HMH Earnings CallNovember 3, 2016

Third Quarter 2016

FORWARD LOOKING STATEMENTS AND NON-GAAP MEASURESThis 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 condition; pre-publication or content development costs; capital expenditures;

liquidity; EdTech integration and timing impact; products, including for new adoptions; our outlook for Q4 2016; prospects; growth;

markets and market share; strategies, including with respect to investing in our core product and adjacent markets; operational

improvement; the industry in which we operate; capital allocation and structures; leverage ratio; 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 November 03, 2016 and in the “Special Note

Regarding Forward-Looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K and our Quarterly

Reports on Form 10-Q. We undertake no obligation, and do not expect, to publicly update or publicly 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. 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 is provided in the appendix to this presentation and in

our news release issued on November 03, 2016, which are posted on hmhco.com under the Investor Relations section. hmhco.com / 2

Agenda

Welcome/Introductions

Business Update

Financial Overview

Questions and Answers

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Business Update

Key Takeaways from the Third Quarter

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Board confident in Company’s strategy and management’s commitment to create greater value for shareholders and improve financial performance

• Company has great brands and a strong executive team• Core products continue to perform well in certain adoption and open territory markets

HMH disappointed in its year-to-date results and expected impact on full year results

• Smaller than expected new adoption market• Loss of market share in domestic education market1• Lower-than-expected EdTech2 growth for the first full year of ownership

The Company is committed to taking significant steps to address challenges, as well as improve operational and financial performance

• Continue to invest in core and adjacent markets to regain market share• Bottoms-up budgeting process to align performance expectations • Preparing for future large and attractive new adoption opportunities • Aggressively pursue operational improvements and efficiencies

1 HMH’s addressable domestic education market for K-12 instructional materials2 The Educational Technology and Services business acquired from Scholastic Corporation on May 29, 2015

Improve Operational Agility

Leverage Our Brands

Expand into Adjacent Markets

Deepen Our Core and Protect Leading Share

Key growth levers: maintaining our focus

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1

2

3

4

Financial Overview

Third Quarter 2016 Highlights 1

hmhco.com / 81 Three months ended September 30, 2016.2 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.3 Please see appendix for a reconciliation of non-GAAP measures.

Adjusted EBITDA3

$ in millions

Billings2Net Sales

Net Income (Loss)

EdTech HMH

$131 $90

($37) ($104)

Q3 2015 Q3 2016 YTD 2015 YTD 2016

$192 $168 $219 $203

Q3 2015 Q3 2016 YTD 2015 YTD 2016

• Net sales and Billings2

decreased primarily due to smaller new adoption market and domestic education market share loss

• Adjusted EBITDA3

lower due to decrease in net sales

• Continued infrastructure upgrades and investment in core products and platforms

$49014 $460

$1,014 $986$86 $73

$104 $145

Q3 2015 Q3 2016 YTD 2015 YTD 2016

$576 $533

$1,118 $1,131

$57314 $499

$1,136 $1,019$109 $121

$130 $182

Q3 2015 Q3 2016 YTD 2015 YTD 2016

$682 $620

$1,266 $1,201

Full Year 2016 Outlook1

NET SALES

BILLINGS2

CONTENT DEVELOPMENT SPEND

$1,320 million to $1,380 million

$1,370 million to $1,430 million

$120 million to $140 million

1 HMH’s expectations as of November 3, 2016.2 An operating measure which we derive from net sales taking into account the change in deferred revenue.

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Revised Guidance Drivers

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2016 Billings midpoint

Year-over-year loss in market share

Smaller year-over-year adoption market

2015 Pro Forma Billings

2015 pro forma billings2 $1,592YoY market size decrease3 - $80Market share loss (from 42% pro forma to 38%-39%)4 - $100Other Factors - $10

2016 FY billings guidance midpoint $1,400

(in millions)

Drivers behind lower year-over-year billings1

guidance on pro forma basis:2015 Pro Forma Billings and Market Share represents 2015 HMH Billings and market share presented as if the EdTech acquisition had occurred on January 1, 2015. Pro forma information is presented for comparative purposes only and is not necessarily indicative of results that actually would have been achieved had the acquisition occurred at that time, nor is it intended to be a projection of future results.

• Best comparison is 2015 pro forma billings2 of $1,592 million and pro forma market share of 42%.

• Updated full year 2016 billings guidance represents a ~$190 million decrease compared to full year 2015 pro forma billings.

