Q3 2016 Investor Presentation

McGraw-Hill Education
Q3-2016 Update
November 8, 2016
This presentation has been prepared for existing debt holders of McGraw-Hill Global Education Holdings LLC and MHGE Parent, LLC .
Final

Important Notice
Forward-Looking Statements
This presentation includes statements that are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can be identified by the use of
forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their
negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of
places throughout this presentation and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of
operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the
future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity,
and the development of the industry in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this
presentation. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the
forward-looking statements contained in this presentation, those results of operations, financial condition and liquidity or developments may not be indicative of results or
developments in subsequent periods.
Any forward-looking statements we make in this presentation speak only as of the date of such statement, and we undertake no obligation to update such statements.
Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and
should only be viewed as historical data.
Non-GAAP Financial Measures
Certain financial information included herein, including Billings, EBITDA and Adjusted EBITDA, are not presentations made in accordance with U.S. GAAP, and use of such
terms varies from others in the same industry. Non-GAAP financial measures should not be considered as alternatives to income from continuing operations, income from
operations or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance or cash flows as measures of liquidity. Non-
GAAP financial measures have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for results as reported under U.S.
GAAP. This presentation includes a reconciliation of certain non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with
U.S. GAAP.
Adjusted EBITDA, which is defined in accordance with our debt agreements, is provided herein on a segment basis and on a consolidated basis. Adjusted EBITDA on a
consolidated basis is presented as a debt covenant compliance measure. Management believes that the presentation of Adjusted EBITDA is appropriate to provide
additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future as well
as other items to assess our debt covenant compliance, ability to service our indebtedness and make capital allocation decisions in accordance with our debt agreements.
2

YTD Sept. 2016 MHE Performance Review
Continued channel destocking in Higher Ed and timing in K-12 adversely impacted Q3
 YTD Billings declined 6.7% to $1.6 billion; YTD Adjusted EBITDA declined 13.5% to $430 million
- YTD market share gains achieved in Higher Ed net sales (+34 bps) and K-12 adoptions (+439 bps)
 Q3-16 was expected to be a more challenging quarter due to the timing shift in K-12 new adoptions (Q3 to
Q2) and a smaller front-list in Higher Education that would be partially offset by an expected recovery in
ordering from distributors in Higher Education
 However, Higher Education results fell short of expectations with a greater than anticipated decline in print
Billings due to distributor destocking that did not abate in Q3-16 and, therefore, did not mitigate the
impact of our smaller front-list
 Higher Education digital Billings, paid activations and unique users of digital adaptive learning products
grew at double-digit rates in YTD 2016, partially offsetting the print decline
 Strong K-12 YTD performance in the California English Language Arts (ELA) adoption partially offset the
anticipated Y/Y decline resulting from the 2016 smaller new adoption market
- Q3-16 impacted by expected timing shifts between Q2-2016 California sales and Q3-2015 Texas sales
Source: Management Practice, Inc. and Association of American Publishers (AAP)
Note: In compliance with SEC interpretative guidance, we now refer to ‘Adjusted Revenue’ as ‘Billings’ throughout the presentation 4

YTD Sept. 2016 MHE Performance Review (continued)
Continued strong digital gains in Higher Ed
Higher Ed Overview
 Higher Education experienced strong digital Billings growth YTD but slower growth in Q3-16
- Paid activations of Connect grew 11% YTD and 9% in the quarter
- Digital Billings grew 11% YTD and 7% in the quarter
 Slower growth rate of digital Billings and paid activations in Q3-16 is due in part to:
- Continued destocking by distributors which includes not only print textbooks we previously
sold to them, but also physical digital activation cards held in inventory
- Smaller front-list which also impacted digital Billings and paid activations (appendix slide 30)
 E-Commerce, 90%+ digital solutions primarily sold direct-to-students, drove $162M net sales YTD,
an increase of 25% Y/Y
- As of October 31, YTD net sales of e-commerce exceeded YTD net sales from our three
largest distributors combined
5
Note: In compliance with SEC interpretative guidance, we now refer to ‘Adjusted Revenue’ as ‘Billings’ throughout the presentation

Decline in print sales higher than anticipated
Higher Ed Overview (continued)
 Industry is undergoing a challenging year with the overall market reporting sharply declining gross and net
sales (appendix slide 31)
 Continued to take market share YTD on a net sales basis, according to Management Practice, Inc. (MPI) – key
factors influencing our performance were:
- Our digital revenues and paid activations continued to grow at double-digit rates YTD
- Actual product return dollars for our Higher Education business are running below prior year and below
the industry through September 30 and October 31 (appendix slide 31)
- Our YTD results do not reflect any adjustments to the reserve rate for returns pending the completion
of the season (November) at which time we will have better visibility into trends
- However, our performance was adversely impacted by two factors:
• A net sales decline in our 2016/2017 (front-list) print copyrights (sold in 2016) which are 36%
smaller on a YTD basis than 2015/2016 copyrights (sold in 2015) (appendix slide 30)
• Distributor destocking, which we expected to begin to abate in Q3-16, continued
6Note: In compliance with SEC interpretative guidance, we now refer to ‘Adjusted Revenue’ as ‘Billings’ throughout the presentation

