Forward-Looking Statements

and Non-GAAP Measures

This presentation and oral statements made in connection with this presentation contain certain statements that are not historical facts, including
information regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, including billings and
net sales; financial performance and condition; liquidity; products and services, including for new adoptions; outlook for full year 2018; prospects; growth;
markets and market share; strategies, including with respect to investing in our core solutions and extensions businesses and operational excellence;
efficiency and cost savings initiatives; the industry in which we operate; and potential business decisions. Those statements constitute “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties and other
factors that could cause our actual results to differ materially from the results express in or implied by our forward-looking statements, including, but not limited to, those
identified under the caption “Forward-Looking Statements” in our news release issued on August 2, 2018 and in the “Special Note Regarding Forward-Looking
Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation, and do not expect,
to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

In addition, this presentation and oral statements made in connection with this presentation reference non-GAAP financial measures, such as adjusted EBITDA and
free cash flow, and operating measures, such as billings. The use of these non-GAAP measures are limited as they include and/or do not include certain items not
included and/or included in the most directly comparable GAAP measure. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP
financial measures (to the extent available without unreasonable efforts) and a calculation of operating measures are provided in the appendix to this presentation and
in our news release issued on August 2, 2018, which are posted on hmhco.com under the Investor Relations section.

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 Market Opportunity &
Strategy

3
The HMH Business
Intervention

Professional
Trade Extensions Learning
13% 45%

Core Solutions
42%

Supplemental

Sources: 2017 HMH Billings Mix

 13,000 Districts

3,000,000 Teachers 88,000 Schools 50,000,000 Students

650 Sales Representatives 42,000 Service Engagements

5
 Classrooms consist of students with diverse academic ability,
requiring different instructional needs
Core Solutions

Professional Services

Supplemental

Intervention

English language
development

6
 Riverside Divestiture: Overview
• HMH to sell Riverside Clinical and Standardized Testing to Alpine Investors for $140 million in cash

• Riverside Portfolio was non-core to our 2020 strategy

• Divestiture sharpens focus and creates opportunity to accelerate investment in faster growing, high
margin Extensions

• Riverside generated Billings of approximately $80 million in 2017

• Approximately $135 million of net proceeds expected to be re-deployed in faster growing, high
margin Extensions opportunities

• Year-to-date results and full year guidance will be adjusted to reflect the divestiture by the Q3 2018
earnings call

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 U.S. K–12 Market: Instructional Materials Spend
$11B
Magazines
Video
Trade Books
Manipulative

Print Supplements

Digital Supplements

State Level Tests

Courseware

Assessment

Services

$1.4B
$1.2B
Basal Curriculum
$.2B

Instructional Materials Spend 2017 HMH Education Billings 2017 HMH International & Trade Total 2017 HMH Billings
Billings

Sources: 2017 HMH Billings

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 HMH Extensions: Market Opportunity
Supplemental
$2.0b
Professional
Learning
$2.3b
4% Growth
3% Growth

$6B

4% Growth

Intervention
$1.5b

Sources: Simba, Company Annual Reports, SEC, Oliver Wyman November 2014 Intervention Web Survey, Oliver Wyman analysis, RAND Corporation School Leadership Interventions Under ESSA report; as of 2017.
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From K12 Publisher to Learning Company
 HMH Strategy: Three Pillars
Enhance & Extend the Core
• Provide highly differentiated products
that leverage data analytics and
learning science to personalize learning
• Expand into faster growing, higher
margin extensions in Supplemental,
Intervention Solutions and Professional
Services
• Platform + advanced analytics +
continuous delivery = efficacy engine
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Develop Integrated Solutions
• Integrate offerings to unlock true value
to customers designed to improve
student outcomes
• Increase revenue through cross selling
and upselling go-to-market initiatives
Achieve Operational Excellence
• Standardize IT infrastructure,
streamline back office and standardize
product catalog to eliminate
unnecessary variation
• Move to Lean Agile Continuous
Delivery model for Software
development
• Improve processes and technology to
elevate customer experience
 Transforming from

HMH Differentiators Publisher to

Learning Company

Submitted: English on April 6, 2018 • Spanish on May 18, 2018

 Financial
Overview

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 Long-Term Billings1 Growth Framework
Trade
Business Line Billings Growth Framework Publishing
13%

Annual growth in line with market

Core Solutions Core Solutions
Long-term average growth in low single digits
42%
Extensions
45%
Extensions Low-to-mid single digits

Trade Low single digits Billings Mix in 2017

1 An operating measure which we derive from net sales taking into account the change in deferred revenue. See appendix for a calculation of this measure.
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 2017 Cost Structure
Our Adjusted Fixed Cost Structure Benefited From Restructuring Actions Taken in 2017-
Targeting $70-80m in Run-Rate Cost Savings

