BT 442.59 473.10 Td (ges in the prior year period ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.10 Td (of $12.5 million included $4.7 million of knowledge transfer costs. ) Tj ET Q q 0 0 0 rg BT 324.61 461.10 Td (The remaining $7.8 million primarily related to severance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.10 Td (costs incurred under the 2016 Program.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 431.10 Td (Depreciation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.83 431.10 Td (increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 168.08 431.10 Td ($9.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 216.97 431.10 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 232.80 431.10 Td (13.2%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 258.63 431.10 Td (, during the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 377.20 431.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.79 431.10 Td (, compared with the prior ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.10 Td (year period primarily due to accelerated depreciation of $6.3 million associated with the abandonment of certain internally-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.10 Td (developed software projects during the fiscal year ended March 31, 2017.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 389.10 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 256.46 389.10 Td ( was $90.0 million for both the fiscal year ended March31, 2017, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 377.10 Td (2016.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 356.10 Td (Non-Operating Items) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 335.10 Td (Loss on early extinguishment of debt ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 226.45 335.10 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 392.79 335.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.39 335.10 Td ( represents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.10 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 54.00 311.10 Td (term loan during the fiscal year ended March 31, 2017.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 293.10 Td (Other expense, net ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 151.44 293.10 Td (was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 169.49 293.10 Td ($1.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 218.38 293.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 237.82 293.10 Td ($1.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 286.71 293.10 Td ( for the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.22 293.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.82 293.10 Td ( and 2016 respectively) Tj ET Q q 0 0 0 rg BT 545.42 293.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.10 Td (Other expense in each period was primarily due to an impairment char) Tj ET Q q 0 0 0 rg BT 335.66 281.10 Td (ge related to an other) Tj ET Q q 0 0 0 rg BT 419.86 281.10 Td (-than-temporary decline in the fair ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.10 Td (value of a cost method investment, partially of) Tj ET Q q 0 0 0 rg BT 239.88 269.10 Td (fset by foreign currency transaction gains.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 251.10 Td (Interest expense ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 141.44 251.10 Td (increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.69 251.10 Td ($5.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 230.58 251.10 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 246.41 251.10 Td (3.8%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.24 251.10 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.52 251.10 Td ($157.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 341.41 251.10 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.03 251.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.63 251.10 Td (, primarily ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 239.10 Td (due to the issuance of our new debt during the fiscal year ended March 31, 2017.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 221.10 Td (Reorganization items, net, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 182.29 221.10 Td (were $0.4 million and $1.8 million for the fiscal years ended March31, 2017 and 2016, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.10 Td (respectively) Tj ET Q q 0 0 0 rg BT 101.66 209.10 Td (, and represent post-emer) Tj ET Q q 0 0 0 rg BT 202.55 209.10 Td (gence professional and administrative fees incurred for continued bankruptcy-related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 197.10 Td (claims management ef) Tj ET Q q 0 0 0 rg BT 143.78 197.10 Td (forts. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 179.10 Td (Benefit from income taxes) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 180.60 179.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 183.10 179.10 Td (was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.15 179.10 Td ($36.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 255.04 179.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.48 179.10 Td ($33.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.37 179.10 Td ( for the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 433.88 179.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 497.48 179.10 Td ( and 2016, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 167.10 Td (respectively) Tj ET Q q 0 0 0 rg BT 101.66 167.10 Td (. ) Tj ET Q q 0 0 0 rg BT 106.48 167.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 124.53 167.10 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 157.28 167.10 Td ( of the ef) Tj ET Q q 0 0 0 rg BT 192.92 167.10 Td (fective tax rate to 45.5% for the fiscal year ended March 31, 2017 compared with 31.6% in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 155.10 Td (the prior year period was primarily attributable to favorable return-to-provision adjustments and income in jurisdictions with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.10 Td (full valuation allowances.) 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 (Segment Operating Results) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.88 710.25 Td (Y) Tj ET Q q 0 0 0 rg BT 104.88 710.25 Td (ear Ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 149.88 710.25 Td (March31, 2018) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 215.16 710.25 Td ( Compared with Fiscal ) Tj ET Q q 0 0 0 rg BT 311.10 710.25 Td (Y) Tj ET Q q 0 0 0 rg BT 316.10 710.25 Td (ear Ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 361.10 710.25 Td (March31, 2017) Tj ET Q BT /F5 10.00 Tf ET 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 679.75 m 344.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 679.75 m 348.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 679.75 m 428.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 679.75 m 492.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 679.75 m 496.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 496.5 679.75 m 556.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 665.75 m 344.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 679.75 m 428.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 665.75 m 428.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 665.75 m 492.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 496.5 665.75 m 556.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 665.75 m 344.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 665.75 m 428.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 665.75 m 492.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 496.5 665.75 m 556.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 605.75 m 344.5 605.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 605.75 m 428.5 605.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 605.75 m 344.5 605.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 591.75 m 344.5 591.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 589.75 m 344.5 589.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 605.75 m 428.5 605.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 591.75 m 428.5 591.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 589.75 m 428.5 589.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 605.75 m 492.5 605.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 591.75 m 492.5 591.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 589.75 m 492.5 589.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 526.75 m 344.5 526.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 512.75 m 344.5 512.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 510.75 m 344.5 510.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 526.75 m 428.5 526.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 512.75 m 428.5 512.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 510.75 m 428.5 510.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 526.75 m 492.5 526.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 512.75 m 492.5 512.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 510.75 m 492.5 510.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 447.75 m 344.5 447.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 433.75 m 344.5 433.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 431.75 m 344.5 431.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 447.75 m 428.5 447.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 433.75 m 428.5 433.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 431.75 m 428.5 431.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 447.75 m 492.5 447.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 433.75 m 492.5 433.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 431.75 m 492.5 431.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 368.75 m 344.5 368.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 354.75 m 344.5 354.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 352.75 m 344.5 352.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 368.75 m 428.5 368.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 354.75 m 428.5 354.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 352.75 m 428.5 352.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 368.75 m 492.5 368.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 354.75 m 492.5 354.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 352.75 m 492.5 352.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 290.45 684.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 315.03 684.20 Td (Y) Tj ET Q q 0 0 0 rg BT 320.86 684.20 Td (ear) Tj ET Q q 0 0 0 rg BT 332.77 684.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 379.11 684.20 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 479.20 684.20 Td (Change) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 57.00 670.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 295.00 670.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 379.00 670.20 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 459.75 670.20 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 521.50 670.20 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 655.42 Td (Adjusted Revenues) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 134.49 659.95 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 640.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 640.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 640.42 Td (944.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 640.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 640.42 Td (978.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 640.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.80 640.47 Td (\(33.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 640.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.45 640.42 Td (\(3.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 640.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 625.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 625.42 Td (232.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 625.42 Td (229.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.15 625.42 Td (3.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.80 625.42 Td (1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 547.65 625.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 610.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 610.42 Td (283.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 610.42 Td (253.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.15 610.42 Td (30.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 526.80 610.42 Td (12.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 547.65 610.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 595.42 Td (T) Tj ET Q q 0 0 0 rg BT 74.76 595.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 595.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.65 595.42 Td (1,461.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 595.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.65 595.42 Td (1,460.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 595.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.15 595.42 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 534.30 595.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 547.65 595.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 576.42 Td (Adjusted EBITDA) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 132.27 580.95 Td (\(1\)\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 561.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 561.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 561.42 Td (237.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 561.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 561.42 Td (319.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 561.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.80 561.47 Td (\(82.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 561.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.45 561.42 Td (\(25.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 561.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 546.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.15 546.42 Td (92.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.15 546.42 Td (94.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.80 546.47 Td (\(1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 546.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.45 546.42 Td (\(1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 546.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 531.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.15 531.42 Td (71.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.15 531.42 Td (56.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.15 531.42 Td (15.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 526.80 531.42 Td (27.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 547.65 531.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 516.42 Td (T) Tj ET Q q 0 0 0 rg BT 74.76 516.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 516.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 516.42 Td (402.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 516.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 516.42 Td (470.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 516.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.80 516.47 Td (\(67.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 516.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.45 516.42 Td (\(14.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 516.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 497.42 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 131.72 497.42 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 238.66 501.95 Td (\(1\)\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 482.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 482.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 482.42 Td (183.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 482.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 482.42 Td (250.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 482.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.80 482.47 Td (\(66.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 482.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.45 482.42 Td (\(26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 482.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 467.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.15 467.42 Td (66.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.15 467.42 Td (63.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.15 467.42 Td (2.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.80 467.42 Td (4.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 547.65 467.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 452.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.15 452.42 Td (48.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.15 452.42 Td (36.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.15 452.42 Td (12.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 526.80 452.42 Td (33.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 547.65 452.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 437.42 Td (T) Tj ET Q q 0 0 0 rg BT 74.76 437.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 437.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 437.42 Td (298.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 437.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 437.42 Td (350.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 437.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.80 437.47 Td (\(51.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 437.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.45 437.42 Td (\(14.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 437.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 418.42 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 131.72 418.42 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 235.86 422.95 Td (\(1\)\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 403.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 403.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 403.42 Td (140.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 403.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 403.42 Td (197.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 403.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.80 403.47 Td (\(56.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 403.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.45 403.42 Td (\(28.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 403.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 388.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.15 388.42 Td (61.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.15 388.42 Td (56.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.15 388.42 Td (5.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 526.80 388.42 Td (10.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 547.65 388.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 373.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.15 373.42 Td (43.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.15 373.42 Td (32.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.15 373.42 Td (10.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 526.80 373.42 Td (32.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 547.65 373.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 358.42 Td (T) Tj ET Q q 0 0 0 rg BT 74.41 358.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 358.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 358.42 Td (245.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 358.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 358.42 Td (285.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 358.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.80 358.47 Td (\(40.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 358.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.45 358.42 Td (\(14.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 358.42 Td (\)%) 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 72.00 341.53 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 337.45 Td (See Overview for the definition of this Non-GAAP) Tj ET Q q 0 0 0 rg BT 281.87 337.45 Td ( financial measure and Reconciliations of Non-GAAP) Tj ET Q q 0 0 0 rg BT 479.98 337.45 Td ( Financial Measures ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 326.65 Td (for reconciliations to the most directly comparable financial measures prepared in accordance with GAAP) Tj ET Q q 0 0 0 rg BT 471.11 326.65 Td (.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 319.93 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 315.85 Td (W) Tj ET Q q 0 0 0 rg BT 97.77 315.85 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 90.00 305.05 Td (identification or activity) Tj ET Q q 0 0 0 rg BT 176.39 305.05 Td (, or revenue.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 287.05 Td (Learning ) Tj ET Q q 0 0 0 rg BT 112.47 287.05 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 294.95 287.05 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 360.23 287.05 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 362.73 287.05 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.15 287.05 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.65 287.05 Td ($33.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.54 287.05 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 474.37 287.05 Td (3.4%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.20 287.05 Td (, primarily due ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 275.05 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 389.80 275.05 Td (-priced print \(rental\) and digital options, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 263.05 Td (partially of) Tj ET Q q 0 0 0 rg BT 97.97 263.05 Td (fset by growth of standalone core digital products and growth of sales of ) Tj ET Q q 0 0 0 rg BT 389.84 263.05 Td (Advanced Placement & Elective ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 251.05 Td (materials in the School channel.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 233.05 Td (Gale ) Tj ET Q q 0 0 0 rg BT 93.57 233.05 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 276.05 233.05 Td (March31, 2018) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 341.33 233.05 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.83 233.05 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 376.58 233.05 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.08 233.05 Td ($3.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 432.98 233.05 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.81 233.05 Td (1.7%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.64 233.05 Td (, primarily due to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 221.05 Td (strong performance in ) Tj ET Q q 0 0 0 rg BT 144.25 221.05 Td (Asia, ) Tj ET Q q 0 0 0 rg BT 167.03 221.05 Td (Australia, Latin ) Tj ET Q q 0 0 0 rg BT 231.73 221.05 Td (America, the U.S. public market, partially of) Tj ET Q q 0 0 0 rg BT 410.39 221.05 Td (fset by the ongoing decline in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.05 Td (U.S. print business and declines in EMEA. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 191.05 Td (International ) Tj ET Q q 0 0 0 rg BT 129.15 191.05 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 311.63 191.05 Td (March31, 2018) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 376.91 191.05 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.41 191.05 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 412.17 191.05 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.67 191.05 Td ($30.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.56 191.05 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.39 191.05 Td (12.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.22 191.05 Td (, primarily ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 179.05 Td (due to strong sales of our higher education products in ) Tj ET Q q 0 0 0 rg BT 273.40 179.05 Td (Australia, sales growth in our EL) Tj ET Q q 0 0 0 rg BT 405.23 179.05 Td (T) Tj ET Q q 0 0 0 rg BT 411.16 179.05 Td ( products in EMEA) Tj ET Q q 0 0 0 rg BT 488.65 179.05 Td ( and Latin ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 167.05 Td (America, partially of) Tj ET Q q 0 0 0 rg BT 137.39 167.05 Td (fset by a decline in sales of higher education products in ) Tj ET Q q 0 0 0 rg BT 364.27 167.05 Td (Asia.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 149.05 Td (Learning ) Tj ET Q q 0 0 0 rg BT 112.47 149.05 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 187.77 149.05 Td ( less Pre-Publication Costs for the fiscal year ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 402.47 149.05 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.76 149.05 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.26 149.05 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 504.67 149.05 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.17 149.05 Td ($66.8 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 137.05 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 137.05 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.72 137.05 Td (26.7%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 124.55 137.05 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 139.83 137.05 Td ($183.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 198.72 137.05 Td ( due to the contribution of lower Learning ) Tj ET Q q 0 0 0 rg BT 368.68 137.05 Td (Adjusted Revenues, operating expenses ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 125.05 Td (associated with our acquisition of ) Tj ET Q q 0 0 0 rg BT 190.73 125.05 Td (W) Tj ET Q q 0 0 0 rg BT 199.37 125.05 Td (ebAssign in September 2016 and, higher employee compensation lar) Tj ET Q q 0 0 0 rg BT 474.40 125.05 Td (gely due to a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 113.05 Td (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 54.00 101.05 Td (education digital product and technology infrastructure teams. ) Tj ET Q q 0 0 0 rg BT 304.48 101.05 Td (Additionally) Tj ET Q q 0 0 0 rg BT 354.38 101.05 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 89.05 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 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 /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td ( ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 77.00 731.10 Td (Gale ) Tj ET Q q 0 0 0 rg BT 98.57 731.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 173.87 731.10 Td ( less Pre-Publication Costs for the fiscal year ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 388.57 731.10 Td (March31, 2018) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 453.86 731.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.36 731.10 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.11 731.10 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.61 731.10 Td ($2.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 545.50 731.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 64.83 719.10 Td (4.4%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.66 719.10 Td (, primarily due to the contribution of higher revenue and a decrease in prepublication spend, partially of) Tj ET Q q 0 0 0 rg BT 500.34 719.10 Td (fset by higher ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (employee compensation and related costs.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 689.10 Td (International ) Tj ET Q q 0 0 0 rg BT 129.15 689.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 204.45 689.10 Td ( less Pre-Publication Costs for the fiscal year ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 419.15 689.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.44 689.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.94 689.10 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.69 689.10 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.19 689.10 Td ($12.1 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.10 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 677.10 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.72 677.10 Td (33.1%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 124.55 677.10 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 139.83 677.10 Td ($48.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 193.72 677.10 Td (. ) Tj ET Q q 0 0 0 rg BT 198.54 677.10 Td (The high flow-through on increased International ) Tj ET Q q 0 0 0 rg BT 397.93 677.10 Td (Adjusted Revenues was driven by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (improved mar) Tj ET Q q 0 0 0 rg BT 110.19 665.10 Td (gins and operating ef) Tj ET Q q 0 0 0 rg BT 194.15 665.10 Td (ficiencies, partially of) Tj ET Q q 0 0 0 rg BT 281.43 665.10 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 54.00 653.10 Td (prepublication spend.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 629.10 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.88 629.10 Td (Y) Tj ET Q q 0 0 0 rg BT 104.88 629.10 Td (ear Ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 149.88 629.10 Td (March31, 2017) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 215.16 629.10 Td ( Compared with Fiscal ) Tj ET Q q 0 0 0 rg BT 311.10 629.10 Td (Y) Tj ET Q q 0 0 0 rg BT 316.10 629.10 Td (ear Ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 361.10 629.10 Td (March31, 2016) Tj ET Q BT /F5 10.00 Tf ET 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 595.6 m 343.5 595.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 343.5 595.6 m 347.5 595.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 595.6 m 427.5 595.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 595.6 m 491.5 595.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 491.5 595.6 m 495.5 595.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 495.5 595.6 m 555.5 595.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 581.6 m 343.5 581.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 581.6 m 427.5 581.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 581.6 m 491.5 581.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 495.5 581.6 m 555.5 581.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 521.6 m 343.5 521.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 521.6 m 427.5 521.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 521.6 m 491.5 521.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 521.6 m 343.5 521.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 507.6 m 343.5 507.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 505.6 m 343.5 505.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 521.6 m 427.5 521.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 507.6 m 427.5 507.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 505.6 m 427.5 505.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 521.6 m 491.5 521.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 507.6 m 491.5 507.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 505.6 m 491.5 505.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 442.6 m 343.5 442.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 428.6 m 343.5 428.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 426.6 m 343.5 426.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 442.6 m 427.5 442.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 428.6 m 427.5 428.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 426.6 m 427.5 426.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 442.6 m 491.5 442.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 428.6 m 491.5 428.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 426.6 m 491.5 426.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 363.6 m 343.5 363.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 349.6 m 343.5 349.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 347.6 m 343.5 347.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 363.6 m 427.5 363.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 349.6 m 427.5 349.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 347.6 m 427.5 347.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 363.6 m 491.5 363.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 349.6 m 491.5 349.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 347.6 m 491.5 347.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 284.6 m 343.5 284.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 270.6 m 343.5 270.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 268.6 m 343.5 268.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 284.6 m 427.5 284.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 270.6 m 427.5 270.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 268.6 m 427.5 268.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 284.6 m 491.5 284.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 270.6 m 491.5 270.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 268.6 m 491.5 268.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 289.45 600.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 314.03 600.05 Td (Y) Tj ET Q q 0 0 0 rg BT 319.86 600.05 Td (ear) Tj ET Q q 0 0 0 rg BT 331.77 600.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 378.11 600.05 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 478.20 600.05 Td (Change) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 58.00 585.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 294.00 586.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 378.00 586.05 Td (2016) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 458.75 586.05 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 520.50 586.05 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 571.27 Td (Adjusted Revenues) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 135.49 575.80 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 556.27 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 556.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 556.27 Td (978.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 556.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 556.27 Td (1,153.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 556.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.80 556.32 Td (\(175.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 556.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 556.27 Td (\(15.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 556.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 541.27 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 541.27 Td (229.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 541.27 Td (230.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.80 541.32 Td (\(1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 541.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.45 541.27 Td (\(0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 541.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 526.27 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 526.27 Td (253.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 526.27 Td (238.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 526.27 Td (14.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 526.27 Td (6.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 526.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 511.27 Td (T) Tj ET Q q 0 0 0 rg BT 75.76 511.27 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 511.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.65 511.27 Td (1,460.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 511.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 511.27 Td (1,623.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 511.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.80 511.32 Td (\(162.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 511.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 511.27 Td (\(10.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 511.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 492.27 Td (Adjusted EBITDA) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 133.27 496.80 Td (\(1\)\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 477.27 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 477.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 477.27 Td (319.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 477.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 477.27 Td (432.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 477.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.80 477.32 Td (\(1) Tj ET Q q 0 0 0 rg BT 470.13 477.32 Td (12.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 477.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 477.27 Td (\(25.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 477.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 462.27 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 462.27 Td (94.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 462.27 Td (90.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 462.27 Td (3.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 462.27 Td (3.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 462.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 447.27 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 447.27 Td (56.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 447.27 Td (43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 447.27 Td (13.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.80 447.27 Td (30.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 447.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 432.27 Td (T) Tj ET Q q 0 0 0 rg BT 75.76 432.27 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 432.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 432.27 Td (470.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 432.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 432.27 Td (566.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 432.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 432.32 Td (\(95.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 432.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 432.27 Td (\(16.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 432.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 413.27 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 132.72 413.27 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 239.66 417.80 Td (\(1\)\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 398.27 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 398.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 398.27 Td (250.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 398.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 398.27 Td (359.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 398.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.80 398.32 Td (\(109.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 398.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 398.27 Td (\(30.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 398.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 383.27 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 383.27 Td (63.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 383.27 Td (55.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 383.27 Td (8.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.80 383.27 Td (14.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 383.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 368.27 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 368.27 Td (36.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 368.27 Td (23.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 368.27 Td (13.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.80 368.27 Td (59.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 368.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 353.27 Td (T) Tj ET Q q 0 0 0 rg BT 75.76 353.27 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 353.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 353.27 Td (350.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 353.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 353.27 Td (438.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 353.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 353.32 Td (\(87.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 353.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 353.27 Td (\(20.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 353.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 334.27 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 132.72 334.27 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 236.86 338.80 Td (\(1\)\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 319.27 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 319.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 319.27 Td (197.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 319.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 319.27 Td (31) Tj ET Q q 0 0 0 rg BT 411.15 319.27 Td (1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 319.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.80 319.32 Td (\(1) Tj ET Q q 0 0 0 rg BT 470.13 319.32 Td (14.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 319.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 319.27 Td (\(36.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 319.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 304.27 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 304.27 Td (56.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 304.27 Td (51.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 304.27 Td (4.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 304.27 Td (8.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 304.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 289.27 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 289.27 Td (32.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 289.27 Td (19.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 289.27 Td (13.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.80 289.27 Td (68.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 289.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 274.27 Td (T) Tj ET Q q 0 0 0 rg BT 75.41 274.27 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 274.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 274.27 Td (285.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 274.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 274.27 Td (383.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 274.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 274.32 Td (\(97.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 274.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 274.27 Td (\(25.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 274.27 Td (\)%) 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 72.00 257.38 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 253.30 Td (See Overview for the definition of this Non-GAAP) Tj ET Q q 0 0 0 rg BT 281.87 253.30 Td ( financial measure and Reconciliations of Non-GAAP) Tj ET Q q 0 0 0 rg BT 479.98 253.30 Td ( Financial Measures ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 242.50 Td (for reconciliations to the most directly comparable financial measures prepared in accordance with GAAP) Tj ET Q q 0 0 0 rg BT 471.11 242.50 Td (.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 235.78 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 231.70 Td (W) Tj ET Q q 0 0 0 rg BT 97.77 231.70 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 90.00 220.90 Td (identification or activity) Tj ET Q q 0 0 0 rg BT 176.39 220.90 Td (, or revenue.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 202.90 Td (Learning ) Tj ET Q q 0 0 0 rg BT 112.47 202.90 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 294.95 202.90 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 360.23 202.90 Td ( decreased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.65 202.90 Td ($175.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.54 202.90 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.37 202.90 Td (15.2%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.20 202.90 Td (, primarily ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 190.90 Td (driven by a significant increase in the availability of counterfeit print books in the market, the impact of used and rental ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 178.90 Td (markets, lower enrollments, and front list cycling. In addition, the prior year includes one-time orders that were not repeated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 166.90 Td (in the current year) Tj ET Q q 0 0 0 rg BT 126.47 166.90 Td (. Our print business continues to be impacted by the attrition to digital solutions and the impact from the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 154.90 Td (used book market. ) Tj ET Q q 0 0 0 rg BT 129.91 154.90 Td (These decreases were partially of) Tj ET Q q 0 0 0 rg BT 262.99 154.90 Td (fset by overall growth associated with our core digital product sales as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 142.90 Td (well as the impact of the acquisition of ) Tj ET Q q 0 0 0 rg BT 211.55 142.90 Td (W) Tj ET Q q 0 0 0 rg BT 220.19 142.90 Td (ebAssign during the fiscal year ended March 31, 2017.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 124.90 Td (Gale ) Tj ET Q q 0 0 0 rg BT 93.57 124.90 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 276.05 124.90 Td (March31, 2017) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 341.33 124.90 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.83 124.90 Td (decreased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.75 124.90 Td ($1.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.64 124.90 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 450.47 124.90 Td (0.7%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.30 124.90 Td (, primarily due to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 112.90 Td (impact of the ongoing decline in the print business in the U.S., a portion of which is a result of customer inventory ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 100.90 Td (adjustments, partially of) Tj ET Q q 0 0 0 rg BT 150.74 100.90 Td (fset by increased international sales driven by strategic investment in new markets. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 82.90 Td (International ) Tj ET Q q 0 0 0 rg BT 129.15 82.90 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 311.63 82.90 Td (March31, 2017) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 376.91 82.90 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.41 82.90 Td (increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.67 82.90 Td ($14.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.56 82.90 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.39 82.90 Td (6.2%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.22 82.90 Td (, primarily ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 70.90 Td (due to increased sales of our higher education products in EMEA) Tj ET Q q 0 0 0 rg BT 314.48 70.90 Td ( and ) Tj ET Q q 0 0 0 rg BT 333.37 70.90 Td (Australia, and our EL) Tj ET Q q 0 0 0 rg BT 419.09 70.90 Td (T) Tj ET Q q 0 0 0 rg BT 425.02 70.90 Td ( products in Latin ) Tj ET Q q 0 0 0 rg BT 497.79 70.90 Td (America, ) Tj ET Q q 0 0 0 rg BT 536.66 70.90 Td (Asia ) 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 /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (and EMEA. ) Tj ET Q q 0 0 0 rg BT 104.09 731.10 Td (These increases were partially of) Tj ET Q q 0 0 0 rg BT 235.51 731.10 Td (fset by lower sales of our higher education products in Latin ) Tj ET Q q 0 0 0 rg BT 478.50 731.10 Td (America, as well as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (our U.S. EL) Tj ET Q q 0 0 0 rg BT 101.41 719.10 Td (T) Tj ET Q q 0 0 0 rg BT 107.34 719.10 Td ( and engineering products.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 701.10 Td (Learning ) Tj ET Q q 0 0 0 rg BT 112.47 701.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 187.77 701.10 Td ( less Pre-Publication Costs for the fiscal year ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 402.47 701.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.76 701.10 Td ( decreased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.17 701.10 Td ($109.3 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 689.10 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 689.10 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.72 689.10 Td (30.4%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 124.55 689.10 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 139.83 689.10 Td ($250.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 198.72 689.10 Td ( primarily due to the contribution of lower Learning ) Tj ET Q q 0 0 0 rg BT 408.39 689.10 Td (Adjusted Revenues. ) Tj ET Q q 0 0 0 rg BT 490.69 689.10 Td (This decrease ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.10 Td (was partially of) Tj ET Q q 0 0 0 rg BT 116.02 677.10 Td (fset by overall lower selling, general and administrative expenses associated with our strategic cost savings ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (initiatives and lower employee incentive compensation, as well as lower spending on pre-publication costs.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 647.10 Td (Gale ) Tj ET Q q 0 0 0 rg BT 93.57 647.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 168.87 647.10 Td ( less Pre-Publication Costs for the fiscal year ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 383.57 647.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.86 647.10 Td ( increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.61 647.10 Td ($8.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 540.50 647.10 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 635.10 Td (14.4%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 79.83 635.10 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 95.11 635.10 Td ($63.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 149.00 635.10 Td ( despite the contribution of lower ) Tj ET Q q 0 0 0 rg BT 283.97 635.10 Td (Adjusted Revenues due to reduced spending on pre-publication ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 623.10 Td (costs and lower overall operating expenses as a result of favorable product mix and improved ef) Tj ET Q q 0 0 0 rg BT 437.86 623.10 Td (ficiencies.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 605.10 Td (International ) Tj ET Q q 0 0 0 rg BT 129.15 605.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 204.45 605.10 Td ( less Pre-Publication Costs for the fiscal year ended ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 419.15 605.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.44 605.10 Td ( increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.19 605.10 Td ($13.6 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 593.10 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.72 593.10 Td (59.1%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 124.55 593.10 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 139.83 593.10 Td ($36.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 193.72 593.10 Td (. ) Tj ET Q q 0 0 0 rg BT 198.54 593.10 Td (The high flow-through on increased International ) Tj ET Q q 0 0 0 rg BT 397.93 593.10 Td (Adjusted Revenues was driven by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.10 Td (improved mar) Tj ET Q q 0 0 0 rg BT 110.19 581.10 Td (gins and operating ef) Tj ET Q q 0 0 0 rg BT 194.15 581.10 Td (ficiencies.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 558.30 Td (Reconciliations of Non-GAAP) Tj ET Q q 0 0 0 rg BT 199.22 558.30 Td ( Financial Measur) Tj ET Q q 0 0 0 rg BT 276.81 558.30 Td (es) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 537.30 Td (The following table reconciles ) Tj ET Q q 0 0 0 rg BT 195.85 537.30 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 312.5 506.8 m 391.5 506.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 506.8 m 395.5 506.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 395.5 506.8 m 474.5 506.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 474.5 506.8 m 478.5 506.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478.5 506.8 m 558.5 506.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 492.8 m 391.5 492.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 395.5 492.8 m 474.5 492.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478.5 506.8 m 558.5 506.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478.5 492.8 m 558.5 492.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 492.8 m 391.5 492.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 395.5 492.8 m 474.5 492.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478.5 492.8 m 558.5 492.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 447.8 m 391.5 447.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 433.8 m 391.5 433.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 431.8 m 391.5 431.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 395.5 447.8 m 474.5 447.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 395.5 433.8 m 474.5 433.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 395.5 431.8 m 474.5 431.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478.5 447.8 m 558.5 447.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478.5 433.8 m 558.5 433.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478.5 431.8 m 558.5 431.8 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 379.45 511.25 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 404.03 511.25 Td (Y) Tj ET Q q 0 0 0 rg BT 409.86 511.25 Td (ear) Tj ET Q q 0 0 0 rg BT 421.77 511.25 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 468.11 511.25 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 57.00 497.05 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 342.50 497.25 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 425.50 497.25 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 509.00 497.25 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 482.47 Td (Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.00 482.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 357.65 482.47 Td (1,466.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 398.00 482.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.65 482.47 Td (1,460.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 481.00 482.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 524.65 482.47 Td (1,630.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 467.47 Td (Impact of fresh start accounting) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 196.17 472.00 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 377.65 467.47 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.65 467.47 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 467.47 Td (2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 452.47 Td (Impact of foreign currency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 371.80 452.52 Td (\(5.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.65 452.47 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.15 452.47 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 538.80 452.52 Td (\(9.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 554.65 452.47 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 437.47 Td (Adjusted Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.00 437.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 357.65 437.47 Td (1,461.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 398.00 437.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.65 437.47 Td (1,460.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 481.00 437.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 524.65 437.47 Td (1,623.0) 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 72.00 420.58 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 416.50 Td (The add-back of the impact of fresh start accounting represents the reduction in revenues recognized as a result of the reduction ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 405.70 Td (in deferred revenue recorded as of March 31, 2014.) 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 /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 312.5 680.6 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 455.5 694.6 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 /F3 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 (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 408.00 685.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 486.50 685.05 Td (2016) 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 359.80 670.32 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 670.27 Td (\)) 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 426.80 670.32 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 670.27 Td (\)) 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 (\(72.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.65 670.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 655.27 Td (Impact of fresh start accounting) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 196.17 659.80 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 365.65 655.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 437.65 655.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.15 655.27 Td (171.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 640.27 Td (Impact of foreign currency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 359.80 640.32 Td (\(2.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 640.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.15 640.27 Td (0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 516.80 640.32 Td (\(2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.65 640.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 625.27 Td (Equity-based compensation expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 358.15 625.27 Td (17.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 430.15 625.27 Td (13.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.15 625.27 Td (1) Tj ET Q q 0 0 0 rg BT 520.15 625.27 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 610.27 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 208.67 614.80 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 610.27 Td (8.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 430.15 610.27 Td (13.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.15 610.27 Td (10.0) 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 430.15 595.27 Td (10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.65 595.27 Td () 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 (127.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.15 580.27 Td (150.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.15 580.27 Td (149.5) 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 (10.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 430.15 565.27 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.15 565.27 Td (12.5) 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 (72.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 430.15 550.27 Td (83.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.15 550.27 Td (74.1) 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 (94.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 430.15 535.27 Td (92.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.15 535.27 Td (90.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 520.27 Td (Other expense \(income\), net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 354.80 520.32 Td (\(10.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 520.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.15 520.27 Td (1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.15 520.27 Td (2.1) 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 (159.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.15 505.27 Td (156.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.15 505.27 Td (151.1) 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 435.15 490.27 Td (0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.15 490.27 Td (1.8) 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 (\(73.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 475.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.80 475.32 Td (\(36.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 475.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.80 475.32 Td (\(33.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.65 475.27 Td (\)) 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 (402.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.15 460.27 Td (470.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.15 460.27 Td (566.0) 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 349.80 445.32 Td (\(104.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 445.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 421.80 445.32 Td (\(1) Tj ET Q q 0 0 0 rg BT 430.13 445.32 Td (19.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 445.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.80 445.32 Td (\(127.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.65 445.27 Td (\)) 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 (298.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.15 430.27 Td (350.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.15 430.27 Td (438.1) 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 (\(52.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 405.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.80 405.32 Td (\(64.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 405.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.80 405.32 Td (\(55.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.65 405.27 Td (\)) 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 ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 353.15 390.27 Td (245.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.00 390.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.15 390.27 Td (285.8) 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 (383.0) 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 72.00 373.38 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 369.30 Td (The add-back of the impact of fresh start accounting includes the flow-through of the inventory step-up of ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 474.13 369.30 Td ($168.9 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 527.13 369.30 Td ( and the ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 357.30 Td (reduction in deferred revenue of ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 208.19 357.30 Td ($2.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 252.19 357.30 Td ( ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 254.69 357.30 Td (for the fiscal year ended March31, 2016.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 347.58 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 343.50 Td (Non-core other operating expenses includes primarily severance costs, acquisition-related costs, consulting, bank fees and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 332.70 Td (management fees. ) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 322.98 Td (\(3\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 318.90 Td (Additions to pre-publication costs and property) Tj ET Q q 0 0 0 rg BT 259.63 318.90 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 90.00 308.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 157.25 308.10 Td ( less Pre-Publication Costs on a constant currency and accrual basis. ) Tj ET Q q 0 0 0 rg BT 405.02 308.10 Td (The impact of foreign currency exchange ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 297.30 Td (related to additions to pre-publication costs was $0.3 million, less than $0.1 million and $0.6 million for the fiscal years ended ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 286.50 Td (March 31, 2018, 2017 and 2016, respectively) Tj ET Q q 0 0 0 rg BT 252.63 286.50 Td (. ) Tj ET Q q 0 0 0 rg BT 256.97 286.50 Td (The impact of foreign currency exchange related to property) Tj ET Q q 0 0 0 rg BT 473.78 286.50 Td (, equipment and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 275.70 Td (capitalized internal-use software was $0.2 million, less than $0.1 million, and $0.1 million for the fiscal years ended March 31, ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 264.90 Td (2018, 2017 and 2016, respectively) Tj ET Q q 0 0 0 rg BT 213.39 264.90 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 243.90 Td (Liquidity and Capital Resour) Tj ET Q q 0 0 0 rg BT 197.68 243.90 Td (ces) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 210.39999999999998 m 488.5 210.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 210.39999999999998 m 492.5 210.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 210.39999999999998 m 557.5 210.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 196.39999999999998 m 488.5 196.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 196.39999999999998 m 557.5 196.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 196.39999999999998 m 488.5 196.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 196.39999999999998 m 557.5 196.39999999999998 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 470.30 214.85 Td (Mar) Tj ET Q q 0 0 0 rg BT 487.21 214.85 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 200.65 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 446.50 200.85 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 515.50 200.85 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 186.07 Td (Cash and cash equivalents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 186.07 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 186.07 Td (319.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 186.07 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 186.07 Td (352.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 171.07 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 190.41 175.60 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 171.07 Td (6.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 171.07 Td (33.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 156.07 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 118.48 160.60 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 454.65 156.07 Td (2,244.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 156.07 Td (2,239.4) 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 72.00 139.18 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 135.10 Td (Includes capital lease and original issue discount.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 117.10 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 54.00 105.10 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 93.10 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 81.10 Td (activities throughout the first and fourth quarters of our fiscal year) Tj ET Q q 0 0 0 rg BT 318.37 81.10 Td (.) 