Decline in print sales higher than anticipated
 2016 is expected to be the second straight year of a back-to-back industry decline since the
2011/2012 period; the market returned to growth in 2013 and 2014
- Distributor sell-through visibility remains challenging as students may buy new, used or
rental from multiple sources (MHE e-commerce, Amazon, etc.)
- Distributor purchasing patterns tend to be cyclical as excess ordering is typically followed
by higher product returns followed by reduced ordering and lower returns ultimately
leading to a return to normalized ordering
 With enrollment declines concentrated in the for-profit channel, our exposure remains
comparatively lower given only 9% of Higher Ed Billings in YTD 2016 were from that sector
(appendix slide 31)

Prospects should improve in 2017
 Despite disruption among distributor ordering, we believe opportunities to stabilize the print decline
and increase digital sell-through will improve for McGraw-Hill Education in 2017
- Anticipate Q4-16 to be challenging as distributor destocking continues
 Expect a larger 2018 copyright list, which begins to sell in 2017, as we strategically revise extended
titles
- An increase in revised titles tends to decrease the used/rental alternatives
- Revisions of existing titles and the introduction of new titles has historically been an effective
way to disintermediate used and rental; however, for some disciplines, too frequent revisions
drove lower classroom sell-through which prompted revision cycle extension
- A stronger front-list will drive Billings growth for both print and digital and will accelerate digital
adaptive conversion and adoption
 Distributor destocking should abate as back-list inventories are depleted and purchases of new
copyrights increase; returns have declined as inventories are depleted

Strong K-12 performance offsets the smaller new adoption market
K-12 Overview
 Entered 2016 expecting a Y/Y decline in K-12 Billings due to a smaller new adoption market vs. prior year
(appendix slide 32)
 Stronger than anticipated new adoption market share in California (K-5) ELA partially offset the expected
YTD decline; estimate ~70% K-5 market share in the first year of the CA ELA adoption
 Billings comparability in Q3 was unfavorably impacted by the timing of adoptions vs. last year (CA
primarily Q2-16; TX primarily Q3-15)
 Open Territory down slightly on a YTD basis; lower than expected Q3 performance in a few larger markets
- Sales force refinements underway to drive stronger 2017 Open Territory performance
 Digital Billings were lower this year strictly due to the sales mix; K-12 ALEKS unique users are up 30% Y/Y
and paid activations of ConnectEd are up 46% Y/Y
- Math and social studies Billings in 2015 were more weighted towards digital as compared to
reading/literacy sales this year which are typically less digital
- All of our programs are “blended” (digital/print) although digital Billings and the digital percent of
total Billings will vary with the sales mix
9

Robust new adoption market over the 2017-2019 period
K-12 Overview (continued)
 87 bps improvement in YTD U.S. market share as adoption gains offset nominal sales decline
in Open Territory
 New adoption market will expand over the 2017-2019 period with significant key opportunities
(appendix slide 33)
 Strong performance in 2016 positions us well for the second and third year of the California ELA
adoption
- Study Sync, our digital literature program with print supplement, performed significantly
above expectations as an alternative to traditional print
- Anticipate ~50% of total California ELA adoption opportunity purchases in 2017 (only 1/3
fulfilled in 2016)

Renewing and Extending our Brand through Innovation
 Higher Education and Professional teams are partnering with a number of educational institutions on
initiatives to improve student performance by using McGraw-Hill Education software. These initiatives
include:
- Cleveland Clinic will launch a new internal medicine course in Spring 2017 using SmartBook
technology – combining both their content and MHE content [Link: New Courses unveiled at
Cleveland Clinic Innovation Summit]
- Georgia Tech announced that it will launch in Spring 2017 an innovative ‘Introduction to
Computing course’ using their content and powered by SmartBook technology [Link: Python CS
1301 launch ]
- Arizona State University is researching ALEKS efficacy based on the over 20,000 students now
involved in the Global Freshman Academy

Renewing and Extending our Brand through Innovation (continued)
 Pilot launch of Connect2 which delivers complete course solution to customers in international markets
- Created from our Digital Learning Ecosystem platform which enables modular content, open
ecosystems and allows customers to use products in the way that best matches their needs
 Launched the Learning Science Research Council
 The goal of learning science research at
McGraw-Hill Education is to maximize
the impact of our technology and
solutions for improving learning
outcomes
 The research exists at the apex of data
science and learning theory
 It is conducted by a talented in-house
team of computer scientists, educational
researchers and statisticians in
partnership with leading academics

Executing on the Digital Strategy
Redbird Advanced Learning and United Arab Emirates contract
13
 Acquisition of Redbird Advanced Learning and
its adaptive digital products continues our
transformation from a textbook publisher to a
learning science company
 Expands the depth of our adaptive learning
portfolio especially in grades K-5
 Provides for a full K-12 adaptive math offering
when coupled with ALEKS
 Founded on Stanford research, the digital
curriculum is already recognized within the
personalized learning space
 Executed a seven year agreement to develop,
deliver and maintain local language and
culturally adapted digital K-12 math and science
curriculum for the United Arab Emirates (print
can be obtained at client discretion)
 Noteworthy achievement that leverages MHE
assets to develop a localized solution for a
strategically important market
 Expands the significance of the MHE brand and
footprint within the region
 Digital and localized learning solutions position
us well for success in other countries
Financial terms have not been disclosed for the UAE contract