47%
2017 Adjusted Fixed
Costs Percent of
Billings1

38%
2017 Adjusted
Variable Costs
Percent of Billings1

1 An operating measure which we derive from net sales taking into account the change in deferred revenue. See calculation of this metric in the appendix to this presentation.
2 Please see appendix for a reconciliation of non-GAAP measures (to the extent available without unreasonable efforts).
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 Variability in Content Spend Driven by
Major Adoptions $139

$127
$124
($ in
Program Development commences
Millions) $116 ELA
up to two years before major
Math
adoptions

$104
Social
Higher spend associated with:
Studies • Multiple major adoptions in upcoming
Math &
Reading
Social
Science
two years
Studies
• Reading and Math programs
Reading

In 2017 the calendar includes adoptions in:

Science &
Math & Social • California Social Studies (2018)
Science Studies
& Reading Social
Math
• Florida Science (2018)
Studies
Social
Studies
• Texas Reading (2019)
2013 2014 2015 2016 2017 • Florida Math (2019)
• California Science (2019)
CA Math TX Social CA Reading CA Social
Studies Studies
First Year FL Math, Reading
of Adoption FL Science
TX Math, Science

Note: Amounts are as reported and do not include content spend of the Ed Tech business prior to the May 29, 2015 acquisition.
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 PP&E Capital Investment Supports
Operating Model Transformation
Major Components

FACILITIES
($ in • 4 office moves in 2016 (non recurring)
Millions) • Modest ongoing maintenance

IT SYSTEMS
• New ERP implementation (planning)
• System updates (ongoing)
• Ongoing maintenance

PLATFORM
• Ongoing Ed feature enhancements
• Maintenance of legacy platforms
until sunset

$60 $67 $83 $106 $58

2013 2014 2015 2016 2017

Note: Amounts are as reported and do not include PP&E spend of the Ed Tech business prior to the May 29, 2015 acquisition.
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 Looking Ahead

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 Understanding HMH Share of
U.S. K-12 Market Total AAP Market
6 Contributing Members
Includes:
o Basal Curriculum
Total U.S. K–12 Market o Program-Based Services
o Educational Assessment
Instructional Materials o Coursework

Disciplines Include:
• Math
• Reading/Language Arts
• Science
Outside U.S. K–12 Market • Social Studies
• International • World Languages
• Trade • Vocational
HMH Share of
Addressable
AAP Market
$11B • Music
• Advanced Placement
HMH Revenue

HMH’s Addressable
Outside AAP but within U.S. K–12 Market AAP Market
• Practice-Based Services
• Clinical Assessment • Only includes opportunities
• Extensions not included in AAP Market where HMH has products (e.g.,
excludes Vocational, Music, and
Advanced Placement)

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 HMH’s AAP Addressable Market
Open Territory Adoption
PEAK-TO-PEAK

TROUGH-TO-TROUGH
Projected Market Drivers
~$3.1
($ in Billions)
Adoption States
• 2018 : FL – Science (K–12)
CA – Social Studies (K-8)
• 2019 : TX – English Language Arts (K-8)
FL – Math (K-12)
CA – Science (K-8) and
Social Studies (K-8) (year 2)
• 2020 : TX – English Language Arts (6-12)
FL – English Language Arts (K-12)
CA – Science (K-8) (year 2)

Open Territory
• State education expenditure growth
• Common Core program replacement approaching

2013 1 2014 1 2015 1 2016 2017 2018P 2 2019P 2 2020P 2

44% 48% 42% 39% 38% HMH Share

($29m) $308m $162m ($86m) ($62m) Free Cash Flow3
1HMH’s 2013, 2014 and 2015 AAP addressable market and market share are presented on a pro forma basis as if the Ed Tech acquisition had occurred on January 1, 2013.
2HMH’s 2018, 2019 and 2020 AAP addressable market assumptions are as of February 22, 2018.
20 3Free Cash Flow amounts are as reported and do not include Free Cash Flow of the EdTech business prior to the May 29, 2015 acquisition.
 How We Will Grow Free Cash Flow
• Increase market share in Core Solutions
o Launch of next generation Reading & Math in 2019

o Progress on integrated solutions

• Grow our Extensions businesses

o Invest for future growth (organically, partnerships and acquisition)

• Manage fixed costs to offset inflationary items

o Process and systems re-engineering

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Questions?
 Appendix

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 2018 Billings2 Calculation/
2017 Billings2 & Net Sales Reclassification1
($ in Millions) 2017 Reclassified 2018
Q1 Q2 Q3 Q4 Total Q1 Q2
Core Solutions
Net Sales $65 $176 $277 76 595 $61 $152
Change in Deferred Revenue 9 22 (21) (10) (25) 13
(19)
Billings $46 $185 $299 $55 $585 $36 $165
Extensions
Net Sales $120 174 $204 134 632 $122 $187
Change in Deferred Revenue (18) (7) (14) 1
31 (10) (5)
Billings $102 $168 $234 $124 $628 $108 $188
Total Education $148 $353 $533 $179 $1,213 $145 $353