1 An operating measure which we derive from net sales taking into account the change in deferred revenue.2 Includes $51m of billings contribution from the EdTech business under Scholastic ownership3 Addressable domestic education market decreased from 2.85 billion in 2015 to 2.67 billion in 2016 (HMH estimates)4 HMH estimates

New State Adoptions - 2014 to 2019

State 2014A 2015A 2016E 2017E 2018E 2019E

TexasScienceMathematics

Social StudiesMathematics Foreign Language Reading/Language Arts

California-SA Mathematics MathematicsReading/Language ArtsMathematics

Reading/Language ArtsESL

Reading/Language ArtsESLSocial Studies

ScienceSocial Studies

FloridaReading/Language ArtsMathematics

Reading/Language ArtsMathematics

Reading/Language ArtsMathematics Social Studies

ScienceSocial Studies Mathematics

Alabama Social Studies

Georgia Reading/Language Arts Mathematics Reading/Language Arts ScienceSocial StudiesScience

Social StudiesMathematics

Tennessee Social Studies Mathematics Science Social StudiesSouth Carolina Reading/Language Arts Reading/Language Arts Reading/Language Arts MathematicsLouisiana Reading/Language Arts MathematicsWest Virginia Reading/Language ArtsOklahoma Reading/Language ArtsNew Mexico Reading/Language Arts

OregonMathematicsReading/Language Arts

ScienceMathematics

North Carolina Mathematics

Virginia Social Studies MathematicsReading/Language ArtsMathematics

Mississippi Reading/Language Arts

Source: States’ related education websites

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Investing in our Core Education Products

Social Studies• Due to launch later this

month in advance of the 2017 Florida Social Studies adoption

• Effective combination of print and digital assets

• Incorporates HMH Field Trips

Reading• All new, next-generation

product under production• Incorporates best-in-class

fiction, non-fiction, poetry and drama

• Ready to launch for the 2019 Texas Reading adoption

HMH Science Dimensions• Brand new program launched in October• First comprehensive K-12 science program

specifically designed to meet the new “Next Generation Science Standards (NGSS)”

• Includes more digital learning tools such as HMH Field Trips

• Incorporates engaging material from Randall Munroe’s “Thing Explainer”

Free Cash Flow & Capital Allocation

• HMH’s capital allocation since its IPO has been approximately 1/3 each over time to:

• Capital Expenditures• Strategic M&A• Shareholder Returns

$308

$162

($49)($100)($50)

$0 $50

$100 $150 $200 $250 $300 $350

2014A 2015A LTM Sept 2016A

• Operating leverage impacted by high fixed cost base

• Lower market share and higher capital expenditures impacting free cash flow for 2016

• Q4 2016 is expected to be lower than Q4 2015

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Balanced Use of CapitalFree Cash Flow Consumption

HMH capital allocation 2013 to YTD 2016

$425 $217

$849 $540 $64 $588

$555

$518

Over time, maintain gross leverage consistent with single-B ratings trajectory and leverage ratio reduction through adjusted EBITDA growth as Billings increase, and cost reduction

Prudent maintenance of excess liquidity through seasonal and cyclical trough period

“Through-the-cycle” approach to capital allocation, balancing investment, acquisitions and return of capital over time

Capital Strategy

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Questions and Answers

Appendix

Financial Highlights

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 the appendix for a reconciliation of non-GAAP measures.3 As of December 31, 2015, cash and short term investments includes cash and cash equivalents of $234.3M and short term investments of $198.1M. As of September 30, 2016,

it includes, cash and cash equivalents and short term investments of $216.5M 4 Capital expenditures include pre-publication costs and property, plant and equipment expenditures.

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$ in Millions Q3 Year to Date

2015 2016 Variance % 2015 2016 Variance %

Net Sales 576 533 (7%) 1,118 1,131 1%

Change in Deferred Revenue 106 87 (18%) 148 70 (53%)

Billings1 682 620 (9%) 1,266 1,201 (5%)

Net Loss 131 90 (31%) (37) (104) (183%)

Adjusted EBITDA2 192 168 (12%) 219 203 (8%)

Cash and Short Term Investments3 432 217 (50%)

Free Cash Flow2 246 115 N/A 35 (176) N/A

Pre-publication Costs (33) (29) (12%) (79) (95) 20%

Capital Expenditures4 (52) (64) 23% (129) (185) 44%

Non-GAAP Reconciliation – Adjusted EBITDA1

1 Details may not sum to total due to rounding.

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($ in millions) Q3 YTD2015 2016 2015 2016

Net Income (Loss) 131 90 (37) (104)Interest Expense 10 9 22 28 Provision (benefit) for Income Taxes (40) (16) (30) 16 Depreciation Expense 17 21 53 59 Amortization Expense 59 54 163 158 Non-Cash Charges - Stock Compensation 3 2 10 9 Non-Cash Charges- (Gain) Loss on Derivative Instrument 0 (0) 2 (0)Purchase Accounting Adjustments 4 1 5 4

Fees Expenses or Charges for Equity Offerings, Debt or Acquisitions - 0 19 1 Restructuring/ Integration 4 2 5 12 Severance, separation costs and facility closures 2 4 4 9 Loss on Extinguishment of Debt 1 - 3 -Legal Settlement - - - 10 Adjusted EBITDA 192 168 219 203

Non-GAAP Reconciliation – Free Cash Flow1

1 Details may not sum to total due to rounding.

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$ in Millions Full Year Full Year Last Twelve Months Nine Months Ended2014 2015 September 30, 2016 September 30, 2015 September 30, 2016