MHE ADAPTIVE LEARNING PLATFORM USERS AND USAGE
CONTINUED TO RAMP
 Paid activations, unique users and user engagement on digital
adaptive learning products continued to grow at double-digit
rates
 Adaptive products continue to gain recognition in the market
among students and professors
- 68M assignments submitted through Connect, up 12% Y/Y
- ~6.3B interactions (questions answered) on LearnSmart since
2009
- ~4.5B interactions (questions answered) on ALEKS since 2010
YTD Sept. 2016 Digital Highlights
10 Billion+ cumulative adaptive interactions
2.2
2.6
3.0 2.8
3.1
2013 2014 2015 YTD 2015 YTD 2016
0.7 1.0
1.6
1.3
1.7
0.8
0.9
1.1
1.0
1.2
1.5
2.0
2.7
2.3
2.9
2013 2014 2015 YTD 2015 YTD 2016
K-12 Higher Ed
+11%
CONNECT/LEARNSMART PAID ACTIVATIONS (HIGHER ED)
ALEKS UNIQUE USERS (HIGHER ED & K-12)
+25%
14
(Millions)
CONNECT-ED UNIQUE USERS (K-12)
2.2
3.5
5.2
4.0
5.9
2013 2014 2015 YTD 2015 YTD 2016
+46%

$11 $13
$37 $39
38% 46% 45% 48%
$13 $16
$24
$30
13% 17% 11% 15%
$169
$130
$276
$214
39% 34% 38% 30%
$160 $171
$288
$319
42% 52% 46% 57%
$355 $330
$624 $603
37% 40% 38% 39%
15
YTD Sept. 2016 Digital Billings
Continued digital growth in Higher Ed; product mix impacting K-12
($ in Millions)
MCGRAW-HILL EDUCATION
(3%)
(7%)
K-12
(22%)
Q315 Q316 YTD 15 YTD 16
HIGHER ED
Q315 Q316 YTD 15 YTD 16
+7%
Q315 Q316 YTD 15 YTD 16
Q315
PROFESSIONAL
+7%
+13%
Q316 YTD 15 YTD 16
INTERNATIONAL
+28%
+18%
Q315 Q316 YTD 15 YTD 16
% of Total
Billings
% of Total
Billings
% of Total
Billings
% of Total
Billings
% of Total
Billings
 MHE digital Billings impacted
by K-12 product mix
 Reading adoption in 2016 less
digital than math and social
studies in 2015
(23%)
+11%

E-COMMERCE CHANNEL CONTINUES TO DRIVE STRONG
DIGITAL SALES
 YTD Higher Ed digital Billings expanded 1,100 bps Y/Y as a
percentage of total Higher Ed Billings, from 46% to 57%
 YTD Higher Ed digital Billings expanded 11% Y/Y driven by
double-digit growth in e-commerce Billings
 YTD 2016 net sales through the proprietary e-commerce
channel were nearly equivalent to net sales from our three
largest distributors combined and the trend continued into
October
 E-commerce channel continues to drive strong growth in
Connect/LearnSmart paid activations
- Total paid activations of Connect/LearnSmart increased 9%
Y/Y in the quarter and 11% YTD
- E-commerce net sales are primarily digital and direct-to-
student
$40
$67
$105
$140
$129
$162
2012 2013 2014 2015 YTD 2015 YTD 2016
Higher Ed Billings Mix
YTD Sept. 2016 Higher Ed Digital Billings
E-Commerce is a significant sales channel in Higher Ed
DIGITAL VS. PRINT BILLINGS MIX %
E-COMMERCE BILLINGS
16
+25%
($ in Millions)
29% 34% 38% 45% 46%
57%
71% 66% 62% 55% 54%
43%
2012 2013 2014 2015 YTD 2015 YTD 2016
Digital Print

$952
$832
$1,663
$1,551
$489
$410
$498
$430
51% 49% 30% 28%
Total BillingsMHE TOTAL BILLINGS
18
($ in Millions)
Adjusted EBITDAMHE ADJUSTED EBITDA
Digital %
Constant FX (12%) $834 (6%) $1,558
(13%)
Constant FX (16%) $410 (14%) $430
(16%)
(14%)
Margin %
(7%)
Q315 Q316 YTD 15 YTD 16
Q315 Q316 YTD 15 YTD 16
37% 40% 38% 39%
McGraw-Hill Education Financial Review
Print pressure in Higher Ed partially offset by digital and strong YTD K-12 performance
BILLINGS GROWTH IMPACTED BY SMALLER FRONT LIST
AND CONTINUED CHANNEL DESTOCKING IN HIGHER ED
 McGraw-Hill Education YTD Billings decreased 7% Y/Y, 6%
on constant FX
- Lower print Billings in Higher Ed were partially offset by
growth in Higher Ed digital Billings and strong YTD K-12
performance
- Strong U.S. dollar unfavorably impacted overall YTD
Billings by $7M
 Q3-16 Higher Ed Billings decreased due to a greater than
anticipated decline in print Billings
- Billings unfavorably impacted by distributor destocking
and a smaller MHE front-list
- Distributor purchasing patterns tend to be cyclical and
destocking should abate as inventories are depleted
- Expect larger 2018 MHE copyright list for sale in 2017
YTD ADJUSTED EBITDA IMPACTED BY LOWER BILLINGS
 YTD Adjusted EBITDA unfavorably impacted by lower
Billings, primarily in Higher Ed print; adjusted EBITDA in the
quarter unfavorably impacted by lower K-12 Billings
 Aggressively pursuing near-term cost savings to mitigate
EBITDA impact of lower Billings