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 /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 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 54.00 719.10 Td (commitments, operating leases, working capital and capital expenditure requirements, is dependent on our future financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 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 482.82 707.10 Td (There can be no ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (assurance that our business will generate suf) Tj ET Q q 0 0 0 rg BT 231.54 695.10 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 54.00 683.10 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 524.31 683.10 Td (, or any ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.10 Td (other facility) Tj ET Q q 0 0 0 rg BT 104.72 671.10 Td (, in an amount suf) Tj ET Q q 0 0 0 rg BT 176.47 671.10 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 72.00 653.10 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 54.00 641.10 Td (technology of) Tj ET Q q 0 0 0 rg BT 109.08 641.10 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 54.00 629.10 Td (repurchases. ) Tj ET Q q 0 0 0 rg BT 106.02 629.10 Td (W) Tj ET Q q 0 0 0 rg BT 114.65 629.10 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 54.00 617.10 Td (existing cash and cash equivalents, to provide suf) Tj ET Q q 0 0 0 rg BT 251.55 617.10 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 54.00 605.10 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 54.00 593.10 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 54.00 581.10 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 54.00 569.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 78.44 569.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 142.04 569.10 Td (, we had ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 178.14 569.10 Td ($319.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 237.03 569.10 Td ( of cash and cash equivalents, of which approximately $65.1 million was held ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.10 Td (in our foreign subsidiaries. ) Tj ET Q q 0 0 0 rg BT 163.52 557.10 Td (W) Tj ET Q q 0 0 0 rg BT 172.16 557.10 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 516.03 557.10 Td (W) Tj ET Q q 0 0 0 rg BT 524.67 557.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.10 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 54.00 533.10 Td (believe any changes to this assertion would not have a material impact on our tax provision.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 515.10 Td (Shar) Tj ET Q q 0 0 0 rg BT 90.52 515.10 Td (e Repur) Tj ET Q q 0 0 0 rg BT 121.53 515.10 Td (chase Pr) Tj ET Q q 0 0 0 rg BT 156.42 515.10 Td (ograms) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 497.10 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 54.00 485.10 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 54.00 473.10 Td (aggregate. ) Tj ET Q q 0 0 0 rg BT 97.68 473.10 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 54.00 461.10 Td (during fiscal year 2017.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 443.10 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 54.00 431.10 Td (2016 share repurchase program and was funded utilizing cash from operations. ) Tj ET Q q 0 0 0 rg BT 371.68 431.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 421.58 431.10 Td (, we made share repurchases of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.10 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 54.00 407.10 Td (from our issuance of long-term debt during fiscal year 2017. ) Tj ET Q q 0 0 0 rg BT 297.92 407.10 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 54.00 395.10 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 54.00 383.10 Td (dividend paid on September 30, 2016.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 365.10 Td (During fiscal year 2016, we completed six share repurchase programs, with share repurchases valued in aggregate of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 353.10 Td ($150.0 million. Share repurchases were made utilizing cash from operations. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 335.10 Td (Dividends) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 317.10 Td (In fiscal year 2017, we paid a $200.0 million dividend utilizing the net proceeds from our debt issuance in June 2016. ) Tj ET Q q 0 0 0 rg BT 544.49 317.10 Td (W) Tj ET Q q 0 0 0 rg BT 553.12 317.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 305.10 Td (may declare additional dividend payments in the future using either cash from operations, long-term borrowings, or a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.10 Td (combination of both.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 275.10 Td (Long-term Debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 257.10 Td (On June 7, 2016, Cengage Learning, Inc., our wholly owned subsidiary) Tj ET Q q 0 0 0 rg BT 357.13 257.10 Td (, issued senior notes \(Senior Notes\) and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.10 Td (amended and restated its senior secured term loan facility \(T) Tj ET Q q 0 0 0 rg BT 299.59 245.10 Td (erm Loan\) and its asset based lending revolving line of credit ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 233.10 Td (\(ABL) Tj ET Q q 0 0 0 rg BT 81.40 233.10 Td ( Revolving Credit Facility\). ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 212.10 Td (Senior) Tj ET Q q 0 0 0 rg BT 99.60 212.10 Td ( Notes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 194.10 Td (On June 7, 2016, Cengage Learning, Inc., our wholly owned subsidiary) Tj ET Q q 0 0 0 rg BT 357.13 194.10 Td (, issued $620.0 million aggregate principal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 182.10 Td (amount Senior Notes in a private placement, maturing June 15, 2024. ) Tj ET Q q 0 0 0 rg BT 333.76 182.10 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 54.00 170.10 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 386.24 170.10 Td (, commencing on December 15, 2016. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 158.10 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 54.00 146.10 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 54.00 134.10 Td (indenture. ) Tj ET Q q 0 0 0 rg BT 96.58 134.10 Td (W) Tj ET Q q 0 0 0 rg BT 105.22 134.10 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 54.00 122.10 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 54.00 110.10 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 92.10 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 80.10 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 80.10 Td (T) Tj ET Q q 0 0 0 rg BT 486.32 80.10 Td (o date, there are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 68.10 Td (no subsidiary guarantors of the Senior Notes. ) 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 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 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 54.00 719.10 Td (subsidiaries) Tj ET Q q 0 0 0 rg BT 103.80 719.10 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 54.00 707.10 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 54.00 695.10 Td (investments; transfer and sell assets; engage in a consolidation or mer) Tj ET Q q 0 0 0 rg BT 332.63 695.10 Td (ger or sell, transfer or otherwise dispose of all or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.10 Td (substantially all of our assets; and enter into certain transactions with af) Tj ET Q q 0 0 0 rg BT 340.13 683.10 Td (filiates. ) Tj ET Q q 0 0 0 rg BT 372.16 683.10 Td (W) Tj ET Q q 0 0 0 rg BT 380.80 683.10 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 54.00 671.10 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 54.00 659.10 Td (Notes, and \(ii\) no default has occurred and is continuing under the indenture. ) Tj ET Q q 0 0 0 rg BT 363.63 659.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.08 659.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 451.68 659.10 Td (, no default has occurred ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 647.10 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 72.00 626.10 Td (T) Tj ET Q q 0 0 0 rg BT 77.75 626.10 Td (erm Loan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 608.10 Td (The ) Tj ET Q q 0 0 0 rg BT 89.87 608.10 Td (T) Tj ET Q q 0 0 0 rg BT 95.28 608.10 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 54.00 596.10 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 54.00 584.10 Td (million, plus additional amounts subject to certain requirements. Borrowings under the ) Tj ET Q q 0 0 0 rg BT 403.47 584.10 Td (T) Tj ET Q q 0 0 0 rg BT 408.88 584.10 Td (erm Loan bear interest at a rate equal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 572.10 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 54.00 560.10 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 54.00 548.10 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 54.00 536.10 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 391.22 536.10 Td (gin. ) Tj ET Q q 0 0 0 rg BT 408.44 536.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 432.89 536.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.49 536.10 Td (, we elected to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 524.10 Td (carry the ) Tj ET Q q 0 0 0 rg BT 91.57 524.10 Td (T) Tj ET Q q 0 0 0 rg BT 96.98 524.10 Td (erm Loan as a Eurocurrency Rate Loan with an ef) Tj ET Q q 0 0 0 rg BT 296.44 524.10 Td (fective interest rate of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.39 524.10 Td (6.04%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 412.22 524.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 506.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 506.10 Td (e are required to repay 0.25% of the original principal amount of the ) Tj ET Q q 0 0 0 rg BT 356.47 506.10 Td (T) Tj ET Q q 0 0 0 rg BT 361.88 506.10 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 54.00 494.10 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 464.30 494.10 Td (, commencing with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 482.10 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 54.00 470.10 Td (its Excess Cash Flow) Tj ET Q q 0 0 0 rg BT 138.63 470.10 Td (, as defined in the ) Tj ET Q q 0 0 0 rg BT 211.76 470.10 Td (T) Tj ET Q q 0 0 0 rg BT 217.17 470.10 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 54.00 458.10 Td (statements. Based on our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 156.48 458.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 220.08 458.10 Td ( consolidated financial statements, we determined there is no prepayment due under ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 446.10 Td (the Excess Cash Flow provision. Prepayments made under the Excess Cash Flow provision are used to satisfy prospective ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 434.10 Td (mandatory quarterly principal repayments. Based on our March 31, 2018 consolidated financial statements, we determined ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 422.10 Td (there is no prepayment due under the Excess Cash Flow provisions of the ) Tj ET Q q 0 0 0 rg BT 350.15 422.10 Td (T) Tj ET Q q 0 0 0 rg BT 355.56 422.10 Td (erm Loan agreement. ) Tj ET Q q 0 0 0 rg BT 443.11 422.10 Td (W) Tj ET Q q 0 0 0 rg BT 451.75 422.10 Td (e are also required to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 410.10 Td (prepay loans with net proceeds from asset sales, casualty events, or issuances of indebtedness, subject to, in the case of asset ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 398.10 Td (sales and casualty events, reinvestment rights by us 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 54.00 386.10 Td (provisions of the ) Tj ET Q q 0 0 0 rg BT 123.54 386.10 Td (T) Tj ET Q q 0 0 0 rg BT 128.95 386.10 Td (erm Loan facility) Tj ET Q q 0 0 0 rg BT 197.71 386.10 Td (, we made a $27.7 million principal payment on June 8, 2017. In accordance with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 374.10 Td (Excess Cash Flow provisions of the previous term loan facility) Tj ET Q q 0 0 0 rg BT 304.70 374.10 Td (, we made a $25.6 million principal payment on June 2, 2016, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 362.10 Td (which was reimbursed to us using the net proceeds of the issuance of debt. ) Tj ET Q q 0 0 0 rg BT 354.58 362.10 Td (W) Tj ET Q q 0 0 0 rg BT 363.21 362.10 Td (e may prepay or repurchase the ) Tj ET Q q 0 0 0 rg BT 490.75 362.10 Td (T) Tj ET Q q 0 0 0 rg BT 496.16 362.10 Td (erm Loan, in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 350.10 Td (whole or in part, at any time, without penalty) Tj ET Q q 0 0 0 rg BT 233.86 350.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 329.10 Td (The obligations under the ) Tj ET Q q 0 0 0 rg BT 176.79 329.10 Td (T) Tj ET Q q 0 0 0 rg BT 182.21 329.10 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 54.00 317.10 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 54.00 305.10 Td (subsidiaries, subject to certain exceptions. ) Tj ET Q q 0 0 0 rg BT 224.61 305.10 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 54.00 293.10 Td (accounts receivable, loans receivable, other receivables, inventory) Tj ET Q q 0 0 0 rg BT 317.95 293.10 Td (, related books and records, certain related general ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.10 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 54.00 269.10 Td (proceeds of Non-ABL) Tj ET Q q 0 0 0 rg BT 143.05 269.10 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 54.00 257.10 Td (and each subsidiary guarantor \(collectively) Tj ET Q q 0 0 0 rg BT 225.50 257.10 Td (, the ABL) Tj ET Q q 0 0 0 rg BT 269.29 257.10 Td ( priority collateral\), with the ) Tj ET Q q 0 0 0 rg BT 388.69 257.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 408.32 257.10 Td ( facility secured by first-priority ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.10 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 54.00 233.10 Td (subsidiary guarantor) Tj ET Q q 0 0 0 rg BT 135.52 233.10 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 480.93 233.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 500.56 233.10 Td ( priority ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 221.10 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 54.00 209.10 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 54.00 197.10 Td (exceptions \(collectively) Tj ET Q q 0 0 0 rg BT 148.59 197.10 Td (, the Non-ABL) Tj ET Q q 0 0 0 rg BT 212.93 197.10 Td ( priority collateral\), with the ) Tj ET Q q 0 0 0 rg BT 332.33 197.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 351.96 197.10 Td ( Facility secured by second-priority security ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 185.10 Td (interests therein.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 167.10 Td (The ) Tj ET Q q 0 0 0 rg BT 89.87 167.10 Td (T) Tj ET Q q 0 0 0 rg BT 95.28 167.10 Td (erm Loan agreement contains certain customary conditions to borrowing, restrictions, af) Tj ET Q q 0 0 0 rg BT 448.32 167.10 Td (firmative covenants, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 155.10 Td (negative covenants and events of default. ) Tj ET Q q 0 0 0 rg BT 221.26 155.10 Td (The ) Tj ET Q q 0 0 0 rg BT 239.12 155.10 Td (T) Tj ET Q q 0 0 0 rg BT 244.53 155.10 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 72.00 137.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 92.01 137.10 Td ( Revolving Cr) Tj ET Q q 0 0 0 rg BT 151.27 137.10 Td (edit Facility) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 119.10 Td (The availability of credit under the amended and restated five-year ) Tj ET Q q 0 0 0 rg BT 340.77 119.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 360.40 119.10 Td ( Revolving Credit Facility is equal to the lesser ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 107.10 Td (of \(i\) $250.0 million and \(ii\) our borrowing base. ) Tj ET Q q 0 0 0 rg BT 252.39 107.10 Td (The borrowing base equals the sum of \(i\) 90% of eligible credit card ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 95.10 Td (receivables, plus \(ii\) 85% of eligible receivables, plus \(iii\) 85% of the orderly liquidation value of eligible inventory) Tj ET Q q 0 0 0 rg BT 517.38 95.10 Td (, plus \(iv\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 83.10 Td (100% of cash not to exceed $35.0 million. ) Tj ET Q q 0 0 0 rg BT 225.08 83.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 249.52 83.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.12 83.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.56 83.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.16 83.10 Td (, the ) Tj ET Q q 0 0 0 rg BT 415.32 83.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 434.95 83.10 Td ( Revolving Credit Facility had ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 71.10 Td (no outstanding borrowings and $22.6 million and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 253.99 71.10 Td ($6.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 302.88 71.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 355.54 71.10 Td (, in issued and outstanding letters of credit. Our ) 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 54.00 731.10 Td (available borrowing base as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 178.68 731.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 242.28 731.10 Td (, which is based on the balance sheet at ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.67 731.10 Td (February 28, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.26 731.10 Td (, was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 498.32 731.10 Td ($1) Tj ET Q q 0 0 0 rg BT 507.95 731.10 Td (15.0 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 719.10 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 (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 665.10 Td (, we incurred approximately $0.9 million of commitment fees and $0.2 million of letter of credit participation fees.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 647.10 Td ( ) Tj ET Q q 0 0 0 rg BT 74.32 647.10 Td (W) Tj ET Q q 0 0 0 rg BT 82.96 647.10 Td (e have the right to prepay outstanding borrowings under the ) Tj ET Q q 0 0 0 rg BT 324.01 647.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 343.64 647.10 Td ( Revolving Credit Facility) Tj ET Q q 0 0 0 rg BT 447.70 647.10 Td (, in whole or in part, from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 635.10 Td (time to time, without premium or penalty) Tj ET Q q 0 0 0 rg BT 218.60 635.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 617.10 Td (The obligations under the ) Tj ET Q q 0 0 0 rg BT 176.42 617.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 196.05 617.10 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 54.00 605.10 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 54.00 593.10 Td (subsidiaries, subject to certain exceptions. ) Tj ET Q q 0 0 0 rg BT 224.61 593.10 Td (The guarantees of those obligations will be secured by first-priority security ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.10 Td (interests in the ) Tj ET Q q 0 0 0 rg BT 114.27 581.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 133.90 581.10 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 54.00 569.10 Td (\(ii\) second-priority security interests in the Non-ABL) Tj ET Q q 0 0 0 rg BT 267.47 569.10 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 54.00 557.10 Td (security interests therein.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 539.10 Td (The ) Tj ET Q q 0 0 0 rg BT 89.50 539.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 109.12 539.10 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 54.00 527.10 Td (af) Tj ET Q q 0 0 0 rg BT 61.59 527.10 Td (firmative covenants, negative covenants and events of default.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 506.10 Td (Summary of Cash Flows) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 485.10 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 339.5 454.6 m 409.5 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 454.6 m 413.5 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 454.6 m 483.5 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 454.6 m 487.5 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 454.6 m 557.5 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 440.6 m 409.5 440.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 440.6 m 483.5 440.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 454.6 m 557.5 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 440.6 m 557.5 440.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 355.6 m 409.5 355.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 355.6 m 483.5 355.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 355.6 m 557.5 355.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 355.6 m 409.5 355.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 341.6 m 409.5 341.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 339.6 m 409.5 339.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 355.6 m 483.5 355.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 341.6 m 483.5 341.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 339.6 m 483.5 339.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 355.6 m 557.5 355.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 341.6 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 487.5 339.6 m 557.5 339.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 459.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 459.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 459.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 459.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 459.05 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 444.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 445.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 445.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 445.05 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 430.27 Td (Net cash provided by \(used in\):) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 415.27 Td (Operating activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 415.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 415.27 Td (253.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 415.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 415.27 Td (316.6) 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 531.15 415.27 Td (332.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 400.27 Td (Investing activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.80 400.32 Td (\(191.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 400.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 400.32 Td (\(217.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 400.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 400.32 Td (\(173.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 400.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 385.27 Td (Financing activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 385.32 Td (\(95.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 385.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 385.32 Td (\(0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 385.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 385.32 Td (\(169.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 385.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 370.27 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 65.00 360.27 Td (currency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 360.27 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 360.32 Td (\(0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 360.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 360.32 Td (\(1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 360.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 345.27 Td (Net \(decrease\) increase cash and cash equivalents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 345.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 345.32 Td (\(33.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 345.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 345.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 345.27 Td (98.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 345.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 345.32 Td (\(12.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 345.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 323.10 Td (Operating activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 305.10 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 337.73 305.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.33 305.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 421.88 305.10 Td ($253.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.77 305.10 Td (, a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 492.71 305.10 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.13 305.10 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.10 Td ($63.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 107.89 293.10 Td ( from net cash provided by operating activities of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 307.55 293.10 Td ($316.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.45 293.10 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.06 293.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.66 293.10 Td (. ) Tj ET Q q 0 0 0 rg BT 536.48 293.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.10 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 88.41 281.10 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 54.00 269.10 Td (increase in cash used by net working capital, partially of) Tj ET Q q 0 0 0 rg BT 279.30 269.10 Td (fset by higher net income. ) Tj ET Q q 0 0 0 rg BT 385.75 269.10 Td (The increase in cash used for net working ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.10 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 510.35 257.10 Td (ficiencies, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.10 Td (timing of trade payables, partially of) Tj ET Q q 0 0 0 rg BT 199.88 245.10 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 54.00 233.10 Td (prepublication cost payables.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 215.10 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 337.73 215.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.33 215.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 421.88 215.10 Td ($316.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.77 215.10 Td (, a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 492.71 215.10 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.13 215.10 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 203.10 Td ($15.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 107.89 203.10 Td ( from net cash provided by operating activities of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 307.55 203.10 Td ($332.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.45 203.10 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.06 203.10 Td (March31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.66 203.10 Td (. ) Tj ET Q q 0 0 0 rg BT 536.48 203.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 191.10 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 88.41 191.10 Td ( was primarily due to lower net contribution from working capital and increased restructuring-related payments, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 179.10 Td (partially of) Tj ET Q q 0 0 0 rg BT 97.97 179.10 Td (fset by lower cash paid for reor) Tj ET Q q 0 0 0 rg BT 222.74 179.10 Td (ganization items, which is funded by restricted cash, the loss on the extinguishment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 167.10 Td (of debt and increased depreciation expense. ) Tj ET Q q 0 0 0 rg BT 230.68 167.10 Td (The lower net contribution from working capital was primarily a result of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 155.10 Td (impact of fresh start accounting in the prior year) Tj ET Q q 0 0 0 rg BT 246.86 155.10 Td (, most notably inventories, and was fully recognized at the end of fiscal year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.10 Td (2016. Excluding the impact of fresh start accounting, working capital increased $76.1 million, primarily driven by favorable ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 131.10 Td (changes in accounts receivable, primarily due to lower billings, and accrued interest payable as a result of our Senior Notes, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 119.10 Td (which were issued in the first quarter of fiscal year 2017, and the timing of ) Tj ET Q q 0 0 0 rg BT 355.40 119.10 Td (T) Tj ET Q q 0 0 0 rg BT 360.81 119.10 Td (erm Loan payments. ) Tj ET Q q 0 0 0 rg BT 445.04 119.10 Td (These increases were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 107.10 Td (partially of) Tj ET Q q 0 0 0 rg BT 97.97 107.10 Td (fset by lower accrued expenses and accounts payable, as a result of a reduction in bankruptcy-related liabilities ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 95.10 Td (and accrued employee incentive compensation, and deferred revenue.) 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 /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Investing 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 investing activities for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.20 713.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 380.79 713.25 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.35 713.25 Td ($191.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.24 713.25 Td (, a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.18 713.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.59 713.25 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.92 713.25 Td ($25.8 ) 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 in investing activities of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.02 701.25 Td ($217.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 320.91 701.25 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 422.53 701.25 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.12 701.25 Td (.) Tj ET Q q 0 0 0 rg BT 490.94 701.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 508.99 701.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.40 701.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 689.25 Td (was primarily driven by prior year period cash used for the ) Tj ET Q q 0 0 0 rg BT 291.80 689.25 Td (W) Tj ET Q q 0 0 0 rg BT 300.44 689.25 Td (ebAssign acquisition, timing of capital expenditures and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.25 Td (prepublication spend, partially of) Tj ET Q q 0 0 0 rg BT 186.56 677.25 Td (fset by current year acquisition of author/content rights.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 659.25 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 317.20 659.25 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 380.79 659.25 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.35 659.25 Td ($217.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.24 659.25 Td (, an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.18 659.25 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 509.93 659.25 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.26 659.25 Td ($43.2 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 647.25 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 647.25 Td ( from net cash used in investing activities of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.02 647.25 Td ($173.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 320.91 647.25 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 422.53 647.25 Td (March31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.12 647.25 Td (.) Tj ET Q q 0 0 0 rg BT 490.94 647.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 508.99 647.25 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.74 647.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 635.25 Td (was primarily due to the acquisition of ) Tj ET Q q 0 0 0 rg BT 210.73 635.25 Td (W) Tj ET Q q 0 0 0 rg BT 219.37 635.25 Td (ebAssign during the fiscal year ended March 31, 2017, compared with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 623.25 Td (acquisition of Learning Objects in the prior year period. ) Tj ET Q q 0 0 0 rg BT 279.86 623.25 Td (This increase was partially of) Tj ET Q q 0 0 0 rg BT 397.41 623.25 Td (fset by a lower use of restricted cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 611.25 Td (used for the satisfaction of reor) Tj ET Q q 0 0 0 rg BT 178.50 611.25 Td (ganization items including bankruptcy-related claims and professional fees.) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 72.00 593.25 Td (Financing activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 575.25 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 318.29 575.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.89 575.25 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.44 575.25 Td ($95.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.34 575.25 Td (, an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.27 575.25 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.03 575.25 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.36 575.25 Td ($94.9 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.25 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 563.25 Td ( from net cash used by financing activities of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 265.34 563.25 Td ($0.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.23 563.25 Td ( in the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.96 563.25 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.56 563.25 Td (. ) Tj ET Q q 0 0 0 rg BT 480.38 563.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 498.43 563.25 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.18 563.25 Td ( in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.25 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 54.00 539.25 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 451.23 539.25 Td (T) Tj ET Q q 0 0 0 rg BT 456.64 539.25 Td (erm Loan facility of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.25 Td ($27.7 million. ) Tj ET Q q 0 0 0 rg BT 115.21 527.25 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 54.00 515.25 Td (term loan which provided net cash proceeds of $265 million that was primarily of) Tj ET Q q 0 0 0 rg BT 380.68 515.25 Td (fset by a $200 million one-time dividend ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 503.25 Td (and share repurchases of $55.0 million. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 485.25 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 318.29 485.25 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.89 485.25 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.44 485.25 Td ($0.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 451.34 485.25 Td (, a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.27 485.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 497.69 485.25 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.02 485.25 Td ($168.8 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.25 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 473.25 Td ( from net cash used in financing activities of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.12 473.25 Td ($169.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.01 473.25 Td ( in the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.74 473.25 Td (March31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 483.34 473.25 Td (. ) Tj ET Q q 0 0 0 rg BT 488.16 473.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.21 473.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 540.62 473.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.25 Td (reflects the issuance of debt of $2,312.9 million, partially of) Tj ET Q q 0 0 0 rg BT 293.76 461.25 Td (fset by the repayment of our prior ) Tj ET Q q 0 0 0 rg BT 431.03 461.25 Td (T) Tj ET Q q 0 0 0 rg BT 436.44 461.25 Td (erm Loan for $2,019.2 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.25 Td (million and $35.4 million of capitalized debt issuance costs and deferred financing fees related to the new debt. ) Tj ET Q q 0 0 0 rg BT 501.45 449.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.25 Td (remainder of the proceeds were used to fund our one-time $200.0 million cash dividend, paid during the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 425.25 Td (March 31, 2017, and a $65.0 million share repurchase program. ) Tj ET Q q 0 0 0 rg BT 310.60 425.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 360.50 425.25 Td (, we made $55.0 million of share repurchases in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 413.25 Td (the fiscal year ended March 31, 2017, a decrease of $95.0 million compared with the prior year period.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 392.25 Td (Contractual Obligations and Commitments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 371.25 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 361.36 371.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 424.96 371.25 Td (:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 266.5 331.75 m 321.5 331.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 325.5 331.75 m 380.5 331.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 384.5 331.75 m 439.5 331.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 443.5 331.75 m 498.5 331.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 502.5 331.75 m 557.5 331.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 384.5 331.75 m 439.5 331.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 502.5 331.75 m 557.5 331.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 266.5 241.75 m 321.5 241.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 325.5 241.75 m 380.5 241.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 384.5 241.75 m 439.5 241.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 443.5 241.75 m 498.5 241.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 266.5 241.75 m 321.5 241.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 266.5 227.75 m 321.5 227.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 266.5 225.75 m 321.5 225.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 325.5 241.75 m 380.5 241.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 325.5 227.75 m 380.5 227.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 325.5 225.75 m 380.5 225.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 384.5 241.75 m 439.5 241.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 384.5 227.75 m 439.5 227.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 384.5 225.75 m 439.5 225.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 443.5 241.75 m 498.5 241.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 443.5 227.75 m 498.5 227.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 443.5 225.75 m 498.5 225.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 502.5 241.75 m 557.5 241.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 502.5 227.75 m 557.5 227.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 502.5 225.75 m 557.5 225.75 l s BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 336.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 275.10 345.20 Td (Less than ) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 281.35 336.20 Td (1 ) Tj ET Q q 0 0 0 rg BT 287.77 336.20 Td (Y) Tj ET Q q 0 0 0 rg BT 293.27 336.20 Td (ear) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 334.75 336.20 Td (1-3 ) Tj ET Q q 0 0 0 rg BT 348.83 336.20 Td (Y) Tj ET Q q 0 0 0 rg BT 354.66 336.20 Td (ears) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 393.75 336.20 Td (3-5 ) Tj ET Q q 0 0 0 rg BT 407.83 336.20 Td (Y) Tj ET Q q 0 0 0 rg BT 413.66 336.20 Td (ears) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 450.20 345.20 Td (Mor) Tj ET Q q 0 0 0 rg BT 467.03 345.20 Td (e than ) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 456.50 336.20 Td (5 ) Tj ET Q q 0 0 0 rg BT 462.92 336.20 Td (Y) Tj ET Q q 0 0 0 rg BT 468.42 336.20 Td (ears) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 519.65 336.20 Td (T) Tj ET Q q 0 0 0 rg BT 524.83 336.20 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 321.42 Td (Long-term debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 269.00 321.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 305.15 321.42 Td (6.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.00 321.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 359.15 321.42 Td (34.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.00 321.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 418.15 321.42 Td (34.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 446.00 321.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.65 321.42 Td (2,214.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.00 321.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 321.42 Td (2,289.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 306.42 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 208.19 310.95 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 306.42 Td (168.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 354.15 306.42 Td (348.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 413.15 306.42 Td (344.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 306.42 Td (1) Tj ET Q q 0 0 0 rg BT 477.15 306.42 Td (1) Tj ET Q q 0 0 0 rg BT 482.15 306.42 Td (1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 306.42 Td (972.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 291.42 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 165.41 295.95 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 300.15 291.42 Td (27.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 359.15 291.42 Td (50.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 418.15 291.42 Td (35.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.15 291.42 Td (84.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 291.42 Td (197.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 276.42 Td (Capital lease obligations) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 305.15 276.42 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.15 276.42 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.65 276.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 276.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 276.42 Td (0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 261.42 Td (Purchase obligations) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 139.04 265.95 Td (\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 300.15 261.42 Td (27.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 359.15 261.42 Td (33.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.15 261.42 Td (4.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 261.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 261.42 Td (65.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 246.42 Td (Other) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 305.15 246.42 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.15 246.42 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.15 246.42 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.15 246.42 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 246.42 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 231.42 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 231.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 269.00 231.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 231.42 Td (230.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.00 231.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 354.15 231.42 Td (467.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.00 231.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 413.15 231.42 Td (419.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 446.00 231.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.65 231.42 Td (2,410.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.00 231.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 231.42 Td (3,527.0) 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 72.00 217.53 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 213.45 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 436.87 213.45 Td (March31, 2018) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 494.11 213.45 Td (. ) Tj ET Q q 0 0 0 rg BT 498.45 213.45 Td (W) Tj ET Q q 0 0 0 rg BT 506.22 213.45 Td (e expect our ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 202.65 Td (cash flows from operations, combined with availability of funds under our ) Tj ET Q q 0 0 0 rg BT 359.44 202.65 Td (ABL) Tj ET Q q 0 0 0 rg BT 377.11 202.65 Td ( revolving credit facility) Tj ET Q q 0 0 0 rg BT 463.74 202.65 Td (, to pay for these ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 191.85 Td (obligations.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 182.13 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 178.05 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 502.11 178.05 Td (.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 168.33 Td (\(3\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 164.25 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 90.00 153.45 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 90.00 142.65 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 90.00 131.85 Td (minimum usage requirements in agreements with content providers. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.00 113.85 Td (In addition, lar) Tj ET Q q 0 0 0 rg BT 131.97 113.85 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 54.00 101.85 Td (expenditures, including pre-publication costs, in the range of $165 million to $200 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 89.85 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 89.85 Td (. ) 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 /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Off-Balance Sheet ) Tj ET Q q 0 0 0 rg BT 151.80 731.25 Td (T) Tj ET Q q 0 0 0 rg BT 157.73 731.25 Td (ransactions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 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 54.00 698.25 Td (the consolidated balance sheets in amounts that are dif) Tj ET Q q 0 0 0 rg BT 271.52 698.25 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 54.00 686.25 Td (including, but not limited to facilities and other operating equipment leases. ) Tj ET Q q 0 0 0 rg BT 359.02 686.25 Td (W) Tj ET Q q 0 0 0 rg BT 368.06 686.25 Td (ith the exception of the contractual obligations ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (and purchase commitments described in Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 238.95 674.25 Td (18) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 248.95 674.25 Td (, Commitments and Contingencies, to our consolidated financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 662.25 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 545.90 662.25 Td (f-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 650.25 Td (balance sheet transactions.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 629.25 Td (Application of Critical ) Tj ET Q q 0 0 0 rg BT 170.05 629.25 Td (Accounting Policies and Estimates) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 608.25 Td (Our consolidated financial statements are prepared in conformity with GAAP) Tj ET Q q 0 0 0 rg BT 381.08 608.25 Td (. In preparing our consolidated financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 596.25 Td (statements, we apply various accounting policies and are required to use estimates and assumptions. ) Tj ET Q q 0 0 0 rg BT 456.49 596.25 Td (While we believe we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 584.25 Td (have considered all available information, actual results could af) Tj ET Q q 0 0 0 rg BT 311.77 584.25 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 54.00 572.25 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 54.00 560.25 Td (during the reporting periods. ) Tj ET Q q 0 0 0 rg BT 170.74 560.25 Td (W) Tj ET Q q 0 0 0 rg BT 179.38 560.25 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 460.96 560.25 Td (1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 465.96 560.25 Td (, Basis of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 548.25 Td (Presentation and Summary of Significant ) Tj ET Q q 0 0 0 rg BT 220.92 548.25 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 54.00 536.25 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 72.00 518.25 Td (Revenue Recognition: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 170.60 518.25 Td (W) Tj ET Q q 0 0 0 rg BT 179.24 518.25 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 54.00 506.25 Td (libraries, professionals and corporations around the world. ) Tj ET Q q 0 0 0 rg BT 289.59 506.25 Td (These solutions are delivered through specialized content, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 494.25 Td (applications and services. ) Tj ET Q q 0 0 0 rg BT 158.41 494.25 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 411.70 494.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 414.20 494.25 Td (learning resource, we are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 482.25 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 54.00 470.25 Td (digital solutions, including digital versions of our print products. ) Tj ET Q q 0 0 0 rg BT 314.63 470.25 Td (W) Tj ET Q q 0 0 0 rg BT 323.27 470.25 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 54.00 458.25 Td (criteria are met:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 440.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 440.25 Td (Persuasive evidence of an arrangement exists,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 422.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 422.25 Td (Delivery has occurred or services have been rendered,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 404.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 404.25 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 72.00 386.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 386.25 Td (Collectability is reasonably assured.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 368.25 Td (Digital Content) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 143.39 368.25 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 54.00 356.25 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 54.00 344.25 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 54.00 332.25 Td (revenues are deferred and amortized over the subscription period.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 314.25 Td (Print and Other Materials) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 186.17 314.25 Td (W) Tj ET Q q 0 0 0 rg BT 194.80 314.25 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 54.00 302.25 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 486.40 302.25 Td (.) Tj ET Q q 0 0 0 rg BT 491.22 302.25 Td (W) Tj ET Q q 0 0 0 rg BT 499.85 302.25 Td (e classify ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 290.25 Td (amounts billed to customers for shipping and handling as revenues. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 272.25 Td (Subscription-Based Pr) Tj ET Q q 0 0 0 rg BT 162.45 272.25 Td (oducts) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 197.45 272.25 Td (W) Tj ET Q q 0 0 0 rg BT 206.09 272.25 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 54.00 260.25 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 54.00 248.25 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 54.00 236.25 Td (subscription revenues are deferred and amortized over the subscription period.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 218.25 Td (Multiple Element ) Tj ET Q q 0 0 0 rg BT 143.46 218.25 Td (Arrangements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 209.02 218.25 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 54.00 206.25 Td (the individual elements are accounted for separately) Tj ET Q q 0 0 0 rg BT 261.59 206.25 Td (, if applicable criteria are met. Specifically) Tj ET Q q 0 0 0 rg BT 431.41 206.25 Td (, the revenues are allocated to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 194.25 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 461.15 194.25 Td (The amount allocated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 182.25 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 54.00 170.25 Td (met with respect to that unit.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 152.25 Td (Rental Revenue ) Tj ET Q q 0 0 0 rg BT 136.79 152.25 Td (Arrangements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 202.34 152.25 Td (W) Tj ET Q q 0 0 0 rg BT 210.97 152.25 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 54.00 140.25 Td (inventory of printed products. ) Tj ET Q q 0 0 0 rg BT 175.74 140.25 Td (W) Tj ET Q q 0 0 0 rg BT 184.38 140.25 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 54.00 128.25 Td (revenue recognition criteria are met.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 110.25 Td (Reserve for) Tj ET Q q 0 0 0 rg BT 120.96 110.25 Td ( Sales Returns: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 190.40 110.25 Td (Accounts receivable are reflected net of a reserve for sales returns. ) Tj ET Q q 0 0 0 rg BT 458.96 110.25 Td (The reserve for sales ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 98.25 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 86.25 Td (various product types and sales channels, as well as current market trends in the businesses in which we operate. ) Tj ET Q q 0 0 0 rg BT 505.82 86.25 Td (A) Tj ET Q q 0 0 0 rg BT 512.49 86.25 Td ( change in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 74.25 Td (the pattern or trends in returns could af) Tj ET Q q 0 0 0 rg BT 209.60 74.25 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 62.25 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 62.25 Td (ference between actual ) 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 (returns and our original estimate. ) Tj ET Q q 0 0 0 rg BT 188.41 731.10 Td (Actual sales returns are char) Tj ET Q q 0 0 0 rg BT 301.50 731.10 Td (ged against the reserve as products are returned to inventory) Tj ET Q q 0 0 0 rg BT 541.60 731.10 Td (. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (conjunction with the sales return reserve, we also record estimated increases in inventory) Tj ET Q q 0 0 0 rg BT 409.62 719.10 Td (, to the extent that product returns ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (are resalable, and estimated recoupable royalty costs. ) Tj ET Q q 0 0 0 rg BT 269.00 707.10 Td (The sales returns reserve as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.29 707.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.88 707.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.32 707.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.32 707.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.88 707.10 Td ($70.8 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 695.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 102.33 695.10 Td ($75.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 156.22 695.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 208.88 695.10 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 677.10 Td (Reserve for) Tj ET Q q 0 0 0 rg BT 120.96 677.10 Td ( Inventory Obsolescence: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 233.16 677.10 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 54.00 665.10 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 54.00 653.10 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 481.99 653.10 Td (The reserve is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 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 BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (current market conditions, including estimates of customer demand, and publication revision cycles. ) Tj ET Q q 0 0 0 rg BT 456.95 629.10 Td (A) Tj ET Q q 0 0 0 rg BT 463.62 629.10 Td ( change in sales trends ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (could af) Tj ET Q q 0 0 0 rg BT 86.30 617.10 Td (fect our estimated reserve. ) Tj ET Q q 0 0 0 rg BT 194.13 617.10 Td (W) Tj ET Q q 0 0 0 rg BT 202.76 617.10 Td (e periodically assess the obsolescence reserve by evaluating general factors such as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (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 496.19 605.10 Td (ged against the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 Td (reserve. ) Tj ET Q q 0 0 0 rg BT 87.69 593.10 Td (The reserve for inventory obsolescence as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 269.00 593.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.60 593.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 352.04 593.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 372.04 593.10 Td ( was $53.0 million and $56.5 million, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.10 Td (respectively) Tj ET Q q 0 0 0 rg BT 101.66 581.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 563.10 Td (Impairment of Long-Lived ) Tj ET Q q 0 0 0 rg BT 188.95 563.10 Td (Assets: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 223.94 563.10 Td (W) Tj ET Q q 0 0 0 rg BT 232.58 563.10 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 54.00 551.10 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 54.00 539.10 Td (independent of other assets, may not be recoverable.) Tj ET Q q 0 0 0 rg BT 265.96 539.10 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 54.00 527.10 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 54.00 515.10 Td (flows, the individual assets are impaired proportionately) Tj ET Q q 0 0 0 rg BT 278.57 515.10 Td (, limited to their respective estimated fair values.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 497.10 Td (Goodwill: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 119.23 497.10 Td (W) Tj ET Q q 0 0 0 rg BT 127.86 497.10 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 54.00 485.10 Td (of each fiscal year) Tj ET Q q 0 0 0 rg BT 126.61 485.10 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 54.00 473.10 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 54.00 461.10 Td (the guidance issued in May 2017 by the F) Tj ET Q q 0 0 0 rg BT 220.46 461.10 Td (ASB, which simplifies accounting for goodwill impairment. ) Tj ET Q q 0 0 0 rg BT 463.30 461.10 Td (The guidance removes ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.10 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 473.59 449.10 Td (A) Tj ET Q q 0 0 0 rg BT 480.26 449.10 Td ( goodwill ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.10 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 54.00 425.10 Td (of goodwill. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 407.10 Td (For reporting units that passed their most recent impairment test by a substantial mar) Tj ET Q q 0 0 0 rg BT 410.91 407.10 Td (gin, we may consider performing a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.10 Td (detailed qualitative assessment, considering various company-specific, industry) Tj ET Q q 0 0 0 rg BT 371.60 395.10 Td (, and macro-economic factors, to determine ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.10 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 432.22 383.10 Td (. If, as a result of weighing the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 371.10 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 484.44 371.10 Td (s fair value is less ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 359.10 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 54.00 347.10 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 54.00 335.10 Td (goodwill for impairment. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 317.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 317.10 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 474.42 317.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 494.42 317.10 Td (. In order to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 305.10 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 54.00 293.10 Td (approach methodologies. ) Tj ET Q q 0 0 0 rg BT 156.85 293.10 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 54.00 281.10 Td (value of expected future unlevered after) Tj ET Q q 0 0 0 rg BT 213.43 281.10 Td (-tax free cash flows to be generated by such reporting unit. ) Tj ET Q q 0 0 0 rg BT 450.95 281.10 Td (This methodology ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.10 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 54.00 257.10 Td (growth, profit mar) Tj ET Q q 0 0 0 rg BT 127.41 257.10 Td (gins, and working capital. ) Tj ET Q q 0 0 0 rg BT 233.32 257.10 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 54.00 245.10 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 54.00 233.10 Td (average cost of capital of comparable companies. ) Tj ET Q q 0 0 0 rg BT 253.73 233.10 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 54.00 221.10 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 462.58 221.10 Td (The discount rate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.10 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 378.65 209.10 Td (10.5%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.48 209.10 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.26 209.10 Td (15.5%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.09 209.10 Td ( and residual growth rate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 197.10 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 378.65 197.10 Td (1.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.48 197.10 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 412.26 197.10 Td (4.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 433.09 197.10 Td (. In addition to the discounted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 185.10 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 54.00 173.10 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 54.00 161.10 Td (characteristics. If recent mer) Tj ET Q q 0 0 0 rg BT 167.64 161.10 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 54.00 149.10 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 54.00 137.10 Td (transactions. ) Tj ET Q q 0 0 0 rg BT 106.58 137.10 Td (W) Tj ET Q q 0 0 0 rg BT 115.22 137.10 Td (e apply comparable revenue and EBITDA) Tj ET Q q 0 0 0 rg BT 283.21 137.10 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 54.00 125.10 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 468.05 125.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.05 125.10 Td (, we applied ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 113.10 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 269.20 113.10 Td (1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 281.70 113.10 Td (x - ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.03 113.10 Td (2.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 307.53 113.10 Td (x and forward multiples of projected EBITDA) Tj ET Q q 0 0 0 rg BT 492.48 113.10 Td ( in a range of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 101.10 Td (7.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 66.50 101.10 Td (x - ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 79.83 101.10 Td (13.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.33 101.10 Td (x. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 83.10 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 83.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 281.66 83.10 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 71.10 Td (units exceeded their respective carrying values. ) Tj ET Q q 0 0 0 rg BT 245.68 71.10 Td (There were no goodwill impairment char) Tj ET Q q 0 0 0 rg BT 409.61 71.10 Td (ges recorded during the fiscal years ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 59.10 Td (ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 80.38 59.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 143.98 59.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 148.98 59.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 168.98 59.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 188.41 59.10 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 208.41 59.10 Td (. ) Tj ET Q q 0 0 0 rg BT 213.23 59.10 Td (The estimated fair value of our Learning reporting unit exceeded its carrying value by ) 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 /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (5%. ) Tj ET Q q 0 0 0 rg BT 72.15 731.10 Td (The discount rate applied to the Learning reporting unit discounted cash flow was 1) Tj ET Q q 0 0 0 rg BT 406.41 731.10 Td (1.5% and the residual growth rate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (was 2%. ) Tj ET Q q 0 0 0 rg BT 90.20 719.10 Td (W) Tj ET Q q 0 0 0 rg BT 98.84 719.10 Td (e performed a sensitivity analysis on our significant assumptions used to determine the fair value of the Learning ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (reporting unit and determined that a more than nominal change to our significant assumptions would impact our conclusion. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (If actual results dif) Tj ET Q q 0 0 0 rg BT 129.07 695.10 Td (fer from the projections and assumptions used in the calculation of the Learning reporting unit fair value, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.10 Td (we could be required to record future non-cash impairment char) Tj ET Q q 0 0 0 rg BT 309.55 683.10 Td (ges.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 665.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 665.10 Td (e will continue to evaluate goodwill on an annual basis and whenever events or changes in circumstances indicate that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (there may be potential indicators of impairment. If expectations for revenues and cash flows decline or if actual results are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (less than our revised forecasts, we may not be able to realize the carrying value of our goodwill and could be required to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (record future impairment char) Tj ET Q q 0 0 0 rg BT 174.04 629.10 Td (ges. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 73.00 611.10 Td (Legal Contingencies: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 165.22 611.10 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 54.00 599.10 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 468.97 599.10 Td (W) Tj ET Q q 0 0 0 rg BT 477.60 599.10 Td (e assess our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.10 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 54.00 575.10 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 476.51 575.10 Td (W) Tj ET Q q 0 0 0 rg BT 485.15 575.10 Td (e determine ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 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 54.00 551.10 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 54.00 539.10 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 54.00 527.10 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 482.17 527.10 Td (As such, gains ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.10 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 73.00 497.10 Td (Equity-Based Compensation Plan: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 225.25 497.10 Td (W) Tj ET Q q 0 0 0 rg BT 233.88 497.10 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 54.00 485.10 Td (recognition provisions for share-based payments. ) Tj ET Q q 0 0 0 rg BT 253.21 485.10 Td (W) Tj ET Q q 0 0 0 rg BT 261.85 485.10 Td (e adopted the 2014 Cengage Learning Equity Incentive Plan \(the 2014 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.10 Td (Equity Incentive Plan\) on March 31, 2014, and issue 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 54.00 461.10 Td (options \(ISOs\), non-qualified stock options \(NQSOs\) and performance awards.