Financial Analysis

CONTINGENCIES Litigation, Legal and Other Matters . The Company and its subsidiaries are subject to complaints and administrative proceedings and are defendants in various civil lawsuits that have arisen in the ordinary course of their businesses, including contract disputes; actions alleging negligence, libel, defamation and invasion of privacy; trademark, copyright and patent infringement; real estate lease and sublease disputes; violations of employment laws and applicable wage and hour laws; and statutory or common law claims involving current and former students and employees. Although the outcomes of the legal claims and proceedings against the Company cannot be predicted with certainty, based on currently available information, management believes that there are no existing claims or proceedings that are likely to have a material effect on the Companys business, financial condition, results of operations or cash flows. However, based on currently available information, management believes it is reasonably possible that future losses from existing and threatened legal, regulatory and other proceedings in excess of the amounts recorded could reach approximately $20 million. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

DEBT The Companys borrowings consist of the following: As of (in thousands) Maturities Stated Interest Rate Effective Interest Rate June 30, 2026 December 31, 2025 Unsecured notes (1) 2033 5.625% 5.625% $ 493,760 $ 493,625 Revolving credit facility 2030 5.00% - 7.13% 5.11% 231,159 222,466 Real estate term loan (2) 2028 5.37% - 5.45% 5.48% 89,356 91,836 Capital term loan (3) 2028 6.12% - 6.20% 6.22% 60,228 64,079 Other indebtedness 2026 - 2028 6.25% - 8.00% 25,870 8,750 Total Debt 900,373 880,756 Less: current portion (191,472) (175,138) Total Long-Term Debt $ 708,901 $ 705,618 ___________ (1) The carrying value is net of $6.2 million and $6.4 million of unamortized debt issuance costs as of June 30, 2026 and December 31, 2025, respectively . (2) The carrying value is net of $0.1 million of unamortized debt issuance costs as of June 30, 2026 and December 31, 2025. (3) The carrying value is net of $0.4 million and $0.5 million of unamortized debt issuance costs as of June 30, 2026 and December 31, 2025, respectively. On November 24, 2025, the Company issued $500 million of 5.625% unsecured eight-year fixed-rate notes due December 1, 2033 (the Notes). Interest is paid semi-annually on June 1 and December 1. Also on November 24, 2025, the Company used the net proceeds from the sale of the Notes, together with the borrowings under the revolving credit agreement, to (i) redeem the $400 million of 5.75% unsecured notes due June 1, 2026, (ii) refinance outstanding revolving loans und …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

FAIR VALUE MEASUREMENTS The Companys financial assets and liabilities measured at fair value on a recurring basis were as follows: As of June 30, 2026 (in thousands) Level 1 Level 2 Level 3 Total Assets Money market investments (1) $ $ 7,285 $ $ 7,285 Marketable equity securities (2) 1,083,092 1,083,092 Other current investments (3) 6,209 6,209 Total Financial Assets $ 1,083,092 $ 13,494 $ $ 1,096,586 Liabilities Interest rate swaps (4) $ $ 1,033 $ $ 1,033 Mandatorily redeemable noncontrolling interest (5) 7,423 7,423 Total Financial Liabilities $ $ 1,033 $ 7,423 $ 8,456 As of December 31, 2025 (in thousands) Level 1 Level 2 Level 3 Total Assets Money market investments (1) $ $ 5,251 $ $ 5,251 Marketable equity securities (2) 1,081,938 1,081,938 Other current investments (3) 7,032 7,032 Total Financial Assets $ 1,081,938 $ 12,283 $ $ 1,094,221 Liabilities Contingent consideration liabilities (6) $ $ $ 1,526 $ 1,526 Interest rate swaps (4) 2,289 2,289 Mandatorily redeemable noncontrolling interest (5) 8,401 8,401 Total Financial Liabilities $ $ 2,289 $ 9,927 $ 12,216 ____________ (1) The Companys money market investments are included in cash and cash equivalents and the value considers the liquidity of the counterparty. (2) The Companys investments in marketable equity securities are held in common shares of U.S. corporations that are actively traded on U.S. stock exchanges. Price quotes for these shares are readily available. (3) Includes mutual funds, which are valued using …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