$235
$193
$246
$197
61% 59% 39% 35%
$386
$326
$630
$562
Higher Ed Financial Review
Gaining market share on a net sales basis in Higher Ed despite industry decline
19
($ in Millions)
Total Billings
Adjusted EBITDA
HIGHER ED TOTAL BILLINGS
HIGHER ED ADJUSTED EBITDA
Q315 Q316 YTD 15 YTD 16
Digital %
(16%)
(11%)
Margin %
42%
52% 46% 57%
Q315 Q316 YTD 15 YTD 16
GAINING MARKET SHARE DESPITE SMALLER FRONT-LIST
AND CHANNEL DESTOCKING
 YTD Higher Ed Billings declined 11% as strong gains in digital
sales were more than offset by the larger than anticipated
decline in print Billings industry-wide driven by:
- A smaller (expected) MHE front-list
- Continued destocking in the channel as distributors tighten
inventory management
 YTD Higher Ed digital Billings increased 11% Y/Y
-Direct-to-student digital e-commerce Billings expanded double-
digits while sales of bundled digital access cards were lower,
unfavorably impacted by channel destocking
- Net sales from the e-commerce channel exceeded net sales
from our three largest distributors combined as of October 31
ADJUSTED EBITDA IMPACTED BY LOWER BILLINGS
 YTD Adjusted EBITDA unfavorably impacted by lower print
Billings slightly offset by favorable timing of pre-publication
investment
(18%)
(20%)

$225
$185
$215 $209
52% 48% 29% 30%
$435
$383
$731 $704
K-12 Financial Review
Strong YTD performance in a smaller new adoption market
20
($ in Millions)
Total Billings
Adjusted EBITDA
K-12 TOTAL BILLINGS
K-12 ADJUSTED EBITDA
Digital %
(4%)
(12%)
Margin %
39% 34% 38% 30%
Q315 Q316 YTD 15 YTD 16
Q315 Q316 YTD 15 YTD 16
YTD PERFORMANCE EXCEEDED EXPECTATIONS IN THE
NEW ADOPTION MARKET THAT WAS EVEN SMALLER
THAN CYCLICALLY ANTICIPATED
 K-12 exceeded expectations due to stronger than
anticipated YTD market share in CA K-5 reading and 6-12
literacy
 Strong performance partially offset a previously anticipated
decline in FY 2016 Billings due to market cycle
 YTD Billings declined 4% due to cyclically smaller new
adoption market in 2016; outpaced industry according to
AAP primarily in new adoptions
 Billings in the quarter, down 12% Y/Y, were primarily
impacted by order timing of California in Q2-2016 vs. Texas
in Q3-2015
 Open territory was slightly down YTD as Q3-16 sales
continued to lag in a few larger markets
 Digital Billings negatively impacted this year strictly as a
result of product mix with reading / literacy less digital than
math and social studies
YTD PROFITABILITY IMPACTED BY LOWER BILLINGS
 YTD EBITDA unfavorable vs. PY due to lower Billings
partially offset by favorable timing of pre-publication
investment
(18%) (3%)

$30 $28
$82 $81
$24
$17 $20
$7
24% 18% 9% 4%
(65%)
$100 $95
$217 $203
International & Professional Financial Review
Continued to execute on the digital strategy
21
($ in Millions)
Total BillingsTotal Billings
INTERNATIONAL TOTAL BILLINGS
INTERNATIONAL ADJUSTED EBITDA
Margin %
Q315 Q316 YTD 15 YTD 16
Digital %
Q315 Q316 YTD 15 YTD 16
13% 17% 11% 15%
 YTD Billings decreased 1% Y/Y as growth in Access platform
subscriptions was more than offset by print decline following the
2015 release of a key medical title (Harrison’s Principles of Internal
Medicine)
 Q3 margin favorably impacted by timing of digital related investment
PROFESSIONAL ADJUSTED EBITDA
PROFESSIONAL TOTAL BILLINGS
 YTD Billings declined 3% Y/Y on constant FX as lower US export
business within mature markets more than offset growth in localized
digital offerings
 YTD margin unfavorably impacted by lower Billings and timing of the
UAE investment in advance of Q4-16 revenue
Digital % 38% 46% 45% 48%
Q215 Q216 YTD 15 YTD 16
Margin %
Q315 Q316 YTD 15 YTD 16
(5%)
(6%)
Constant FX (3%) $97 (3%) $210
(1%)
(7%)
Constant FX (28%) $17 (68%) $7
(1%)
+20%
(28%)
$7 $9
$16 $16
24% 31% 20% 20%

Capital Structure and Liquidity
Cash position is building in the second half of the year
($ in Millions)
Senior Secured Term Loan due 2022 $1,571
Revolving Credit Facility due 2021 ($350M) 0
Total First Lien Indebtedness $1,571
Less: McGraw-Hill Global Education
Cash and Cash Equivalents (258)
Net First Lien Indebtedness $1,313
Last Twelve Months Covenant EBITDA $419
Net First Lien Leverage Ratio 3.1x
Leverage
Cash and Cash Equivalents
McGraw-Hill Global Education Holdings $258
McGraw-Hill Education Inc. 8
Total McGraw-Hill Education, Inc. $266
Available under Credit Facilities at Sept. 30, 2016 350
Total Liquidity $616
MCGRAW-HILL GLOBAL EDUCATION HOLDINGS
NET TOTAL INDEBTEDNESS AT SEPTEMBER 30, 2016
MCGRAW-HILL EDUCATION INC. LIQUIDITY
AT SEPTEMBER 30, 2016
Notes
˗ Net Total Indebtedness calculation excludes $500 of MHGE
Parent LLC debt and cash held at McGraw-Hill Education Inc.
˗ Net First Lien Leverage covenant takes effect only if 30% of
revolving line of credit is drawn at quarter-end. Usage was
less than 30% at September 30, so the covenant did not apply.
Covenant level is 5.25x in Q2 and 4.8x in Q1, Q3 and Q4.
22
Senior Unsecured Notes Due 2024 400
Net Total Indebtedness $1,713
MCGRAW-HILL GLOBAL EDUCATION HOLDINGS
COVENANT LEVERAGE AT SEPTEMBER 30, 2016