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 443.10 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 456.72 443.10 Td (Therefore, to value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.10 Td (equity-based awards granted under the 2014 Equity Incentive Plan, we followed guidelines set forth in the ) Tj ET Q q 0 0 0 rg BT 480.83 431.10 Td (American Institute ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.10 Td (of Certified Public ) Tj ET Q q 0 0 0 rg BT 130.38 419.10 Td (Accountants \(AICP) Tj ET Q q 0 0 0 rg BT 212.50 419.10 Td (A\) ) Tj ET Q q 0 0 0 rg BT 229.43 419.10 Td (Accounting & ) Tj ET Q q 0 0 0 rg BT 288.69 419.10 Td (V) Tj ET Q q 0 0 0 rg BT 294.80 419.10 Td (aluation Guide, ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 358.95 419.10 Td (V) Tj ET Q q 0 0 0 rg BT 363.95 419.10 Td (aluation of Privately-Held Company Equity ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 407.10 Td (Securities Issued as Compensation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 193.16 407.10 Td (. ) Tj ET Q q 0 0 0 rg BT 197.97 407.10 Td (T) Tj ET Q q 0 0 0 rg BT 203.38 407.10 Td (o estimate the fair value of RSUs on the date of grant we are first required to estimate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.10 Td (the value of our equity) Tj ET Q q 0 0 0 rg BT 143.88 395.10 Td (. Our estimate of equity value is based on an estimate of our enterprise value, reduced by the fair value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.10 Td (of our outstanding indebtedness net of cash and cash equivalents. ) Tj ET Q q 0 0 0 rg BT 317.36 383.10 Td (The value is then allocated to the outstanding common ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 371.10 Td (stock, RSUs, and stock options on a fully diluted basis using the Option-Pricing Method \(OPM\). Under the OPM, the value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 359.10 Td (of each equity security is determined via a series of call options on our total equity value with exercise prices based on value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 347.10 Td (thresholds, or breakpoints, at which value begins to be shared dif) Tj ET Q q 0 0 0 rg BT 313.76 347.10 Td (ferently between the holders of each type of equity security) Tj ET Q q 0 0 0 rg BT 550.51 347.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 335.10 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 54.00 323.10 Td (free interest rate, volatility factor) Tj ET Q q 0 0 0 rg BT 185.48 323.10 Td (, and time period from date of grant to a liquidity event. ) Tj ET Q q 0 0 0 rg BT 410.42 323.10 Td (After determining the value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 311.10 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 54.00 299.10 Td (awards. ) Tj ET Q q 0 0 0 rg BT 87.14 299.10 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 54.00 287.10 Td (granted under the 2014 Equity Incentive Plan in 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 307.5 253.60000000000002 m 387.5 253.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 387.5 253.60000000000002 m 391.5 253.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 253.60000000000002 m 471.5 253.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 471.5 253.60000000000002 m 475.5 253.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 253.60000000000002 m 555.5 253.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 307.5 238.60000000000002 m 387.5 238.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 238.60000000000002 m 471.5 238.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 253.60000000000002 m 555.5 253.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 238.60000000000002 m 555.5 238.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 307.5 238.60000000000002 m 387.5 238.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 238.60000000000002 m 471.5 238.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 238.60000000000002 m 555.5 238.60000000000002 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 375.45 258.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 400.03 258.05 Td (Y) Tj ET Q q 0 0 0 rg BT 405.86 258.05 Td (ear) Tj ET Q q 0 0 0 rg BT 417.77 258.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 464.11 258.05 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 338.00 243.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 422.00 243.05 Td (2017) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 505.00 243.28 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 228.27 Td (W) Tj ET Q q 0 0 0 rg BT 66.64 228.27 Td (eighted-average grant date fair value) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.00 228.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 356.15 228.27 Td (16.59) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.00 228.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.15 228.27 Td (17.44) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 478.00 228.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 524.15 228.27 Td (19.20) Tj ET Q BT /F1 10.00 Tf ET 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 /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 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 495.60 731.10 Td (T) Tj ET Q q 0 0 0 rg BT 501.01 731.10 Td (o determine ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 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 493.73 719.10 Td (The risk-free ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (interest rate was based on interpolated yields of U.S ) Tj ET Q q 0 0 0 rg BT 264.32 707.10 Td (T) Tj ET Q q 0 0 0 rg BT 270.07 707.10 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 54.00 695.10 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 54.00 683.10 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 54.00 671.10 Td (mid-point of the vesting date and date of expiration. ) Tj ET Q q 0 0 0 rg BT 264.32 671.10 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 54.00 659.10 Td (options granted under the 2014 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 54.00 647.10 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 307.5 613.6 m 387.5 613.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 387.5 613.6 m 391.5 613.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 613.6 m 471.5 613.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 471.5 613.6 m 475.5 613.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 613.6 m 555.5 613.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 307.5 599.6 m 387.5 599.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 599.6 m 471.5 599.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 613.6 m 555.5 613.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 599.6 m 555.5 599.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 307.5 599.6 m 387.5 599.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 599.6 m 471.5 599.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 599.6 m 555.5 599.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 375.45 618.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 400.03 618.05 Td (Y) Tj ET Q q 0 0 0 rg BT 405.86 618.05 Td (ear) Tj ET Q q 0 0 0 rg BT 417.77 618.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 464.11 618.05 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 338.00 604.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 422.00 604.05 Td (2017) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 505.00 604.28 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 589.27 Td (W) Tj ET Q q 0 0 0 rg BT 67.04 589.27 Td (eighted-average grant date fair value) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.00 589.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 361.15 589.27 Td (6.08) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.00 589.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 445.15 589.27 Td (6.08) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 478.00 589.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 529.15 589.27 Td (6.41) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 574.27 Td (W) Tj ET Q q 0 0 0 rg BT 66.64 574.27 Td (eighted-average assumptions:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 559.27 Td (Risk-free interest rate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.15 559.27 Td (1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 559.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 450.15 559.27 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.65 559.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 534.15 559.27 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 559.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 544.27 Td (Dividend yield) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.15 544.27 Td (0.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 544.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 450.15 544.27 Td (0.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.65 544.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 534.15 544.27 Td (0.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 544.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 529.27 Td (Expected volatility) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 361.15 529.27 Td (40.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 529.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 445.15 529.27 Td (35.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.65 529.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 529.15 529.27 Td (38.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 529.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 514.27 Td (Expected life \(years\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 361.15 514.27 Td (4.75) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 445.15 514.27 Td (4.75) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 529.15 514.27 Td (4.75) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 492.10 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 54.00 480.10 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 54.00 468.10 Td (multiples and comparable transaction-related multiples.) Tj ET Q q 0 0 0 rg BT 278.75 468.10 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 54.00 456.10 Td (calculations reflect our best estimates at the time of the date of grant.) Tj ET Q q 0 0 0 rg BT 331.68 456.10 Td (A) Tj ET Q q 0 0 0 rg BT 338.35 456.10 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 54.00 444.10 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 72.00 426.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 426.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 426.10 Td (, there was aggregate unrecognized compensation cost of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 390.78 426.10 Td ($14.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.68 426.10 Td ( related to outstanding stock ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 414.10 Td (option and RSU awards that is expected to be recognized over a remaining weighted-average period of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.74 414.10 Td (2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.24 414.10 Td ( years. ) Tj ET Q q 0 0 0 rg BT 508.29 414.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 402.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 402.10 Td (, there was aggregate unrecognized compensation cost of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 348.34 402.10 Td ($3.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.23 402.10 Td ( related to performance-based RSUs. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 390.10 Td (No compensation cost related to the performance-based RSUs will be recognized until both performance conditions have ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 378.10 Td (been met.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 360.10 Td (Income ) Tj ET Q q 0 0 0 rg BT 105.98 360.10 Td (T) Tj ET Q q 0 0 0 rg BT 111.73 360.10 Td (axes: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 138.39 360.10 Td (W) Tj ET Q q 0 0 0 rg BT 147.03 360.10 Td (e account for income taxes using the asset and liability method of ) Tj ET Q q 0 0 0 rg BT 410.85 360.10 Td (ASC ) Tj ET Q q 0 0 0 rg BT 432.62 360.10 Td (T) Tj ET Q q 0 0 0 rg BT 438.03 360.10 Td (opic 740, Income ) Tj ET Q q 0 0 0 rg BT 514.49 360.10 Td (T) Tj ET Q q 0 0 0 rg BT 519.90 360.10 Td (axes. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 348.10 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 54.00 336.10 Td (consequences attributable to dif) Tj ET Q q 0 0 0 rg BT 180.72 336.10 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 54.00 324.10 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 54.00 312.10 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 452.81 312.10 Td (fect for the year in which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 300.10 Td (those temporary dif) Tj ET Q q 0 0 0 rg BT 132.13 300.10 Td (ferences are expected to be recovered or settled. ) Tj ET Q q 0 0 0 rg BT 326.56 300.10 Td (V) Tj ET Q q 0 0 0 rg BT 332.67 300.10 Td (aluation allowances are established when realization of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 288.10 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 352.06 288.10 Td (The ef) Tj ET Q q 0 0 0 rg BT 377.69 288.10 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 54.00 276.10 Td (change in income tax rates is recognized in income in the period that includes the enactment date.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 258.10 Td (On December 22, 2017, the U.S. government enacted the ) Tj ET Q q 0 0 0 rg BT 303.14 258.10 Td (T) Tj ET Q q 0 0 0 rg BT 308.55 258.10 Td (ax ) Tj ET Q q 0 0 0 rg BT 319.93 258.10 Td (Act. ) Tj ET Q q 0 0 0 rg BT 339.19 258.10 Td (The ) Tj ET Q q 0 0 0 rg BT 357.06 258.10 Td (T) Tj ET Q q 0 0 0 rg BT 362.47 258.10 Td (ax ) Tj ET Q q 0 0 0 rg BT 373.86 258.10 Td (Act made significant revisions to the U.S. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 246.10 Td (corporate income tax system, including lowering the U.S. federal corporate income tax rate to 21%, accelerating deductions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 234.10 Td (for certain business assets, changing the U.S. system from a worldwide tax system to a modified territorial tax system, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 222.10 Td (requiring companies to pay a one-time transition tax on certain non-U.S. earnings of foreign subsidiaries, eliminating certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 210.10 Td (deductions such as the domestic production deduction, establishing limitations on the deductibility of certain expenses ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 198.10 Td (including interest and executive compensation, and creating new taxes on certain foreign earnings. In accordance with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 186.10 Td (Securities and Exchange Commission Staf) Tj ET Q q 0 0 0 rg BT 223.79 186.10 Td (f ) Tj ET Q q 0 0 0 rg BT 229.07 186.10 Td (Accounting Bulletin No. 1) Tj ET Q q 0 0 0 rg BT 334.80 186.10 Td (18, the Company has completed its assessment of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 174.10 Td (impact of the ) Tj ET Q q 0 0 0 rg BT 109.08 174.10 Td (T) Tj ET Q q 0 0 0 rg BT 114.49 174.10 Td (ax ) Tj ET Q q 0 0 0 rg BT 125.88 174.10 Td (Act on the Company's fiscal year 2018 financial statements. See Note 14, Income ) Tj ET Q q 0 0 0 rg BT 461.29 174.10 Td (T) Tj ET Q q 0 0 0 rg BT 466.70 174.10 Td (axes, to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 162.10 Td (consolidated financial statements included in this ) Tj ET Q q 0 0 0 rg BT 252.84 162.10 Td (Annual Report for further detail. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 144.10 Td (New ) Tj ET Q q 0 0 0 rg BT 92.83 144.10 Td (Accounting Standards and ) Tj ET Q q 0 0 0 rg BT 208.70 144.10 Td (Accounting Changes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 123.10 Td (See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 110.88 123.10 Td (1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.88 123.10 Td (, Basis of Presentation and Summary of Significant ) Tj ET Q q 0 0 0 rg BT 327.23 123.10 Td (Accounting Policies, to our consolidated financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 111.10 Td (statements for a description of new accounting standards and accounting changes.) 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 206.25 760.75 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 (- 55 -) 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, 2018) 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 (2017) 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 (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 307.78 551.25 Td (, we derived approximately 21%, 19%, and 16%, 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, 2018) 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 ($1,669.4 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, 2018) 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 (.) Tj ET Q endstream endobj 123 0 obj <><><><><><><>] /Rotate 0 /Contents 124 0 R>> 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 201.80 760.75 Td (CONSOLIDA) Tj ET Q q 0 0 0 rg BT 261.62 760.75 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 340.80 760.75 Td ( ST) Tj ET Q q 0 0 0 rg BT 354.79 760.75 Td (A) Tj ET Q q 0 0 0 rg BT 361.27 760.75 Td (TEMENTS) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 252.65 736.75 Td (T) Tj ET Q q 0 0 0 rg BT 258.58 736.75 Td (ABLE OF) Tj ET Q q 0 0 0 rg BT 301.82 736.75 Td ( CONTENTS) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 56 -) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 507.5 686.2 m 557.5 686.2 l s BT /F1 10.00 Tf ET q 0 0 0 rg BT 513.65 690.87 Td (Page No.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 675.87 Td (Report of Independent ) Tj ET Q q 0 0 0 rg BT 148.19 675.87 Td (Auditors) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 660.87 Td (Consolidated Balance Sheets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 645.87 Td (Consolidated Statements of Operations) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 630.87 Td (Consolidated Statements of Comprehensive Income \(Loss\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 615.87 Td (Consolidated Statements of Cash Flows) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 600.87 Td (Consolidated Statements of Stockholders) Tj ET Q q 0 0 0 rg BT 223.66 600.87 Td ( Equity) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 585.87 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.50 675.87 Td (57) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.50 660.87 Td (58) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.50 645.87 Td (59) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.50 630.87 Td (60) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.50 615.87 Td (61) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.50 600.87 Td (62) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.50 585.87 Td (63) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 125 0 obj <> endobj 126 0 obj <> stream BT /F1 10.00 Tf ET BT /F3 9.00 Tf ET q 0 0 0 rg BT 54.00 43.30 Td (Pricewater) Tj ET Q q 0 0 0 rg BT 93.83 43.30 Td (houseCoopers LLP) Tj ET Q q 0 0 0 rg BT 161.93 43.30 Td (, 101 Seaport Boulevar) Tj ET Q q 0 0 0 rg BT 245.08 43.30 Td (d, Suite 500, Boston, MA) Tj ET Q q 0 0 0 rg BT 334.66 43.30 Td ( 02210) Tj ET Q BT /F3 9.00 Tf ET q 0 0 0 rg BT 54.00 32.50 Td (T) Tj ET Q q 0 0 0 rg BT 58.51 32.50 Td (: \(617\) 530-5000, F:\(617\) 530-5001, www) Tj ET Q q 0 0 0 rg BT 211.07 32.50 Td (.pwc.com/us) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 20.50 Td (- 57 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 237.50 677.25 Td (Report of Independent ) Tj ET Q q 0 0 0 rg BT 336.67 677.25 Td (Auditors) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.25 Td (T) Tj ET Q q 0 0 0 rg BT 59.41 641.25 Td (o the Board of Directors and Management of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.25 Td (Cengage Learning Holdings II, Inc.) 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, 2018) 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 2017, 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 income \(loss\), stockholders' 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 420.16 581.25 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 422.66 581.25 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, 2018. ) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 54.00 545.25 Td (Management's Responsibility for the Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.25 Td (Management is responsible for the preparation and fair presentation of the consolidated) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 1 0 0 rg BT 403.60 521.25 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 406.10 521.25 Td (financial statements in accordance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.25 Td (with accounting principles generally accepted in the United States of ) Tj ET Q q 0 0 0 rg BT 331.13 509.25 Td (America; this includes the design, implementation, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.25 Td (maintenance of internal control relevant to the preparation and fair presentation of consolidated) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 435.51 497.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 438.01 497.25 Td (financial statements that are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.25 Td (free from material misstatement, whether due to fraud or error) Tj ET Q q 0 0 0 rg BT 302.23 485.25 Td (.) Tj ET Q BT /F5 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 /F5 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, 2018 and 2017, 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, 2018 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 18, 2018) Tj ET Q /GS0 gs q 98.13 0 0 83.00 54.00 696.50 cm /I11 Do Q endstream endobj 127 0 obj <> endobj 128 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 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 ( - 58 -) 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 /F3 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 (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 /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 ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 685.17 Td (319.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 685.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 685.17 Td (352.3) 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 (180.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 670.17 Td (173.6) 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 (1) Tj ET Q q 0 0 0 rg BT 462.15 655.17 Td (16.8) 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 (12.5) 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 (58.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 640.17 Td (51.7) 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 (675.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 625.17 Td (690.1) 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 (164.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 606.17 Td (183.4) 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 (232.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 591.17 Td (253.9) 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 (22.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 576.17 Td (20.9) 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 449.65 561.17 Td (1,009.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 561.17 Td (1,080.4) 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 (1,633.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 546.17 Td (1,627.9) 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 (7.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 531.17 Td (6.8) 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 (3.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 516.17 Td (4.4) 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 (24.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 501.17 Td (27.5) 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 ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 449.65 486.17 Td (3,772.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 486.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 486.17 Td (3,895.3) 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 ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 453.17 Td (276.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 453.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 453.17 Td (256.7) 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 (178.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 438.17 Td (171.6) 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 467.15 423.17 Td (6.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 423.17 Td (33.1) 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 (3.9) 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 (18.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 393.17 Td (10.8) 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 (484.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 378.17 Td (476.1) 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 (2,244.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 359.17 Td (2,239.4) 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 (78.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 344.17 Td (164.6) 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 (50.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 329.17 Td (61.0) 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 (2,857.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 314.17 Td (2,941.1) 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 \($0.01 par value, 300,000,000 shares authorized, 61,009,916 and) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 240.17 Td (68,029,162 shares issued and outstanding at March 31, 2018 and March 31, 2017,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 230.17 Td (respectively\)) 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 (0.7) 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 (1,224.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 215.17 Td (1,273.1) 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 (\(270.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 200.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 200.22 Td (\(269.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 200.17 Td (\)) 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 (\(39.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 185.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 185.22 Td (\(50.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 185.17 Td (\)) 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 (915.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 170.17 Td (954.2) 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 ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 449.65 155.17 Td (3,772.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 155.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 155.17 Td (3,895.3) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 129 0 obj <> endobj 130 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 ( - 59 -) 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 339.5 709.5 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 413.5 709.5 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 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 /F3 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 (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 713.95 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 713.95 Td (2016) 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 ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 699.17 Td (1,466.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 699.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 449.65 699.17 Td (1,460.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 699.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 699.17 Td (1,630.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 680.17 Td (Cost of revenues, excluding amortization of pre-publication ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.50 670.17 Td (costs and identifiable intangible assets and depreciation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.50 660.17 Td (stated below) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 660.17 Td (625.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 660.17 Td (632.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 660.17 Td (817.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 645.17 Td (Amortization of pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 645.17 Td (127.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 645.17 Td (150.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 645.17 Td (149.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 630.17 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 630.17 Td (4.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 630.17 Td (2.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 630.17 Td (0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 615.17 Td (T) Tj ET Q q 0 0 0 rg BT 73.76 615.17 Td (otal cost of revenues, excluding depreciation stated below) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 615.17 Td (756.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 615.17 Td (785.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 615.17 Td (967.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 596.17 Td (Selling, general and administrative expenses, excluding depreciation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.50 586.17 Td (stated below) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 586.17 Td (462.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 586.17 Td (384.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 586.17 Td (437.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 571.17 Td (Operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 216.40 571.17 Td (ges) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 571.17 Td (10.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 571.17 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 571.17 Td (12.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 556.17 Td (Depreciation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 556.17 Td (72.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 556.17 Td (83.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 556.17 Td (74.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 541.17 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 541.17 Td (90.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 541.17 Td (90.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 541.17 Td (90.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 526.17 Td (Other \(income\) expense, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 526.22 Td (\(0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 526.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 526.17 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 526.17 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 511.17 Td (T) Tj ET Q q 0 0 0 rg BT 73.76 511.17 Td (otal costs and expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 511.17 Td (1,391.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 449.65 511.17 Td (1,370.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 511.17 Td (1,581.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 492.17 Td (Operating income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 492.17 Td (74.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 492.17 Td (89.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 492.17 Td (49.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 473.17 Td (Loss on early extinguishment of debt, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 473.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 473.22 Td (\(10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 473.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 473.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 458.17 Td (Other income \(expense\), net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 458.17 Td (10.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 458.22 Td (\(1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 458.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 458.22 Td (\(1.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 458.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 443.17 Td (Interest income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 443.17 Td (2.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 443.17 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 443.17 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 428.17 Td (Interest expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.80 428.22 Td (\(162.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 428.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 428.22 Td (\(157.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 428.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 428.22 Td (\(151.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 428.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 413.17 Td (Reor) Tj ET Q q 0 0 0 rg BT 75.35 413.17 Td (ganization items, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 413.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 413.22 Td (\(0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 413.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 413.22 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 413.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 398.17 Td (Loss before taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 398.22 Td (\(74.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 398.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 398.22 Td (\(79.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 398.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 398.22 Td (\(105.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 398.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 383.17 Td (Benefit from income taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 383.17 Td (73.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 383.17 Td (36.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 383.17 Td (33.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 368.17 Td (Net loss) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 368.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 368.22 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 368.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 368.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 368.22 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 368.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 368.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 368.22 Td (\(72.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 368.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 131 0 obj <> endobj 132 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 181.75 760.75 Td (Consolidated Statements of Compr) Tj ET Q q 0 0 0 rg BT 331.29 760.75 Td (ehensive Income \(Loss\)) 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 ( - 60 -) 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 339.5 709.5 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 413.5 709.5 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 339.5 660.5 m 409.5 660.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 660.5 m 483.5 660.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 660.5 m 557.5 660.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 660.5 m 409.5 660.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 646.5 m 409.5 646.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 644.5 m 409.5 644.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 660.5 m 483.5 660.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 646.5 m 483.5 646.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 644.5 m 483.5 644.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 660.5 m 557.5 660.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 646.5 m 557.5 646.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 644.5 m 557.5 644.5 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 /F3 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 (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 713.95 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 713.95 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 699.17 Td (Net loss) 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 389.80 699.22 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 699.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 699.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 699.22 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 699.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 699.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 699.22 Td (\(72.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 699.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 680.17 Td (Other comprehensive income \(loss\):) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 665.17 Td (Foreign currency translation adjustments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 665.17 Td (1) Tj ET Q q 0 0 0 rg BT 393.15 665.17 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 665.22 Td (\(1) Tj ET Q q 0 0 0 rg BT 467.13 665.22 Td (1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 665.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 665.22 Td (\(9.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 665.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 650.17 Td (Comprehensive income \(loss\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 650.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 650.17 Td (9.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 650.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 650.22 Td (\(54.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 650.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 650.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 650.22 Td (\(82.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 650.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET 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 221.80 760.75 Td (Consolidated Statements of Cash Flows) 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 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 339.5 711.5 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 413.5 711.5 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 487.5 711.5 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 339.5 311.5 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 413.5 311.5 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 487.5 311.5 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 339.5 311.5 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 339.5 296.5 m 409.5 296.5 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 413.5 296.5 m 483.5 296.5 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 487.5 296.5 m 557.5 296.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 183.5 m 409.5 183.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 183.5 m 483.5 183.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 183.5 m 557.5 183.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 183.5 m 409.5 183.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 168.5 m 409.5 168.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 183.5 m 483.5 183.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 168.5 m 483.5 168.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 183.5 m 557.5 183.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 168.5 m 557.5 168.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 168.5 m 409.5 168.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 144.5 m 409.5 144.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 168.5 m 483.5 168.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 144.5 m 483.5 144.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 168.5 m 557.5 168.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 144.5 m 557.5 144.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 144.5 m 409.5 144.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 144.5 m 483.5 144.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 144.5 m 557.5 144.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 100.5 m 409.5 100.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 100.5 m 483.5 100.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 100.5 m 557.5 100.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 100.5 m 409.5 100.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 86.5 m 409.5 86.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 84.5 m 409.5 84.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 100.5 m 483.5 100.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 86.5 m 483.5 86.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 84.5 m 483.5 84.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 100.5 m 557.5 100.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 86.5 m 557.5 86.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 84.5 m 557.5 84.5 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 /F3 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 (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 715.90 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 715.90 Td (2016) 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 389.80 687.22 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 687.17 Td (\)) 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 458.80 687.22 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 687.17 Td (\)) 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 (\(72.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 687.17 Td (\)) 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 (127.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 647.17 Td (150.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 647.17 Td (149.5) 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 (72.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 632.17 Td (83.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 632.17 Td (74.1) 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 (94.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 617.17 Td (92.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 617.17 Td (90.7) 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 (7.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 602.17 Td (4.2) 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 388.15 587.17 Td (17.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 587.17 Td (13.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 587.17 Td (1) Tj ET Q q 0 0 0 rg BT 541.15 587.17 Td (1.1) 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 (10.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 572.17 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 572.17 Td (12.5) 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 (\(14.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 557.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 557.22 Td (\(26.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 557.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 557.22 Td (\(8.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 557.17 Td (\)) 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 462.15 542.17 Td (10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 542.17 Td () 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 467.15 527.17 Td (0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 527.17 Td (1.8) 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 463.80 512.22 Td (\(3.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 512.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 512.22 Td (\(30.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 512.17 Td (\)) 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 (\(87.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 497.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 497.22 Td (\(46.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 497.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 497.22 Td (\(45.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 497.17 Td (\)) 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 (26.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 482.17 Td (48.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 482.17 Td (144.4) 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 389.80 467.22 Td (\(0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 467.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 467.17 Td (1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 467.17 Td (1.0) 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 (253.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 452.17 Td (316.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 452.17 Td (332.1) 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 (\(3.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 414.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 414.22 Td (\(45.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 414.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 414.22 Td (\(22.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 414.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 399.17 Td (Investments in equity method investees) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 399.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 399.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 399.22 Td (\(0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 399.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 384.17 Td (Additions to pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.80 384.22 Td (\(103.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 384.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 384.22 Td (\(122.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 384.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 384.22 Td (\(127.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 384.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 369.17 Td (Additions to property) Tj ET Q q 0 0 0 rg BT 141.45 369.17 Td (, equipment and capitalized internal-use) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 65.00 359.17 Td (software) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 359.22 Td (\(63.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 359.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 359.22 Td (\(53.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 359.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 359.22 Td (\(53.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 359.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 344.17 Td (Acquisition of author content rights) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 344.22 Td (\(21.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 344.17 Td (\)) 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 543.65 344.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 329.17 Td (Use of restricted cash) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 329.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 329.17 Td (3.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 329.17 Td (29.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 315.07 Td (Other) Tj ET Q q 0 0 0 rg BT 78.57 315.07 Td (, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 315.07 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 315.07 Td (0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 315.07 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 301.17 Td (Net cash used in investing activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.80 301.22 Td (\(191.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 301.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 301.22 Td (\(217.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 301.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 301.22 Td (\(173.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 301.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 278.18 Td (Cash Flows fr) Tj ET Q q 0 0 0 rg BT 115.35 278.18 Td (om Financing ) Tj ET Q q 0 0 0 rg BT 176.10 278.18 Td (Activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 263.17 Td (Proceeds from issuance of debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 263.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 449.65 263.17 Td (2,312.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 263.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 248.17 Td (Repayments of long-term debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 248.22 Td (\(28.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 248.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 446.30 248.22 Td (\(2,023.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 248.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 248.22 Td (\(20.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 248.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 233.17 Td (Proceeds from issuance of common stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 233.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 233.17 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 233.17 Td (1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 218.17 Td (Debt issuance costs and other financing fees) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 218.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 218.22 Td (\(35.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 218.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 218.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 203.17 Td (Dividends and dividend equivalents paid) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 203.22 Td (\(0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 203.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 203.22 Td (\(200.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 203.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 203.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 188.17 Td (Share repurchases) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 188.22 Td (\(66.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 188.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 188.22 Td (\(55.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 188.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 188.22 Td (\(150.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 188.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 173.17 Td (Net cash used in financing activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 173.22 Td (\(95.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 173.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 173.22 Td (\(0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 173.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 173.22 Td (\(169.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 173.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 159.18 Td (Impact on Cash and Cash Equivalents fr) Tj ET Q q 0 0 0 rg BT 229.75 159.18 Td (om Changes in For) Tj ET Q q 0 0 0 rg BT 310.96 159.18 Td (eign) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 60.50 149.18 Td (Curr) Tj ET Q q 0 0 0 rg BT 81.98 149.18 Td (ency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 149.17 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 149.22 Td (\(0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 149.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 149.22 Td (\(1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 149.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 134.18 Td (Net \(Decr) Tj ET Q q 0 0 0 rg BT 97.27 134.18 Td (ease\) Incr) Tj ET Q q 0 0 0 rg BT 139.02 134.18 Td (ease in Cash and Cash Equivalents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 134.22 Td (\(33.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 134.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 134.17 Td (98.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 134.22 Td (\(12.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 134.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 120.18 Td (Cash and Cash Equivalents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 105.17 Td (Beginning of year) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 105.17 Td (352.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 105.17 Td (253.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 105.17 Td (266.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 90.17 Td (End of year) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 90.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 90.17 Td (319.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 90.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 90.17 Td (352.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 90.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 90.17 Td (253.5) 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 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 ( - 62 -) 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 273.5 415.5 m 333.5 415.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 415.5 m 397.5 415.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 415.5 m 461.5 415.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 415.5 m 525.5 415.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 415.5 m 589.5 415.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 415.5 m 663.5 415.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 415.5 m 737.5 415.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 415.5 m 333.5 415.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 415.5 m 397.5 415.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 415.5 m 461.5 415.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 415.5 m 525.5 415.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 415.5 m 589.5 415.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 415.5 m 663.5 415.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 415.5 m 737.5 415.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 246.5 m 333.5 246.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 246.5 m 397.5 246.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 246.5 m 461.5 246.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 246.5 m 525.5 246.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 246.5 m 589.5 246.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 246.5 m 663.5 246.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 246.5 m 737.5 246.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 246.5 m 397.5 246.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 246.5 m 461.5 246.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 246.5 m 525.5 246.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 246.5 m 589.5 246.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 246.5 m 663.5 246.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 105.5 m 333.5 105.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 91.5 m 333.5 91.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 89.5 m 333.5 89.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 105.5 m 397.5 105.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 91.5 m 397.5 91.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 89.5 m 397.5 89.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 105.5 m 461.5 105.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 91.5 m 461.5 91.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 89.5 m 461.5 89.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 105.5 m 525.5 105.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 91.5 m 525.5 91.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 89.5 m 525.5 89.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 105.5 m 589.5 105.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 91.5 m 589.5 91.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 89.5 m 589.5 89.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 105.5 m 663.5 105.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 91.5 m 663.5 91.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 89.5 m 663.5 89.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 105.5 m 737.5 105.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 91.5 m 737.5 91.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 89.5 m 737.5 89.5 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 /F3 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, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 510.17 Td (76.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.00 510.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.15 510.17 Td (0.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.00 510.17 Td ($) 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 ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.65 510.17 Td (1,656.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.00 510.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 559.80 510.17 Td (\(153.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 585.65 510.17 Td (\)) 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 (\(29.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 659.65 510.17 Td (\)) 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 (1,474.5) 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 (\(72.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 585.65 495.17 Td (\)) 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 (\(72.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 495.17 Td (\)) 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 643.80 480.17 Td (\(9.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 659.65 480.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 717.80 480.17 Td (\(9.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 480.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 465.17 Td (Purchase of treasury stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.80 465.22 Td (\(6.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.65 465.17 Td (\)) 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 431.80 465.22 Td (\(150.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.65 465.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 465.17 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 (\(150.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 465.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 450.17 Td (Retirement of treasury stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 450.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 377.80 450.22 Td (\(0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 450.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.15 450.17 Td (150.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.80 450.22 Td (\(149.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.65 450.17 Td (\)) 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 723.65 450.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 435.17 Td (Issuance of common 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 447.65 435.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 509.15 435.17 Td (1.3) 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 721.15 435.17 Td (1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 420.17 Td (Equity-based compensation) 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 504.15 420.17 Td (1) Tj ET Q q 0 0 0 rg BT 509.15 420.17 Td (1.1) 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 716.15 420.17 Td (1) Tj ET Q q 0 0 0 rg BT 721.15 420.17 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 405.17 Td (Balance at March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 405.17 Td (70.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.15 405.17 Td (0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 405.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.65 405.17 Td (1,519.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 559.80 405.17 Td (\(226.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 585.65 405.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 638.80 405.17 Td (\(39.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 659.65 405.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 703.65 405.17 Td (1,254.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 390.17 Td (Net loss) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 390.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 390.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 390.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 390.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 564.80 390.17 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 585.65 390.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 390.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 712.80 390.17 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 390.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 375.17 Td (Foreign currency translation adjustment) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 375.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 375.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 375.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 375.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 375.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 638.80 375.17 Td (\(1) Tj ET Q q 0 0 0 rg BT 647.13 375.17 Td (1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 659.65 375.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 712.80 375.17 Td (\(1) Tj ET Q q 0 0 0 rg BT 721.13 375.17 Td (1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 375.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 360.17 Td (Dividends paid) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 360.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 360.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 360.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.80 360.22 Td (\(200.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.65 360.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 360.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 360.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 707.80 360.17 Td (\(200.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 360.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 345.17 Td (Purchase of treasury stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.80 345.22 Td (\(2.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.65 345.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 345.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 436.80 345.22 Td (\(54.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.65 345.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 345.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 345.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 345.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 712.80 345.17 Td (\(54.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 345.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 330.17 Td (Retirement of treasury stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 330.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 330.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.15 330.17 Td (54.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 500.80 330.22 Td (\(54.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.65 330.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 330.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 330.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 723.65 330.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 315.17 Td (Restricted stock unit dividend equivalents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 315.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 315.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 315.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.80 315.22 Td (\(5.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.65 315.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 315.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 315.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 717.80 315.17 Td (\(5.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 315.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 301.07 Td (Issuance of common stock under share based) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 291.07 Td (compensation plan and shares withheld to cover tax) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 281.07 Td (withholding requirements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 281.17 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 281.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 281.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.80 281.22 Td (\(0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.65 281.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 281.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 281.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 717.80 281.17 Td (\(0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 281.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 266.17 Td (Issuance of common stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 266.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 266.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 266.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 509.15 266.17 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 266.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 266.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 721.15 266.17 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 251.17 Td (Equity-based compensation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 251.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 251.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 251.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 504.15 251.17 Td (13.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 251.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 251.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 716.15 251.17 Td (13.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 236.17 Td (Balance at March 31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 236.17 Td (68.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.15 236.17 Td (0.7) 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 491.65 236.17 Td (1,273.