Trade
Net Sales $37 $42 $51 50 181 $37 $36
Change in Deferred Revenue - - (1) - (1) - -
Billings $36 $42 $50 $50 $180 $37 $36
Consolidated
Net Sales $222 $393 $532 $261 $1,408 $220 $376
Change in Deferred Revenue (38) 2 52 (31) (15) (38) 14
Total HMH $184 $395 $584 $229 $1,392 $182 $389
1 The Company has recast prior results to report International net sales and billings in the Core Solutions and Extension categories of our Education segment, whereas previously all International net sales and billings were reported in the Core Solutions
category. Further, certain other products and/or certain other products have been recast between the Core Solutions and Extension categories to better align with the manner that the businesses are now viewed and managed. Lastly, an elimination
entry impacting each of our Education and Trade segments in the fourth quarter of 2017 has been recast to attribute certain revenue to the Education segment originally reported in the Trade segment to better align such sales to the segment selling
to the end customer. The Company’s first quarter 2018 quarterly report on Form 10-Q dated May 3, 2018 is the first to reflect the above changes on a comparative basis.
2 Details may not sum due to rounding.
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 Reconciliation of Free Cash Flow
($ in 2013 2014 2015 2016 2017
Millions)
Cash Flows from operating activities

Net cash provided by operating activities $157 $491 $348 $144 $135

Cash Flows from investing activities

Additions to pre-publication costs (127) (116) (104) (124) (139)

Additions to property, plant, and equipment (60) (67) (83) (106) (58)

Free Cash Flow $(29) $308 $162 $(86) $(62)

Note: Details may not sum to total due to rounding.

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 Non-GAAP Reconciliation – Adjusted Fixed
and Adjusted Variable Costs
$ in Millions Full Year
2016 2017
Cost of sales per Form 10-K $ 802 $ 790
Selling and administrative per Form 10-K 700 655
1,502 1,445

Less:
Depreciation - cost of sales (41) (38)
Depreciation - selling and administrative (39) (37)
Publishing rights amortization - cost of sales (61) (46)
Pre-publication amortization - cost of sales (130) (126)
Stock-compensation - selling and administrative (11) (11)
Restructuring/Integration (14) 0
Legal settlement (10) 4
Fees, expenses for debt/acquisition matters (1) (1)
$ 1,194 $ 1,189

% of Billings1 % of Billings1
Fixed expenses $ 673 48% $ 657 47%
Variable expenses 521 37% 532 38%
$ 1,194 $ 1,189

Net sales $ 1,373 $ 1,408

Change in deferred revenue 38 (15)
Billings1 $ 1,410 $ 1,392
1 Details may not sum to total due to rounding. An operating measure which we derive from net sales taking into account the change in deferred revenue.
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 Forward-Looking Non-GAAP Reconciliation –
Adjusted Fixed and Variable Costs and Free Cash Flow
Management has presented certain forward-looking statements about the Company’s expected future performance on a non-GAAP basis, including adjusted fixed and variable
costs and free cash flow. Management is unable to present a quantitative reconciliation of these forward-looking non-GAAP financial measures to their most directly comparable
forward-looking GAAP financial measures of cost of sales and selling and administrative expense and net cash provided by operating activities because management cannot
reliably predict all of the necessary components of such GAAP measures on a forward-looking basis.

The adjusted fixed and variable costs are derived by excluding and/or including certain items required to be included in/excluded from the most directly comparable GAAP
financial measures of cost of sales and selling and administrative expense. The determination of the items excluded from/included in adjusted fixed and variable costs is a matter
of management judgment and depends upon, among other things, the nature of the underlying items recognized in a given period. Management excludes/includes the following
items from adjusted fixed and variable costs and such items may also be excluded/included in future periods and could be significant in amount.

• Interest expense, interest income, tax benefit/expense, depreciation and amortization expense
• Non-cash charges related to stock compensation, asset impairments and unrealized gains and losses for derivative instruments
• Fees, expenses or charges related to the acquisition of other businesses, including purchase accounting adjustments, integration costs and transaction costs
• Fees, expenses or charges related to securities offerings and debt refinancings
• Charges associated with restructuring and cost saving initiatives, including severance, separation and facility closure costs
• Certain legal settlements or awards
• Non-routine charges or gains

Our inability to present a quantitative reconciliation of adjusted fixed and variable costs to cost of sales and selling and administrative expense on a forward-looking basis also
prevents us from being able to present a quantitative reconciliation of free cash flow to net cash provided by operating activities on a forward-looking basis.

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