23
Summary
 Despite the challenges in the Higher Education market in 2016, digital continues to perform well and
we continued to take market share
- We expect our future front-lists to increase in size as we strategically revise extended copyrights
and we expect distributor destocking to abate
 We came into the year expecting Billings in K-12 to be down because of the anticipated smaller new
adoption market in 2016, but very strong new adoption capture in K-8 California reading/literacy
mitigated the anticipated decline in FY 2016 K-12 Billings
 We will continue to invest in future growth both organically and through M&A
 Expect seasonally stronger cash generation in the second half of the year

FinancialTermsandAcronyms
Financial Terms Description
Adjusted EBITDA
Non-GAAP financial measure that includes adjustments required or permitted in calculating covenant compliance under
our debt agreements. Adjusted EBITDA is a non-GAAP financial measure defined as net income from continuing
operations plus net interest, income taxes, depreciation and amortization (including amortization of pre-publication
investment cash costs) and adjusted to exclude unusual items and other adjustments required or permitted in
calculating covenant compliance under our debt agreements less cash spent for pre-publication investment in addition
to the change in deferred revenue.
Billings (formerly referred to
as Adjusted Revenue)
Non-GAAP financial measure that we define as U.S. GAAP revenue plus the net change in deferred revenue excluding
the impact of purchase accounting. Billings, a measure used by management to assess operating performance, is
defined as the total amount of revenue that would have been recognized in a period if all revenue were recognized
immediately at the time of sale.
Change in Deferred Revenue
The Company receives cash up-front for most product sales but recognizes revenue (primarily related to digital sales)
over time recording a liability for deferred revenue at the time of sale. This adjustment represents the net effect of
converting deferred revenues (inclusive of deferred royalties) to a cash basis assuming the collection of all receivable
balances.
Digital Billings (formerly
referred to as Digital Adjusted
Revenue)
Represents standalone digital sales and, where digital product is sold in a bundled arrangement, only the value
attributed to the digital component(s) is included. The attribution of value in bundled arrangement is based on relative
selling prices (inclusive of discounts).
EBITDA Earnings before interest (net), income tax, depreciation and amortization.
Front-list and Back-list
Front-list represents brand new titles and new revisions of existing titles previously published. For example, the 2016
front-list represents 2017 and 2016 copyrights sold in 2016. Back-list represents copyrights from 2015 and prior sold in
2016.
Net Sales Gross sales less actual returns; net sales are not adjusted for the impact of accruals / net change in deferred revenue.
Pre-publication Investment
Pre-publication costs reflect the costs incurred in the development of instructional solutions, principally design and
content creation. These costs are capitalized when the title is expected to generate future economic benefits and are
amortized upon publication of the title over its estimated useful life of up to six years.
Sell-Through Represents the percentage of net sales a new revised title generates vs. prior editions of the same title.

KPITermsandAcronyms
KPI Terms Description
Paid Activation
A user who accesses a purchased digital product for the first time. Access can be through a physical Access Card
purchased from a bookstore or directly over MHE’s e-commerce channel.
Unique User on a
platform
An individual who authenticates a product at least once during a given period of time.

DigitalProductOfferingDescriptions
27
Product Description Higher Education K-12 International Professional
Access
Digital subscription platform that provides easily searchable and
customizable digital content integrated with dynamic and
functional workflow tools
 
ALEKS
Adaptive learning technology for the K-12 and higher education
markets
   
Connect
Open learning environment for students and instructors in the
higher education market
   
Connect2
Collaborative teaching and learning environment for the
International Higher Education market

ConnectEd Content delivery platform for the K-12 market 
Engrade
Developer of an open digital platform for K-12 education that
unifies the data, curriculum and tools to drive student achievement
and inform district educational strategy

LearnSmart
Adaptive learning program which personalizes learning and designs
targeted study paths for students
   
MH Campus
Integrates digital products from McGraw-Hill Education into a
school’s Learning Management System (LMS)
   
SmartBook
Adaptive reading product designed to help students understand
and retain course material by guiding each student through a
highly personal study experience
   