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 559.80 236.17 Td (\(269.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 585.65 236.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 638.80 236.17 Td (\(50.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 659.65 236.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 711.15 236.17 Td (954.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 221.17 Td (Net loss) 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 511.65 221.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 569.80 221.17 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 585.65 221.17 Td (\)) 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 717.80 221.17 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 221.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 206.17 Td (Foreign currency translation adjustment) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 206.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 206.17 Td () 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 511.65 206.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 206.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 642.15 206.17 Td (1) Tj ET Q q 0 0 0 rg BT 647.15 206.17 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 716.15 206.17 Td (1) Tj ET Q q 0 0 0 rg BT 721.15 206.17 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 191.17 Td (Purchase of treasury stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.80 191.22 Td (\(7.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.65 191.17 Td (\)) 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 436.80 191.22 Td (\(60.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.65 191.17 Td (\)) 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 575.65 191.17 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 (\(60.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 191.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 176.17 Td (Retirement of treasury stock) 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 377.80 176.22 Td (\(0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 176.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.15 176.17 Td (60.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 500.80 176.22 Td (\(60.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.65 176.17 Td (\)) 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 649.65 176.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 723.65 176.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 161.17 Td (Restricted stock unit dividend equivalents) 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 509.15 161.17 Td (0.1) 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 721.15 161.17 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 145.17 Td (Issuance of common stock under share based) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 135.17 Td (compensation plan and shares withheld to cover tax) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 125.17 Td (withholding requirements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 125.17 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 125.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 125.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.80 125.22 Td (\(5.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.65 125.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 125.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 125.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 717.80 125.17 Td (\(5.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 125.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 110.17 Td (Equity-based compensation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 110.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 110.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 110.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 504.15 110.17 Td (17.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 110.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 110.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 716.15 110.17 Td (17.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 95.17 Td (Balance at March 31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 95.17 Td (61.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.00 95.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.15 95.17 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.00 95.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 95.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.00 95.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.65 95.17 Td (1,224.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.00 95.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 559.80 95.17 Td (\(270.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 585.65 95.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 596.00 95.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 638.80 95.17 Td (\(39.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 659.65 95.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 670.00 95.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 711.15 95.17 Td (915.0) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 137 0 obj <> endobj 138 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 (- 63 -) 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 market 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 /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 524.10 Td (In the fiscal year ended 2017, the Company revised its previously reported fiscal year 2016 consolidated statements of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 512.10 Td (cash flows to correct the classification of non-cash investing activities. ) Tj ET Q q 0 0 0 rg BT 339.01 512.10 Td (The revision for this error resulted in a decrease to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 500.10 Td (cash provided by operating activities and a corresponding decrease to cash used in investing activities of approximately $2.3 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 488.10 Td (million for the fiscal year ended March 31, 2016. Management concluded that these errors were immaterial to prior period ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 476.10 Td (financial statements. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 455.10 Td (Use of Estimates) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 434.10 Td (The preparation of financial statements in conformity with GAAP) Tj ET Q q 0 0 0 rg BT 335.45 434.10 Td ( requires management to make estimates and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 422.10 Td (assumptions that af) Tj ET Q q 0 0 0 rg BT 131.03 422.10 Td (fect the amounts reported in these consolidated financial statements and accompanying notes. ) Tj ET Q q 0 0 0 rg BT 507.30 422.10 Td (Although ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 410.10 Td (these estimates are based on management) Tj ET Q q 0 0 0 rg BT 223.10 410.10 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 54.00 398.10 Td (the future, actual results could dif) Tj ET Q q 0 0 0 rg BT 188.22 398.10 Td (fer from those estimates. ) Tj ET Q q 0 0 0 rg BT 289.40 398.10 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 54.00 386.10 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 54.00 374.10 Td (allowances for deferred tax assets, operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 352.02 374.10 Td (ges, legal and tax contingencies, the determination ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 362.10 Td (of fair values related to fresh start accounting, purchase accounting and equity-based compensation, as well as future cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 350.10 Td (flows and fair values used in the assessment of the realizability of long-lived assets, goodwill and identifiable intangible ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 338.10 Td (assets.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 320.10 Td (Change in Segment Reporting Structur) Tj ET Q q 0 0 0 rg BT 239.59 320.10 Td (e) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 302.10 Td (During the first quarter of fiscal year 2017, the Company changed its reporting structure to separate its global research ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 290.10 Td (business, Gale, into a new reportable segment. ) Tj ET Q q 0 0 0 rg BT 242.10 290.10 Td (The Company's previous operating segments, Domestic, renamed Learning, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 278.10 Td (and International have been recast to conform to the current presentation and for a change in the segment measure of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 266.10 Td (profitability) Tj ET Q q 0 0 0 rg BT 101.12 266.10 Td (.Refer to Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 163.04 266.10 Td (19) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 173.04 266.10 Td (, Segment Information, for additional information on these changes.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 245.10 Td (Seasonality and Comparability) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 224.10 Td (The Company) Tj ET Q q 0 0 0 rg BT 131.71 224.10 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 54.00 212.10 Td (academic calendar) Tj ET Q q 0 0 0 rg BT 127.56 212.10 Td (. ) Tj ET Q q 0 0 0 rg BT 132.38 212.10 Td (This seasonality af) Tj ET Q q 0 0 0 rg BT 207.18 212.10 Td (fects the Company) Tj ET Q q 0 0 0 rg BT 284.94 212.10 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 54.00 200.10 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 54.00 188.10 Td (quarters of the fiscal year) Tj ET Q q 0 0 0 rg BT 155.06 188.10 Td (. In addition, changes in customer ordering patterns may impact the comparison of the Company) Tj ET Q q 0 0 0 rg BT 543.85 188.10 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 176.10 Td (results in a quarter with the same quarter of the previous year) Tj ET Q q 0 0 0 rg BT 298.79 176.10 Td (, or in a fiscal year with the prior fiscal year) Tj ET Q q 0 0 0 rg BT 473.59 176.10 Td (, where its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 164.10 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 54.00 152.10 Td (semester start dates or changes in inventory management practices.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 134.10 Td (As the Company continues to migrate its service of) Tj ET Q q 0 0 0 rg BT 276.78 134.10 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 54.00 122.10 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 54.00 110.10 Td (billed in excess of revenues recognized reflected as deferred revenue. ) Tj ET Q q 0 0 0 rg BT 333.95 110.10 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 98.10 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 98.10 Td (. Reported revenues will shift from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 86.10 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 74.10 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 62.10 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 62.10 Td (The current portion of ) Tj ET Q endstream endobj 139 0 obj <> endobj 140 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 (- 64 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (deferred revenue was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 142.00 731.10 Td ($178.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 200.89 731.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 220.33 731.10 Td ($171.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 279.22 731.10 Td ( as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 303.38 731.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.98 731.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.42 731.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.42 731.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 459.08 731.10 Td (, and the non-current ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (portion of deferred revenue was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.22 719.10 Td ($30.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 238.11 719.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 257.55 719.10 Td ($28.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 311.44 719.10 Td ( as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 335.60 719.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.20 719.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 418.64 719.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 438.64 719.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 491.30 719.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 698.10 Td (Summary of Significant ) Tj ET Q q 0 0 0 rg BT 175.62 698.10 Td (Accounting Policies) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 677.10 Td (Revenue Recognition: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 170.60 677.10 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 54.00 665.10 Td (professors, libraries, professionals, and corporations around the world. ) Tj ET Q q 0 0 0 rg BT 338.19 665.10 Td (These solutions are delivered through specialized ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (content, applications and services. ) Tj ET Q q 0 0 0 rg BT 192.85 653.10 Td (A) Tj ET Q q 0 0 0 rg BT 199.52 653.10 Td ( significant portion of the Company) Tj ET Q q 0 0 0 rg BT 345.33 653.10 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 54.00 641.10 Td (including digital versions of its print products. ) Tj ET Q q 0 0 0 rg BT 241.58 641.10 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 54.00 629.10 Td (met:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 611.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 611.10 Td (Persuasive evidence of an arrangement exists,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 593.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 593.10 Td (Delivery has occurred or services have been rendered,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 575.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 575.10 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 72.00 557.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 557.10 Td (Collectability is reasonably assured.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 539.10 Td (Digital Content) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 143.39 539.10 Td (Revenue from sales of digital content without any future performance obligations for the Company is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.10 Td (recognized upon activation. Revenue from sales of digital solutions that contain future performance obligations by the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.10 Td (Company is primarily deferred and recognized ratably over the appropriate period. Incremental costs that are directly related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 503.10 Td (to the deferred digital revenues are deferred and amortized over the subscription period. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 485.10 Td (Print and Other Materials) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 186.17 485.10 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 54.00 473.10 Td (returns, when the product is delivered and title, including the risks and rewards of ownership, passes to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.10 Td (customer) Tj ET Q q 0 0 0 rg BT 90.10 461.10 Td (.) Tj ET Q q 0 0 0 rg BT 94.55 461.10 Td (Amounts billed to customers for shipping and handling are classified as revenues.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 443.10 Td (Subscription-Based Pr) Tj ET Q q 0 0 0 rg BT 162.45 443.10 Td (oducts) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 197.45 443.10 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 54.00 431.10 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 54.00 419.10 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 54.00 407.10 Td (to the subscription revenues are deferred and amortized over the subscription period.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 389.10 Td (Multiple Element ) Tj ET Q q 0 0 0 rg BT 143.46 389.10 Td (Arrangements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 209.02 389.10 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 54.00 377.10 Td (the individual elements are accounted for separately) Tj ET Q q 0 0 0 rg BT 261.59 377.10 Td (, if applicable criteria are met. Specifically) Tj ET Q q 0 0 0 rg BT 431.41 377.10 Td (, the revenues are allocated to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 365.10 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 461.15 365.10 Td (The amount allocated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 353.10 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 54.00 341.10 Td (met with respect to that unit.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 323.10 Td (Rental Revenue ) Tj ET Q q 0 0 0 rg BT 136.79 323.10 Td (Arrangements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 202.34 323.10 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 54.00 311.10 Td (of consigned inventory of printed products. ) Tj ET Q q 0 0 0 rg BT 229.62 311.10 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 54.00 299.10 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 72.00 281.10 Td (Advertising Costs: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 156.17 281.10 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 54.00 269.10 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 54.00 257.10 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 340.5 232.60000000000002 m 410.5 232.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 410.5 232.60000000000002 m 414.5 232.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 414.5 232.60000000000002 m 484.5 232.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 232.60000000000002 m 488.5 232.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 232.60000000000002 m 558.5 232.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 340.5 218.60000000000002 m 410.5 218.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 414.5 218.60000000000002 m 484.5 218.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 218.60000000000002 m 558.5 218.60000000000002 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 393.45 237.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 418.03 237.05 Td (Y) Tj ET Q q 0 0 0 rg BT 423.86 237.05 Td (ear) Tj ET Q q 0 0 0 rg BT 435.77 237.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 482.11 237.05 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 57.00 222.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 366.00 223.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 440.00 223.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 514.00 223.05 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 209.17 Td (Advertising costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.00 209.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.15 209.17 Td (28.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.00 209.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.15 209.17 Td (26.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.00 209.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.15 209.17 Td (29.4) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 187.10 Td (Cash and Cash Equivalents: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 197.87 187.10 Td (Cash consists of cash on deposit in banks. Cash equivalents are generally high-quality) Tj ET Q q 0 0 0 rg BT 541.32 187.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 175.10 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 54.00 163.10 Td (accrued interest, which approximates fair value.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 145.10 Td (Allowance for) Tj ET Q q 0 0 0 rg BT 131.53 145.10 Td ( Doubtful ) Tj ET Q q 0 0 0 rg BT 174.32 145.10 Td (Accounts and Reserve for) Tj ET Q q 0 0 0 rg BT 283.84 145.10 Td ( Sales Returns: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 353.28 145.10 Td (Most of the Company) Tj ET Q q 0 0 0 rg BT 443.56 145.10 Td (s accounts receivable are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 133.10 Td (due from universities, bookstores, wholesalers, libraries, professionals, and corporations. ) Tj ET Q q 0 0 0 rg BT 411.79 133.10 Td (T) Tj ET Q q 0 0 0 rg BT 417.55 133.10 Td (rade accounts receivable are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 121.10 Td (recorded at the invoiced amount and do not bear interest. ) Tj ET Q q 0 0 0 rg BT 283.64 121.10 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 54.00 109.10 Td (of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 64.83 109.10 Td ($70.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 118.72 109.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 138.16 109.10 Td ($75.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 192.05 109.10 Td ( on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 207.05 109.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 270.65 109.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 290.09 109.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.09 109.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 362.75 109.10 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 97.10 Td ($12.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 107.89 97.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.33 97.10 Td ($9.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 176.22 97.10 Td ( on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 191.22 97.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 254.82 97.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.26 97.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 294.26 97.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 346.92 97.10 Td (. ) Tj ET Q q 0 0 0 rg BT 351.74 97.10 Td (The Company periodically estimates the amount of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 85.10 Td (future returns and assesses the allowance for doubtful accounts by evaluating general factors, such as historical sales returns ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 73.10 Td (experience, the length of time individual receivables are past due, historical collection experience and credit evaluations of its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 61.10 Td (customers as well as the economic and competitive environments. ) Tj ET Q q 0 0 0 rg BT 320.41 61.10 Td (The provision for sales returns is reflected as a reduction to ) Tj ET Q endstream endobj 141 0 obj <> endobj 142 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 (- 65 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (revenues in the consolidated statements of operations. Sales returns are char) Tj ET Q q 0 0 0 rg BT 357.88 731.10 Td (ged against the reserve as products are returned to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (inventory) Tj ET Q q 0 0 0 rg BT 91.68 719.10 Td (. ) Tj ET Q q 0 0 0 rg BT 96.12 719.10 Td (Accounts receivable losses for bad debt are written-of) Tj ET Q q 0 0 0 rg BT 311.69 719.10 Td (f against the allowance when the receivable is determined to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (be uncollectible.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 689.10 Td (Concentration of Cr) Tj ET Q q 0 0 0 rg BT 158.47 689.10 Td (edit Risk: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 671.10 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 407.5 636.6 m 480.5 636.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 480.5 636.6 m 484.5 636.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 636.6 m 557.5 636.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 407.5 618.6 m 480.5 618.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 618.6 m 557.5 618.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 451.30 641.05 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 490.21 641.05 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 74.00 622.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 434.50 623.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 511.50 623.05 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 608.27 Td (Customer ) Tj ET Q q 0 0 0 rg BT 115.11 608.27 Td (A) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.65 608.27 Td (1) Tj ET Q q 0 0 0 rg BT 466.65 608.27 Td (1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.65 608.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.30 608.27 Td (N/A) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 593.27 Td (Customer B) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.65 593.27 Td (12) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.65 593.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 538.65 593.27 Td (12) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 548.65 593.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 571.10 Td (N/A) Tj ET Q q 0 0 0 rg BT 88.67 571.10 Td ( - not applicable as % is less than 10%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 553.10 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 529.33 553.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 541.10 Td (Company's top three customers accounted for 14%, 15%, and 18% of our consolidated revenues for the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 529.10 Td (2018, 2017, and 2016, respectively) Tj ET Q q 0 0 0 rg BT 193.60 529.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 511.10 Td (Inventories: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 128.66 511.10 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 54.00 499.10 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 54.00 487.10 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 54.00 475.10 Td (consolidated statements of operations. ) Tj ET Q q 0 0 0 rg BT 209.06 475.10 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 54.00 463.10 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 546.75 463.10 Td (f ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 451.10 Td (against the reserve. ) Tj ET Q q 0 0 0 rg BT 133.23 451.10 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 54.00 439.10 Td (balance sheets and was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 148.96 439.10 Td ($53.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 202.85 439.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 222.29 439.10 Td ($56.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 276.18 439.10 Td ( as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 300.34 439.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.94 439.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.38 439.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.38 439.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 456.04 439.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 421.10 Td (Pr) Tj ET Q q 0 0 0 rg BT 82.37 421.10 Td (operty) Tj ET Q q 0 0 0 rg BT 109.58 421.10 Td (, Equipment and Capitalized Internal-Use Softwar) Tj ET Q q 0 0 0 rg BT 324.97 421.10 Td (e: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 337.74 421.10 Td (Property) Tj ET Q q 0 0 0 rg BT 371.53 421.10 Td (, equipment and capitalized internal-use ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 409.10 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 54.00 397.10 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 480.02 397.10 Td (-facing platforms ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 385.10 Td (used to deliver certain of the Company) Tj ET Q q 0 0 0 rg BT 212.29 385.10 Td (s digital products and services. Major renewals and improvements are capitalized, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 373.10 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 72.00 355.10 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 54.00 343.10 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 54.00 331.10 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 54.00 319.10 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 54.00 307.10 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 54.00 295.10 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 551.60 295.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 283.10 Td (Amortization expense on capitalized internal-use software was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 307.52 283.10 Td ($53.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 361.41 283.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.41 283.10 Td ($62.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 420.30 283.10 Td (, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 442.24 283.10 Td ($55.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.13 283.10 Td ( for the fiscal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 271.10 Td (years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.98 271.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 167.57 271.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 172.57 271.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 192.57 271.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 212.01 271.10 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 232.01 271.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 284.67 271.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 253.10 Td (Upon disposal of property) Tj ET Q q 0 0 0 rg BT 176.06 253.10 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 54.00 241.10 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 498.65 241.10 Td (The Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 229.10 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 54.00 217.10 Td (economic useful life of the asset.) Tj ET Q q 0 0 0 rg BT 187.94 217.10 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 54.00 205.10 Td (accelerated depreciation through the date of abandonment. ) Tj ET Q q 0 0 0 rg BT 290.38 205.10 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 54.00 193.10 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 54.00 181.10 Td (remaining useful life. ) Tj ET Q q 0 0 0 rg BT 141.75 181.10 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 54.00 169.10 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 54.00 157.10 Td (internally-developed software projects during the fiscal year) Tj ET Q q 0 0 0 rg BT 294.46 157.10 Td (. During fiscal years 2018 and 2016, the amount of accelerated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 145.10 Td (depreciation associated with the abandonment of certain projects was inconsequential.) Tj ET Q 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 /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 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 56.00 705.17 Td (Purchased and internally-developed software) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 705.17 Td (310 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 691.17 Td (Computer hardware) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 691.17 Td (35 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 677.17 Td (Buildings and building improvements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 677.17 Td (1040 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 663.17 Td (Furniture and equipment) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 663.17 Td (310 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 649.17 Td (Leasehold improvements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 649.17 Td (Lesser of lease term or estimated useful life) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 627.10 Td (Pr) Tj ET Q q 0 0 0 rg BT 82.37 627.10 Td (e-publication Costs: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 172.65 627.10 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 54.00 615.10 Td (product and represent activities associated with product development. ) Tj ET Q q 0 0 0 rg BT 335.12 615.10 Td (These may be performed internally or outsourced to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 603.10 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 54.00 591.10 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 54.00 579.10 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 54.00 567.10 Td (to be included in the Company) Tj ET Q q 0 0 0 rg BT 179.81 567.10 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 54.00 555.10 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 54.00 543.10 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 54.00 531.10 Td (employees through wages, salaries and salary-related costs. ) Tj ET Q q 0 0 0 rg BT 293.64 531.10 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 54.00 519.10 Td (print to digital, its pre-publication costs continue to decline. ) Tj ET Q q 0 0 0 rg BT 295.16 519.10 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 54.00 507.10 Td (make strategic decisions as to which titles to invest in. ) Tj ET Q q 0 0 0 rg BT 273.50 507.10 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 54.00 495.10 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 54.00 483.10 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 72.00 465.10 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 54.00 453.10 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 417.31 453.10 Td (The Company also considers ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 441.10 Td (current assessments of the market, industry trends and the projected success of programs. ) Tj ET Q q 0 0 0 rg BT 413.44 441.10 Td (When the Company determines to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 429.10 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 505.05 429.10 Td (When the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 417.10 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 54.00 405.10 Td (revised to reflect the use of the asset over its shortened remaining useful life. ) Tj ET Q q 0 0 0 rg BT 363.07 405.10 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 54.00 393.10 Td (ceases to be used. During fiscal years 2018, 2017, and 2016 the Company recorded accelerated amortization of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 381.10 Td (prepublication costs of approximately $10.4 million, $17.7 million, and $3.9 million, respectively) Tj ET Q q 0 0 0 rg BT 444.12 381.10 Td (, associated with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 369.10 Td (abandonment of certain content projects during the fiscal year) Tj ET Q q 0 0 0 rg BT 301.13 369.10 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 351.10 Td (Royalties and ) Tj ET Q q 0 0 0 rg BT 132.01 351.10 Td (Author) Tj ET Q q 0 0 0 rg BT 162.94 351.10 Td ( ) Tj ET Q q 0 0 0 rg BT 164.89 351.10 Td (Advances: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 214.33 351.10 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 54.00 339.10 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 54.00 327.10 Td (Company determines future recovery is not probable. ) Tj ET Q q 0 0 0 rg BT 269.49 327.10 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 54.00 315.10 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 54.00 303.10 Td (associated products or services are recognized.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 285.10 Td (As part of the ongoing assessment of recoverability) Tj ET Q q 0 0 0 rg BT 277.13 285.10 Td (, the Company considers the age of the content since publication. ) Tj ET Q q 0 0 0 rg BT 539.93 285.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 273.10 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 54.00 261.10 Td (advance through the sale of the publication. ) Tj ET Q q 0 0 0 rg BT 230.98 261.10 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 54.00 249.10 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 535.34 249.10 Td () Tj ET Q q 0 0 0 rg BT 538.12 249.10 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 237.10 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 54.00 225.10 Td (believes to be not recoverable is expensed.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 207.10 Td (Identifiable Intangible ) Tj ET Q q 0 0 0 rg BT 169.80 207.10 Td (Assets: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 204.79 207.10 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 54.00 195.10 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 470.09 195.10 Td (The Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 183.10 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 54.00 171.10 Td (upon the economic useful life of the asset.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 153.10 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 56.00 127.17 Td (T) Tj ET Q q 0 0 0 rg BT 61.93 127.17 Td (rademarks and tradenames) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 127.17 Td (815 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 113.17 Td (Copyrights) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 113.17 Td (324 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 99.17 Td (Customer relationships) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 99.17 Td (1420 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 85.17 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 85.17 Td (echnology) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 85.17 Td (48 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 71.17 Td (Author/content rights) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 71.17 Td (525 years) Tj ET Q BT /F1 10.00 Tf ET 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 /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Goodwill: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 116.73 731.25 Td ( Goodwill represents the excess of the Company) Tj ET Q q 0 0 0 rg BT 313.07 731.25 Td (s reor) Tj ET Q q 0 0 0 rg BT 335.38 731.25 Td (ganization value over the fair value of identifiable ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.25 Td (tangible and intangible assets upon emer) Tj ET Q q 0 0 0 rg BT 216.28 719.25 Td (gence from Chapter 1) Tj ET Q q 0 0 0 rg BT 302.81 719.25 Td (1 of the United States Bankruptcy Code \(Chapter 1) Tj ET Q q 0 0 0 rg BT 511.28 719.25 Td (1\) on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.25 Td (March 31, 2014 \(the Ef) Tj ET Q q 0 0 0 rg BT 151.84 707.25 Td (fective Date\), 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 54.00 695.25 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 72.00 677.25 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 54.00 665.25 Td (of each fiscal year) Tj ET Q q 0 0 0 rg BT 126.61 665.25 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 54.00 653.25 Td (value of a reporting unit below its carrying amount.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 635.25 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 54.00 623.25 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 54.00 611.25 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 54.00 599.25 Td (required to perform further quantitative goodwill impairment testing.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 581.25 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 54.00 569.25 Td (the F) Tj ET Q q 0 0 0 rg BT 73.54 569.25 Td (ASB, which simplifies accounting for goodwill impairment.) Tj ET Q q 0 0 0 rg BT 316.38 569.25 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 54.00 557.25 Td (impairment test, which requires a hypothetical purchase price allocation. ) Tj ET Q q 0 0 0 rg BT 346.40 557.25 Td (A) Tj ET Q q 0 0 0 rg BT 353.07 557.25 Td ( goodwill impairment will now be the amount by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.25 Td (which a reporting unit) Tj ET Q q 0 0 0 rg BT 145.37 545.25 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 529.96 545.25 Td (7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 534.96 545.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.25 Td (Goodwill, for further information related to the Company) Tj ET Q q 0 0 0 rg BT 295.60 533.25 Td (s goodwill and impairment testing.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 515.25 Td (Impairment of Long-Lived ) Tj ET Q q 0 0 0 rg BT 188.95 515.25 Td (Assets: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 223.94 515.25 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 54.00 503.25 Td (changes in circumstances indicate that the carrying amounts may not be recoverable. ) Tj ET Q q 0 0 0 rg BT 395.07 503.25 Td (The Company reviews its long-lived ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 491.25 Td (assets for impairment at a reporting unit level since that is the lowest level for which identifiable cash flows are independent ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 479.25 Td (of the cash flows of other groups of assets and liabilities.) Tj ET Q q 0 0 0 rg BT 283.77 479.25 Td (The initial test for impairment of long-lived assets held for use is a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 467.25 Td (recoverability test that compares the asset) Tj ET Q q 0 0 0 rg BT 223.66 467.25 Td (s carrying value with the sum of undiscounted cash flows related to that reporting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.25 Td (unit.If the carrying value is greater than the undiscounted cash flows, impairment is recorded based on estimated fair value. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.25 Td (Individual long-lived assets are impaired proportionately) Tj ET Q q 0 0 0 rg BT 280.79 443.25 Td (, limited to their respective estimated fair values.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 425.25 Td (Investments in ) Tj ET Q q 0 0 0 rg BT 136.45 425.25 Td (Affiliates: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 183.66 425.25 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 54.00 413.25 Td (has the ability to exercise significant influence over operating and financial policies \(generally 20% to 50% ownership of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 401.25 Td (voting equity\), 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 54.00 389.25 Td (recorded at cost and the carrying amounts are adjusted to reflect the Company) Tj ET Q q 0 0 0 rg BT 368.88 389.25 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 54.00 377.25 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 54.00 365.25 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 54.00 353.25 Td (accounted for using the cost method of accounting. ) Tj ET Q q 0 0 0 rg BT 260.70 353.25 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 54.00 341.25 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 450.44 341.25 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 323.25 Td (Operational Restructuring and Other) Tj ET Q q 0 0 0 rg BT 232.64 323.25 Td ( Charges: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 279.03 323.25 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 54.00 311.25 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 54.00 299.25 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 54.00 287.25 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 54.00 275.25 Td (are provided under a one-time benefit arrangement or under an ongoing benefit arrangement. ) Tj ET Q q 0 0 0 rg BT 428.11 275.25 Td (Where the Company has either ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 263.25 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 54.00 251.25 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 54.00 239.25 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 54.00 227.25 Td (restructuring plan and the plan has been communicated to employees. ) Tj ET Q q 0 0 0 rg BT 335.12 227.25 Td (These char) Tj ET Q q 0 0 0 rg BT 378.52 227.25 Td (ges are included in operational restructuring ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 215.25 Td (and other char) Tj ET Q q 0 0 0 rg BT 111.01 215.25 Td (ges on the consolidated statements of operations. Other char) Tj ET Q q 0 0 0 rg BT 351.59 215.25 Td (ges include knowledge transfer costs and business ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 203.25 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 72.00 185.25 Td (Reorganization Items:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 167.26 185.25 Td ( Reor) Tj ET Q q 0 0 0 rg BT 191.52 185.25 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 54.00 173.25 Td (and process of restructuring under Chapter 1) Tj ET Q q 0 0 0 rg BT 231.91 173.25 Td (1, and were separately disclosed as reor) Tj ET Q q 0 0 0 rg BT 390.27 173.25 Td (ganization items, net, on the consolidated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 161.25 Td (statements of operations. Prior to fiscal year 2018 reor) Tj ET Q q 0 0 0 rg BT 271.26 161.25 Td (ganization items incurred during the fiscal years ended March 31, 2017 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 149.25 Td (and 2016 were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.37 149.25 Td ($0.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 164.26 149.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 183.70 149.25 Td ($1.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 232.59 149.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 285.25 149.25 Td (, and consisted of professional and administrative fees associated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 137.25 Td (with the Company) Tj ET Q q 0 0 0 rg BT 130.66 137.25 Td (s Chapter 1) Tj ET Q q 0 0 0 rg BT 175.84 137.25 Td (1 reor) Tj ET Q q 0 0 0 rg BT 199.25 137.25 Td (ganization ef) Tj ET Q q 0 0 0 rg BT 250.99 137.25 Td (forts. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 119.25 Td (Legal Contingencies: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 164.22 119.25 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 54.00 107.25 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 512.56 107.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 95.25 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 83.25 Td (matters using all available information, and develop 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 71.25 Td (advisors. ) Tj ET Q q 0 0 0 rg BT 92.15 71.25 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 59.25 Td (deemed probable and can be reasonably estimated. If the contingency is not probable or cannot be reasonably estimated, ) 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 /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 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 54.00 719.10 Td (incurred. See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 131.19 719.10 Td (18) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 141.19 719.10 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 54.00 707.10 Td (contingencies and are recognized in the income statement when all contingencies have been resolved. ) Tj ET Q q 0 0 0 rg BT 462.45 707.10 Td (As such, gains from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (legal settlements are recorded once they are received.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 677.10 Td (Fair) Tj ET Q q 0 0 0 rg BT 90.14 677.10 Td ( ) Tj ET Q q 0 0 0 rg BT 92.46 677.10 Td (V) Tj ET Q q 0 0 0 rg BT 98.77 677.10 Td (alue Measur) Tj ET Q q 0 0 0 rg BT 151.63 677.10 Td (ements: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 189.95 677.10 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 54.00 665.10 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 54.00 653.10 Td (market participants. ) Tj ET Q q 0 0 0 rg BT 135.36 653.10 Td (Authoritative guidance specifies a hierarchy of valuation techniques based upon whether the inputs to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 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 54.00 629.10 Td (independent sources \(observable inputs\) or reflect the Company) Tj ET Q q 0 0 0 rg BT 312.53 629.10 Td (s own assumptions of market participant valuation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (\(unobservable inputs\). ) Tj ET Q q 0 0 0 rg BT 145.74 617.10 Td (The fair value hierarchy consists of three levels:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 599.10 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 72.00 587.10 Td (unrestricted assets or liabilities.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 569.10 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 72.00 557.10 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 72.00 545.10 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 72.00 527.10 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 72.00 515.10 Td (of the assets or liabilities.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 497.10 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 54.00 485.10 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 485.10 Td (fort. ) Tj ET Q q 0 0 0 rg BT 80.85 485.10 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 54.00 473.10 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 54.00 461.10 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 54.00 449.10 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 54.00 437.10 Td (value driver that is significant to the valuation. ) Tj ET Q q 0 0 0 rg BT 242.94 437.10 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 54.00 425.10 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 54.00 413.10 Td (asset or liability being valued.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 395.10 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 54.00 383.10 Td (are recorded at fair value on a nonrecurring basis. ) Tj ET Q q 0 0 0 rg BT 254.83 383.10 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 54.00 371.10 Td (other intangible assets on a nonrecurring basis. ) Tj ET Q q 0 0 0 rg BT 243.77 371.10 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 54.00 359.10 Td (accounts receivable, accounts payable and accrued expenses, approximate their fair values due to the short-term nature of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 347.10 Td (these instruments.) Tj ET Q q 0 0 0 rg BT 128.53 347.10 Td (The fair value of long-term debt is determined based upon either the most recent quoted market prices, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 335.10 Td (average bid and ask 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 548.29 335.10 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.10 Td (debt securities or the 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 72.00 305.10 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 54.00 293.10 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 54.00 281.10 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 54.00 269.10 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 72.00 251.10 Td (See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 110.88 251.10 Td (15) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 120.88 251.10 Td (, Fair ) Tj ET Q q 0 0 0 rg BT 148.74 251.10 Td (V) Tj ET Q q 0 0 0 rg BT 154.86 251.10 Td (alue Measurements, for additional detail on the fair value hierarchy) Tj ET Q q 0 0 0 rg BT 427.98 251.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 233.10 Td (Equity-Based Compensation Plan: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 224.25 233.10 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 54.00 221.10 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 536.07 221.10 Td (13) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.07 221.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.10 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 72.00 191.10 Td (For) Tj ET Q q 0 0 0 rg BT 87.37 191.10 Td (eign Curr) Tj ET Q q 0 0 0 rg BT 129.12 191.10 Td (ency: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 156.89 191.10 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 54.00 179.10 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 54.00 167.10 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 54.00 155.10 Td (at average exchange rates during the period. ) Tj ET Q q 0 0 0 rg BT 232.62 155.10 Td (T) Tj ET Q q 0 0 0 rg BT 238.38 155.10 Td (ranslation adjustments resulting from dif) Tj ET Q q 0 0 0 rg BT 400.95 155.10 Td (ferences between period-end and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.10 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 54.00 131.10 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 54.00 119.10 Td (\(expense\), net, below operating income when the U.S. dollar) Tj ET Q q 0 0 0 rg BT 296.30 119.10 Td (, and not the local currency) Tj ET Q q 0 0 0 rg BT 404.50 119.10 Td (, is the functional currency) Tj ET Q q 0 0 0 rg BT 510.75 119.10 Td (. Currency ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 107.10 Td (gains or losses arising from transactions denominated in a currency other than the functional currency are recorded in other ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 95.10 Td (\(expense\) income, net, below operating income \(loss\) and were as follows:) Tj ET Q 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 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 339.5 709.5 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 413.5 709.5 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 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 /F3 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 (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 713.95 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 713.95 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 700.07 Td (Foreign currency transaction \(losses\) gains, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 700.07 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 700.12 Td (\(1.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 700.07 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 700.07 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 700.07 Td (2.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 700.07 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 700.07 Td (0.7) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 678.00 Td (T) Tj ET Q q 0 0 0 rg BT 77.75 678.00 Td (axes Collected fr) Tj ET Q q 0 0 0 rg BT 148.66 678.00 Td (om Customers and Remitted to Governmental ) Tj ET Q q 0 0 0 rg BT 348.07 678.00 Td (Agencies: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 391.67 678.00 Td ( ) Tj ET Q q 0 0 0 rg BT 393.99 678.00 Td (The Company records taxes on customer ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 666.00 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 72.00 648.00 Td (Income ) Tj ET Q q 0 0 0 rg BT 105.98 648.00 Td (T) Tj ET Q q 0 0 0 rg BT 111.73 648.00 Td (axes: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 138.39 648.00 Td (Significant judgment is required in determining the Company) Tj ET Q q 0 0 0 rg BT 387.51 648.00 Td (s annual provision for income taxes and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 636.00 Td (evaluating its income tax positions. ) Tj ET Q q 0 0 0 rg BT 197.69 636.00 Td (The Company) Tj ET Q q 0 0 0 rg BT 257.40 636.00 Td (s tax rates are impacted by the tax laws, regulations and policies in federal, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 624.00 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 54.00 612.00 Td (uncertainty generated by the prospect of future tax legislation may also af) Tj ET Q q 0 0 0 rg BT 348.43 612.00 Td (fect the Company) Tj ET Q q 0 0 0 rg BT 422.30 612.00 Td (s income tax positions, in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 600.00 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 54.00 588.00 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 54.00 576.00 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 458.29 576.00 Td (A) Tj ET Q q 0 0 0 rg BT 464.96 576.00 Td ( valuation allowance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 564.00 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 72.00 546.00 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 54.00 534.00 Td (regulations and practices. ) Tj ET Q q 0 0 0 rg BT 158.22 534.00 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 54.00 522.00 Td (not limited to, new facts, changes in tax law and information received from regulators. ) Tj ET Q q 0 0 0 rg BT 401.95 522.00 Td (A) Tj ET Q q 0 0 0 rg BT 408.62 522.00 Td ( change in any one of these factors ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 510.00 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 509.80 510.00 Td (ge or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 498.00 Td (benefit to the Company) Tj ET Q q 0 0 0 rg BT 150.92 498.00 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 54.00 486.00 Td (fluctuations in the Company) Tj ET Q q 0 0 0 rg BT 170.37 486.00 Td (s ef) Tj ET Q q 0 0 0 rg BT 184.35 486.00 Td (fective income tax rate. ) Tj ET Q q 0 0 0 rg BT 280.14 486.00 Td (Additionally) Tj ET Q q 0 0 0 rg BT 330.04 486.00 Td (, the Company) Tj ET Q q 0 0 0 rg BT 391.42 486.00 Td (s income tax returns are routinely audited ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 474.00 Td (and settlements of issues raised in these audits sometimes af) Tj ET Q q 0 0 0 rg BT 294.60 474.00 Td (fect its income tax provisions. ) Tj ET Q q 0 0 0 rg BT 417.17 474.00 Td (The resolution of audit issues and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 462.00 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 54.00 450.00 Td (possible extension of statutes of limitations.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 432.00 Td (On December 22, 2017, the U.S. government enacted the ) Tj ET Q q 0 0 0 rg BT 303.14 432.00 Td (T) Tj ET Q q 0 0 0 rg BT 308.55 432.00 Td (ax Cuts and Jobs ) Tj ET Q q 0 0 0 rg BT 378.00 432.00 Td (Act of 2017, \(T) Tj ET Q q 0 0 0 rg BT 443.94 432.00 Td (ax ) Tj ET Q q 0 0 0 rg BT 455.33 432.00 Td (Act\). ) Tj ET Q q 0 0 0 rg BT 482.36 432.00 Td (The ) Tj ET Q q 0 0 0 rg BT 500.22 432.00 Td (T) Tj ET Q q 0 0 0 rg BT 505.63 432.00 Td (ax ) Tj ET Q q 0 0 0 rg BT 517.02 432.00 Td (Act made ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 420.00 Td (significant revisions to the U.S. corporate income tax system, including lowering the U.S. federal corporate income tax rate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 408.00 Td (to 21%, accelerating deductions for certain business assets, changing the U.S. system from a worldwide tax system to a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 396.00 Td (modified territorial tax system, requiring companies to pay a one-time transition tax on certain non-U.S. earnings of foreign ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 384.00 Td (subsidiaries, eliminating certain deductions such as the domestic production deduction, establishing limitations on the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 372.00 Td (deductibility of certain expenses including interest and executive compensation, and creating new taxes on certain foreign ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 360.00 Td (earnings. In accordance with the Securities and Exchange Commission Staf) Tj ET Q q 0 0 0 rg BT 355.95 360.00 Td (f ) Tj ET Q q 0 0 0 rg BT 361.23 360.00 Td (Accounting Bulletin No. 1) Tj ET Q q 0 0 0 rg BT 466.96 360.00 Td (18, the Company has ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 348.00 Td (completed its assessment of the impact of the ) Tj ET Q q 0 0 0 rg BT 237.66 348.00 Td (T) Tj ET Q q 0 0 0 rg BT 243.07 348.00 Td (ax ) Tj ET Q q 0 0 0 rg BT 254.46 348.00 Td (Act on the Company's fiscal year 2018 financial statements. See Note 14, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 336.00 Td (Income ) Tj ET Q q 0 0 0 rg BT 90.74 336.00 Td (T) Tj ET Q q 0 0 0 rg BT 96.15 336.00 Td (axes to the consolidated financial statements included in this ) Tj ET Q q 0 0 0 rg BT 344.70 336.00 Td (Annual Report for further detail. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 318.00 Td (Accumulated Other) Tj ET Q q 0 0 0 rg BT 156.53 318.00 Td ( Compr) Tj ET Q q 0 0 0 rg BT 189.40 318.00 Td (ehensive Income \(Loss\): ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 296.61 318.00 Td (Accumulated other comprehensive income \(loss\) consisted of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 306.00 Td (cumulative foreign currency translation adjustments at both ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 294.76 306.00 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 358.36 306.00 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 377.80 306.00 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.80 306.00 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 285.00 Td (New ) Tj ET Q q 0 0 0 rg BT 92.83 285.00 Td (Accounting Standards and ) Tj ET Q q 0 0 0 rg BT 208.70 285.00 Td (Accounting Changes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 264.00 Td (In March 2018, the Financial ) Tj ET Q q 0 0 0 rg BT 190.31 264.00 Td (Accounting Standards Board \(F) Tj ET Q q 0 0 0 rg BT 320.93 264.00 Td (ASB\) issued guidance on compliance and disclosures ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 252.00 Td (related to the ) Tj ET Q q 0 0 0 rg BT 108.52 252.00 Td (T) Tj ET Q q 0 0 0 rg BT 113.93 252.00 Td (ax ) Tj ET Q q 0 0 0 rg BT 125.31 252.00 Td (Act enacted December 22, 2017. ) Tj ET Q q 0 0 0 rg BT 258.32 252.00 Td (A) Tj ET Q q 0 0 0 rg BT 264.99 252.00 Td ( company must first reflect the income tax ef) Tj ET Q q 0 0 0 rg BT 444.19 252.00 Td (fects of the ) Tj ET Q q 0 0 0 rg BT 490.93 252.00 Td (T) Tj ET Q q 0 0 0 rg BT 496.34 252.00 Td (ax ) Tj ET Q q 0 0 0 rg BT 507.73 252.00 Td (Act in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 240.00 Td (which the accounting under the ) Tj ET Q q 0 0 0 rg BT 181.46 240.00 Td (Accounting Standard Codification \(ASC\)T) Tj ET Q q 0 0 0 rg BT 361.55 240.00 Td (opic 740 is complete. ) Tj ET Q q 0 0 0 rg BT 449.04 240.00 Td (A) Tj ET Q q 0 0 0 rg BT 455.71 240.00 Td ( company must then ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 228.00 Td (report provisional amounts for those specific income tax ef) Tj ET Q q 0 0 0 rg BT 289.86 228.00 Td (fects of the ) Tj ET Q q 0 0 0 rg BT 336.60 228.00 Td (T) Tj ET Q q 0 0 0 rg BT 342.01 228.00 Td (ax ) Tj ET Q q 0 0 0 rg BT 353.40 228.00 Td (Act for which the accounting will be incomplete ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 216.00 Td (but for which a reasonable estimate can be determined. For any specific income tax ef) Tj ET Q q 0 0 0 rg BT 397.85 216.00 Td (fects of the ) Tj ET Q q 0 0 0 rg BT 444.59 216.00 Td (T) Tj ET Q q 0 0 0 rg BT 450.00 216.00 Td (ax ) Tj ET Q q 0 0 0 rg BT 461.39 216.00 Td (Act for which a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 204.00 Td (reasonable estimate cannot be determined, a company would not report provisional amounts and would continue to apply the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 192.00 Td (guidance based on the provisions of the tax laws that were in ef) Tj ET Q q 0 0 0 rg BT 307.63 192.00 Td (fect immediately prior to the ) Tj ET Q q 0 0 0 rg BT 424.36 192.00 Td (T) Tj ET Q q 0 0 0 rg BT 429.77 192.00 Td (ax ) Tj ET Q q 0 0 0 rg BT 441.15 192.00 Td (Act being enacted. For those ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 180.00 Td (income tax ef) Tj ET Q q 0 0 0 rg BT 108.24 180.00 Td (fects for which a company was not able to determine a reasonable estimate \(such that no related provisional ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 168.00 Td (amount was reported for the reporting period in which the ) Tj ET Q q 0 0 0 rg BT 288.19 168.00 Td (T) Tj ET Q q 0 0 0 rg BT 293.60 168.00 Td (ax ) Tj ET Q q 0 0 0 rg BT 304.99 168.00 Td (Act was enacted\), the company would report provisional ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 156.00 Td (amounts in the first reporting period in which a reasonable estimate can be determined. ) Tj ET Q q 0 0 0 rg BT 404.17 156.00 Td (An entity should include financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 144.00 Td (statement disclosures to provide information about the material financial reporting impacts of the ) Tj ET Q q 0 0 0 rg BT 445.09 144.00 Td (T) Tj ET Q q 0 0 0 rg BT 450.50 144.00 Td (ax ) Tj ET Q q 0 0 0 rg BT 461.89 144.00 Td (Act for which the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 132.00 Td (accounting under ) Tj ET Q q 0 0 0 rg BT 125.09 132.00 Td (ASC ) Tj ET Q q 0 0 0 rg BT 146.86 132.00 Td (T) Tj ET Q q 0 0 0 rg BT 152.27 132.00 Td (opic 740 is incomplete. Discussion of estimates used in tax calculations as a result of the ) Tj ET Q q 0 0 0 rg BT 508.96 132.00 Td (T) Tj ET Q q 0 0 0 rg BT 514.37 132.00 Td (ax ) Tj ET Q q 0 0 0 rg BT 525.75 132.00 Td (Act can ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 120.00 Td (be found in the Basis of the Presentation section above, and in Note 14, Income ) Tj ET Q q 0 0 0 rg BT 379.01 120.00 Td (T) Tj ET Q q 0 0 0 rg BT 384.42 120.00 Td (axes. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 102.00 Td (In November 2016, the F) Tj ET Q q 0 0 0 rg BT 172.07 102.00 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 90.00 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 78.00 Td (equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ) Tj ET Q q 0 0 0 rg BT 430.35 78.00 Td (The guidance is ef) Tj ET Q q 0 0 0 rg BT 503.75 78.00 Td (fective for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 66.00 Td (fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, ) 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 54.00 731.10 Td (with early adoption permitted. ) Tj ET Q q 0 0 0 rg BT 177.40 731.10 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 534.24 731.10 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (consolidated cash flows.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 701.10 Td (In ) Tj ET Q q 0 0 0 rg BT 82.28 701.10 Td (August 2016, the F) Tj ET Q q 0 0 0 rg BT 158.21 701.10 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 54.00 689.10 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 54.00 677.10 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 54.00 665.10 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 54.00 653.10 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 54.00 641.10 Td (principle. ) Tj ET Q q 0 0 0 rg BT 94.36 641.10 Td (The amendments are an improvement to GAAP) Tj ET Q q 0 0 0 rg BT 285.05 641.10 Td ( because they provide guidance for each of the eight issues, for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (which GAAP) Tj ET Q q 0 0 0 rg BT 107.79 629.10 Td ( guidance was previously unclear or did not exist, thereby reducing the current and potential future diversity in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (practice. ) Tj ET Q q 0 0 0 rg BT 90.46 617.10 Td (The guidance is ef) Tj ET Q q 0 0 0 rg BT 163.86 617.10 Td (fective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (beginning after December 15, 2019, with early adoption permitted. ) Tj ET Q q 0 0 0 rg BT 324.29 605.10 Td (The Company is evaluating the impact of this update on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 Td (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 72.00 572.10 Td (In March 2016, the F) Tj ET Q q 0 0 0 rg BT 155.96 572.10 Td (ASB issued guidance that changes the accounting for certain aspects of share-based payments to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 560.10 Td (employees. ) Tj ET Q q 0 0 0 rg BT 101.58 560.10 Td (The guidance requires the recognition of the income tax ef) Tj ET Q q 0 0 0 rg BT 335.47 560.10 Td (fects of awards in the income statement when the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 548.10 Td (awards vest or are settled, thus eliminating additional paid-in capital pools. ) Tj ET Q q 0 0 0 rg BT 356.24 548.10 Td (The guidance also simplifies withholding of taxes ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 536.10 Td (on employees) Tj ET Q q 0 0 0 rg BT 111.85 536.10 Td ( behalf upon exercise of stock options or vesting of nonvested shares without resulting in liability classification ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 524.10 Td (as long as the amounts withheld do not exceed the maximum statutory tax rates in the employees) Tj ET Q q 0 0 0 rg BT 444.27 524.10 Td ( applicable jurisdictions. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 512.10 Td (addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 500.10 Td (The guidance is ef) Tj ET Q q 0 0 0 rg BT 127.40 500.10 Td (fective for the Company for fiscal years beginning after December 15, 2017, and interim periods within ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 488.10 Td (fiscal years beginning after December 15, 2018, with early adoption permitted. ) Tj ET Q q 0 0 0 rg BT 372.05 488.10 Td (The Company adopted this guidance in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 476.10 Td (fourth quarter of fiscal year 2018. ) Tj ET Q q 0 0 0 rg BT 191.27 476.10 Td (The adoption did not have a material impact on the Company's consolidated financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 464.10 Td (statements.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 446.10 Td (In February 2016, the F) Tj ET Q q 0 0 0 rg BT 165.96 446.10 Td (ASB issued an updated standard to add ) Tj ET Q q 0 0 0 rg BT 324.55 446.10 Td (ASC ) Tj ET Q q 0 0 0 rg BT 346.33 446.10 Td (T) Tj ET Q q 0 0 0 rg BT 351.74 446.10 Td (opic 842, Leases, which will replace most of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 434.10 Td (existing leasing guidance in U.S. GAAP) Tj ET Q q 0 0 0 rg BT 215.00 434.10 Td ( when it becomes ef) Tj ET Q q 0 0 0 rg BT 294.79 434.10 Td (fective. One of the most significant changes this update will ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 422.10 Td (institute is that for all leases the lessees will be required to recognize at the commencement date: a\) a lease liability; and b\) a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 410.10 Td (right-of-use asset. ) Tj ET Q q 0 0 0 rg BT 127.96 410.10 Td (The lease liability represents lessee) Tj ET Q q 0 0 0 rg BT 271.80 410.10 Td (s obligation to make lease payments and it is measured on a discounted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 398.10 Td (basis. ) Tj ET Q q 0 0 0 rg BT 78.82 398.10 Td (The right-of-use asset represents the lessee) Tj ET Q q 0 0 0 rg BT 252.92 398.10 Td (s right to use, or control the use of, the underlying leased asset during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 386.10 Td (term of the lease. ) Tj ET Q q 0 0 0 rg BT 124.81 386.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 174.71 386.10 Td (, the guidance requires improved disclosures to help users of financial statements better ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 374.10 Td (understand the nature and magnitude of lessees) Tj ET Q q 0 0 0 rg BT 245.42 374.10 Td ( lease obligations.) Tj ET Q q 0 0 0 rg BT 319.66 374.10 Td (The amendments in this update are ef) Tj ET Q q 0 0 0 rg BT 469.43 374.10 Td (fective for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 362.10 Td (Company for fiscal years beginning after December 15, 2019 and interim periods within fiscal years beginning after ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 350.10 Td (December 15, 2020. ) Tj ET Q q 0 0 0 rg BT 137.40 350.10 Td (The Company is evaluating the impact of this update on its consolidated financial position, results of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 338.10 Td (operations and cash flows.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 320.10 Td (In May 2014, the F) Tj ET Q q 0 0 0 rg BT 148.20 320.10 Td (ASB issued an update to add ) Tj ET Q q 0 0 0 rg BT 265.41 320.10 Td (ASC ) Tj ET Q q 0 0 0 rg BT 287.18 320.10 Td (T) Tj ET Q q 0 0 0 rg BT 292.59 320.10 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 54.00 308.10 Td (replace most existing revenue recognition guidance in U.S. GAAP) Tj ET Q q 0 0 0 rg BT 319.67 308.10 Td ( when it becomes ef) Tj ET Q q 0 0 0 rg BT 399.46 308.10 Td (fective. ) Tj ET Q q 0 0 0 rg BT 431.49 308.10 Td (The authoritative guidance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 296.10 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 54.00 284.10 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 54.00 272.10 Td (through the application of the following steps:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.00 254.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 254.10 Td (Step 1: Identify the contract\(s\) with a customer) Tj ET Q q 0 0 0 rg BT 314.00 254.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.00 236.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 236.10 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 108.00 218.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 218.10 Td (Step 3: Determine the transaction price.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.00 200.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 200.10 Td (Step 4: ) Tj ET Q q 0 0 0 rg BT 156.00 200.10 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 108.00 182.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 182.10 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 72.00 164.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 121.90 164.10 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 54.00 152.10 Td (nature, amount, timing, and uncertainty of revenues that are recognized. ) Tj ET Q q 0 0 0 rg BT 344.26 152.10 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 54.00 140.10 Td (retrospective basis, utilizing one of two dif) Tj ET Q q 0 0 0 rg BT 225.17 140.10 Td (ferent alternatives. In ) Tj ET Q q 0 0 0 rg BT 312.35 140.10 Td (August 2015, the F) Tj ET Q q 0 0 0 rg BT 388.28 140.10 Td (ASB approved a one year deferral of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 128.10 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 128.10 Td (fective date of the amended revenue recognition guidance. ) Tj ET Q q 0 0 0 rg BT 297.32 128.10 Td (As a result, the amendments in this update are ef) Tj ET Q q 0 0 0 rg BT 491.52 128.10 Td (fective for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 116.10 Td (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 54.00 104.10 Td (December 15, 2019. Early application is permitted, with certain limitations. ) Tj ET Q q 0 0 0 rg BT 358.74 104.10 Td (The Company is evaluating the potential ef) Tj ET Q q 0 0 0 rg BT 531.29 104.10 Td (fect of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 92.10 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 80.10 Td (financial position, results of operations and cash flows. ) Tj ET Q q 0 0 0 rg BT 276.55 80.10 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 68.10 Td (implementing the new standard.) 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 /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (2) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 731.25 Td (. ) Tj ET Q q 0 0 0 rg BT 63.45 731.25 Td (ACQUISITIONS) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.12 710.25 Td (Y) Tj ET Q q 0 0 0 rg BT 105.24 710.25 Td (ear) Tj ET Q q 0 0 0 rg BT 118.93 710.25 Td ( 2017 ) Tj ET Q q 0 0 0 rg BT 143.38 710.25 Td (Acquisition) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 689.25 Td (On September 23, 2016, the Company acquired all of the outstanding equity of ) Tj ET Q q 0 0 0 rg BT 389.99 689.25 Td (Advanced Instructional Systems, Inc. \(d/) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.25 Td (b/a W) Tj ET Q q 0 0 0 rg BT 81.79 677.25 Td (ebAssign\), 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 54.00 665.25 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 511.21 665.25 Td (fective ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.25 Td (settlement of an accrued liability and other preexisting contractual obligations. ) Tj ET Q q 0 0 0 rg BT 370.66 653.25 Td (The acquisition of ) Tj ET Q q 0 0 0 rg BT 445.74 653.25 Td (W) Tj ET Q q 0 0 0 rg BT 454.38 653.25 Td (ebAssign strengthens the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.25 Td (Company) Tj ET Q q 0 0 0 rg BT 95.67 641.25 Td (s position as a market leader in science, technology and math, of) Tj ET Q q 0 0 0 rg BT 353.46 641.25 Td (fering three unique platforms for faculty and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.25 Td (institutions. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 611.25 Td (The operating results of ) Tj ET Q q 0 0 0 rg BT 169.57 611.25 Td (W) Tj ET Q q 0 0 0 rg BT 178.21 611.25 Td (ebAssign were included in the operating results of the Company) Tj ET Q q 0 0 0 rg BT 437.87 611.25 Td (s Learning segment from the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 599.25 Td (acquisition date and were not material for the fiscal year ended March 31, 2017. ) Tj ET Q q 0 0 0 rg BT 376.48 599.25 Td (The pro forma impact of the acquisition was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.25 Td (not significant to the Company) Tj ET Q q 0 0 0 rg BT 180.65 587.25 Td (s results for the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.66 587.25 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 382.26 587.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.70 587.25 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 421.70 587.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 569.25 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 371.06 569.25 Td ($29.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 424.95 569.25 Td ( of goodwill, which was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.25 Td (primarily due to the expected syner) Tj ET Q q 0 0 0 rg BT 195.16 557.25 Td (gies of the combined entities and the workforce in place. ) Tj ET Q q 0 0 0 rg BT 424.06 557.25 Td (The transaction was structured as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.25 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 72.00 524.25 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.12 524.25 Td (Y) Tj ET Q q 0 0 0 rg BT 105.24 524.25 Td (ear) Tj ET Q q 0 0 0 rg BT 118.93 524.25 Td ( 2016 ) Tj ET Q q 0 0 0 rg BT 143.38 524.25 Td (Acquisition) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 503.25 Td (On September 22, 2015, the Company acquired all of the outstanding equity of Learning Objects, LLC, an education ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 491.25 Td (technology company based in ) Tj ET Q q 0 0 0 rg BT 175.46 491.25 Td (W) Tj ET Q q 0 0 0 rg BT 184.09 491.25 Td (ashington D.C., for total cash consideration of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 371.28 491.25 Td ($28.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.17 491.25 Td (, net of a working capital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 479.25 Td (adjustment determined as of the acquisition date. ) Tj ET Q q 0 0 0 rg BT 252.10 479.25 Td (The cash consideration included a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 390.66 479.25 Td ($9.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.55 479.25 Td ( deferred cash payment that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 467.25 Td (was paid to the selling equity holders in semi-annual equal installments over a three-year period from the acquisition date, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.25 Td (with one payment remaining as of March 31, 2018. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 437.25 Td (The acquisition of Learning Objects complements the Company) Tj ET Q q 0 0 0 rg BT 331.10 437.25 Td (s existing course solutions portfolio and expands the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 425.25 Td (Company) Tj ET Q q 0 0 0 rg BT 95.67 425.25 Td (s institutional business and its ability to provide a full-service online program experience. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 407.25 Td (The operating results of Learning Objects were included in the operating results of the Company) Tj ET Q q 0 0 0 rg BT 461.33 407.25 Td (s Learning segment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.25 Td (from the acquisition date and were not material for the fiscal year ended March 31, 2016. ) Tj ET Q q 0 0 0 rg BT 413.13 395.25 Td (The pro forma impact of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.25 Td (acquisition was not significant to the Company) Tj ET Q q 0 0 0 rg BT 245.08 383.25 Td (s results for the fiscal year ended March31, 2016. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 365.25 Td (As a result of the purchase price allocation, the Company recognized ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.23 365.25 Td ($16.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.12 365.25 Td ( of goodwill, which was primarily due ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 353.25 Td (to the expected syner) Tj ET Q q 0 0 0 rg BT 138.51 353.25 Td (gies of the combined entities and the workforce in place. ) Tj ET Q q 0 0 0 rg BT 367.41 353.25 Td (The transaction was structured as an asset ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 341.25 Td (acquisition for tax purposes, therefore, the goodwill created by the transaction is expected to be deductible for tax purposes.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 323.25 Td (3) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 323.25 Td (. INVENT) Tj ET Q q 0 0 0 rg BT 102.72 323.25 Td (ORIES ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 302.25 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 423.5 271.75 m 488.5 271.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 271.75 m 492.5 271.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 271.75 m 557.5 271.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 257.75 m 488.5 257.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 257.75 m 557.5 257.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 257.75 m 488.5 257.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 257.75 m 557.5 257.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 215.75 m 488.5 215.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 215.75 m 557.5 215.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 215.75 m 488.5 215.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 202.75 m 488.5 202.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 200.75 m 488.5 200.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 215.75 m 557.5 215.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 202.75 m 557.5 202.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 200.75 m 557.5 200.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 459.30 276.20 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 498.21 276.20 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 262.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 446.50 262.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 515.50 262.20 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 248.32 Td (Raw materials) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 248.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 248.32 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 248.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 248.32 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 234.32 Td (W) Tj ET Q q 0 0 0 rg BT 65.04 234.32 Td (ork-in-progress) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 234.32 Td (0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 234.32 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 220.32 Td (Finished goods) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 220.32 Td (1) Tj ET Q q 0 0 0 rg BT 467.15 220.32 Td (16.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 220.32 Td (1) Tj ET Q q 0 0 0 rg BT 536.15 220.32 Td (1) Tj ET Q q 0 0 0 rg BT 541.15 220.32 Td (1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 206.32 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 206.32 Td (otal inventories) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 206.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 206.32 Td (1) Tj ET Q q 0 0 0 rg BT 467.15 206.32 Td (16.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 206.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 206.32 Td (1) Tj ET Q q 0 0 0 rg BT 536.15 206.32 Td (12.5) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 184.25 Td (4) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 184.25 Td (. RESTRICTED CASH) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 163.25 Td (During the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 187.79 163.25 Td (March31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 251.38 163.25 Td (, the Company withdrew ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 352.76 163.25 Td ($29.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.65 163.25 Td ( of funds from restricted cash to settle ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 151.25 Td (Chapter 1) Tj ET Q q 0 0 0 rg BT 92.78 151.25 Td (1 bankruptcy claims and unpaid bankruptcy-related professional fees. During the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.31 151.25 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 552.91 151.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 139.25 Td (the Company withdrew the remaining $3.4 million of funds from the restricted escrow accounts to complete the final ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 127.25 Td (distribution related to the Chapter 1) Tj ET Q q 0 0 0 rg BT 196.09 127.25 Td (1 claims. See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 273.58 127.25 Td (18) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 283.58 127.25 Td (, Commitments and Contingencies.) 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 /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (5) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 731.25 Td (. PROPER) Tj ET Q q 0 0 0 rg BT 104.76 731.25 Td (TY) Tj ET Q q 0 0 0 rg BT 117.73 731.25 Td (, EQUIPMENT) Tj ET Q q 0 0 0 rg BT 184.22 731.25 Td ( ) Tj ET Q q 0 0 0 rg BT 186.17 731.25 Td (AND CAPIT) Tj ET Q q 0 0 0 rg BT 240.70 731.25 Td (ALIZED INTERNAL-USE SOFTW) Tj ET Q q 0 0 0 rg BT 394.63 731.25 Td (ARE) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (Property) Tj ET Q q 0 0 0 rg BT 105.79 710.25 Td (, ) Tj ET Q q 0 0 0 rg BT 110.79 710.25 Td (equipment ) Tj ET Q q 0 0 0 rg BT 155.50 710.25 Td (and ) Tj ET Q q 0 0 0 rg BT 172.44 710.25 Td (capitalized ) Tj ET Q q 0 0 0 rg BT 218.25 710.25 Td (internal-use ) Tj ET Q q 0 0 0 rg BT 267.95 710.25 Td (software, ) Tj ET Q q 0 0 0 rg BT 307.38 710.25 Td (net ) Tj ET Q q 0 0 0 rg BT 322.09 710.25 Td (consist ) Tj ET Q q 0 0 0 rg BT 352.37 710.25 Td (of ) Tj ET Q q 0 0 0 rg BT 363.20 710.25 Td (the ) Tj ET Q q 0 0 0 rg BT 377.92 710.25 Td (following:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 679.75 m 488.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 679.75 m 492.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 679.75 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 423.5 665.75 m 488.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 665.75 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 423.5 665.75 m 488.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 665.75 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 423.5 581.75 m 488.5 581.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 581.75 m 557.5 581.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 553.75 m 488.5 553.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 553.75 m 557.5 553.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 553.75 m 488.5 553.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 540.75 m 488.5 540.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 538.75 m 488.5 538.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 553.75 m 557.5 553.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 540.75 m 557.5 540.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 538.75 m 557.5 538.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 459.30 684.20 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 498.21 684.20 Td (ch 31,) Tj ET Q BT /F3 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 446.50 670.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 515.50 670.20 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 656.32 Td (Purchased and internally-developed software) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 656.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 656.32 Td (313.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 656.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 656.32 Td (271.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 642.32 Td (Computer hardware) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 642.32 Td (40.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 642.32 Td (41.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 628.32 Td (Leasehold improvements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 628.32 Td (35.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 628.32 Td (40.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 614.32 Td (Buildings and building improvements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 614.32 Td (27.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 614.32 Td (25.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 600.32 Td (Furniture and equipment) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 600.32 Td (24.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 600.32 Td (23.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 586.32 Td (Land and land improvements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 586.32 Td (3.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 586.32 Td (3.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 572.32 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 572.32 Td (otal property) Tj ET Q q 0 0 0 rg BT 112.46 572.32 Td (, equipment and capitalized internal-use software, gross) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 572.32 Td (443.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 572.32 Td (404.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 558.32 Td (Less: ) Tj ET Q q 0 0 0 rg BT 79.33 558.32 Td (Accumulated depreciation and amortization) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 558.37 Td (\(279.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 558.32 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 558.37 Td (\(221.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 558.32 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 544.32 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 544.32 Td (otal property) Tj ET Q q 0 0 0 rg BT 112.13 544.32 Td (, equipment and capitalized internal-use software, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 544.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 544.32 Td (164.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 544.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 544.32 Td (183.4) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 522.25 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 54.00 510.25 Td ($0.5 million as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.05 510.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 190.65 510.25 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 489.25 Td (6) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 489.25 Td (. IDENTIFIABLE INT) Tj ET Q q 0 0 0 rg BT 156.34 489.25 Td (ANGIBLE ) Tj ET Q q 0 0 0 rg BT 204.41 489.25 Td (ASSETS ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 468.25 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 201.5 434.75 m 256.5 434.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 256.5 434.75 m 260.5 434.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 434.75 m 319.5 434.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 319.5 434.75 m 323.5 434.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 434.75 m 378.5 434.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 434.75 m 437.5 434.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 437.5 434.75 m 441.5 434.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 434.75 m 499.5 434.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 499.5 434.75 m 503.5 434.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 434.75 m 558.5 434.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 420.75 m 256.5 420.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 256.5 420.75 m 260.5 420.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 420.75 m 319.5 420.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 319.5 420.75 m 323.5 420.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 420.75 m 378.5 420.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 420.75 m 437.5 420.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 437.5 420.75 m 441.5 420.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 420.75 m 499.5 420.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 499.5 420.75 m 503.5 420.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 420.75 m 558.5 420.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 397.75 m 256.5 397.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 397.75 m 319.5 397.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 397.75 m 378.5 397.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 397.75 m 437.5 397.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 397.75 m 499.5 397.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 397.75 m 558.5 397.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 397.75 m 256.5 397.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 397.75 m 319.5 397.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 397.75 m 378.5 397.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 397.75 m 437.5 397.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 397.75 m 499.5 397.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 397.75 m 558.5 397.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 328.75 m 256.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 328.75 m 319.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 328.75 m 378.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 328.75 m 437.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 328.75 m 499.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 328.75 m 558.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 328.75 m 256.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 314.75 m 256.5 314.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 312.75 m 256.5 312.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 328.75 m 319.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 314.75 m 319.5 314.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 312.75 m 319.5 312.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 328.75 m 378.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 314.75 m 378.5 314.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 312.75 m 378.5 312.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 328.75 m 437.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 314.75 m 437.5 314.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 312.75 m 437.5 312.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 328.75 m 499.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 314.75 m 499.5 314.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 312.75 m 499.5 312.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 328.75 m 558.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 314.75 m 558.5 314.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 312.75 m 558.5 312.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 258.80 439.20 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 297.71 439.20 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.30 439.20 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 478.21 439.20 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 280.50 425.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 461.00 425.20 Td (2017) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 57.00 402.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 219.75 402.20 Td (Cost) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 264.00 411.20 Td (Accumulated) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 264.75 402.20 Td (amortization) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 333.10 411.20 Td (Net book) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 340.20 402.20 Td (value) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 400.75 402.20 Td (Cost) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 444.50 411.20 Td (Accumulated) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 445.25 402.20 Td (amortization) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.10 411.20 Td (Net book) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 520.20 402.20 Td (value) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 387.42 Td (Copyrights) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 204.00 387.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 230.15 387.42 Td (730.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.00 387.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 289.80 387.47 Td (\(200.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.65 387.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 326.00 387.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 352.15 387.42 Td (529.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.00 387.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.15 387.42 Td (728.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.00 387.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.80 387.47 Td (\(149.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.65 387.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.00 387.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.15 387.42 Td (578.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 372.42 Td (Customer relationships) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 230.15 372.42 Td (368.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 294.80 372.47 Td (\(97.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.65 372.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 352.15 372.42 Td (270.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.15 372.42 Td (366.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 474.80 372.47 Td (\(72.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.65 372.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.15 372.42 Td (294.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 357.42 Td (T) Tj ET Q q 0 0 0 rg BT 62.93 357.42 Td (rademarks) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 230.15 357.42 Td (233.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 294.80 357.47 Td (\(62.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.65 357.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 352.15 357.42 Td (171.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.15 357.42 Td (232.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 474.80 357.47 Td (\(46.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.65 357.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.15 357.42 Td (186.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 343.32 Td (T) Tj ET Q q 0 0 0 rg BT 62.41 343.32 Td (echnology and author/content ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 333.32 Td (rights) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 79.78 337.85 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.15 333.42 Td (45.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 299.80 333.47 Td (\(7.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.65 333.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 357.15 333.42 Td (38.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.15 333.42 Td (24.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.80 333.47 Td (\(3.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.65 333.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.15 333.42 Td (21.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 318.42 Td (T) Tj ET Q q 0 0 0 rg BT 62.41 318.42 Td (otal identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 204.00 318.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 222.65 318.42 Td (1,377.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.00 318.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 289.80 318.47 Td (\(367.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.65 318.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 326.00 318.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 344.65 318.42 Td (1,009.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.00 318.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.65 318.42 Td (1,352.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.00 318.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.80 318.47 Td (\(271.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.65 318.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.00 318.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 524.65 318.42 Td (1,080.4) 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 72.00 300.78 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 79.58 296.25 Td ( During fiscal year 2018, the Company acquired certain author/content rights that will be amortized over their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 284.25 Td (estimated useful life, up to a maximum of 25 years.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 266.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 266.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 266.25 Td (, estimated annual amortization expense for each of the next five fiscal years is as follows:) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 241.70 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 228.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 80.41 228.20 Td (Y) Tj ET Q q 0 0 0 rg BT 85.91 228.20 Td (ears Ending Mar) Tj ET Q q 0 0 0 rg BT 151.25 228.20 Td (ch 31,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 214.32 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 214.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 214.32 Td (96.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 200.32 Td (2020) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 200.32 Td (82.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 186.32 Td (2021) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 186.32 Td (81.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 172.32 Td (2022) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 172.32 Td (81.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 158.32 Td (2023) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 158.32 Td (80.9) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 133.25 Td (7) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 133.25 Td (. GOODWILL) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 115.25 Td (The following table shows the changes in the carrying amounts of goodwill by segment. ) 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 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 261.5 723.5 m 332.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 723.5 m 407.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 723.5 m 482.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 723.5 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 261.5 723.5 m 332.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 723.5 m 407.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 723.5 m 482.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 723.5 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 261.5 678.5 m 332.5 678.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 678.5 m 407.5 678.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 678.5 m 482.5 678.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 678.5 m 557.5 678.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 261.5 678.5 m 332.5 678.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 678.5 m 407.5 678.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 678.5 m 482.5 678.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 678.5 m 557.5 678.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 261.5 633.5 m 332.5 633.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 633.5 m 407.5 633.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 633.5 m 482.5 633.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 633.5 m 557.5 633.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 261.5 633.5 m 332.5 633.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 261.5 619.5 m 332.5 619.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 261.5 617.5 m 332.5 617.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 633.5 m 407.5 633.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 619.5 m 407.5 619.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 617.5 m 407.5 617.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 633.5 m 482.5 633.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 619.5 m 482.5 619.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 617.5 m 482.5 617.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 633.5 m 557.5 633.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 619.5 m 557.5 619.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 617.5 m 557.5 617.5 l s BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 727.75 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 278.70 727.95 Td (Learning) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 362.50 727.95 Td (Gale) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 420.95 727.95 Td (International) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 511.65 727.95 Td (T) Tj ET Q q 0 0 0 rg BT 516.83 727.95 Td (otal) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 713.18 Td (Balance at Mar) Tj ET Q q 0 0 0 rg BT 122.00 713.18 Td (ch 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 264.00 713.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 298.65 713.17 Td (1,296.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.00 713.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.15 713.17 Td (205.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 414.00 713.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.15 713.17 Td (102.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.00 713.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 713.17 Td (1,603.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 698.17 Td (Foreign currency translation and other) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.65 698.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.80 698.22 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.65 698.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.80 698.22 Td (\(3.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 478.65 698.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 698.22 Td (\(5.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 698.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 683.17 Td (Goodwill acquired during the period) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 311.15 683.17 Td (29.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 683.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.65 683.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 683.17 Td (29.6) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 668.18 Td (Balance at Mar) Tj ET Q q 0 0 0 rg BT 122.00 668.18 Td (ch 31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 298.65 668.17 Td (1,326.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.15 668.17 Td (203.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.15 668.17 Td (98.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 668.17 Td (1,627.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 653.17 Td (Foreign currency translation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.65 653.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 391.15 653.17 Td (1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.15 653.17 Td (3.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 653.17 Td (5.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 638.17 Td (Goodwill acquired during the period) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.65 638.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 638.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.65 638.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 638.17 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 623.18 Td (Balance at Mar) Tj ET Q q 0 0 0 rg BT 121.91 623.18 Td (ch 31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 264.00 623.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 298.65 623.17 Td (1,326.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.00 623.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.15 623.17 Td (204.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 414.00 623.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.15 623.17 Td (102.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.00 623.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 623.17 Td (1,633.2) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.00 601.00 Td (Goodwill acquired during fiscal year 2017 was primarily related to the acquisition of ) Tj ET Q q 0 0 0 rg BT 414.67 601.00 Td (W) Tj ET Q q 0 0 0 rg BT 423.30 601.00 Td (ebAssign. See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 504.40 601.00 Td (2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 509.40 601.00 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 589.00 Td (Acquisitions, for additional information. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 571.00 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 54.00 559.00 Td (fiscal year) Tj ET Q q 0 0 0 rg BT 94.81 559.00 Td (. ) Tj ET Q q 0 0 0 rg BT 102.13 559.00 Td (The reporting units are Learning and Gale, which are also reportable segments, and North ) Tj ET Q q 0 0 0 rg BT 463.12 559.00 Td (America, EMEA) Tj ET Q q 0 0 0 rg BT 530.32 559.00 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 547.00 Td (\(Europe, Middle East and ) Tj ET Q q 0 0 0 rg BT 158.70 547.00 Td (Africa\), ) Tj ET Q q 0 0 0 rg BT 192.01 547.00 Td (Asia, Latin ) Tj ET Q q 0 0 0 rg BT 238.39 547.00 Td (America and ) Tj ET Q q 0 0 0 rg BT 291.71 547.00 Td (Australia, within the International reportable segment. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 529.00 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 514.39 529.00 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 534.39 529.00 Td (. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 517.00 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 54.00 505.00 Td (cash flow and market approach methodologies. ) Tj ET Q q 0 0 0 rg BT 245.15 505.00 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 54.00 493.00 Td (calculating the present value of expected future unlevered after) Tj ET Q q 0 0 0 rg BT 305.89 493.00 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 54.00 481.00 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 54.00 469.00 Td (projections of revenue growth, profit mar) Tj ET Q q 0 0 0 rg BT 219.32 469.00 Td (gins, and working capital. ) Tj ET Q q 0 0 0 rg BT 325.23 469.00 Td (The projections underlying the valuation were based on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 457.00 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 54.00 445.00 Td (based on a weighted-average cost of capital of comparable companies. ) Tj ET Q q 0 0 0 rg BT 338.42 445.00 Td (The estimated residual growth rate was developed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 433.00 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 54.00 421.00 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 403.63 421.00 Td (10.5%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 429.46 421.00 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 442.24 421.00 Td (15.5%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.07 421.00 Td ( and residual growth ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 409.00 Td (rate assumptions ranged from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 175.08 409.00 Td (1.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 195.91 409.00 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 208.69 409.00 Td (4.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 229.52 409.00 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 54.00 397.00 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 54.00 385.00 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 480.34 385.00 Td (ger and acquisition ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 373.00 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 54.00 361.00 Td (value are also compared to the range of multiples from such precedent transactions. ) Tj ET Q q 0 0 0 rg BT 390.36 361.00 Td (The Company applies comparable ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 349.00 Td (revenue and EBITDA) Tj ET Q q 0 0 0 rg BT 141.19 349.00 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 54.00 337.00 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 271.43 337.00 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 291.43 337.00 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 54.00 325.00 Td (a range of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.48 325.00 Td (1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.98 325.00 Td (x - ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 122.31 325.00 Td (2.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 134.81 325.00 Td (x and forward multiples of projected EBITDA) Tj ET Q q 0 0 0 rg BT 319.76 325.00 Td ( in a range of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.01 325.00 Td (7.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.51 325.00 Td (x - ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 400.84 325.00 Td (13.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 418.34 325.00 Td (x. For the annual impairment test ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 313.00 Td (for fiscal years ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.91 313.00 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 135.91 313.00 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 140.91 313.00 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.91 313.00 Td (, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 182.85 313.00 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 202.85 313.00 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 54.00 301.00 Td (respective carrying values. ) Tj ET Q q 0 0 0 rg BT 163.21 301.00 Td (The estimated fair value of the Company's Learning reporting unit exceeded its carrying value by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 289.00 Td (5%. ) Tj ET Q q 0 0 0 rg BT 72.15 289.00 Td (The discount rate applied to the Learning reporting unit discounted cash flow was 1) Tj ET Q q 0 0 0 rg BT 406.41 289.00 Td (1.5% and the residual growth rate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 277.00 Td (was 2%. ) Tj ET Q q 0 0 0 rg BT 90.20 277.00 Td (The Company performed a sensitivity analysis on its significant assumptions used to determine the fair value of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 265.00 Td (Learning reporting unit and determined that a more than nominal change to the Company's significant assumptions would ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 253.00 Td (impact its conclusion. If actual results dif) Tj ET Q q 0 0 0 rg BT 219.05 253.00 Td (fer from the projections and assumptions used in the calculation of the Learning ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 241.00 Td (reporting unit fair value, the Company could be required to record future non-cash impairment char) Tj ET Q q 0 0 0 rg BT 451.73 241.00 Td (ges.) 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 /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (8) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 731.25 Td (. ) Tj ET Q q 0 0 0 rg BT 63.45 731.25 Td (ACCOUNTS P) Tj ET Q q 0 0 0 rg BT 127.43 731.25 Td (A) Tj ET Q q 0 0 0 rg BT 133.74 731.25 Td (Y) Tj ET Q q 0 0 0 rg BT 140.04 731.25 Td (ABLE ) Tj ET Q q 0 0 0 rg BT 169.22 731.25 Td (AND ) Tj ET Q q 0 0 0 rg BT 192.83 731.25 Td (ACCRUED EXPENSES) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 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 393.5 679.75 m 473.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 679.75 m 477.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 679.75 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 393.5 665.75 m 473.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 665.75 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 393.5 665.75 m 473.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 665.75 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 393.5 590.75 m 473.5 590.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 590.75 m 557.5 590.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 590.75 m 473.5 590.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 576.75 m 473.5 576.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 574.75 m 473.5 574.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 590.75 m 557.5 590.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 576.75 m 557.5 576.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 574.75 m 557.5 574.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 444.30 684.20 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 483.21 684.20 Td (ch 31,) Tj ET Q BT /F3 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 424.00 670.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 508.00 670.20 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 655.42 Td (Accounts payable) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 655.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 655.42 Td (79.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 655.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 655.42 Td (90.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 640.42 Td (Accrued royalties) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 640.42 Td (58.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 640.42 Td (61.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 625.42 Td (Accrued bonuses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 625.42 Td (58.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 625.42 Td (23.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 610.42 Td (Accrued interest payable) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 610.42 Td (22.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 610.42 Td (23.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 595.42 Td (Other accrued expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 595.42 Td (57.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 595.42 Td (58.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 580.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 580.42 Td (276.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 580.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 580.42 Td (256.7) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 537.25 Td (9) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 537.25 Td (. OPERA) Tj ET Q q 0 0 0 rg BT 98.26 537.25 Td (TIONAL) Tj ET Q q 0 0 0 rg BT 137.16 537.25 Td ( RESTRUCTURING ) Tj ET Q q 0 0 0 rg BT 229.40 537.25 Td (AND OTHER CHARGES) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 516.25 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 54.00 504.25 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 441.54 504.25 Td (These char) Tj ET Q q 0 0 0 rg BT 484.94 504.25 Td (ges were $0.6 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 492.25 Td (million for the fiscal year ended March 31, 2018, with related cash payments of $0.2 million. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 471.25 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 54.00 459.25 Td (segment to streamline and better align our operations to current market conditions. ) Tj ET Q q 0 0 0 rg BT 386.78 459.25 Td (The Company incurred char) Tj ET Q q 0 0 0 rg BT 499.05 459.25 Td (ges of $1.7 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 447.25 Td (million for the fiscal year ended March 31, 2018, with cash related payments of $0.4 million.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 426.25 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 540.84 426.25 Td (fices ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 414.25 Td (and recorded a restructuring char) Tj ET Q q 0 0 0 rg BT 185.97 414.25 Td (ge of $1.5 million, representing the relative portion of remaining future lease payments, net ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 402.25 Td (of estimated sublease income, and net of a $0.1 million non-cash write-of) Tj ET Q q 0 0 0 rg BT 347.90 402.25 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 54.00 390.25 Td (liability) Tj ET Q q 0 0 0 rg BT 84.46 390.25 Td (. ) Tj ET Q q 0 0 0 rg BT 89.28 390.25 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 72.00 369.25 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 54.00 357.25 Td (its of) Tj ET Q q 0 0 0 rg BT 74.10 357.25 Td (fices and recorded a restructuring char) Tj ET Q q 0 0 0 rg BT 227.45 357.25 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 54.00 345.25 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 405.94 345.25 Td (f of the related portion of the landlord ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 333.25 Td (inducement liability) Tj ET Q q 0 0 0 rg BT 133.61 333.25 Td (. ) Tj ET Q q 0 0 0 rg BT 138.43 333.25 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 72.00 312.25 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 54.00 300.25 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 54.00 288.25 Td (operations, and to further support the shift from a textbook to a software sales and support model. During the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 276.25 Td (March 31, 2018, the Company incurred $3.4 million of severance related costs, with related cash payments expected to be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 264.25 Td (made through the fourth quarter of fiscal year 2019. ) Tj ET Q q 0 0 0 rg BT 263.75 264.25 Td (The Company incurred $4.6 million and $2.8 million of process ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 252.25 Td (reengineering consulting costs during the the fiscal year ended March 31, 2018 and the fourth quarter of fiscal year 2017, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 240.25 Td (respectively) Tj ET Q q 0 0 0 rg BT 101.66 240.25 Td (. ) Tj ET Q q 0 0 0 rg BT 106.48 240.25 Td (These char) Tj ET Q q 0 0 0 rg BT 149.88 240.25 Td (ges are expensed as incurred, with related cash payments of $0.2 during the fourth quarter of fiscal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 228.25 Td (year 2017 and $7.2 million and during the fiscal year ended March 31, 2018.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 207.25 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 531.58 207.25 Td (As a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 195.25 Td (result, the Company recorded a $3.5 million non-cash char) Tj ET Q q 0 0 0 rg BT 288.75 195.25 Td (ge to write-of) Tj ET Q q 0 0 0 rg BT 342.99 195.25 Td (f the existing landlord inducement liability) Tj ET Q q 0 0 0 rg BT 513.14 195.25 Td (. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 183.25 Td (connection with exiting the existing facility) Tj ET Q q 0 0 0 rg BT 227.48 183.25 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 54.00 171.25 Td (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 72.00 150.25 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 54.00 138.25 Td (operations and improve its cost structure. ) Tj ET Q q 0 0 0 rg BT 221.28 138.25 Td (This program included actions across the Company) Tj ET Q q 0 0 0 rg BT 429.57 138.25 Td (s segments and its corporate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 126.25 Td (functions. Such actions included streamlining the Company) Tj ET Q q 0 0 0 rg BT 295.35 126.25 Td (s or) Tj ET Q q 0 0 0 rg BT 309.89 126.25 Td (ganizational structure and spending at the functional, business ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 114.25 Td (and geographic levels. ) Tj ET Q q 0 0 0 rg BT 146.01 114.25 Td (The Company incurred aggregate char) Tj ET Q q 0 0 0 rg BT 299.64 114.25 Td (ges of $23.8 million associated with these actions. ) Tj ET Q q 0 0 0 rg BT 502.39 114.25 Td (As of March ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 102.25 Td (31, 2018, the program was complete. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 84.25 Td (During the third quarter of fiscal year 2016, 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 72.25 Td (operations and improve its cost structure. ) Tj ET Q q 0 0 0 rg BT 221.28 72.25 Td (This program included actions across the Company) Tj ET Q q 0 0 0 rg BT 429.57 72.25 Td (s Learning and International ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 60.25 Td (segments and its corporate functions. Such actions included outsourcing services where appropriate and streamlining the ) 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 19.60 Td (- 75 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 742.10 Td (Company) Tj ET Q q 0 0 0 rg BT 95.67 742.10 Td (s or) Tj ET Q q 0 0 0 rg BT 110.21 742.10 Td (ganizational structure. ) Tj ET Q q 0 0 0 rg BT 201.38 742.10 Td (The Company incurred aggregate char) Tj ET Q q 0 0 0 rg BT 355.02 742.10 Td (ges of $12.5 million associated with these actions, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.10 Td (including knowledge transfer costs. ) Tj ET Q q 0 0 0 rg BT 198.14 730.10 Td (As of March 31, 2018, this program was complete.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 712.10 Td (Operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 232.31 712.10 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 54.00 700.10 Td (follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 675.6 m 396.5 675.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 396.5 675.6 m 400.5 675.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 675.6 m 468.5 675.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 468.5 675.6 m 472.5 675.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 675.6 m 540.5 675.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 661.6 m 396.5 661.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 661.6 m 468.5 661.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 661.6 m 540.5 661.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 661.6 m 396.5 661.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 661.6 m 468.5 661.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 661.6 m 540.5 661.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 601.6 m 396.5 601.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 601.6 m 468.5 601.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 601.6 m 540.5 601.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 571.6 m 396.5 571.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 571.6 m 468.5 571.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 571.6 m 540.5 571.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 571.6 m 396.5 571.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 557.6 m 396.5 557.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 555.6 m 396.5 555.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 571.6 m 468.5 571.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 557.6 m 468.5 557.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 555.6 m 468.5 555.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 571.6 m 540.5 571.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 557.6 m 540.5 557.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 555.6 m 540.5 555.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 378.95 680.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 403.53 680.05 Td (Y) Tj ET Q q 0 0 0 rg BT 409.36 680.05 Td (ear) Tj ET Q q 0 0 0 rg BT 421.27 680.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 467.61 680.05 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 57.00 665.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 353.50 666.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 425.00 666.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 497.00 666.05 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 651.27 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.00 651.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 380.15 651.27 Td (4.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.00 651.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 651.27 Td (15.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.00 651.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 524.15 651.27 Td (1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 636.27 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 382.65 636.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 636.27 Td (0.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 526.65 636.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 621.27 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 380.15 621.27 Td (1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 454.65 621.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 524.15 621.27 Td (0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 606.27 Td (Corporate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 380.15 606.27 Td (4.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 606.27 Td (10.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.15 606.27 Td (10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 591.27 Td (T) Tj ET Q q 0 0 0 rg BT 62.41 591.27 Td (otal operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 237.99 591.27 Td (ges, net) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 268.54 595.80 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.00 591.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.15 591.27 Td (10.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.00 591.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 591.27 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.00 591.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.15 591.27 Td (12.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 576.27 Td (Less: non-cash write-of) Tj ET Q q 0 0 0 rg BT 163.23 576.27 Td (fs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 376.80 576.32 Td (\(3.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.65 576.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 454.65 576.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 526.65 576.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 561.27 Td (T) Tj ET Q q 0 0 0 rg BT 62.41 561.27 Td (otal char) Tj ET Q q 0 0 0 rg BT 96.93 561.27 Td (ges expected to be settled in cash) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.00 561.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.15 561.27 Td (14.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.00 561.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 561.27 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.00 561.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.15 561.27 Td (12.5) 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 72.00 544.38 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 540.30 Td (Operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 234.28 540.30 Td (ges includes ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 280.77 540.30 Td ($4.7 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 324.77 540.30 Td ( of knowledge transfer costs in the fiscal year ended March 31, ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 529.50 Td (2016.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 511.50 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 54.00 499.50 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 262.5 451 m 333.5 451 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 451 m 408.5 451 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 451 m 483.5 451 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 451 m 558.5 451 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 451 m 408.5 451 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 262.5 409 m 333.5 409 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 409 m 408.5 409 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 409 m 483.5 409 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 409 m 558.5 409 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 367 m 558.5 367 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 262.5 367 m 333.5 367 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 367 m 408.5 367 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 367 m 483.5 367 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 367 m 558.5 367 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 262.5 311 m 333.5 311 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 262.5 298 m 333.5 298 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 262.5 296 m 333.5 296 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 311 m 408.5 311 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 298 m 408.5 298 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 296 m 408.5 296 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 311 m 483.5 311 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 298 m 483.5 298 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 296 m 483.5 296 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 311 m 558.5 311 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 298 m 558.5 298 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 296 m 558.5 296 l s BT /F3 8.00 Tf ET q 0 0 0 rg BT 57.00 455.25 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 278.00 455.45 Td (Severance) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 358.05 473.45 Td (Pr) Tj ET Q q 0 0 0 rg BT 367.46 473.45 Td (ocess) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 346.05 464.45 Td (r) Tj ET Q q 0 0 0 rg BT 349.96 464.45 Td (eengineering) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 352.70 455.45 Td (consulting) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 418.95 464.45 Td (Lease Exit and) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 436.05 455.45 Td (Other) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 512.65 455.45 Td (T) Tj ET Q q 0 0 0 rg BT 517.83 455.45 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 441.57 Td (Balance at March 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 265.00 441.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 441.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.00 441.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.65 441.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.00 441.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 441.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 441.