Net cash used in operating activities 491 348 66 163 9

Additions to pre-publication costs (116) (104) (152) (79) (95)

Additions to property, plant, and equipment (67) (83) (98) (50) (90)

Free Cash Flow 308 162 (298) 35 (176)

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Billings$ in millions Q3 YTD

2015 2016 2015 2016Net Sales 576 533 Net Sales 1,118 1,131

Change in Deferred Revenue 106 87 Change in Deferred Revenue 148 70

Billings 682 620 Billings 1,266 1,201

Balance Sheet($ in Millions)

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unaudited unaudited

Dec 31, 2015 Sep 30, 2016Current AssetsCash and cash equivalents 234 150 Short-term investments 198 66 Accounts receivable less allowance for bad debts and book returns 256 439Inventories 171 170 Prepaid expenses and other assets 23 26 Total current assets 883 850 Property, plant, and equipment, net 150 179 Pre-publication costs, net 322 321 Royalty advances to authors, net 45 47 Goodwill 783 783 Other intangible assets, net 913 848 Deferred income taxes 4 4 Other assets 23 21 Total assets 3,122 3,052

Dec 31, 2015 Sep 30, 2016Current LiabilitiesCurrent portion of long-term debt 8 8 Accounts payable 94 87 Royalties payable 86 84 Salaries, wages, and commissions payable 45 40 Deferred revenue 231 277 Interest payable 0 0 Severance and other charges 5 7 Accrued postretirement benefitsOther Liabilities

235

231

Total current liabilities 507 536 Long-term debt, net of discount and issuance costs 769 766 Long-term deferred revenue 441 464 Accrued pension benefits 24 21 Accrued postretirement benefits 24 22 Deferred income taxes 140 153 Other liabilities 20 27

Total liabilities 1,924 1,989 Stockholder's EquityCommon stock 1 1 Treasury stock (463) (518)Capital in excess of par value 4,833 4,866 Retained earnings (accumulated deficit) (3,134) (3,237)Accumulated other comprehensive income (loss) (40) (49)

Total stockholder's equity (deficit) 1,198 1,063

Total liability and stockholder's equity 3,122 3,052

Income Statement (unaudited)

($ in Millions)

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Q3 Year to Date

2015 2016 2015 2016

Net Sales $576 $533 $1,118 $1,131

Costs and expensesCost of sales, excluding publishing right and pre-publication amortization

220 206 485 485

Publishing rights amortization 19 15 62 47 Pre-publication amortization 32 34 87 93

Cost of sales 272 255 634 625 Selling and administrative 192 185 506 538 Other intangible asset amortization 7 6 15 18 Severance and other charges 2 4 4 9

Operating Income (Loss) 103 83 (39) (60)

Other Income (Expense)Interest expense (10) (9) (22) (28)Change in fair value of derivative instruments (0) 0 (2) 0 Loss on extinguishment of debt (1) - (3) -

Income (Loss) before taxes 91 74 (67) (88)

Income tax expense (benefit) (40) (16) (30) 16 Net Income (Loss) 131 90 (37) (104)

Statement of Cash Flows (unaudited)($ in Millions)

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Nine Months EndedSep 30 2015 Sep 30 2016

Cash flows from operating activitiesNet loss ($37) ($104)Adjustments ro reconcile net loss to net cash provided by operating activities

Depreciation and amortization expense 217 217 Amortization of debt discount and deferred financing costs 6 3 Deferred income taxes 42 13 Stock compensation 10 9 Loss on extinguishment of debt 3 -Change in fair value of derivative instruments 2 (0)Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable (192) (182)Inventories 12 2 Other Assets (9) 1 Accounts payable and accrued expenses 26 (10)Royalties payable and author advances, net 16 (4)Deferred revenue 148 70 Interest payable 0 -Severance and other charges (3) 1 Accrued pension and postretirement benefits (4) (4)Other liabilities (73) (3)

Net cash provided by operating activities 163 9

Nine Months EndedSep 30 2015 Sep 30 2016

Cash flows from investing activities

Purchases of short-term investments (147) (66)

Proceeds from sales and maturities of short-term investments 287 198

Additions to pre-publication costs (79) (95)

Additions to property, plant, and equipment (50) (90)

Acquisition of business, net of cash acquired (578) -

Investment in preferred stock - (1)

Net cash used in investing activities (567) (55)

Cash flows from financing activities

Proceeds from term loan, net of discount 796 -

Payments of long-term debt (245) (6)

Payments of deferred financing fees (15) -

Tax withholding payments associated with restricted stock vesting (1) (1)

Proceeds from stock option exercises 28 21

Repurchases of common stock (239) (55)

Issuance of common stock under employee stock purchase plan - 2 Net cash (used in) provided by financing activities 324 (39)

Cash and cash equivalents at beginning of period 457 234

Net decrease in cash and cash equivalents (80) (84)

Cash and cash equivalents at end of period 377 150