Digital vs. Print Billings Detail
29
Figures are represented on a cash basis inclusive of actual returns but excluding purchase accounting adjustments. Accrued returns are reflected in print revenue.
($ in Millions)
Q3 Billings Detail by Component
September YTD Billings Detail by Component
2014 2015 2016 2015 2014 2015 2016 2015 2014 2015 2016 2015
Higher Ed $136 $160 $171 6.6% $247 $226 $155 (31.3%) $383 $386 $326 (15.6%)
K-12 113 169 130 (23.3%) 272 266 253 (4.9%) 385 435 383 (12.0%)
International 13 13 16 18.5% 101 87 79 (8.6%) 114 100 95 (5.0%)
Professional 12 11 13 12.9% 19 19 15 (18.9%) 31 30 28 (7.0%)
Other 0 0 0 (0.8%) 0 0 (0) (100.4%) 0 0 0 (87.4%)
Total MHE $274 $355 $330 (7.0%) $638 $598 $503 (15.9%) $912 $952 $832 (12.6%)
% of Total
Higher Ed 36% 42% 52% 64% 58% 48% 100% 100% 100%
K-12 29% 39% 34% 71% 61% 66% 100% 100% 100%
International 12% 13% 17% 88% 87% 83% 100% 100% 100%
Professional 38% 38% 46% 62% 62% 54% 100% 100% 100%
Total MHE 30% 37% 40% 70% 63% 60% 100% 100% 100%
% ∆ vs % ∆ vs% ∆ vs
Q3 Digital Billings Q3 Print Billings Q3 Total Billings
2014 2015 2016 2015 2014 2015 2016 2015 2014 2015 2016 2015
Higher Ed $239 $288 $319 10.6% $374 $342 $243 (28.8%) $612 $630 $562 (10.7%)
K-12 191 276 214 (22.2%) 470 456 490 7.5% 661 731 704 (3.7%)
International 23 24 30 27.8% 219 193 173 (10.6%) 241 217 203 (6.3%)
Professional 37 37 39 6.8% 50 46 42 (7.4%) 88 82 81 (1.1%)
Other 0 0 0 134.8% 1 3 1 (79.4%) 1 3 1 (76.2%)
Total MHE $490 $624 $603 (3.4%) $1,114 $1,038 $948 (8.7%) $1,604 $1,663 $1,551 (6.7%)
% of Total
Higher Ed 39% 46% 57% 61% 54% 43% 100% 100% 100%
K-12 29% 38% 30% 71% 62% 70% 100% 100% 100%
International 9% 11% 15% 91% 89% 85% 100% 100% 100%
Professional 43% 45% 48% 57% 55% 52% 100% 100% 100%
Total MHE 31% 38% 39% 69% 62% 61% 100% 100% 100%
% ∆ vs % ∆ vs % ∆ vs
Sep YTD Digital Billings Sep YTD Print Billings Sep YTD Total Billings

MHE Higher Ed Front List / Back List Net Sales
($ in Millions)
Front-list / Back-list is on a net sales basis; refer to key financial terms in appendix
2012 2013 2014 2015 Sept. 30, 2015 Sept. 30, 2016
Digital Net Sales
Front-list $100 $126 $132 $156 $120 $114
Back-list 137 153 194 220 177 211
Total Digital Net Sales $237 $278 $326 $376 $297 $326
Y/Y %
Front-list n/a 25.1% 5.2% 18.2% n/a (4.7%)
Back-list n/a 11.8% 27.1% 13.4% n/a 19.2%
Total Digital Net Sales n/a 17.4% 17.2% 15.3% n/a 9.6%
Print Net Sales
Front-list $317 $323 $291 $233 $187 $119
Back-list 205 215 233 178 146 118
Total Print Net Sales $523 $538 $524 $411 $333 $237
Y/Y %
Front-list n/a 1.9% (9.9%) (20.0%) n/a (36.3%)
Back-list n/a 4.7% 8.5% (23.6%) n/a (19.4%)
Total Print Net Sales n/a 3.0% (2.6%) (21.6%) n/a (28.9%)
Total Net Sales
Front-list $418 $449 $423 $389 $307 $233
Back-list 342 368 427 398 324 329
Total Net Sales $760 $817 $851 $787 $630 $563
Y/Y %
Front-list n/a 7.5% (5.7%) (8.1%) n/a (23.9%)
Back-list n/a 7.5% 16.2% (6.8%) n/a 1.8%
Total Net Sales n/a 7.5% 4.2% (7.4%) n/a (10.7%)
Nine Months EndedTwelve Months Ended

Higher Ed Industry and MHE Higher Ed Sales Trend
($ in Millions)
2011 2012 2013 2014 2015 Sept. 30, 2015 Sept. 30, 2016
Higher Ed Industry per Management Practice, Inc.1
Higher Ed Market
Gross Sales $5,726 $5,420 $5,453 $5,465 $5,302 $4,064 $3,668
Returns 1,323 1,311 1,262 1,214 1,377 844 831
Net Sales $4,403 $4,110 $4,191 $4,251 $3,925 $3,220 $2,837
Y/Y %
Gross Sales n/a (5.3%) 0.6% 0.2% (3.0%) n/a (9.8%)
Returns n/a (0.9%) (3.7%) (3.8%) 13.5% n/a (1.6%)
Net Sales n/a (6.7%) 2.0% 1.4% (7.7%) n/a (11.9%)
McGraw-Hill Education Return Detail
Actual Returns $263 $276 $257 $252 $277 $177 $163
Reserve for Returns Adjustment (3) (13) 9 16 (31) (12) (10)
Reported Returns $260 $263 $266 $268 $246 $165 $153
Return Accrual % 24% 26% 25% 24% 23% 22% 23%
McGraw-Hill Higher Education Billings Mix (%)2
For-profit % of Total Higher Ed Billings 18% 19% 16% 11% 10% 9% 9%
Non-profit % of Total Higher Ed Billings 82% 81% 84% 89% 90% 91% 91%
Billings will not reconcile to MPI submission due to classification of revenue between K-12 and Higher Ed
Nine Months Ended
(1) MPI data reflects gross and net sales on an actual returns basis and includes other adjustments, eg. advanced placement which is reported in K-12
(2) Billings mix on a net sales basis; refer to key financial terms in the appendix
Twelve Months Ended