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.65 441.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 427.57 Td (Char) Tj ET Q q 0 0 0 rg BT 76.26 427.57 Td (ges) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 89.59 432.10 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 427.57 Td (7.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.65 427.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 427.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 427.57 Td (7.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 413.57 Td (Cash Payments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.80 413.62 Td (\(2.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.65 413.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.65 413.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 413.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 538.80 413.62 Td (\(2.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 554.65 413.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 399.57 Td (Balance at March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 265.00 399.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 399.57 Td (4.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.00 399.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.65 399.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.00 399.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 399.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 399.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 399.57 Td (4.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 385.57 Td (Char) Tj ET Q q 0 0 0 rg BT 76.35 385.57 Td (ges) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 385.57 Td (15.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.15 385.57 Td (10.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 385.57 Td (0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.15 385.57 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 371.57 Td (Cash Payments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 308.80 371.62 Td (\(17.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.65 371.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.80 371.62 Td (\(7.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.65 371.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 371.62 Td (\(0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 371.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 533.80 371.62 Td (\(25.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 554.65 371.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 357.57 Td (Balance at March 31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 265.00 357.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 357.57 Td (3.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.00 357.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.15 357.57 Td (2.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.00 357.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 357.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 357.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 357.57 Td (5.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 343.57 Td (Char) Tj ET Q q 0 0 0 rg BT 76.35 343.57 Td (ges, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 343.57 Td (5.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.15 343.57 Td (4.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 343.57 Td (0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.15 343.57 Td (10.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 329.57 Td (Cash Payments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.80 329.62 Td (\(6.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.65 329.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.80 329.62 Td (\(7.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.65 329.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 329.62 Td (\(0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 329.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 533.80 329.62 Td (\(14.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 554.65 329.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 315.57 Td (Non-cash write-of) Tj ET Q q 0 0 0 rg BT 129.85 315.57 Td (fs ) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 139.57 320.10 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 315.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.65 315.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 315.57 Td (3.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 315.57 Td (3.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 301.57 Td (Balance at March 31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 265.00 301.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 301.57 Td (2.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.00 301.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.65 301.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.00 301.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 301.57 Td (3.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 301.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 301.57 Td (6.4) 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 72.00 284.78 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 280.70 Td (Char) Tj ET Q q 0 0 0 rg BT 107.33 280.70 Td (ges exclude $4.7 million of knowledge transfer costs.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 267.98 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 263.90 Td (Represents write-of) Tj ET Q q 0 0 0 rg BT 160.56 263.90 Td (fs of landlord inducement liabilities in connection with facility and lease exit activities ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 54.00 245.90 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 297.07 245.90 Td ( ) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 212.39999999999998 m 486.5 212.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 490.5 212.39999999999998 m 564.5 212.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 189.39999999999998 m 486.5 189.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 490.5 189.39999999999998 m 564.5 189.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 161.39999999999998 m 486.5 161.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 490.5 161.39999999999998 m 564.5 161.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 161.39999999999998 m 486.5 161.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 147.39999999999998 m 486.5 147.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 145.39999999999998 m 486.5 145.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 490.5 161.39999999999998 m 564.5 161.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 490.5 147.39999999999998 m 564.5 147.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 490.5 145.39999999999998 m 564.5 145.39999999999998 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 457.30 216.85 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 496.21 216.85 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 57.00 193.65 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 440.00 193.85 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 518.00 193.85 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 179.97 Td (Other current liabilities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.00 179.97 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 179.97 Td (4.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 493.00 179.97 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 548.15 179.97 Td (5.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 165.97 Td (Other non-current liabilities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 165.97 Td (2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 550.65 165.97 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 151.07 Td (T) Tj ET Q q 0 0 0 rg BT 62.41 151.07 Td (otal restructuring liability) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.00 151.07 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 151.07 Td (6.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 493.00 151.07 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 548.15 151.07 Td (5.9) Tj ET Q BT /F1 10.00 Tf ET 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 /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (10) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 731.25 Td (. DEBT) Tj ET Q q 0 0 0 rg BT 96.05 731.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 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 325.80 710.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.40 710.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 408.84 710.25 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 428.84 710.25 Td (:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 305.5 665.75 m 365.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 365.5 665.75 m 369.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 369.5 665.75 m 429.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 665.75 m 493.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 665.75 m 497.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 665.75 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 241.5 651.75 m 301.5 651.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 305.5 651.75 m 365.5 651.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 369.5 651.75 m 429.5 651.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 651.75 m 493.5 651.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 651.75 m 557.5 651.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 606.75 m 493.5 606.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 606.75 m 557.5 606.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 591.75 m 493.5 591.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 591.75 m 557.5 591.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 501.75 m 493.5 501.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 501.75 m 557.5 501.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 486.75 m 493.5 486.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 486.75 m 557.5 486.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 468.75 m 493.5 468.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 466.75 m 493.5 466.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 468.75 m 557.5 468.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 466.75 m 557.5 466.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 337.05 684.20 Td (Inter) Tj ET Q q 0 0 0 rg BT 356.46 684.20 Td (est Rate at) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 254.70 670.20 Td (Original) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 347.30 670.20 Td (Mar) Tj ET Q q 0 0 0 rg BT 364.21 670.20 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 475.30 670.20 Td (Mar) Tj ET Q q 0 0 0 rg BT 492.21 670.20 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 656.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 253.50 656.20 Td (Maturity) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 326.00 656.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 390.00 656.20 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 454.00 656.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 518.00 656.20 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 641.42 Td (Current portion:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 626.42 Td (T) Tj ET Q q 0 0 0 rg BT 73.76 626.42 Td (erm Loan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 261.00 626.42 Td (2023) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.05 626.42 Td (6.04%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 390.25 626.42 Td (5.25) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 436.00 626.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.15 626.42 Td (6.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 500.00 626.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 626.42 Td (32.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 611.42 Td (Capital lease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 261.00 611.42 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.15 611.42 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 611.42 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 596.42 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 596.42 Td (otal current portion of long-term debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.15 596.42 Td (6.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 596.42 Td (33.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 581.42 Td (Non-current portion:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 566.42 Td (Senior Notes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 261.00 566.42 Td (2024) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.05 566.42 Td (9.50%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 390.25 566.42 Td (9.50) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 566.42 Td (620.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 566.42 Td (620.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 551.42 Td (T) Tj ET Q q 0 0 0 rg BT 73.76 551.42 Td (erm Loan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 261.00 551.42 Td (2023) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.05 551.42 Td (6.04%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 390.25 551.42 Td (5.25) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.65 551.42 Td (1,663.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 551.42 Td (1,664.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 536.42 Td (Capital lease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 261.00 536.42 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.15 536.42 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 536.42 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 521.42 Td (Unamortized ) Tj ET Q q 0 0 0 rg BT 122.52 521.42 Td (T) Tj ET Q q 0 0 0 rg BT 127.93 521.42 Td (erm Loan discount) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.80 521.47 Td (\(12.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.65 521.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 521.47 Td (\(15.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 521.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 506.42 Td (Unamortized deferred financing costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.80 506.47 Td (\(25.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.65 506.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 506.47 Td (\(30.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 506.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 491.42 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 491.42 Td (otal non-current portion of long-term debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.65 491.42 Td (2,244.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 491.42 Td (2,239.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 80.00 472.42 Td (T) Tj ET Q q 0 0 0 rg BT 85.41 472.42 Td (otal debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 436.00 472.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.65 472.42 Td (2,251.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 500.00 472.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 472.42 Td (2,272.5) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 450.25 Td (Scheduled principal payments due on the Company) Tj ET Q q 0 0 0 rg BT 280.84 450.25 Td (s debt as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.61 450.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.21 450.25 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 492.5 313.75 m 557.5 313.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 299.75 m 557.5 299.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 297.75 m 557.5 297.75 l s BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 423.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 408.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 80.41 408.20 Td (Y) Tj ET Q q 0 0 0 rg BT 85.91 408.20 Td (ears Ending Mar) Tj ET Q q 0 0 0 rg BT 151.25 408.20 Td (ch 31,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 393.42 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 393.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 393.42 Td (6.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 378.42 Td (2020) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 378.42 Td (17.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 363.42 Td (2021) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 363.42 Td (17.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 348.42 Td (2022) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 348.42 Td (17.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 333.42 Td (2023) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 333.42 Td (17.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 318.42 Td (Thereafter) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 318.42 Td (2,214.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 303.42 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 303.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 303.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 303.42 Td (2,289.8) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 281.25 Td (On June 7, 2016, Cengage Learning, Inc., a wholly owned subsidiary of the Company) Tj ET Q q 0 0 0 rg BT 415.17 281.25 Td (, issued senior notes \(Senior) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.25 Td (Notes\) and amended and restated its senior secured term loan facility \(T) Tj ET Q q 0 0 0 rg BT 350.13 269.25 Td (erm Loan\) and its asset based lending revolving ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.25 Td (line of credit \(ABL) Tj ET Q q 0 0 0 rg BT 134.99 257.25 Td ( Revolving Credit Facility\). ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 239.25 Td (In connection with the issuance of the Senior Notes, ) Tj ET Q q 0 0 0 rg BT 282.88 239.25 Td (T) Tj ET Q q 0 0 0 rg BT 288.29 239.25 Td (erm Loan and ) Tj ET Q q 0 0 0 rg BT 345.77 239.25 Td (ABL) Tj ET Q q 0 0 0 rg BT 365.40 239.25 Td ( Revolving Credit Facility) Tj ET Q q 0 0 0 rg BT 469.46 239.25 Td (, the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 227.25 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 54.00 215.25 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 54.00 203.25 Td (million related to the ) Tj ET Q q 0 0 0 rg BT 139.54 203.25 Td (ABL) Tj ET Q q 0 0 0 rg BT 159.17 203.25 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 54.00 191.25 Td (at June 30, 2016. ) Tj ET Q q 0 0 0 rg BT 124.37 191.25 Td (The net proceeds from the of) Tj ET Q q 0 0 0 rg BT 239.97 191.25 Td (fering of the Senior Notes and the ) Tj ET Q q 0 0 0 rg BT 377.81 191.25 Td (T) Tj ET Q q 0 0 0 rg BT 383.22 191.25 Td (erm Loan, after deducting underwriting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 179.25 Td (discounts and estimated of) Tj ET Q q 0 0 0 rg BT 160.19 179.25 Td (fering expenses, were approximately$2.3 billion and were used to repay the Company) Tj ET Q q 0 0 0 rg BT 509.53 179.25 Td (s $2.0 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 167.25 Td (billion aggregate principal amount of the ) Tj ET Q q 0 0 0 rg BT 219.88 167.25 Td (T) Tj ET Q q 0 0 0 rg BT 225.29 167.25 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 54.00 155.25 Td (dividend. See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 132.87 155.25 Td (12) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 142.87 155.25 Td (, Equity) Tj ET Q q 0 0 0 rg BT 178.33 155.25 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 54.00 143.25 Td (year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 100.08 143.25 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 163.68 143.25 Td (, the Company recorded a char) Tj ET Q q 0 0 0 rg BT 286.23 143.25 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 54.00 131.25 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 500.53 131.25 Td (s board of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 119.25 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 54.00 107.25 Td (secured term loan.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 86.25 Td (Senior) Tj ET Q q 0 0 0 rg BT 99.60 86.25 Td ( Notes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 68.25 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 56.25 Td (placement, maturing June 15, 2024. ) Tj ET Q q 0 0 0 rg BT 199.34 56.25 Td (The notes bear interest at a rate of 9.50% per annum, payable semi-annually in arrears on ) Tj ET Q 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 30.60 Td (- 77 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (June 15 and December 15 of each year) Tj ET Q q 0 0 0 rg BT 208.80 731.10 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 54.00 719.10 Td (redeem the Senior Notes, in whole or in part, at any time on or after 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 54.00 707.10 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 497.56 707.10 Td (The Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 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 54.00 683.10 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 54.00 671.10 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 72.00 653.10 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 54.00 641.10 Td (its and its subsidiaries) Tj ET Q q 0 0 0 rg BT 144.64 641.10 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 54.00 629.10 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 54.00 617.10 Td (make certain investments; transfer and sell assets; engage in a consolidation or mer) Tj ET Q q 0 0 0 rg BT 386.49 617.10 Td (ger or sell, transfer or otherwise dispose of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (all or substantially all of its assets; and enter into transactions with af) Tj ET Q q 0 0 0 rg BT 329.87 605.10 Td (filiates. ) Tj ET Q q 0 0 0 rg BT 361.90 605.10 Td (The Company will not be subject to these ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 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 54.00 581.10 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 406.96 581.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 431.40 581.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 581.10 Td (, no default has ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.10 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 72.00 551.10 Td (T) Tj ET Q q 0 0 0 rg BT 77.75 551.10 Td (erm Loan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 533.10 Td (The ) Tj ET Q q 0 0 0 rg BT 89.87 533.10 Td (T) Tj ET Q q 0 0 0 rg BT 95.28 533.10 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 54.00 521.10 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 54.00 509.10 Td (to $500.0 million, plus additional amounts subject to certain requirements. Borrowings under the ) Tj ET Q q 0 0 0 rg BT 443.75 509.10 Td (T) Tj ET Q q 0 0 0 rg BT 449.16 509.10 Td (erm Loan bear interest at a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.10 Td (rate equal to, at the Company) Tj ET Q q 0 0 0 rg BT 174.52 497.10 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 54.00 485.10 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 54.00 473.10 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 54.00 461.10 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 498.39 461.10 Td (gin. ) Tj ET Q q 0 0 0 rg BT 515.62 461.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 449.10 Td (, the Company elected to carry the ) Tj ET Q q 0 0 0 rg BT 257.36 449.10 Td (T) Tj ET Q q 0 0 0 rg BT 262.77 449.10 Td (erm Loan as a Eurocurrency Rate Loan with an ef) Tj ET Q q 0 0 0 rg BT 462.23 449.10 Td (fective interest rate of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.10 Td (6.04%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 79.83 437.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 419.10 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 394.79 419.10 Td (T) Tj ET Q q 0 0 0 rg BT 400.20 419.10 Td (erm Loan on the last business day of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.10 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 485.11 407.10 Td (, commencing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.10 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 54.00 383.10 Td (leverage ratio, of its Excess Cash Flow) Tj ET Q q 0 0 0 rg BT 209.15 383.10 Td (, as defined in the ) Tj ET Q q 0 0 0 rg BT 282.28 383.10 Td (T) Tj ET Q q 0 0 0 rg BT 287.69 383.10 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 54.00 371.10 Td (financial statements. Based on the Company) Tj ET Q q 0 0 0 rg BT 234.51 371.10 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 240.90 371.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 304.50 371.10 Td ( consolidated financial statements, the Company determined ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 359.10 Td (there is no prepayment 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 54.00 347.10 Td (are used to satisfy prospective mandatory quarterly principal repayments. ) Tj ET Q q 0 0 0 rg BT 349.83 347.10 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 54.00 335.10 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 54.00 323.10 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 54.00 311.10 Td (provisions of the ) Tj ET Q q 0 0 0 rg BT 123.54 311.10 Td (T) Tj ET Q q 0 0 0 rg BT 128.95 311.10 Td (erm Loan facility) Tj ET Q q 0 0 0 rg BT 197.71 311.10 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 54.00 299.10 Td (holders in June 2017. In accordance with the Excess Cash Flow provisions of the previous term loan facility) Tj ET Q q 0 0 0 rg BT 486.03 299.10 Td (, the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 287.10 Td (made a $25.6 million principal payment in June 2016, which was reimbursed to the Company using the net proceeds of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 275.10 Td (issuance of debt. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 254.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 92.01 254.10 Td ( Revolving Cr) Tj ET Q q 0 0 0 rg BT 151.27 254.10 Td (edit Facility) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 236.10 Td (The availability of credit under the amended and restated five-year ) Tj ET Q q 0 0 0 rg BT 340.77 236.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 360.40 236.10 Td ( Revolving Credit Facility is equal to the lesser ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 224.10 Td (of \(i\) $250.0 million and \(ii\) the Company) Tj ET Q q 0 0 0 rg BT 226.20 224.10 Td (s borrowing base. ) Tj ET Q q 0 0 0 rg BT 299.34 224.10 Td (The borrowing base equals the sum of \(i\) 90% of eligible credit ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 212.10 Td (card receivables, plus \(ii\) 85% of eligible receivables, plus \(iii\) 85% of the orderly liquidation value of eligible inventory) Tj ET Q q 0 0 0 rg BT 537.09 212.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 200.10 Td (plus \(iv\) 100% of cash not to exceed $35.0 million. ) Tj ET Q q 0 0 0 rg BT 261.19 200.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 285.63 200.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 349.23 200.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.67 200.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 432.27 200.10 Td (, the ) Tj ET Q q 0 0 0 rg BT 451.43 200.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 471.06 200.10 Td ( Revolving Credit ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 188.10 Td (Facility had no outstanding borrowings and $22.6 million and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 303.98 188.10 Td ($6.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 352.87 188.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 405.53 188.10 Td (, in issued and outstanding letters of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 176.10 Td (credit. ) Tj ET Q q 0 0 0 rg BT 81.58 176.10 Td (The Company) Tj ET Q q 0 0 0 rg BT 141.29 176.10 Td (s available borrowing base as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 272.36 176.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 335.96 176.10 Td (, which is based on the balance sheet at ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.35 176.10 Td (February 28, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 164.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 164.10 Td (, was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.05 164.10 Td ($1) Tj ET Q q 0 0 0 rg BT 106.68 164.10 Td (15.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 155.57 164.10 Td (, net of letters of credit. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 146.10 Td (The unused commitment fee will range between ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.21 146.10 Td (0.25%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 293.04 146.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.48 146.10 Td (0.375%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.31 146.10 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 54.00 134.10 Td (recently ended fiscal quarter) Tj ET Q q 0 0 0 rg BT 167.00 134.10 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 54.00 122.10 Td (will vary between ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 128.14 122.10 Td (1.75%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 153.97 122.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 173.41 122.10 Td (2.25%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.24 122.10 Td (, depending on the average daily availability) Tj ET Q q 0 0 0 rg BT 376.03 122.10 Td (. During the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.81 122.10 Td (March31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 110.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 110.10 Td (, the Company incurred approximately $0.9 million of unused commitment fees and $0.2 million of letter of credit ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 98.10 Td (participation fees.) 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 30.60 Td (- 78 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (1) Tj ET Q q 0 0 0 rg BT 58.45 731.25 Td (1) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 63.45 731.25 Td (. BENEFIT) Tj ET Q q 0 0 0 rg BT 112.17 731.25 Td ( PLANS) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (The Company maintains a defined contribution 401\(k\) Savings Plan in the United States. ) Tj ET Q q 0 0 0 rg BT 430.65 710.25 Td (The plan covers substantially ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 698.25 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 54.00 686.25 Td (portion of their annual compensation on a pre-tax or post-tax basis. ) Tj ET Q q 0 0 0 rg BT 324.86 686.25 Td (The Company matches ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.56 686.25 Td (100%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 442.89 686.25 Td ( of employee contributions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (up to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 76.78 674.25 Td (4%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.11 674.25 Td ( of the employee) Tj ET Q q 0 0 0 rg BT 159.81 674.25 Td (s compensation, as defined in the plan. ) Tj ET Q q 0 0 0 rg BT 317.09 674.25 Td (These matching contributions vest based upon an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 662.25 Td (employee) Tj ET Q q 0 0 0 rg BT 95.65 662.25 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 288.07 662.25 Td (four) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 304.73 662.25 Td ( years of service. ) Tj ET Q q 0 0 0 rg BT 374.79 662.25 Td (The Company also has similar defined ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 650.25 Td (contribution plans for certain employees outside the United States. ) Tj ET Q q 0 0 0 rg BT 322.64 650.25 Td (The Company) Tj ET Q q 0 0 0 rg BT 382.35 650.25 Td (s contributions to all plans, net of plan ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 638.25 Td (forfeitures, were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 122.57 638.25 Td ($13.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 176.47 638.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.47 638.25 Td ($12.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.36 638.25 Td (, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 257.30 638.25 Td ($1) Tj ET Q q 0 0 0 rg BT 266.92 638.25 Td (1.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.82 638.25 Td ( for the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.32 638.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.92 638.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.92 638.25 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 504.92 638.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 524.36 638.25 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.36 638.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 626.25 Td (respectively) Tj ET Q q 0 0 0 rg BT 101.66 626.25 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 605.25 Td (12) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 605.25 Td (. EQUITY) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 587.25 Td (Pursuant to the Company) Tj ET Q q 0 0 0 rg BT 176.16 587.25 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 504.39 587.25 Td (350,000,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 554.39 587.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.25 Td (shares of capital stock, of which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 185.35 575.25 Td (300,000,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.35 575.25 Td ( shares were designated as common stock and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 421.40 575.25 Td (50,000,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.40 575.25 Td ( shares designated as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.25 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 248.91 563.25 Td ($0.01) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 271.41 563.25 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 54.00 551.25 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 382.63 551.25 Td (The Company) Tj ET Q q 0 0 0 rg BT 442.34 551.25 Td (s board of directors is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.25 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 54.00 527.25 Td (rights of the shares of each series and any qualifications, limitations, or restrictions thereof. ) Tj ET Q q 0 0 0 rg BT 420.84 527.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 445.28 527.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 508.88 527.25 Td (, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.25 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 54.00 497.25 Td (Equity Pur) Tj ET Q q 0 0 0 rg BT 101.33 497.25 Td (chase Plan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 479.25 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 54.00 467.25 Td (compensation committee of its board of directors to designate directors, of) Tj ET Q q 0 0 0 rg BT 351.79 467.25 Td (ficers and employees of Cengage to purchase ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.25 Td (newly issued equity securities for fair value based on the Company) Tj ET Q q 0 0 0 rg BT 325.04 455.25 Td (s reor) Tj ET Q q 0 0 0 rg BT 347.35 455.25 Td (ganization value on the Ef) Tj ET Q q 0 0 0 rg BT 452.13 455.25 Td (fective Date.) Tj ET Q q 0 0 0 rg BT 505.53 455.25 Td (The sale of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.25 Td (these securities is not intended to raise capital for Cengage.Rather) Tj ET Q q 0 0 0 rg BT 319.90 443.25 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 54.00 431.25 Td (opportunities to further align the interests of the Company) Tj ET Q q 0 0 0 rg BT 289.51 431.25 Td (s directors, of) Tj ET Q q 0 0 0 rg BT 344.03 431.25 Td (ficers and employees with the interests of its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.25 Td (shareholders. ) Tj ET Q q 0 0 0 rg BT 108.99 419.25 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 554.88 419.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.25 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 54.00 395.25 Td (Purchase Plan.) Tj ET Q q 0 0 0 rg BT 115.20 395.25 Td (The board of directors authorized ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 251.53 395.25 Td (100,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 284.03 395.25 Td ( shares of the Company) Tj ET Q q 0 0 0 rg BT 381.23 395.25 Td (s common stock to be reserved for issuance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.25 Td (under the Equity Purchase Plan. ) Tj ET Q q 0 0 0 rg BT 184.35 383.25 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 54.00 371.25 Td (31, 2018, 2017 and 2016. ) Tj ET Q q 0 0 0 rg BT 157.89 371.25 Td (As of March 31, 2018, 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 54.00 353.25 Td (Dividends ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 335.25 Td (On September 14, 2016, the Company) Tj ET Q q 0 0 0 rg BT 228.37 335.25 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 54.00 323.25 Td (to $200.0 million payable to all common shareholders of record at the close of business on September 16, 2016 \(the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 311.25 Td (Dividend Record Date\), 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 54.00 299.25 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 332.24 299.25 Td (10) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.24 299.25 Td (, Debt, for additional details on the debt issuance. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 287.25 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 54.00 275.25 Td (approximately $2.94 per share. ) Tj ET Q q 0 0 0 rg BT 180.45 275.25 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 54.00 263.25 Td (earnings at the time of the dividend.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 245.25 Td (Pur) Tj ET Q q 0 0 0 rg BT 69.93 245.25 Td (chases of Company Common Stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 227.25 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 54.00 215.25 Td (repurchase up to $265.0 million in shares of the Company) Tj ET Q q 0 0 0 rg BT 288.96 215.25 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 54.00 203.25 Td (connection with the declaration of the one-time $200.0 million cash dividend, the Company announced the reduction of this) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 191.25 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 54.00 179.25 Td (program to May 31, 2018. ) Tj ET Q q 0 0 0 rg BT 160.93 179.25 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 54.00 167.25 Td (for $65.0 million in the aggregate. Under this program, approximately $4.1 million was paid in the fiscal year 2017, $15.8 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 155.25 Td (million was paid in the first quarter of fiscal year 2018, and $45.1 million was paid in the second quarter of fiscal year 2018. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.25 Td (Repurchased shares will be 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 72.00 125.25 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 54.00 113.25 Td (repurchase up to $50.0 million in shares of the Company) Tj ET Q q 0 0 0 rg BT 283.96 113.25 Td (s outstanding common stock. ) Tj ET Q q 0 0 0 rg BT 402.94 113.25 Td (The shares could be repurchased from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 101.25 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 498.31 101.25 Td (April 22, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 89.25 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 77.25 Td (shares were retired and returned to the status of authorized but unissued.) 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 30.60 Td (- 79 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td (Since December 2014, the Company) Tj ET Q q 0 0 0 rg BT 221.68 731.10 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 54.00 719.10 Td (of the Company) Tj ET Q q 0 0 0 rg BT 121.21 719.10 Td (s outstanding common stock under share repurchase programs. ) Tj ET Q q 0 0 0 rg BT 375.13 719.10 Td (The shares could be repurchased from time ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 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 463.32 707.10 Td (As of March 31, 2018, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (all of these programs have 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 54.00 683.10 Td (unissued.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 665.10 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 54.00 653.10 Td (Company) Tj ET Q q 0 0 0 rg BT 95.67 653.10 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 329.19 653.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.78 653.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.78 653.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.78 653.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 437.22 653.10 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.22 653.10 Td (.) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 613.6 m 488.5 613.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 613.6 m 557.5 613.6 l s BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 617.85 Td (\(dollars in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 434.70 627.05 Td (Number) Tj ET Q q 0 0 0 rg BT 466.62 627.05 Td ( of) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 442.55 618.05 Td (Shar) Tj ET Q q 0 0 0 rg BT 460.97 618.05 Td (es) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 508.70 618.05 Td (Amount) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 604.28 Td (Shar) Tj ET Q q 0 0 0 rg BT 76.38 604.28 Td (e Repur) Tj ET Q q 0 0 0 rg BT 110.36 604.28 Td (chases:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 589.27 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 94.20 589.27 Td (Y) Tj ET Q q 0 0 0 rg BT 100.74 589.27 Td (ear 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.65 589.27 Td (7,097,974) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 589.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 589.27 Td (60.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 574.27 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 94.20 574.27 Td (Y) Tj ET Q q 0 0 0 rg BT 100.74 574.27 Td (ear 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.65 574.27 Td (2,825,764) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 574.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 574.27 Td (54.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 559.27 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 94.02 559.27 Td (Y) Tj ET Q q 0 0 0 rg BT 100.24 559.27 Td (ear 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.65 559.27 Td (6,220,359) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 559.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 559.27 Td (150.0) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 534.10 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 54.00 522.10 Td (requirements in connection with the vesting of restricted stock units and delivery of shares. During the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 510.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 510.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 137.04 510.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 200.64 510.10 Td (, the Company spent ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 285.35 510.10 Td ($5.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.24 510.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 353.68 510.10 Td ($0.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.57 510.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 455.23 510.10 Td (, to acquire shares in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 498.10 Td (connection with net settlement of equity-based awards.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 477.10 Td (13) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 477.10 Td (. EQUITY) Tj ET Q q 0 0 0 rg BT 107.54 477.10 Td (-BASED COMPENSA) Tj ET Q q 0 0 0 rg BT 203.19 477.10 Td (TION ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 456.10 Td (2014 Cengage Learning Equity Incentive Plan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 435.10 Td (On the Ef) Tj ET Q q 0 0 0 rg BT 110.70 435.10 Td (fective Date, the Company adopted the 2014 Cengage Learning Equity Incentive Plan \(the 2014 Equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 423.10 Td (Incentive Plan\). ) Tj ET Q q 0 0 0 rg BT 124.07 423.10 Td (The 2014 Equity Incentive Plan was approved by the Bankruptcy Court and the Company) Tj ET Q q 0 0 0 rg BT 486.49 423.10 Td (s board of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 411.10 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 457.61 411.10 Td (ficers, and employees of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 399.10 Td (the Company are eligible to receive awards under the 2014 Equity Incentive Plan. ) Tj ET Q q 0 0 0 rg BT 383.71 399.10 Td (The awards may be granted in the form of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 387.10 Td (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 54.00 375.10 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 54.00 363.10 Td (Equity Incentive Plan, the board of directors is required to modify af) Tj ET Q q 0 0 0 rg BT 328.18 363.10 Td (fected awards to preserve their value, including adjusting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 351.10 Td (the number of shares for awards then outstanding or to be granted, adjusting the exercise price \(or base price in the case of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 339.10 Td (stock appreciation rights\), or provide 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 54.00 327.10 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 54.00 315.10 Td (Company has the authority to cancel af) Tj ET Q q 0 0 0 rg BT 210.44 315.10 Td (fected awards and pay to each af) Tj ET Q q 0 0 0 rg BT 340.74 315.10 Td (fected 2014 Plan participant a cash amount equivalent ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 303.10 Td (to the award) Tj ET Q q 0 0 0 rg BT 106.20 303.10 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 505.79 303.10 Td (4,627,1) Tj ET Q q 0 0 0 rg BT 535.42 303.10 Td (18) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 545.42 303.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 291.10 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 343.90 291.10 Td (5.6%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.73 291.10 Td ( of the fully diluted outstanding common stock. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 279.10 Td (As of March 31, 2015, in connection with the leveraged recapitalization of the Company) Tj ET Q q 0 0 0 rg BT 407.96 279.10 Td (, the total amount of shares ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 267.10 Td (authorized under the 2014 Equity Incentive Plan was increased to 5,103,650. ) Tj ET Q q 0 0 0 rg BT 363.74 267.10 Td (The total amount of shares authorized was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 255.10 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 54.00 243.10 Td (anti-dilution provisions of the plan, and the grant of performance-based RSUs during fiscal year 2017. See below for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 231.10 Td (additional details on the dividend and performance-based RSUs.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 210.10 Td (Stock options vest in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 158.11 210.10 Td (25%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 176.44 210.10 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 54.00 198.10 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 276.15 198.10 Td (20%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 294.48 198.10 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 54.00 186.10 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 54.00 174.10 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 BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 162.10 Td (anniversary) Tj ET Q q 0 0 0 rg BT 100.00 162.10 Td (. ) Tj ET Q q 0 0 0 rg BT 104.82 162.10 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 54.00 150.10 Td (period. ) 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 72.00 731.10 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 54.00 719.10 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 339.5 688.6 m 409.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 688.6 m 413.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 688.6 m 483.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 688.6 m 487.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 688.6 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 339.5 674.6 m 409.5 674.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 674.6 m 483.5 674.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 674.6 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 339.5 644.6 m 409.5 644.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 644.6 m 483.5 644.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 644.6 m 557.5 644.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 644.6 m 409.5 644.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 630.6 m 409.5 630.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 628.6 m 409.5 628.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 644.6 m 483.5 644.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 630.6 m 483.5 630.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 628.6 m 483.5 628.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 644.6 m 557.5 644.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 630.6 m 557.5 630.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 628.6 m 557.5 628.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 693.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 693.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 693.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 693.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 693.05 Td (ch 31,) Tj ET Q BT /F3 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 365.00 679.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 679.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 679.05 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 664.27 Td (Restricted stock units) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 664.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 664.27 Td (6.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 664.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 664.27 Td (8.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 664.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 664.27 Td (6.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 649.27 Td (Stock options) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 649.27 Td (1) Tj ET Q q 0 0 0 rg BT 393.15 649.27 Td (1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 649.27 Td (5.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 649.27 Td (4.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 634.27 Td (Equity-based compensation expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 634.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 634.27 Td (17.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 634.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 634.27 Td (13.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 634.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 634.27 Td (1) Tj ET Q q 0 0 0 rg BT 541.15 634.27 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 612.10 Td (Impact of the 2016 Dividend ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 594.10 Td (On September 30, 2016, the Company paid a one-time cash dividend of approximately $2.94 per share to common) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 582.10 Td (shareholders of record on September 16, 2016. Upon distribution of a qualifying dividend by the Company) Tj ET Q q 0 0 0 rg BT 481.32 582.10 Td (, the 2014 Equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 570.10 Td (Incentive Plan provides all holders of RSUs the rights to dividend equivalents payable in cash subject to the vesting and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 558.10 Td (settlement terms of the underlying RSUs awarded. ) Tj ET Q q 0 0 0 rg BT 257.85 558.10 Td (Accordingly) Tj ET Q q 0 0 0 rg BT 307.18 558.10 Td (, the Company accrued a $5.4 million dividend equivalent ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 546.10 Td (payable to holders of RSUs as of the Dividend Record Date. ) Tj ET Q q 0 0 0 rg BT 297.65 546.10 Td (The dividend equivalents were recorded as a reduction of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 534.10 Td (additional paid-in capital as the Company did not have retained earnings at the time of the dividend and the related liability ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 522.10 Td (was included in other non-current liabilities as of March 31, 2017. ) Tj ET Q q 0 0 0 rg BT 321.25 522.10 Td (The 2014 Equity Incentive Plan also required the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 510.10 Td (Company to proportionally adjust the terms of the ISOs outstanding on the dividend payment date, which adjustment was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 498.10 Td (done through a combination of a reduction in exercise price and an increase in the number of awards outstanding. ) Tj ET Q q 0 0 0 rg BT 510.33 498.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 486.10 Td (provision is intended to provide equitable treatment of outstanding ISOs and preserve the value of such awards as a result of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 474.10 Td (the one-time cash dividend. In accordance with the provision, the exercise prices of outstanding ISOs were reduced by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 462.10 Td (multiplying the exercise price by a factor representing the ratio of the fair value of the Company) Tj ET Q q 0 0 0 rg BT 441.64 462.10 Td (s common stock ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 450.10 Td (immediately after the dividend, to the fair value of its common stock immediately prior to the dividend. ) Tj ET Q q 0 0 0 rg BT 470.66 450.10 Td (The number of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 438.10 Td (outstanding ISOs was increased by 548,867 shares as a result of multiplying the number of awards by a factor representing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 426.10 Td (the ratio of the fair value of the Company) Tj ET Q q 0 0 0 rg BT 222.83 426.10 Td (s common stock immediately prior to the dividend to the fair value of its common ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 414.10 Td (stock immediately after the dividend. ) Tj ET Q q 0 0 0 rg BT 205.44 414.10 Td (This adjustment did not result in additional equity-based compensation expense in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 402.10 Td (period as the fair value of the outstanding ISOs immediately following the payment of the cash dividend was equal to the fair ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 390.10 Td (value immediately prior to such distribution and the equitable treatment af) Tj ET Q q 0 0 0 rg BT 350.95 390.10 Td (forded to the ISOs was established as a term of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 378.10 Td (awards when granted.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 360.10 Td (Similar to the proportional adjustment to the outstanding ISOs, as required by the 2014 Equity Incentive Plan, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 348.10 Td (maximum number of shares issuable under the plan was proportionally adjusted to reflect the one-time cash dividend. ) Tj ET Q q 0 0 0 rg BT 527.21 348.10 Td (As a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 336.10 Td (result, the remaining shares of common stock available for issuance under the 2014 Equity Incentive Plan increased from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 324.10 Td (191,028 to 225,440 immediately after the dividend. ) Tj ET Q q 0 0 0 rg BT 261.74 324.10 Td (As a result of the adjustment to the outstanding ISOs and the remaining ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 312.10 Td (shares available for issuance under the 2014 Equity Incentive Plan, the total amount of shares authorized under the 2014 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 300.10 Td (Equity Incentive Plan increased from 5,103,650 immediately prior to the dividend to 5,686,929 immediately after the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 288.10 Td (dividend.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 270.10 Td (Performance-Based Restricted Stock Units) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 252.10 Td (During the fiscal years ended March 31, 2018 and 2017, the Company granted 73,200 and 215,200 shares of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 240.10 Td (performance-based RSUs with a weighted-average grant date fair value of $16.59 per award. ) Tj ET Q q 0 0 0 rg BT 427.83 240.10 Td (The performance-based RSUs ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 228.10 Td (are subject to two vesting requirements: a service period \(four years\) and a performance condition \(a liquidity event in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 216.10 Td (form of either a change of control or an initial public of) Tj ET Q q 0 0 0 rg BT 275.68 216.10 Td (fering, each as defined in the 2014 Equity Incentive Plan\) in order for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 204.10 Td (the awards to fully vest. ) Tj ET Q q 0 0 0 rg BT 152.13 204.10 Td (The Company did not record any expense related to these awards during the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 192.10 Td (March 31, 2018 and 2017, as it was not probable that the performance condition would be met.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 174.10 Td (Restricted Stock Units) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 156.10 Td (Cengage) Tj ET Q q 0 0 0 rg BT 109.76 156.10 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 482.83 156.10 Td (Therefore, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 144.10 Td (value its shared-based awards, the Company follows guidelines set forth in the ) Tj ET Q q 0 0 0 rg BT 370.32 144.10 Td (American Institute of Certified Public ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 132.10 Td (Accountants ) Tj ET Q q 0 0 0 rg BT 105.93 132.10 Td (Accounting & ) Tj ET Q q 0 0 0 rg BT 165.19 132.10 Td (V) Tj ET Q q 0 0 0 rg BT 171.30 132.10 Td (aluation Guide, ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 235.45 132.10 Td (V) Tj ET Q q 0 0 0 rg BT 240.45 132.10 Td (aluation of Privately-Held Company Equity Securities Issued as ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 120.10 Td (Compensation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.78 120.10 Td (. ) Tj ET Q q 0 0 0 rg BT 116.60 120.10 Td (T) Tj ET Q q 0 0 0 rg BT 122.01 120.10 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 54.00 108.10 Td (its equity) Tj ET Q q 0 0 0 rg BT 90.29 108.10 Td (. ) Tj ET Q q 0 0 0 rg BT 95.11 108.10 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 96.10 Td (value of its outstanding indebtedness. ) Tj ET Q q 0 0 0 rg BT 206.57 96.10 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 84.10 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 72.10 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 60.10 Td (thresholds, or breakpoints, at which value begins to be shared dif) Tj ET Q q 0 0 0 rg BT 313.76 60.10 Td (ferently between the holders of each type of equity security) Tj ET Q q 0 0 0 rg BT 550.51 60.10 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 (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 54.00 719.10 Td (free interest rate, volatility factor) Tj ET Q q 0 0 0 rg BT 185.48 719.10 Td (, and time period from date of grant to a liquidity event. ) Tj ET Q q 0 0 0 rg BT 410.42 719.10 Td (After determining the value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 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 54.00 695.10 Td (awards. ) Tj ET Q q 0 0 0 rg BT 87.14 695.10 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 54.00 683.10 Td (granted under the 2014 Equity Incentive Plan in 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 339.5 652.6 m 409.5 652.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 652.6 m 413.5 652.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 652.6 m 483.5 652.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 652.6 m 487.5 652.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 652.6 m 557.5 652.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 638.6 m 409.5 638.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 638.6 m 483.5 638.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 638.6 m 557.5 638.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 638.6 m 409.5 638.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 638.6 m 483.5 638.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 638.6 m 557.5 638.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 657.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 657.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 657.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 657.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 657.05 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 643.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 643.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 643.05 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 628.27 Td (W) Tj ET Q q 0 0 0 rg BT 64.64 628.27 Td (eighted-average grant date fair value) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 628.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.15 628.27 Td (16.59) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 628.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 628.27 Td (17.44) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 628.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 526.15 628.27 Td (19.20) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 606.10 Td (The following table summarizes the RSU and performance-based RSU activity under the 2014 Equity Incentive Plan:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 566.6 m 459.5 566.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463.5 566.6 m 557.5 566.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 566.6 m 459.5 566.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463.5 566.6 m 557.5 566.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 506.6 m 459.5 506.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 506.6 m 459.5 506.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 492.6 m 459.5 492.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 490.6 m 459.5 490.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 407.05 571.05 Td (Shar) Tj ET Q q 0 0 0 rg BT 425.47 571.05 Td (es) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 474.55 580.05 Td (W) Tj ET Q q 0 0 0 rg BT 483.05 580.05 Td (eighted-A) Tj ET Q q 0 0 0 rg BT 519.88 580.05 Td (verage) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 466.95 571.05 Td (Grant Date Fair) Tj ET Q q 0 0 0 rg BT 529.27 571.05 Td ( ) Tj ET Q q 0 0 0 rg BT 531.36 571.05 Td (V) Tj ET Q q 0 0 0 rg BT 537.03 571.05 Td (alue) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 556.27 Td (Non-vested as of March 31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.65 556.27 Td (1,095,143) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.00 556.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 556.27 Td (18.57) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 541.27 Td (Granted) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.15 541.27 Td (506,626) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 541.27 Td (16.59) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 526.27 Td (V) Tj ET Q q 0 0 0 rg BT 74.67 526.27 Td (ested) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.80 526.32 Td (\(573,385) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.65 526.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 526.27 Td (18.37) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 511.27 Td (Forfeited) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 424.80 511.32 Td (\(70,025) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.65 511.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 511.27 Td (16.99) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 496.27 Td (Non-vested as of March 31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.15 496.27 Td (958,359) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.00 496.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 496.27 Td (17.76) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 474.10 Td (T) Tj ET Q q 0 0 0 rg BT 77.41 474.10 Td (otal unrecognized compensation cost related to non-vested RSUs as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 361.78 474.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.38 474.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 445.93 474.10 Td ($1) Tj ET Q q 0 0 0 rg BT 455.56 474.10 Td (1.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 499.45 474.10 Td (, which is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 462.10 Td (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 299.43 462.10 Td (2.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 311.93 462.10 Td ( years.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 338.03 462.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.53 462.10 Td (T) Tj ET Q q 0 0 0 rg BT 345.94 462.10 Td (otal unrecognized compensation cost related to non-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 450.10 Td (vested performance-based RSUs as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 208.67 450.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 272.27 450.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 292.82 450.10 Td ($3.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 341.71 450.10 Td (. No compensation cost related to the performance-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 438.10 Td (based RSUs will be recognized until it is probable that the performance condition will be met.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 420.10 Td (Stock Options) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 402.10 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 495.60 402.10 Td (T) Tj ET Q q 0 0 0 rg BT 501.01 402.10 Td (o determine ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 390.10 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 535.67 390.