K-12 Industry and MHE K-12 Sales Trend
($ in Millions)
Twelve Months Ended Nine Months Ended
2012 2013 2014 2015 Sept. 30, 2015 Sept. 30, 2016
K-12 Industry per Association of American Publishers (AAP)
AAP U.S. Net Sales 1
Total Adoption 1,311 1,391 1,860 1,621 $1,544 $1,251
Open Territory 1,423 1,563 1,425 1,431 1,353 1,444
Total Net Sales $2,734 $2,954 $3,285 $3,052 $2,896 $2,695
Y/Y %
Total Adoption n/a 6.2% 33.6% (12.8%) n/a (18.9%)
Open Territory n/a 9.8% (8.8%) 0.4% n/a 6.7%
Total Net Sales n/a 8.1% 11.2% (7.1%) n/a (6.9%)
McGraw-Hill Education K-12
McGraw-Hill Education Billings 2
Total Adoption $318 $306 $363 $451 $414 $391
Open Territory / Other 380 371 371 347 317 313
Total K-12 Billings $698 $677 $734 $798 $731 $704
Y/Y %
Total Adoption n/a (3.8%) 18.6% 24.2% n/a (5.6%)
Open Territory / Other n/a (2.4%) 0.0% (6.5%) n/a (1.3%)
Total K-12 Billings n/a (3.0%) 8.5% 8.6% n/a (3.7%)
MHE Adoption Participation % 96% 79% 67% 76% 76% 87%
(1) AAP annual data reflects unrestated net sales on an actual returns basis submitted by five publishers in each respective year; data reflects US sales only and includes sales of AP products, software and platforms, etc.
AAP includes front-list and back-list net sales; annual data prior to 2015 has not been restated for the shift of AR and IN from adoption to open territory
Monthly AAP data reflects nets sales on an actual returns basis submitted by six - seven publishers; 2015 data has been restated
(2) MHE Billings reflect an accrued returns basis and will not reconcile to AAP submission due to classification of revenue; Total adoption includes new adoption and residual
MHE Billings have not been restated for the shift of AR and IN in prior periods

K-12 Industry Adoption Market Overview
2012 2013 2014 2015 2016E 2017E 2018E 2019E
Largest Adoption States
Reading Math Math* Reading Reading* Reading* Science
Math Social Studies Social Studies*
Social Studies Reading (K-5) Reading (6-12) Social Studies Science Math
Math (K-5) Math (6-12)
Science Math (K-8) Math (9-12) Reading (K-8)
Science Social Studies
Science*
All Other Adoption States
Math Reading Social Studies Science
Arkansas Math
Math Math*
Reading Reading*
Idaho Science Reading Math Social Studies Reading
Indiana Reading Reading*
Reading Math
Reading Math (K-8) Math (9-12) Reading Social Studies Science
Social Studies
North Carolina Math Science Social Studies Reading
New Mexico Science Math Reading Social Studies Science Math
Social Studies Science Reading Math
Social Studies Reading Reading* Math Science Social Studies
Reading Math Social Studies (K-5) Science
Social Studies (6-12)
Reading (9-12) Reading (K-6) Social Studies Math Science Social Studies
Virginia Science Math Reading
Social Studies Reading Science Math Social Studies
Math
Historical Industry Net Sales Per AAP Projected Industry Net Sales3
Total Adoption Net Sales ($M)2
$1,311 $1,391 $1,860 $1,621 $1,362 $1,538 $1,435 $1,778
(1) Excludes new state adoptions in non-core disciplines such as music, art, world languages, health, etc.; *disciplines reflect 2nd or 3rd year of major purchasing
Purchases from AR and IN classified as open territory effective 2015
(2) AP adoption net sales includes front-list and back-list and is based on actual returns submitted by five publishers; reflects US sales only and includes the sale of AP products, software and platforms etc.
Includes new state adoptions in non-core disciplines such as music, art, world languages, health, etc.
(3) Reflects MHE estimate with those of third parties, adjusted for the estimated shift of the TX reading adoption from 2018 to 2019
West Virginia
New State Adoptions by Purchase Year
1
California (K-8)
Florida
Texas
Alabama
Georgia
Mississippi
Oklahoma
Oregon
South Carolina
Tennessee
Louisiana

Billings and Adjusted EBITDA
34
Billings is a non-GAAP performance measure that provides useful information in evaluating our period-to-period performance because it reflects the total amount of
revenue that would have been recognized in a period if we recognized all print and digital revenue at the time of sale. We use Billings as a performance measure given
that we typically collect full payment for our digital and print solutions at the time of sale or shortly thereafter, but recognize revenue from digital solutions and multi-
year deliverables ratably over the term of our customer contracts. As sales of our digital learning solutions have increased, so has the amount of revenue that is
deferred in accordance with U.S. GAAP. Billings is a key metric we use to manage our business as it reflects the sales activity in a given period, provides comparability
from period-to-period during this time of digital transition and is the basis for all sales incentive compensation. In the K-12 market where customers typically pay for five
to eight year contracts upfront and the ongoing costs to service any contractual obligation are limited, the impact of the change in deferred revenue is most significant.
Billings is U.S. GAAP revenue plus the net change in deferred revenue.
EBITDA, a measure used by management to assess operating performance, is defined as net income from continuing operations plus net interest, income taxes,
depreciation and amortization (including amortization of pre-publication investment cash costs). Adjusted EBITDA is a non-GAAP debt covenant compliance measure
that is defined in accordance with our debt agreements. Adjusted EBITDA is a material term in our debt agreements and provides an understanding of our debt
covenant compliance, ability to service our indebtedness and make capital allocation decisions in accordance with our debt agreements.
Each of the above described measures is not a recognized term under U.S. GAAP and does not purport to be an alternative to revenue, income from continuing
operations, or any other measure derived in accordance with U.S. GAAP as a measure of operating performance, debt covenant compliance or to cash flows from
operations as a measure of liquidity. Additionally, each such measure is not intended to be a measure of free cash flows available for management’s discretionary use,
as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Such measures have limitations as analytical
tools, and you should not consider any of such measures in isolation or as substitutes for our results as reported under U.S. GAAP. Management compensates for the
limitations of using non-GAAP financial measures by using them to supplement U.S. GAAP results to provide a more complete understanding of the factors and trends
affecting the business than U.S. GAAP results alone. Because not all companies use identical calculations, our measures may not be comparable to other similarly titled
measures of other companies.
Management believes Adjusted EBITDA is helpful in highlighting trends because Adjusted EBITDA excludes the results of decisions that are outside the control of
operating management and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax rules in
the jurisdictions in which companies operate, and capital investments. In addition, Billings and Adjusted EBITDA provides more comparability between the historical
operating results and operating results that reflect purchase accounting and the new capital structure post the Founding Acquisition as well as the digital transformation
that we are undertaking which requires different accounting treatment for digital and print solutions in accordance with U.S. GAAP.
Management believes that the presentation of Adjusted EBITDA is appropriate to provide additional information to investors about certain material non-cash items and
about unusual items that we do not expect to continue at the same level in the future as well as other items to assess our debt covenant compliance, ability to service
our indebtedness and make capital allocation decisions in accordance with our debt agreements.

Revenue Bridge & Segment Detail
35
($ in Millions)
Amounts above may not sum due to rounding.
Sept. 30, 2015 Sept. 30, 2016 Sept. 30, 2015 Sept. 30, 2016
Reported Revenue 740$ 655$ 1,410$ 1,386$
Change in Deferred Revenues 212 177 253 165
Billings 952$ 832$ 1,663$ 1,551$
Billings by segment
Higher Education 386$ 326$ 630$ 562$
K - 12 435 383 731 704
International 100 95 217 203
Professional 30 28 82 81
Other 0 0 3 1
Total Billings 952$ 832$ 1,663$ 1,551$
Adjusted EBITDA
Higher Education 235 193 246 197
K - 12 225 185 215 209
International 24 17 20 7
Professional 7 9 16 16
Other (2) 6 (0) 1
Total Adjusted EBITDA 489$ 410$ 498$ 430$
Three Months Ended Nine Months Ended

Adjusted Operating Expense Bridge
36
($ in Millions)
Amounts above may not sum due to rounding
.Note: In compliance with SEC interpretative guidance, we now refer to ‘Adjusted Revenue’ as ‘Billings’ throughout the presentation
Sept. 30, 2015 Sept. 30, 2016 Sept. 30, 2015 Sept. 30, 2016
Operating Expense Bridge
Total Reported Operating Expenses 340$ 300$ 926$ 895$
Less: Depreciation & Amortization of intangibles (29) (32) (91) (98)
Less: Amortization of prepublication costs (40) (29) (69) (61)
Less: Restructuring and cost savings implementation charges (4) (3) (18) (10)
Less: Other adjustments (9) (5) (17) (15)
Adjusted Operating Expenses 257$ 231$ 733$ 710$
Three Months Ended Nine Months Ended

Adjusted EBITDA Reconciliation
Amounts above may not sum due to rounding.
37
($ in Millions)
Year Ended Dec. 31, LTM Sep. 30,
2015 2016 2015 2016 2015 2016
Net Income 163$ 141$ (31)$ (50)$ (100)$ (118)$
Interest (income) expense, net 48 43 144 153 193 202
Provision for (benefit from) taxes on income 4 3 2 3 6 7
Depreciation, amortization and pre-publication investment amortization 70 61 159 159 213 213
EBITDA 285$ 248$ 274$ 266$ 312$ 303$
Change in deferred revenue (a) 212 177 253 165 221 133
Restructuring and cost savings implementation charges (b) 4 3 18 10 24 16
Sponsor fees (c) 1 1 3 3 4 4
Loss on extinguishment of debt (d) - - - 27 - 27
Other (e) 9 5 17 15 25 24
Pre-publication investment cash costs (f) (23) (24) (67) (55) (99) (87)
Adjusted EBITDA 489$ 410$ 498$ 430$ 486$ 419$
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,

Adjusted EBITDA Footnotes
38
(a) We receive cash up-front for most product sales but recognize revenue (primarily related to digital sales) over time recording a liability for deferred
revenue at the time of sale. This adjustment represents the net effect of converting deferred revenues (inclusive of deferred royalties) to a cash basis
assuming the collection of all receivable balances.
(b) Represents severance and other expenses associated with headcount reductions and other cost savings initiated as part of our formal restructuring
initiatives to create a flatter and more agile organization.
(c) Beginning in 2014, $3.5 million of annual management fees was recorded and payable to Apollo.
(d) This amount represents the write-off of unamortized deferred financing fees, original debt discount and other fees and expenses associated with the
Company’s refinancing of its existing indebtedness on May 4, 2016.
(e) For the three months ended September 30, 2016 and 2015, the amount represents (i) non-cash incentive compensation expense and (ii) other
adjustments required or permitted in calculating covenant compliance under our debt agreements.
For the nine months ended September 30, 2016 and 2015, the amount represents (i) non-cash incentive compensation expense and (ii) other adjustments
required or permitted in calculating covenant compliance under our debt agreements.
(f) Represents the cash cost for pre-publication investment during the period excluding discontinued operations.

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