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 378.10 Td (risk-free interest rate was based on interpolated yields of U.S. ) Tj ET Q q 0 0 0 rg BT 303.18 378.10 Td (T) Tj ET Q q 0 0 0 rg BT 308.94 378.10 Td (reasury securities with a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 408.35 378.10 Td (4.75) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.85 378.10 Td ( year term as of the date of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 366.10 Td (grant. Estimates of the Company) Tj ET Q q 0 0 0 rg BT 188.14 366.10 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 54.00 354.10 Td (companies, with adjustments specific to the Company) Tj ET Q q 0 0 0 rg BT 272.57 354.10 Td (s capital structure on the date of grant. ) Tj ET Q q 0 0 0 rg BT 428.17 354.10 Td (The expected term was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 342.10 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 417.59 342.10 Td (The following table summarizes ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 330.10 Td (the weighted-average fair value of stock options granted under the 2014 Equity Incentive Plan in the periods presented as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 318.10 Td (well as the weighted average of the 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 340.5 293.6 m 410.5 293.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 410.5 293.6 m 414.5 293.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 414.5 293.6 m 484.5 293.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 293.6 m 488.5 293.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 293.6 m 558.5 293.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 340.5 279.6 m 410.5 279.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 414.5 279.6 m 484.5 279.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 279.6 m 558.5 279.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 340.5 279.6 m 410.5 279.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 414.5 279.6 m 484.5 279.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 279.6 m 558.5 279.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 393.45 298.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 418.03 298.05 Td (Y) Tj ET Q q 0 0 0 rg BT 423.86 298.05 Td (ear) Tj ET Q q 0 0 0 rg BT 435.77 298.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 482.11 298.05 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 366.00 284.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 440.00 284.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 514.00 284.05 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 269.27 Td (W) Tj ET Q q 0 0 0 rg BT 66.04 269.27 Td (eighted-average grant date fair value) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.00 269.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.15 269.27 Td (6.08) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.00 269.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.15 269.27 Td (6.08) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.00 269.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.15 269.27 Td (6.41) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 254.27 Td (W) Tj ET Q q 0 0 0 rg BT 65.64 254.27 Td (eighted-average assumptions:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 239.27 Td (Risk-free interest rate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.15 239.27 Td (1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.65 239.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.15 239.27 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.65 239.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.15 239.27 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 549.65 239.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 224.27 Td (Dividend yield) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.15 224.27 Td (0.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.65 224.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.15 224.27 Td (0.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.65 224.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.15 224.27 Td (0.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 549.65 224.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 209.27 Td (Expected volatility) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.15 209.27 Td (40.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.65 209.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.15 209.27 Td (35.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.65 209.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.15 209.27 Td (38.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 549.65 209.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 194.27 Td (Expected life \(years\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.15 194.27 Td (4.75) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.15 194.27 Td (4.75) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.15 194.27 Td (4.75) Tj ET Q BT /F1 10.00 Tf ET 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 72.00 731.10 Td (The following table summarizes the stock option activity under the 2014 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 381.5 691.6 m 459.5 691.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463.5 691.6 m 557.5 691.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 691.6 m 459.5 691.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463.5 691.6 m 557.5 691.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 616.6 m 459.5 616.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 616.6 m 459.5 616.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 602.6 m 459.5 602.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 600.6 m 459.5 600.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 600.6 m 459.5 600.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 602.6 m 459.5 602.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 587.6 m 459.5 587.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 585.6 m 459.5 585.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 407.05 696.05 Td (Shar) Tj ET Q q 0 0 0 rg BT 425.47 696.05 Td (es) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 474.55 705.05 Td (W) Tj ET Q q 0 0 0 rg BT 483.05 705.05 Td (eighted-A) Tj ET Q q 0 0 0 rg BT 519.88 705.05 Td (verage) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 482.70 696.05 Td (Exer) Tj ET Q q 0 0 0 rg BT 501.03 696.05 Td (cise Price) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 681.27 Td (Outstanding as of March 31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.65 681.27 Td (3,571,943) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.00 681.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 681.27 Td (18.49) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 666.27 Td (Granted) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.15 666.27 Td (649,968) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 666.27 Td (16.59) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 651.27 Td (Exercised) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 445.65 651.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 651.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 636.27 Td (Forfeitures and cancellations) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.80 636.32 Td (\(358,235) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.65 636.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 636.27 Td (18.57) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 621.27 Td (Proportional adjustment due to dividend) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 445.65 621.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 621.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 606.27 Td (Outstanding as of March 31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.65 606.27 Td (3,863,676) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.00 606.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 606.27 Td (18.16) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 591.27 Td (V) Tj ET Q q 0 0 0 rg BT 62.11 591.27 Td (ested and exercisable as of March 31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.65 591.27 Td (3,218,045) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.00 591.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 591.27 Td (18.35) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 569.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 569.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 569.10 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 54.00 557.10 Td (life of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 80.66 557.10 Td (3.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 93.16 557.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.59 557.10 Td (3.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 125.09 557.10 Td ( years, respectively) Tj ET Q q 0 0 0 rg BT 201.35 557.10 Td (. ) Tj ET Q q 0 0 0 rg BT 206.17 557.10 Td (T) Tj ET Q q 0 0 0 rg BT 211.58 557.10 Td (otal unrecognized compensation cost related to non-vested stock options as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 545.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 138.15 545.10 Td ($3.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 187.04 545.10 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 474.42 545.10 Td (2.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.92 545.10 Td ( years.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 524.10 Td (14) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 524.10 Td (. INCOME ) Tj ET Q q 0 0 0 rg BT 113.54 524.10 Td (T) Tj ET Q q 0 0 0 rg BT 119.47 524.10 Td (AXES) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 503.10 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 339.5 472.6 m 409.5 472.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 472.6 m 413.5 472.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 472.6 m 483.5 472.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 472.6 m 487.5 472.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 472.6 m 557.5 472.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 458.6 m 409.5 458.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 458.6 m 483.5 458.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 458.6 m 557.5 458.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 428.6 m 409.5 428.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 428.6 m 483.5 428.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 428.6 m 557.5 428.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 428.6 m 409.5 428.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 414.6 m 409.5 414.6 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 413.5 428.6 m 483.5 428.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 414.6 m 483.5 414.6 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 487.5 428.6 m 557.5 428.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 414.6 m 557.5 414.6 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 BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 477.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 477.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 477.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 477.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 477.05 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 462.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 463.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 463.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 463.05 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 448.27 Td (United States) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 448.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.80 448.32 Td (\(101.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 448.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 448.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 448.32 Td (\(106.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 448.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 448.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 448.32 Td (\(122.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 448.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 433.27 Td (Other jurisdictions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 433.27 Td (26.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 433.27 Td (27.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 433.27 Td (16.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 418.27 Td (Loss before taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 418.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 418.32 Td (\(74.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 418.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 418.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 418.32 Td (\(79.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 418.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 418.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 418.32 Td (\(105.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 418.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 396.10 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 339.5 365.6 m 409.5 365.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 365.6 m 413.5 365.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 365.6 m 483.5 365.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 365.6 m 487.5 365.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 365.6 m 557.5 365.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 351.6 m 409.5 351.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 351.6 m 483.5 351.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 351.6 m 557.5 351.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 291.6 m 409.5 291.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 276.6 m 409.5 276.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 291.6 m 483.5 291.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 276.6 m 483.5 276.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 291.6 m 557.5 291.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 276.6 m 557.5 276.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 212.60000000000002 m 409.5 212.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 197.60000000000002 m 409.5 197.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 212.60000000000002 m 483.5 212.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 197.60000000000002 m 483.5 197.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 212.60000000000002 m 557.5 212.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 197.60000000000002 m 557.5 197.60000000000002 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 339.5 177.60000000000002 m 409.5 177.60000000000002 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 413.5 177.60000000000002 m 483.5 177.60000000000002 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 487.5 177.60000000000002 m 557.5 177.60000000000002 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 370.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 370.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 370.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 370.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 370.05 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 355.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 356.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 356.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 356.05 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 341.27 Td (Current:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 326.27 Td (United StatesFederal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 326.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 326.32 Td (\(1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 326.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 326.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 326.32 Td (\(1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 326.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 326.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 326.32 Td (\(2.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 326.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 311.27 Td (United StatesState) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 311.27 Td (0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 311.32 Td (\(1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 311.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 311.32 Td (\(0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 311.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 296.27 Td (Other jurisdictions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 296.32 Td (\(13.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 296.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 296.32 Td (\(8.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 296.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 296.32 Td (\(9.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 296.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 281.27 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 281.27 Td (otal current) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 281.32 Td (\(14.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 281.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 281.32 Td (\(10.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 281.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 281.32 Td (\(12.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 281.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 262.27 Td (Deferred:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 247.27 Td (United StatesFederal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 247.27 Td (77.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 247.27 Td (34.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 247.27 Td (36.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 232.27 Td (United StatesState) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 232.27 Td (7.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 232.27 Td (8.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 232.27 Td (6.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 217.27 Td (Other jurisdictions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 217.27 Td (1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 217.27 Td (3.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 217.27 Td (2.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 202.27 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 202.27 Td (otal deferred) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 202.27 Td (87.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 202.27 Td (46.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 202.27 Td (45.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 183.27 Td (Benefit from income taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 183.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 183.27 Td (73.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 183.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 183.27 Td (36.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 183.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 183.27 Td (33.4) Tj ET Q BT /F1 10.00 Tf ET 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 72.00 731.10 Td (The cumulative tax ef) Tj ET Q q 0 0 0 rg BT 159.28 731.10 Td (fects of significant temporary dif) Tj ET Q q 0 0 0 rg BT 290.72 731.10 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 54.00 719.10 Td (follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 688.6 m 488.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 688.6 m 492.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 688.6 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 423.5 674.6 m 488.5 674.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 674.6 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 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 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 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 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 423.5 417.6 m 488.5 417.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 417.6 m 557.5 417.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 417.6 m 488.5 417.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 417.6 m 557.5 417.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 364.6 m 488.5 364.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 364.6 m 557.5 364.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 346.6 m 488.5 346.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 344.6 m 488.5 344.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 346.6 m 557.5 346.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 344.6 m 557.5 344.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 459.30 693.05 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 498.21 693.05 Td (ch 31,) Tj ET Q BT /F3 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 446.50 679.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 515.50 679.05 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 665.17 Td (Deferred tax assets:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 651.27 Td (Net operating losses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 651.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 651.27 Td (107.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 651.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 651.27 Td (120.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 636.27 Td (Accrued expenses and reserves) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 636.27 Td (50.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 636.27 Td (59.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 621.27 Td (Author advances) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 621.27 Td (9.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 621.27 Td (14.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 606.27 Td (Equity compensation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 606.27 Td (10.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 606.27 Td (10.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 591.27 Td (Deferred revenue) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 591.27 Td (7.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 591.27 Td (9.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 576.27 Td (Fixed assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 576.27 Td (4.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 576.27 Td (6.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 561.27 Td (Deferred financing costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 561.27 Td (2.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 561.27 Td (5.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 546.27 Td (Inventory) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 546.27 Td (1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 546.27 Td (2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 531.27 Td (Other) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 531.27 Td (0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 531.27 Td (1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 516.27 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 516.27 Td (otal deferred tax assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 516.27 Td (193.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 516.27 Td (230.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 497.27 Td (Deferred tax liabilities:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 482.27 Td (Intangibles) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 482.32 Td (\(232.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 482.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 482.32 Td (\(327.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 482.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 467.27 Td (Internally-developed software) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 467.32 Td (\(23.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 467.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 467.32 Td (\(39.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 467.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 452.27 Td (Pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.80 452.32 Td (\(1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 452.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 452.32 Td (\(8.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 452.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 437.27 Td (Minority interests) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 474.65 437.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 437.32 Td (\(1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 437.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 422.27 Td (Other) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.80 422.32 Td (\(0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 422.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 422.32 Td (\(0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 422.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 407.27 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 407.27 Td (otal deferred tax liabilities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 407.32 Td (\(257.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 407.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 407.32 Td (\(377.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 407.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 388.27 Td (Net deferred tax liability) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 388.32 Td (\(63.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 388.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 388.32 Td (\(146.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 388.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 369.27 Td (Less: ) Tj ET Q q 0 0 0 rg BT 91.43 369.27 Td (V) Tj ET Q q 0 0 0 rg BT 97.54 369.27 Td (aluation allowance) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.80 369.32 Td (\(7.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 369.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 369.32 Td (\(1) Tj ET Q q 0 0 0 rg BT 541.13 369.32 Td (1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 369.27 Td (\)) 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 (otal net deferred tax liability) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 350.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 350.32 Td (\(70.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 350.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 350.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 350.32 Td (\(157.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 350.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 328.10 Td (For the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 173.35 328.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 236.95 328.10 Td (, the Company had federal net operating loss carryforwards of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.69 328.10 Td ($378.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.58 328.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 316.10 Td (that will begin to expire in 2035 if not utilized. In addition, the Company had state net operating loss carryforwards of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.61 316.10 Td ($625.7 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 301.70 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 301.70 Td ( that will begin to expire in 2020 if not utilized.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 272.58 301.70 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 275.58 301.70 Td (Utilization of certain U.S. net operating loss carryforwards and other ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 289.70 Td (tax attributes may be subject to limitation due to the ownership change limitations set forth under Internal Revenue Code ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 277.70 Td (Section 382 and similar state provisions.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 259.70 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 54.00 247.70 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 72.00 229.70 Td (The ) Tj ET Q q 0 0 0 rg BT 89.87 229.70 Td (T) Tj ET Q q 0 0 0 rg BT 95.28 229.70 Td (ax ) Tj ET Q q 0 0 0 rg BT 106.66 229.70 Td (Act lowered the corporate income tax rate from 35% to 21% and included a broad range of additional domestic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 217.70 Td (and international tax changes. ) Tj ET Q q 0 0 0 rg BT 175.72 217.70 Td (The Company's deferred taxes were remeasured based on the new 21% corporate tax rate, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 205.70 Td (resulting in a reduction of the Company's net deferred tax liability and a corresponding tax benefit. In addition, the ) Tj ET Q q 0 0 0 rg BT 514.65 205.70 Td (T) Tj ET Q q 0 0 0 rg BT 520.06 205.70 Td (ax ) Tj ET Q q 0 0 0 rg BT 531.45 205.70 Td (Act ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 193.70 Td (provides for a mandatory toll char) Tj ET Q q 0 0 0 rg BT 190.16 193.70 Td (ge on the deemed repatriation of the Company's post-1986 undistributed foreign earnings ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 181.70 Td (and profits. ) Tj ET Q q 0 0 0 rg BT 101.87 181.70 Td (The Company has evaluated and concluded there is no toll char) Tj ET Q q 0 0 0 rg BT 355.49 181.70 Td (ge due to the level of its foreign earnings and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 169.70 Td (profits. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 151.70 Td (For the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 173.35 151.70 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 236.95 151.70 Td (, the Company) Tj ET Q q 0 0 0 rg BT 298.33 151.70 Td (s net deferred tax liability ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.57 151.70 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 437.98 151.70 Td (d by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.98 151.70 Td ($87.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.87 151.70 Td (. ) Tj ET Q q 0 0 0 rg BT 516.69 151.70 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 139.70 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 88.41 139.70 Td ( was due primarily due to the impact of the ) Tj ET Q q 0 0 0 rg BT 262.63 139.70 Td (T) Tj ET Q q 0 0 0 rg BT 268.04 139.70 Td (ax ) Tj ET Q q 0 0 0 rg BT 279.42 139.70 Td (Act on the Company's deferred tax liabilities and assets and the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 127.70 Td (generation of net operating losses for the year) Tj ET Q q 0 0 0 rg BT 236.44 127.70 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 109.70 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 97.70 Td (foreign subsidiaries since it is the Company) Tj ET Q q 0 0 0 rg BT 231.75 97.70 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 85.70 Td (subsidiaries. Based on the Company) Tj ET Q q 0 0 0 rg BT 202.04 85.70 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 73.70 Td (permanently reinvest the earnings of the Company) Tj ET Q q 0 0 0 rg BT 258.94 73.70 Td (s foreign subsidiaries would not have a material impact on the Company) Tj ET Q q 0 0 0 rg BT 551.37 73.70 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 61.70 Td (tax provision.) 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 /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td (Reconciliation of income taxes from the U.S. statutory blended rate of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 355.53 731.10 Td (31.5%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.36 731.10 Td ( to the consolidated ef) Tj ET Q q 0 0 0 rg BT 469.49 731.10 Td (fective tax rate is as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 688.6 m 409.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 688.6 m 413.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 688.6 m 483.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 688.6 m 487.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 688.6 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 339.5 674.6 m 409.5 674.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 674.6 m 483.5 674.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 674.6 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 339.5 524.6 m 409.5 524.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 510.6 m 409.5 510.6 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 413.5 524.6 m 483.5 524.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 510.6 m 483.5 510.6 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 487.5 524.6 m 557.5 524.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 510.6 m 557.5 510.6 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 BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 693.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 693.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 693.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 693.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 693.05 Td (ch 31,) Tj ET Q BT /F3 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 365.00 679.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 679.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 679.05 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 664.27 Td (Benefit at the statutory rate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 664.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 664.27 Td (23.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 664.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 664.27 Td (27.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 664.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 664.27 Td (37.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 649.27 Td (State taxes, net of federal benefit) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 649.27 Td (2.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 649.27 Td (2.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 649.27 Td (4.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 634.27 Td (Foreign tax rate dif) Tj ET Q q 0 0 0 rg BT 144.83 634.27 Td (ferential) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 634.27 Td (0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 634.27 Td (2.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 634.27 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 619.27 Td (W) Tj ET Q q 0 0 0 rg BT 77.24 619.27 Td (ithholding tax) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 619.32 Td (\(4.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 619.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 619.32 Td (\(3.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 619.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 619.32 Td (\(3.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 619.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 604.27 Td (Return-to-provision adjustments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 604.32 Td (\(1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 604.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 604.27 Td (4.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 604.32 Td (\(3.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 604.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 589.27 Td (Change in valuation allowance) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 589.27 Td (3.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 589.27 Td (4.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 589.27 Td (0.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 574.27 Td (Bankruptcy-related items) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 574.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 574.32 Td (\(0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 574.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 574.32 Td (\(0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 574.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 559.27 Td (Foreign exchange gain/\(loss\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 559.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 559.27 Td (0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 559.32 Td (\(2.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 559.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 544.27 Td (Change in tax rate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 544.27 Td (49.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 544.27 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 544.27 Td (1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 529.27 Td (Other) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 529.32 Td (\(2.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 529.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 529.32 Td (\(3.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 529.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 529.32 Td (\(2.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 529.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 514.27 Td (Benefit at the ef) Tj ET Q q 0 0 0 rg BT 119.96 514.27 Td (fective income tax rate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 514.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 514.27 Td (73.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 514.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 514.27 Td (36.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 514.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 514.27 Td (33.4) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 492.10 Td (A) Tj ET Q q 0 0 0 rg BT 78.67 492.10 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 339.5 461.6 m 409.5 461.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 461.6 m 413.5 461.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 461.6 m 483.5 461.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 461.6 m 487.5 461.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 461.6 m 557.5 461.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 447.6 m 409.5 447.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 447.6 m 483.5 447.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 447.6 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 339.5 417.6 m 409.5 417.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 403.6 m 409.5 403.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 401.6 m 409.5 401.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 417.6 m 483.5 417.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 403.6 m 483.5 403.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 401.6 m 483.5 401.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 417.6 m 557.5 417.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 403.6 m 557.5 403.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 401.6 m 557.5 401.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 466.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 466.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 466.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 466.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 466.05 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 451.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 452.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 452.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 452.05 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 437.27 Td (Balance at beginning of period) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 437.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 437.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 437.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 437.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 437.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 437.27 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 422.27 Td (Reductions of tax positions of prior years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 422.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 422.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 422.32 Td (\(0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 422.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 407.27 Td (Balance at end of period) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 407.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 407.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 407.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 407.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 407.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 407.27 Td () Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 385.10 Td (There was no interest 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 419.93 385.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 483.53 385.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.53 385.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 508.53 385.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.97 385.10 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 547.97 385.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 373.10 Td (and no accrued interest and penalties. ) Tj ET Q q 0 0 0 rg BT 206.26 373.10 Td (The examination period related to the UTB balance at March 31, 2015 closed during ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 361.10 Td (fiscal year 2016. ) Tj ET Q q 0 0 0 rg BT 122.31 361.10 Td (Accordingly) Tj ET Q q 0 0 0 rg BT 171.65 361.10 Td (, the UTB balance was reduced to zero at March 31, 2016.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 343.10 Td (The Company) Tj ET Q q 0 0 0 rg BT 131.71 343.10 Td (s income tax returns are currently under examination in various foreign jurisdictions. ) Tj ET Q q 0 0 0 rg BT 473.38 343.10 Td (The Company is no ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 331.10 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 BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 319.10 Td (year ended March 31, 2014, and all preceding tax years and, with limited exceptions, for periods preceding 2012 for foreign ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 307.10 Td (tax examinations. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 289.10 Td (15) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 289.10 Td (. F) Tj ET Q q 0 0 0 rg BT 74.37 289.10 Td (AIR ) Tj ET Q q 0 0 0 rg BT 95.02 289.10 Td (V) Tj ET Q q 0 0 0 rg BT 100.95 289.10 Td (ALUE MEASUREMENTS) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 268.10 Td (Recurring Measur) Tj ET Q q 0 0 0 rg BT 132.96 268.10 Td (ements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 247.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 247.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 247.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 179.48 247.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.48 247.10 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 54.00 226.10 Td (Non-Recurring Measur) Tj ET Q q 0 0 0 rg BT 154.08 226.10 Td (ements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 205.10 Td (Non-financial assets and liabilities, which include goodwill, identifiable intangible assets, property and equipment and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 193.10 Td (various liabilities, are not required to be measured at fair value on a recurring basis. However) Tj ET Q q 0 0 0 rg BT 427.07 193.10 Td (, if an impairment test is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 181.10 Td (required, the Company evaluates the non-financial assets and liabilities for impairment. If impairment is determined to have ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 169.10 Td (occurred, the asset or liability is required to be written down to its estimated fair value. During fiscal year 2017, the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 157.10 Td (determined that the fair value of one of its cost method investments was below its carrying value and that the carrying value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 145.10 Td (of the investment was not expected to be recoverable within a reasonable period of time. ) Tj ET Q q 0 0 0 rg BT 409.99 145.10 Td (Accordingly) Tj ET Q q 0 0 0 rg BT 459.32 145.10 Td (, the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 133.10 Td (recognized an impairment char) Tj ET Q q 0 0 0 rg BT 177.93 133.10 Td (ge of $3.0 million related to this investment during fiscal year 2017. During fiscal year 2016, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 121.10 Td (the Company determined that the fair value of one of its cost method investments was below its carrying value and that the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 109.10 Td (carrying value of the investment was not expected to be recoverable within a reasonable period of time. ) Tj ET Q q 0 0 0 rg BT 469.96 109.10 Td (Accordingly) Tj ET Q q 0 0 0 rg BT 519.29 109.10 Td (, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 97.10 Td (Company recognized an impairment char) Tj ET Q q 0 0 0 rg BT 219.31 97.10 Td (ge related to this investment of $2.5 million. ) Tj ET Q q 0 0 0 rg BT 399.10 97.10 Td (These impairment char) Tj ET Q q 0 0 0 rg BT 491.10 97.10 Td (ges are included ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 85.10 Td (in other income \(expense\), net, below operating income \(loss\) in the accompanying consolidated statement of operations. ) 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 /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (Other) Tj ET Q q 0 0 0 rg BT 79.37 731.25 Td ( Fair) Tj ET Q q 0 0 0 rg BT 100.01 731.25 Td ( ) Tj ET Q q 0 0 0 rg BT 102.33 731.25 Td (V) Tj ET Q q 0 0 0 rg BT 108.63 731.25 Td (alue Disclosur) Tj ET Q q 0 0 0 rg BT 168.73 731.25 Td (es) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 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 54.00 698.25 Td (standards require disclosures regarding the fair value of all of the Company) Tj ET Q q 0 0 0 rg BT 358.62 698.25 Td (s financial instruments. ) Tj ET Q q 0 0 0 rg BT 453.98 698.25 Td (The estimated carrying ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 686.25 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 309.5 655.75 m 368.5 655.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 368.5 655.75 m 372.5 655.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 372.5 655.75 m 431.5 655.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 435.5 655.75 m 494.5 655.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 494.5 655.75 m 498.5 655.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498.5 655.75 m 557.5 655.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 655.75 m 368.5 655.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 641.75 m 368.5 641.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 368.5 641.75 m 372.5 641.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 372.5 641.75 m 431.5 641.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 435.5 641.75 m 494.5 641.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 494.5 641.75 m 498.5 641.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498.5 641.75 m 557.5 641.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 641.75 m 368.5 641.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 618.75 m 368.5 618.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 372.5 641.75 m 431.5 641.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 372.5 618.75 m 431.5 618.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 435.5 641.75 m 494.5 641.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 435.5 618.75 m 494.5 618.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498.5 641.75 m 557.5 641.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498.5 618.75 m 557.5 618.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 618.75 m 368.5 618.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 372.5 618.75 m 431.5 618.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 435.5 618.75 m 494.5 618.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498.5 618.75 m 557.5 618.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 339.30 660.20 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 378.21 660.20 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 465.30 660.20 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 504.21 660.20 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 361.00 646.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 487.00 646.20 Td (2017) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 623.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 320.75 632.20 Td (Carrying) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 322.70 623.20 Td (Amount) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 393.30 632.20 Td (Fair) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 390.65 623.20 Td (V) Tj ET Q q 0 0 0 rg BT 396.32 623.20 Td (alue) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 446.75 632.20 Td (Carrying) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 448.70 623.20 Td (Amount) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 519.30 632.20 Td (Fair) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 516.65 623.20 Td (V) Tj ET Q q 0 0 0 rg BT 522.32 623.20 Td (alue) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 608.42 Td (Senior Notes) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 107.94 612.95 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 608.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.15 608.42 Td (612.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.00 608.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.15 608.42 Td (471.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 438.00 608.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.15 608.42 Td (61) Tj ET Q q 0 0 0 rg BT 478.15 608.42 Td (1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 501.00 608.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 608.42 Td (553.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 593.42 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 593.42 Td (erm Loan) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 100.00 597.95 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.65 593.42 Td (1,638.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.65 593.42 Td (1,486.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.65 593.42 Td (1,660.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 593.42 Td (1,581.3) 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 72.00 576.53 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 572.45 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 469.62 572.45 Td ($7.1 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 513.62 572.45 Td ( and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 531.12 572.45 Td ($8.3 ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 561.65 Td (million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 116.00 561.65 Td ( as of ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 137.75 561.65 Td (March31, 2018) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 194.99 561.65 Td ( and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 212.48 561.65 Td (March31, 2017) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 269.72 561.65 Td (, respectively) Tj ET Q q 0 0 0 rg BT 317.11 561.65 Td (.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 548.93 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 544.85 Td (The carrying amount for the ) Tj ET Q q 0 0 0 rg BT 193.55 544.85 Td (T) Tj ET Q q 0 0 0 rg BT 198.42 544.85 Td (erm Loan as of ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 254.90 544.85 Td (March31, 2018) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 312.13 544.85 Td ( and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 329.63 544.85 Td (March31, 2017) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 386.87 544.85 Td ( is presented net of the unamortized original ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 534.05 Td (issue discount and deferred financing costs of ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 256.70 534.05 Td ($31.1 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 305.20 534.05 Td ( and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 322.70 534.05 Td ($37.0 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 371.20 534.05 Td (, respectively) Tj ET Q q 0 0 0 rg BT 418.60 534.05 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 516.05 Td (The estimated fair value of the Company) Tj ET Q q 0 0 0 rg BT 238.61 516.05 Td (s Senior Notes and ) Tj ET Q q 0 0 0 rg BT 316.20 516.05 Td (T) Tj ET Q q 0 0 0 rg BT 321.61 516.05 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 54.00 504.05 Td (or broker quotes and may not represent prices that can be transacted upon. ) Tj ET Q q 0 0 0 rg BT 353.16 504.05 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 54.00 492.05 Td (fair value hierarchy) Tj ET Q q 0 0 0 rg BT 131.64 492.05 Td (. ) Tj ET Q q 0 0 0 rg BT 136.46 492.05 Td (The carrying values of cash and cash equivalents, accounts receivable, and accounts payable ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 480.05 Td (approximated their fair values as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 198.39 480.05 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 261.99 480.05 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 281.43 480.05 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.43 480.05 Td ( due to the short-term nature of these instruments. ) Tj ET Q q 0 0 0 rg BT 502.86 480.05 Td (The assets ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 468.05 Td (acquired and liabilities assumed during the period were recorded at their respective fair values as of the acquisition date.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 447.05 Td (16) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 447.05 Td (. SUPPLEMENT) Tj ET Q q 0 0 0 rg BT 136.60 447.05 Td (AL) Tj ET Q q 0 0 0 rg BT 149.94 447.05 Td ( CASH FLOW) Tj ET Q q 0 0 0 rg BT 213.10 447.05 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 263.74 447.05 Td (TION) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 426.05 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 339.5 395.54999999999995 m 409.5 395.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 395.54999999999995 m 413.5 395.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 395.54999999999995 m 483.5 395.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 395.54999999999995 m 487.5 395.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 395.54999999999995 m 557.5 395.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 381.54999999999995 m 409.5 381.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 381.54999999999995 m 483.5 381.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 381.54999999999995 m 557.5 381.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 246.54999999999995 m 409.5 246.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 246.54999999999995 m 483.5 246.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 246.54999999999995 m 557.5 246.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 246.54999999999995 m 409.5 246.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 232.54999999999995 m 409.5 232.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 230.54999999999995 m 409.5 230.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 246.54999999999995 m 483.5 246.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 232.54999999999995 m 483.5 232.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 230.54999999999995 m 483.5 230.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 246.54999999999995 m 557.5 246.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 232.54999999999995 m 557.5 232.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 230.54999999999995 m 557.5 230.54999999999995 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 400.00 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 400.00 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 400.00 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 400.00 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 400.00 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 385.80 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 386.00 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 386.00 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 386.00 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 371.22 Td (Accounts receivable, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 371.22 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 371.27 Td (\(4.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 371.22 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 371.22 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 371.22 Td (23.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 371.22 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 371.27 Td (\(45.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 371.22 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 356.22 Td (Inventories) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 100.99 360.75 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 356.27 Td (\(3.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 356.22 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 356.22 Td (26.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 356.22 Td (181.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 341.22 Td (Prepaid expenses and other current assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 341.27 Td (\(6.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 341.22 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 341.27 Td (\(6.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 341.22 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 341.22 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 326.22 Td (Author advances, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 326.27 Td (\(1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 326.22 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 326.27 Td (\(2.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 326.22 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 326.27 Td (\(1.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 326.22 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 311.22 Td (Accounts payable and accrued expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 311.22 Td (29.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 311.27 Td (\(22.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 311.22 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 311.27 Td (\(5.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 311.22 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 296.22 Td (Accrued interest payable) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 296.27 Td (\(1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 296.22 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 296.22 Td (23.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 296.22 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 281.22 Td (Deferred revenue) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 125.67 285.75 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 281.22 Td (8.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 281.22 Td (5.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 281.22 Td (16.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 266.22 Td (Current taxes payable) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 266.22 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 266.22 Td (1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 266.22 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 251.22 Td (Other) Tj ET Q q 0 0 0 rg BT 78.37 251.22 Td (, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 251.22 Td (5.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 251.27 Td (\(1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 251.22 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 251.27 Td (\(0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 251.22 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 236.22 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 236.22 Td (26.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 236.22 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 236.22 Td (48.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 236.22 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 236.22 Td (144.4) 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 72.00 219.33 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 215.25 Td (The non-cash flow-through impact of ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 227.21 215.25 Td ($168.9 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 280.21 215.25 Td ( related to the inventory step-up that was recorded on the Ef) Tj ET Q q 0 0 0 rg BT 495.73 215.25 Td (fective Date ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 204.45 Td (resulting from the adoption of fresh start accounting change is included in the change in inventories during the fiscal year ended ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 193.65 Td (March 31, 2016.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 180.93 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 176.85 Td (The non-cash flow-through impact of ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 227.21 176.85 Td ($2.3 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 271.21 176.85 Td ( related to the deferred revenue that was recorded on the Ef) Tj ET Q q 0 0 0 rg BT 484.19 176.85 Td (fective Date ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 166.05 Td (resulting from the adoption of fresh start accounting change is included in the change in deferred revenue during the fiscal year ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 155.25 Td (ended March 31, 2016.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 137.25 Td (Cash ) Tj ET Q q 0 0 0 rg BT 94.50 137.25 Td (paid ) Tj ET Q q 0 0 0 rg BT 114.22 137.25 Td (for ) Tj ET Q q 0 0 0 rg BT 128.38 137.25 Td (interest ) Tj ET Q q 0 0 0 rg BT 160.31 137.25 Td (and ) Tj ET Q q 0 0 0 rg BT 177.25 137.25 Td (income ) Tj ET Q q 0 0 0 rg BT 209.18 137.25 Td (taxes ) Tj ET Q q 0 0 0 rg BT 232.23 137.25 Td (was:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 106.75 m 409.5 106.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 106.75 m 413.5 106.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 106.75 m 483.5 106.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 106.75 m 487.5 106.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 106.75 m 557.5 106.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 92.75 m 409.5 92.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 92.75 m 483.5 92.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 92.75 m 557.5 92.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 111.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 111.20 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 111.20 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 111.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 111.20 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 97.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 97.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 97.20 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 97.20 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 82.42 Td (Net cash interest paid) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 82.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 82.42 Td (152.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 82.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 82.42 Td (125.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 82.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 82.42 Td (146.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 67.42 Td (Income taxes paid, net of refunds) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 67.42 Td (9.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 67.42 Td (5.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 67.42 Td (12.4) 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 /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 719.25 Td (Non-cash Investing ) Tj ET Q q 0 0 0 rg BT 137.91 719.25 Td (Activities ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 698.25 Td (Additions to pre-publication costs and property) Tj ET Q q 0 0 0 rg BT 260.48 698.25 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 54.00 686.25 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 339.5 652.75 m 409.5 652.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 652.75 m 413.5 652.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 652.75 m 483.5 652.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 652.75 m 487.5 652.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 652.75 m 557.5 652.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 638.75 m 409.5 638.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 638.75 m 483.5 638.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 638.75 m 557.5 638.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 657.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 657.20 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 657.20 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 657.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 657.20 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 643.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 643.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 643.20 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 643.20 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 628.42 Td (Additions to pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 628.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 628.42 Td (9.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 628.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 628.42 Td (8.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 628.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 628.42 Td (1) Tj ET Q q 0 0 0 rg BT 541.15 628.42 Td (1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 613.42 Td (Additions to property) Tj ET Q q 0 0 0 rg BT 141.45 613.42 Td (, equipment and capitalized internal-use) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.50 603.42 Td (software) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 603.42 Td (3.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 603.42 Td (14.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 603.42 Td (2.6) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 578.25 Td (During the fiscal year ended March 31, 2016, the Company entered into a capital lease of $0.9 million for computer ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 566.25 Td (hardware. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 545.25 Td (Non-cash Financing ) Tj ET Q q 0 0 0 rg BT 141.24 545.25 Td (Activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 524.25 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 54.00 512.25 Td (Company accrued $5.4 million of dividend equivalents payable to holders of RSUs. ) Tj ET Q q 0 0 0 rg BT 391.53 512.25 Td (The accrued dividend was included in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 500.25 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 54.00 488.25 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 390.83 488.25 Td ($5.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.72 488.25 Td ( of dividend equivalents ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 476.25 Td (payable to holders of RSUs. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 455.25 Td (As of March 31, 2018, $8.2 million of dividend equivalents payable was included in other accrued expenses and $0.8 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.25 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 54.00 422.25 Td (17) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 422.25 Td (. ) Tj ET Q q 0 0 0 rg BT 69.00 422.25 Td (RELA) Tj ET Q q 0 0 0 rg BT 96.04 422.25 Td (TED ) Tj ET Q q 0 0 0 rg BT 119.10 422.25 Td (P) Tj ET Q q 0 0 0 rg BT 124.47 422.25 Td (AR) Tj ET Q q 0 0 0 rg BT 138.56 422.25 Td (TY) Tj ET Q q 0 0 0 rg BT 152.08 422.25 Td ( ) Tj ET Q q 0 0 0 rg BT 154.40 422.25 Td (TRANSACTIONS) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 401.25 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 427.47 401.25 Td (s past transactions are not the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 389.25 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 72.00 371.25 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 54.00 359.25 Td (currently in place with a former af) Tj ET Q q 0 0 0 rg BT 190.98 359.25 Td (filiate of Cengage Learning Holdings II, L.P) Tj ET Q q 0 0 0 rg BT 367.60 359.25 Td (. \(the Predecessor of the Company\), the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 347.25 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 368.69 347.25 Td (filiate were related parties. Under the MSA, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 335.25 Td (the Company provides the former af) Tj ET Q q 0 0 0 rg BT 199.05 335.25 Td (filiate with various services including those relating to business and technology) Tj ET Q q 0 0 0 rg BT 516.11 335.25 Td (, content ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.25 Td (management, customers and operations, management, fulfillment services and business information support. ) Tj ET Q q 0 0 0 rg BT 490.66 323.25 Td (The former ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 311.25 Td (af) Tj ET Q q 0 0 0 rg BT 61.59 311.25 Td (filiate provides the Company with certain real estate services. ) Tj ET Q q 0 0 0 rg BT 310.21 311.25 Td (The cost of each of the services provided under the MSA) Tj ET Q q 0 0 0 rg BT 537.92 311.25 Td ( is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 299.25 Td (based on a fixed fee. ) Tj ET Q q 0 0 0 rg BT 138.41 299.25 Td (All services under the MSA) Tj ET Q q 0 0 0 rg BT 249.50 299.25 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 54.00 287.25 Td (agreement of the parties. ) Tj ET Q q 0 0 0 rg BT 155.16 287.25 Td (The former af) Tj ET Q q 0 0 0 rg BT 210.50 287.25 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 54.00 275.25 Td (without penalty) Tj ET Q q 0 0 0 rg BT 115.84 275.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 257.25 Td (Under the MDLA, the former af) Tj ET Q q 0 0 0 rg BT 200.66 257.25 Td (filiate is the Company) Tj ET Q q 0 0 0 rg BT 292.03 257.25 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 54.00 245.25 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 469.47 245.25 Td (s prior approval on a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 233.25 Td (product by product basis, the former af) Tj ET Q q 0 0 0 rg BT 209.61 233.25 Td (filiate also has the exclusive right to adapt, customize and translate the Company) Tj ET Q q 0 0 0 rg BT 535.90 233.25 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 221.25 Td (publications for sale and distribution in Canada. ) Tj ET Q q 0 0 0 rg BT 248.22 221.25 Td (The agreement sets certain other restrictions on the use of the Company) Tj ET Q q 0 0 0 rg BT 537.85 221.25 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.25 Td (content. ) Tj ET Q q 0 0 0 rg BT 88.25 209.25 Td (The former af) Tj ET Q q 0 0 0 rg BT 143.59 209.25 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 54.00 197.25 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 54.00 185.25 Td (products. ) Tj ET Q q 0 0 0 rg BT 93.26 185.25 Td (The agreement also requires the af) Tj ET Q q 0 0 0 rg BT 231.07 185.25 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 72.00 167.25 Td (The MSA) Tj ET Q q 0 0 0 rg BT 111.17 167.25 Td ( was assumed by the Company upon emer) Tj ET Q q 0 0 0 rg BT 279.57 167.25 Td (gence from Chapter 1) Tj ET Q q 0 0 0 rg BT 366.11 167.25 Td (1 bankruptcy on March 31, 2014 and renewed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 155.25 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 425.66 155.25 Td (The MDLA) Tj ET Q q 0 0 0 rg BT 472.60 155.25 Td ( was also assumed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.25 Td (by the Company upon on March 31, 2014, on the same term length, but was amended ef) Tj ET Q q 0 0 0 rg BT 406.80 143.25 Td (fective March 17, 2017, and will end ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 131.25 Td (on 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 54.00 119.25 Td (bankruptcy or the mutual agreement of the parties. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 101.25 Td (In November 201) Tj ET Q q 0 0 0 rg BT 142.17 101.25 Td (1, the Predecessor entered into a new distribution agreement with the former af) Tj ET Q q 0 0 0 rg BT 458.26 101.25 Td (filiate, under which the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 89.25 Td (former af) Tj ET Q q 0 0 0 rg BT 91.29 89.25 Td (filiate is the Company) Tj ET Q q 0 0 0 rg BT 182.67 89.25 Td (s exclusive authorized distributor) Tj ET Q q 0 0 0 rg BT 315.29 89.25 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 77.25 Td (of certain research digital and print products in Canada. ) Tj ET Q q 0 0 0 rg BT 278.74 77.25 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 65.25 Td (Cengage will distribute these research products directly to Canadian customers.) Tj ET Q 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 (The following is a summary of the Company) Tj ET Q q 0 0 0 rg BT 254.47 731.10 Td (s activity and balances with the former af) Tj ET Q q 0 0 0 rg BT 419.50 731.10 Td (filiate:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 700.6 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 339.5 686.6 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 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 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 339.5 686.6 m 409.5 686.6 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 /F3 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 (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 691.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 691.05 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 676.27 Td (Revenue from former af) Tj ET Q q 0 0 0 rg BT 152.81 676.27 Td (filiate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 676.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 676.27 Td (18.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 676.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 676.27 Td (19.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 676.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 676.27 Td (21.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 661.27 Td (Expenses to former af) Tj ET Q q 0 0 0 rg BT 143.84 661.27 Td (filiate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 661.27 Td (1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 661.27 Td (1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 661.27 Td (1.6) 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 423.5 626.6 m 488.5 626.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 626.6 m 492.5 626.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 626.6 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 423.5 612.6 m 488.5 612.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 612.6 m 557.5 612.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 459.30 631.05 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 498.21 631.05 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 616.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 446.50 617.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 515.50 617.05 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 602.27 Td (Accounts receivable) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 602.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 602.27 Td (1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 602.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 602.27 Td (2.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 587.27 Td (Accounts payable and accrued expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 587.27 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 587.27 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 562.10 Td (18) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 562.10 Td (. ) Tj ET Q q 0 0 0 rg BT 69.00 562.10 Td (COMMITMENTS ) Tj ET Q q 0 0 0 rg BT 150.95 562.10 Td (AND ) Tj ET Q q 0 0 0 rg BT 175.11 562.10 Td (CONTINGENCIES) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 541.10 Td (Claims, Disputes and Legal and Regulatory ) Tj ET Q q 0 0 0 rg BT 259.52 541.10 Td (Actions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 520.10 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 54.00 508.10 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 429.54 508.10 Td (The Company assesses its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 496.10 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 54.00 484.10 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 472.64 484.10 Td (The Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 472.10 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 54.00 460.10 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 54.00 448.10 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 54.00 436.10 Td (have been incurred.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 418.10 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 54.00 406.10 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 54.00 394.10 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 54.00 382.10 Td (involving material amounts, it could have a material adverse ef) Tj ET Q q 0 0 0 rg BT 305.95 382.10 Td (fect on the Company) Tj ET Q q 0 0 0 rg BT 392.32 382.10 Td (s financial position, results of operations ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 370.10 Td (and cash flows.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 352.10 Td (As of March 31, 2017, all claims in connection with the Company) Tj ET Q q 0 0 0 rg BT 339.45 352.10 Td (s Chapter 1) Tj ET Q q 0 0 0 rg BT 384.63 352.10 Td (1 filing were settled, the resolution process) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 340.10 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 431.50 340.10 Td (The Chapter 1) Tj ET Q q 0 0 0 rg BT 488.33 340.10 Td (1 cases were) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 328.10 Td (formally closed in ) Tj ET Q q 0 0 0 rg BT 128.71 328.10 Td (August 2016.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 310.10 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 54.00 298.10 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 446.72 298.10 Td (fect on the consolidated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 286.10 Td (financial position, results of operations or cash flows. ) 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 /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Leases) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 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 54.00 698.25 Td (expiring at various dates through 2029, except for one lease that expires in 2091. ) Tj ET Q q 0 0 0 rg BT 378.91 698.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.36 698.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.95 698.25 Td (, future minimum ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 686.25 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 477.5 552.75 m 557.5 552.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 552.75 m 557.5 552.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 522.75 m 557.5 522.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 522.75 m 557.5 522.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 508.75 m 557.5 508.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 506.75 m 557.5 506.75 l s BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 661.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 647.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 80.41 647.20 Td (Y) Tj ET Q q 0 0 0 rg BT 85.91 647.20 Td (ears Ending Mar) Tj ET Q q 0 0 0 rg BT 151.25 647.20 Td (ch 31,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 632.42 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 632.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 632.42 Td (27.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 617.42 Td (2020) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 617.42 Td (26.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 602.42 Td (2021) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 602.42 Td (24.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 587.42 Td (2022) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 587.42 Td (19.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 572.42 Td (2023) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 572.42 Td (15.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 557.42 Td (Thereafter) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 557.42 Td (84.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 542.42 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 542.42 Td (otal minimum future lease payments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 542.42 Td (197.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 527.42 Td (Less: Sublease income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 527.42 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 512.42 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 512.42 Td (otal minimum future lease payments, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 512.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 512.42 Td (197.2) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 490.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 121.90 490.25 Td (, the Company has $0.4 million of computer hardware under capital lease that expires in 2019. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 472.25 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 339.5 441.75 m 409.5 441.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 441.75 m 413.5 441.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 441.75 m 483.5 441.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 441.75 m 487.5 441.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 441.75 m 557.5 441.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 427.75 m 409.5 427.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 427.75 m 483.5 427.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 427.75 m 557.5 427.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 446.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 446.20 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 446.20 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 446.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 446.20 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 432.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 432.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 432.20 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 432.20 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 417.42 Td (Rent expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 417.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 417.42 Td (29.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 417.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 417.42 Td (27.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 417.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 417.42 Td (26.6) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 392.25 Td (Other) Tj ET Q q 0 0 0 rg BT 97.37 392.25 Td ( Commitments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 371.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 371.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 371.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 179.48 371.25 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.48 371.25 Td (, the Company had approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 337.78 371.25 Td ($65.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 391.67 371.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.11 371.25 Td ($72.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 465.00 371.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 517.66 371.25 Td (, of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 359.25 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 54.00 347.25 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 54.00 335.25 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 401.96 335.25 Td (s educational products and royalty ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.25 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 72.00 305.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 305.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 305.25 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 467.5 169.75 m 557.5 169.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 467.5 169.75 m 557.5 169.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 467.5 155.75 m 557.5 155.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 467.5 153.75 m 557.5 153.75 l s BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 278.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 264.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 80.41 264.20 Td (Y) Tj ET Q q 0 0 0 rg BT 85.91 264.20 Td (ears Ending Mar) Tj ET Q q 0 0 0 rg BT 151.25 264.20 Td (ch 31,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 249.42 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.00 249.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 249.42 Td (27.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 234.42 Td (2020) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 234.42 Td (16.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 219.42 Td (2021) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 219.42 Td (17.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 204.42 Td (2022) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 204.42 Td (2.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 189.42 Td (2023) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 189.42 Td (2.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 174.42 Td (Thereafter) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 174.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.00 159.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 159.42 Td (65.7) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 134.25 Td (W) Tj ET Q q 0 0 0 rg BT 81.45 134.25 Td (arranties) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 113.25 Td (Under the Company) Tj ET Q q 0 0 0 rg BT 155.87 113.25 Td (s standard terms and conditions of sale, it warrants ownership of and/or licensing rights to its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 101.25 Td (products and provide certain warranties and indemnifications. ) Tj ET Q q 0 0 0 rg BT 303.74 101.25 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 89.25 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 77.25 Td (recorded in the consolidated financial statements.) 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 (19) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 731.25 Td (. SEGMENT) Tj ET Q q 0 0 0 rg BT 118.83 731.25 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 169.47 731.25 Td (TION) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 713.25 Td (The Company) Tj ET Q q 0 0 0 rg BT 131.71 713.25 Td (s three operating segments, which are consistent with its reportable business segments are:) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 695.25 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.56 695.25 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 54.00 683.25 Td (services for the academic, skills and school markets. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 665.25 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 100.33 665.25 Td (the Company of) Tj ET Q q 0 0 0 rg BT 164.58 665.25 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 54.00 653.25 Td (of primary source materials and aggregated periodicals to learners at libraries, colleges, universities, schools and businesses.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 632.25 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 133.67 632.25 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 54.00 620.25 Td (language teaching \(EL) Tj ET Q q 0 0 0 rg BT 148.03 620.25 Td (T\) products and adapts its Learning of) Tj ET Q q 0 0 0 rg BT 305.03 620.25 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 54.00 608.25 Td (world.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 590.25 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 453.19 590.25 Td (. ) Tj ET Q q 0 0 0 rg BT 457.63 590.25 Td (All transactions between ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 578.25 Td (reportable segments are eliminated upon consolidation. ) Tj ET Q q 0 0 0 rg BT 277.36 578.25 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 54.00 566.25 Td (of its segments using either number of employees, specific identification or activity) Tj ET Q q 0 0 0 rg BT 387.15 566.25 Td (, or revenue. ) Tj ET Q q 0 0 0 rg BT 439.44 566.25 Td (The Company discloses ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 554.25 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 54.00 542.25 Td (segments. ) Tj ET Q q 0 0 0 rg BT 96.04 542.25 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 54.00 530.25 Td (exchange rates. ) Tj ET Q q 0 0 0 rg BT 117.95 530.25 Td (T) Tj ET Q q 0 0 0 rg BT 123.36 530.25 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 54.00 518.25 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 451.62 518.25 Td (. ) Tj ET Q q 0 0 0 rg BT 456.07 518.25 Td (As needed, the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 506.25 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 54.00 494.25 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 72.00 476.25 Td (The Company uses ) Tj ET Q q 0 0 0 rg BT 150.60 476.25 Td (Adjusted Revenues and ) Tj ET Q q 0 0 0 rg BT 246.98 476.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 321.69 476.25 Td ( less Pre-Publication Costs to measure the operating ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 464.25 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 54.00 452.25 Td (operations by eliminating the ef) Tj ET Q q 0 0 0 rg BT 181.01 452.25 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 54.00 440.25 Td (ongoing operating business. ) Tj ET Q q 0 0 0 rg BT 167.88 440.25 Td (Adjusted Revenues is defined as revenues before the impact of the deferred revenue reduction ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 428.25 Td (recorded on March 31, 2014 in connection with the adoption of fresh start accounting upon emer) Tj ET Q q 0 0 0 rg BT 440.93 428.25 Td (gence from bankruptcy and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 416.25 Td (the impact of changes in foreign currency exchange rates. ) Tj ET Q q 0 0 0 rg BT 286.68 416.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 361.39 416.25 Td ( less Pre-Publication Costs is defined as net ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 404.25 Td (income \(loss\) before: benefit from \(provision for\) income taxes; reor) Tj ET Q q 0 0 0 rg BT 328.45 404.25 Td (ganization items, net; interest expense, net; loss on early ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 392.25 Td (extinguishment of debt, net; other \(income\) expense, net in operating income \(loss\); amortization of identifiable intangible ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 380.25 Td (assets; depreciation; operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 295.39 380.25 Td (ges; amortization of pre-publication costs; the impact of fresh ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 368.25 Td (start accounting; other income \(expense\), net, below operating income \(loss\); equity-based compensation expense and non-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 356.25 Td (core other operating expenses in the accompanying consolidated statements of operations, less additions to pre-publication ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 344.25 Td (costs on an accrual basis. ) Tj ET Q q 0 0 0 rg BT 157.12 344.25 Td (This measure also removes the impact of changes in foreign currency exchange rates on the items ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 332.25 Td (noted above. By reducing ) Tj ET Q q 0 0 0 rg BT 158.70 332.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 233.41 332.25 Td ( by pre-publication costs, the Company includes the impact of re-investment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 320.25 Td (within the segments, primarily for content and digital platform technology) Tj ET Q q 0 0 0 rg BT 350.50 320.25 Td (. ) Tj ET Q q 0 0 0 rg BT 355.32 320.25 Td (The prior periods have been revised to conform to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 308.25 Td (current period presentation.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 290.25 Td (Selected financial information for the Company) Tj ET Q q 0 0 0 rg BT 266.11 290.25 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 309.5 253.75 m 389.5 253.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 253.75 m 393.5 253.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 253.75 m 473.5 253.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 253.75 m 477.5 253.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 253.75 m 557.5 253.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 239.75 m 389.5 239.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 239.75 m 393.5 239.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 239.75 m 473.5 239.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 239.75 m 477.5 239.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 239.75 m 557.5 239.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 225.75 m 389.5 225.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 225.75 m 473.5 225.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 225.75 m 557.5 225.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 225.75 m 389.5 225.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 225.75 m 473.5 225.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 225.75 m 557.5 225.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 180.75 m 389.5 180.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 180.75 m 473.5 180.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 180.75 m 557.5 180.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 180.75 m 389.5 180.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 180.75 m 473.5 180.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 180.75 m 557.5 180.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 135.75 m 389.5 135.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 121.75 m 389.5 121.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 119.75 m 389.5 119.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 135.75 m 473.5 135.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 121.75 m 473.5 121.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 119.75 m 473.5 119.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 135.75 m 557.5 135.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 121.75 m 557.5 121.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 119.75 m 557.5 119.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 396.10 258.20 Td (Adjusted Revenues) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 377.45 244.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 402.03 244.20 Td (Y) Tj ET Q q 0 0 0 rg BT 407.86 244.20 Td (ear) Tj ET Q q 0 0 0 rg BT 419.77 244.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 466.11 244.20 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 230.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 340.00 230.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 424.00 230.20 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 508.00 230.20 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 215.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 215.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 215.42 Td (944.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 215.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 215.42 Td (978.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 215.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 215.42 Td (1,153.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 200.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 200.42 Td (232.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 200.42 Td (229.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 200.42 Td (230.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 185.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 185.42 Td (283.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 185.42 Td (253.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 185.42 Td (238.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 170.42 Td (Segment ) Tj ET Q q 0 0 0 rg BT 99.22 170.42 Td (Adjusted Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 355.65 170.42 Td (1,461.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.65 170.42 Td (1,460.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 170.42 Td (1,623.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 155.42 Td (Impact of foreign currency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 373.15 155.42 Td (5.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 155.47 Td (\(0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 155.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 155.42 Td (9.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 140.42 Td (Impact of fresh start accounting) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 183.17 144.95 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 140.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.65 140.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 140.47 Td (\(2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 140.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 125.42 Td (T) Tj ET Q q 0 0 0 rg BT 67.41 125.42 Td (otal revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 125.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 355.65 125.42 Td (1,466.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 125.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.65 125.42 Td (1,460.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 125.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 125.42 Td (1,630.5) 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 72.00 108.53 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 104.45 Td (The add-back of the impact of fresh start accounting represents the reduction in revenues recognized as a result of the reduction ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 93.65 Td (in deferred revenue recorded as of March31, 2014.) 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 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 723.5 m 389.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 723.5 m 393.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 723.5 m 473.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 723.5 m 477.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 723.5 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 309.5 723.5 m 389.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 709.5 m 389.5 709.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 723.5 m 393.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 709.5 m 393.5 709.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 723.5 m 473.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 709.5 m 473.5 709.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 723.5 m 477.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 709.5 m 477.5 709.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 723.5 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 477.5 709.5 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 309.5 709.5 m 389.5 709.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 695.5 m 389.5 695.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 709.5 m 393.5 709.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 709.5 m 473.5 709.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 695.5 m 473.5 695.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 709.5 m 477.5 709.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 709.5 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 477.5 695.5 m 557.5 695.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 695.5 m 389.5 695.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 695.5 m 473.5 695.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 695.5 m 557.5 695.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 650.5 m 389.5 650.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 650.5 m 473.5 650.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 650.5 m 557.5 650.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 650.5 m 389.5 650.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 650.5 m 473.5 650.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 650.5 m 557.5 650.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 605.5 m 389.5 605.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 591.5 m 389.5 591.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 589.5 m 389.5 589.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 605.5 m 473.5 605.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 591.5 m 473.5 591.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 589.5 m 473.5 589.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 605.5 m 557.5 605.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 591.5 m 557.5 591.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 589.5 m 557.5 589.5 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 366.45 727.95 Td (Additions to Pr) Tj ET Q q 0 0 0 rg BT 425.37 727.95 Td (e-Publication Costs) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 377.45 713.95 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 402.03 713.95 Td (Y) Tj ET Q q 0 0 0 rg BT 407.86 713.95 Td (ear) Tj ET Q q 0 0 0 rg BT 419.77 713.95 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 466.11 713.95 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 699.75 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 340.00 699.95 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 424.00 699.95 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 508.00 699.95 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 685.17 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 685.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 685.17 Td (54.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 685.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 685.17 Td (69.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 685.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 685.17 Td (72.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 670.17 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 670.17 Td (26.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 670.17 Td (30.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 670.17 Td (35.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 655.17 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 655.17 Td (23.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 655.17 Td (19.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 655.17 Td (20.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 640.17 Td (Segment additions to pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 640.17 Td (104.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 640.17 Td (1) Tj ET Q q 0 0 0 rg BT 452.15 640.17 Td (19.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 640.17 Td (127.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 625.17 Td (Impact of foreign currency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 373.15 625.17 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.65 625.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 625.17 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 610.17 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 192.63 614.70 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 369.80 610.22 Td (\(0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 610.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 610.17 Td (2.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 610.22 Td (\(0.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 610.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 595.17 Td (T) Tj ET Q q 0 0 0 rg BT 67.41 595.17 Td (otal additions to pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 595.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 595.17 Td (103.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 595.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 595.17 Td (122.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 595.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 595.17 Td (127.7) 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 72.00 578.28 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 574.20 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 90.00 563.40 Td (additions.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 545.40 Td (Segment ) Tj ET Q q 0 0 0 rg BT 108.94 545.40 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 534.76 545.40 Td (T) Tj ET Q q 0 0 0 rg BT 540.17 545.40 Td (otal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.40 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 542.21 533.40 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 515.40 Td (The following table reconciles ) Tj ET Q q 0 0 0 rg BT 195.85 515.40 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 270.56 515.40 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 54.00 503.40 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 309.5 472.9 m 389.5 472.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 472.9 m 393.5 472.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 472.9 m 473.5 472.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 472.9 m 477.5 472.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 472.9 m 557.5 472.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 458.9 m 389.5 458.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 458.9 m 473.5 458.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 458.9 m 557.5 458.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 458.9 m 389.5 458.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 458.9 m 473.5 458.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 458.9 m 557.5 458.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 413.9 m 389.5 413.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 413.9 m 473.5 413.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 413.9 m 557.5 413.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 188.89999999999998 m 389.5 188.89999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 174.89999999999998 m 389.5 174.89999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 172.89999999999998 m 389.5 172.89999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 188.89999999999998 m 473.5 188.89999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 174.89999999999998 m 473.5 174.89999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 172.89999999999998 m 473.5 172.89999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 188.89999999999998 m 557.5 188.89999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 174.89999999999998 m 557.5 174.89999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 172.89999999999998 m 557.5 172.89999999999998 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 377.45 477.35 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 402.03 477.35 Td (Y) Tj ET Q q 0 0 0 rg BT 407.86 477.35 Td (ear) Tj ET Q q 0 0 0 rg BT 419.77 477.35 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 466.11 477.35 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 463.15 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 340.00 463.35 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 424.00 463.35 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 508.00 463.35 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 448.57 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 448.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 448.57 Td (183.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 448.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 448.57 Td (250.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 448.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 448.57 Td (359.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 433.57 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 433.57 Td (66.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 433.57 Td (63.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 433.57 Td (55.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 418.57 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 418.57 Td (48.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 418.57 Td (36.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 418.57 Td (23.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 403.57 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 403.57 Td (otal Segment ) Tj ET Q q 0 0 0 rg BT 116.12 403.57 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 190.84 403.57 Td ( less Pre-Publication Costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 403.57 Td (298.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 403.57 Td (350.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 403.57 Td (438.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 388.57 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 203.82 393.10 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 388.57 Td (104.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 388.57 Td (1) Tj ET Q q 0 0 0 rg BT 452.15 388.57 Td (19.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 388.57 Td (127.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 373.57 Td (Impact of fresh start accounting) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 195.17 378.10 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 373.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.65 373.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 373.62 Td (\(171.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 373.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 358.57 Td (Impact of foreign currency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 373.15 358.57 Td (2.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 358.62 Td (\(0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 358.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 358.57 Td (2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 343.57 Td (Equity-based compensation expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.80 343.62 Td (\(17.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 343.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.80 343.62 Td (\(13.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 343.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 343.62 Td (\(1) Tj ET Q q 0 0 0 rg BT 541.13 343.62 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 343.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 328.57 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 207.67 333.10 Td (\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 369.80 328.62 Td (\(8.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 328.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.80 328.62 Td (\(13.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 328.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 328.62 Td (\(10.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 328.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 313.57 Td (Loss on early extinguishment of debt, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 313.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.80 313.62 Td (\(10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 313.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 313.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 298.57 Td (Amortization of pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 359.80 298.62 Td (\(127.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 298.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.80 298.62 Td (\(150.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 298.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 298.62 Td (\(149.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 298.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 283.57 Td (Operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 228.40 283.57 Td (ges) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.80 283.62 Td (\(10.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 283.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.80 283.62 Td (\(26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 283.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 283.62 Td (\(12.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 283.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 268.57 Td (Depreciation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.80 268.62 Td (\(72.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 268.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.80 268.62 Td (\(83.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 268.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 268.62 Td (\(74.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 268.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 253.57 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.80 253.62 Td (\(94.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 253.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.80 253.62 Td (\(92.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 253.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 253.62 Td (\(90.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 253.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 238.57 Td (Other \(expense\) income, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 238.57 Td (10.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 238.62 Td (\(1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 238.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 238.62 Td (\(2.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 238.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 223.57 Td (Interest expense, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 359.80 223.62 Td (\(159.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 223.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.80 223.62 Td (\(156.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 223.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 223.62 Td (\(151.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 223.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 208.57 Td (Reor) Tj ET Q q 0 0 0 rg BT 87.35 208.57 Td (ganization items, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 208.57 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 208.62 Td (\(0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 208.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 208.62 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 208.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 193.57 Td (Benefit from income taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 193.57 Td (73.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 193.57 Td (36.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 193.57 Td (33.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 178.57 Td (Net loss) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 178.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 369.80 178.62 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 178.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 178.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.80 178.62 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 178.57 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 178.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 178.62 Td (\(72.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 178.57 Td (\)) 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 72.00 161.68 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 157.60 Td (Additions to pre-publication costs are excluded from segment ) Tj ET Q q 0 0 0 rg BT 313.95 157.60 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 381.19 157.60 Td ( less Pre-Publication Costs on a constant ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 146.85 Td (currency and accrual basis. ) Tj ET Q q 0 0 0 rg BT 189.54 146.85 Td (The impact of foreign currency exchange related to additions to pre-publication costs was $0.3 ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 136.05 Td (million, less than $0.1 million, and $0.6 million for the fiscal years ended March 31, 2018, 2017 and 2016, respectively) Tj ET Q q 0 0 0 rg BT 519.33 136.05 Td (. ) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 128.13 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 124.05 Td (The add-back of the impact of fresh start accounting includes the flow-through of the inventory step-up of ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 474.13 124.05 Td ($168.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.13 124.05 Td ( ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 529.63 124.05 Td (and the) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 555.87 124.05 Td ( ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 113.25 Td (reduction in deferred revenue of ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 208.19 113.25 Td ($2.3 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 252.19 113.25 Td ( for the fiscal years ended March31, 2016.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 106.53 Td (\(3\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 102.45 Td (Non-core other operating expenses includes primarily severance costs, acquisition-related costs, consulting, bank fees and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 91.65 Td (management fees. ) 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 /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Geographic Information) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (Revenues and long-lived assets, consisting of property) Tj ET Q q 0 0 0 rg BT 289.36 710.25 Td (, equipment and capitalized internal-use software and pre-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 698.25 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 309.5 667.75 m 389.5 667.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 667.75 m 393.5 667.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 667.75 m 473.5 667.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 667.75 m 477.5 667.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 667.75 m 557.5 667.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 653.75 m 389.5 653.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 653.75 m 473.5 653.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 653.75 m 557.5 653.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 653.75 m 389.5 653.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 653.75 m 473.5 653.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 653.75 m 557.5 653.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 608.75 m 389.5 608.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 594.75 m 389.5 594.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 592.75 m 389.5 592.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 608.75 m 473.5 608.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 594.75 m 473.5 594.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 592.75 m 473.5 592.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 608.75 m 557.5 608.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 594.75 m 557.5 594.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 592.75 m 557.5 592.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 544.75 m 389.5 544.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 530.75 m 389.5 530.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 528.75 m 389.5 528.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 544.75 m 473.5 544.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 530.75 m 473.5 530.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 528.75 m 473.5 528.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 544.75 m 557.5 544.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 530.75 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 477.5 528.75 m 557.5 528.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 377.45 672.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 402.03 672.20 Td (Y) Tj ET Q q 0 0 0 rg BT 407.86 672.20 Td (ear) Tj ET Q q 0 0 0 rg BT 419.77 672.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 466.11 672.20 Td (ch 31,) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 658.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 340.00 658.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 424.00 658.20 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 508.00 658.20 Td (2016) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 643.43 Td (Revenues:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 628.42 Td (United States) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 628.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 355.65 628.42 Td (1,147.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 628.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.65 628.42 Td (1,182.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 628.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 628.42 Td (1,367.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 613.42 Td (Rest of world) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 613.42 Td (319.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 613.42 Td (277.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 613.42 Td (263.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 598.42 Td (T) Tj ET Q q 0 0 0 rg BT 73.76 598.42 Td (otal revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 598.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 355.65 598.42 Td (1,466.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 598.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.65 598.42 Td (1,460.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 598.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 598.42 Td (1,630.5) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 579.43 Td (Long-lived assets:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 564.42 Td (United States) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 564.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 564.42 Td (366.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 564.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 564.42 Td (405.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 564.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 564.42 Td (454.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 549.42 Td (Rest of world) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 549.42 Td (29.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 549.42 Td (31.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 549.42 Td (33.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 534.42 Td (T) Tj ET Q q 0 0 0 rg BT 73.41 534.42 Td (otal long-lived assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 534.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 534.42 Td (396.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 534.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 534.42 Td (437.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 534.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 534.42 Td (488.3) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 509.25 Td (20) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 509.25 Td (. ) Tj ET Q q 0 0 0 rg BT 68.82 509.25 Td (V) Tj ET Q q 0 0 0 rg BT 74.75 509.25 Td (ALUA) Tj ET Q q 0 0 0 rg BT 102.34 509.25 Td (TION ) Tj ET Q q 0 0 0 rg BT 129.85 509.25 Td (AND QUALIFYING ) Tj ET Q q 0 0 0 rg BT 220.97 509.25 Td (ACCOUNTS) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 287.5 475.75 m 338.5 475.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 338.5 475.75 m 342.5 475.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 342.5 475.75 m 392.5 475.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 53.5 443.75 m 228.5 443.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 232.5 443.75 m 283.5 443.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 287.5 443.75 m 338.5 443.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 342.5 443.75 m 392.5 443.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 396.5 443.75 m 447.5 443.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 451.5 443.75 m 502.5 443.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 506.5 443.75 m 557.5 443.75 l s BT /F3 8.00 Tf ET q 0 0 0 rg BT 56.00 480.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 320.70 480.20 Td (Additions) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 448.20 Td (Description) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 237.35 466.20 Td (Balance at) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 237.95 457.20 Td (Beginning) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 239.85 448.20 Td (of Period) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 293.35 466.20 Td (Charge to) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 293.60 457.20 Td (Costs and) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 294.70 448.20 Td (Expenses) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 347.85 466.20 Td (Charge to) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 355.55 457.20 Td (Other) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 349.25 448.20 Td (Accounts) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 400.95 448.20 Td (W) Tj ET Q q 0 0 0 rg BT 409.87 448.20 Td (rite Offs) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 454.30 448.20 Td (T) Tj ET Q q 0 0 0 rg BT 459.97 448.20 Td (ranslation) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 511.35 466.20 Td (Balance at) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 518.60 457.20 Td (End of) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 518.75 448.20 Td (Period) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 434.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 80.58 434.20 Td (Y) Tj ET Q q 0 0 0 rg BT 86.41 434.20 Td (ear) Tj ET Q q 0 0 0 rg BT 98.32 434.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 144.66 434.20 Td (ch 31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 419.42 Td (Allowance for doubtful accounts) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.00 419.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.15 419.42 Td (9.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 290.00 419.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 419.42 Td (5.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 345.00 419.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 419.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.00 419.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.80 419.47 Td (\(2.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.65 419.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 454.00 419.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.15 419.42 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 509.00 419.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 419.42 Td (12.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 404.42 Td (Sales return reserves) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.15 404.42 Td (75.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 404.42 Td (232.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 372.80 404.47 Td (\(0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.65 404.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.80 404.47 Td (\(237.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.65 404.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.15 404.42 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 404.42 Td (70.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 389.42 Td (Deferred tax valuation allowance) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.15 389.42 Td (1) Tj ET Q q 0 0 0 rg BT 267.15 389.42 Td (1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.80 389.47 Td (\(3.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.65 389.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 372.80 389.47 Td (\(0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.65 389.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 433.65 389.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.15 389.42 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 389.42 Td (7.0) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 371.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 80.58 371.20 Td (Y) Tj ET Q q 0 0 0 rg BT 86.41 371.20 Td (ear) Tj ET Q q 0 0 0 rg BT 98.32 371.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 144.66 371.20 Td (ch 31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 356.42 Td (Allowance for doubtful accounts) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.00 356.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.15 356.42 Td (10.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 290.00 356.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 356.42 Td (5.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 345.00 356.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 356.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.00 356.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.80 356.47 Td (\(5.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.65 356.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 454.00 356.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.80 356.47 Td (\(0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 498.65 356.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 509.00 356.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 356.42 Td (9.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 341.42 Td (Sales return reserves) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.15 341.42 Td (92.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 341.42 Td (31) Tj ET Q q 0 0 0 rg BT 322.15 341.42 Td (1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 372.80 341.47 Td (\(2.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.65 341.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.80 341.47 Td (\(324.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.65 341.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.80 341.47 Td (\(0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 498.65 341.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 341.42 Td (75.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 326.42 Td (Deferred tax valuation allowance) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.15 326.42 Td (15.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.80 326.47 Td (\(4.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.65 326.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 326.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 433.65 326.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 326.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 326.42 Td (1) Tj ET Q q 0 0 0 rg BT 541.15 326.42 Td (1.0) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 308.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 80.41 308.20 Td (Y) Tj ET Q q 0 0 0 rg BT 85.91 308.20 Td (ear) Tj ET Q q 0 0 0 rg BT 98.24 308.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 144.58 308.20 Td (ch 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 293.42 Td (Allowance for doubtful accounts) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.00 293.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.15 293.42 Td (6.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 290.00 293.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 293.42 Td (5.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 345.00 293.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 293.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.00 293.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.80 293.47 Td (\(1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.65 293.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 454.00 293.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.80 293.47 Td (\(0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 498.65 293.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 509.00 293.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 293.42 Td (10.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 278.42 Td (Sales return reserves) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 257.15 278.42 Td (101.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 278.42 Td (388.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 376.15 278.42 Td (1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.80 278.47 Td (\(398.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.65 278.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.80 278.47 Td (\(1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 498.65 278.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 278.42 Td (92.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 263.42 Td (Deferred tax valuation allowance) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.15 263.42 Td (17.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.80 263.47 Td (\(0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.65 263.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 263.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 433.65 263.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.80 263.47 Td (\(1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 498.65 263.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 263.42 Td (15.7) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 221.45 Td (21) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 221.45 Td (. SUBSEQUENT) Tj ET Q q 0 0 0 rg BT 136.07 221.45 Td ( EVENTS ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 76.00 203.45 Td (There were no material subsequent events identified through May 18, 2018, the date these financial statements were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 191.45 Td (issued. ) Tj ET Q endstream endobj 195 0 obj <> /View <>>>>> endobj 196 0 obj <> /View <>>>>> endobj 197 0 obj <> endobj 198 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>|;