GOODWILL AND OTHER INTANGIBLE ASSETS During the first quarter of 2026, in connection with the classification of the KLG disposal group as held for sale, the Company recognized a goodwill impairment charge of $1.0 million at Kaplan International (see Note 2). Amortization of intangible assets for the three months ended June 30, 2026 and 2025, was $6.0 million and $7.2 million, respectively. Amortization of intangible assets for the six months ended June 30, 2026 and 2025, was $12.0 million and $15.1 million, respectively. Amortization of intangible assets is estimated to be approximately $11 million for the remainder of 2026, $9 million in 2027, $6 million in 2028, $5 million in 2029, $5 million in 2030 and $13 million thereafter. The changes in the carrying amount of goodwill, by segment, were as follows: (in thousands) Education Television Broadcasting Healthcare Manufacturing Automotive Other Businesses Total As of December 31, 2025 Goodwill $ 1,181,284 $ 190,815 $ 136,637 $ 272,523 $ 140,832 $ 108,943 $ 2,031,034 Accumulated impairment losses (331,151) (82,062) (32,155) (445,368) 850,133 190,815 136,637 190,461 140,832 76,788 1,585,666 Acquisition 17,996 17,996 Impairment (976) (976) Disposition Foreign currency exchange rate changes (2,113) (2,113) As of June 30, 2026 Goodwill 1,178,195 190,815 154,633 272,523 140,832 108,943 2,045,941 Accumulated impairment losses (331,151) (82,062) (32,155) (445,368) $ 847,044 $ 190,815 $ 154,633 $ 190,461 $ 140,832 $ 76,788 $ 1,600,573 …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES The Company recognized a U.S. income tax benefit of $69.6 million during the six months ended June 30, 2026, in connection with the restructuring and sale of the KLG business. No corresponding tax benefit was recognized in any other jurisdiction. The Company continues to monitor relevant developments, including any forthcoming Internal Revenue Service guidance, that could affect the ultimate realization of this benefit. As a result of the significant U.S. income tax benefit recorded related to the KLG business, the Company has recorded a Pillar Two top-up income tax accrual and expense of $19.2 million. In January 2026, the Organization for Economic Co-operation and Development (OECD) published administrative guidance introducing a Side-by-Side (SbS) Safe Harbor that would effectively exempt U.S. parent multinational groups from Pillar Two top-up tax on their U.S. source income. The SbS Safe Harbor is only effective to the extent participating countries have enacted legislation adopting the guidance. The Company has assessed current law and administrative guidance in relevant non-U.S. jurisdictions. Currently, not all participating countries have enacted legislation to adopt the SbS Safe Harbor, including the U.K. The Company will continue to monitor local implementation and guidance as non-U.S. countries adopt the SbS Safe Harbor into domestic law. The enactment of such legislation in the U.K. and other jurisdictions would have a favorable impact on the Pillar T …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recently Adopted and Issued Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (FASB) issued new guidance that requires disclosures about certain significant expense categories including inventory purchases, employee compensation, depreciation, amortization, and selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on the disclosures within its Condensed Consolidated Financial Statements. In September 2025, FASB issued new guidance which updates the accounting for internal-use software by removing references to software development project stages and adding new criteria to determine when an entity is required to start capitalizing internal-use software costs. The guidance is effective for fiscal years and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its Condensed Consolidated Financial Statements. …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

PENSION PLANS Defined Benefit Plans. The total benefit arising from the Companys defined benefit pension plans consists of the following components: Three Months Ended June 30 Six Months Ended June 30 (in thousands) 2026 2025 2026 2025 Service cost $ 11,922 $ 11,699 $ 23,502 $ 23,891 Interest cost 7,597 6,956 16,292 13,377 Expected return on assets (44,538) (41,881) (88,818) (83,852) Amortization of prior service credit (497) (521) (993) (1,040) Net Periodic Benefit (25,516) (23,747) (50,017) (47,624) Settlement (136,955) (136,955) Early retirement and separation program costs 3,837 6,015 7,937 6,639 Total Benefit $ (158,634) $ (17,732) $ (179,035) $ (40,985) In June 2026, the Company purchased an irrevocable group annuity contract from an insurance company for $113.9 million to settle $124.3 million of the outstanding defined benefit pension obligation related to certain retirees and beneficiaries. The purchase of the group annuity contract was funded from the assets of the Companys pension plan. As a result of this transaction, the Company was relieved of all responsibility for these pension obligations and the insurance company is now required to pay and administer the retirement benefits owed to approximately 1,080 retirees and beneficiaries, with no change to the amount, timing or form of monthly retirement benefit payments. As a result, the Company remeasured the accumulated and projected benefit obligation as of June 17, 2026 and recorded a one-time pre-tax settlement …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

REVENUE FROM CONTRACTS WITH CUSTOMERS The Company generated 80% and 79% of its revenue from U.S. domestic sales for the three and six months ended June 30, 2026, respectively. The remaining 20% and 21% of revenue was generated from non-U.S. sales for the three and six months ended June 30, 2026, respectively. For the three and six months ended June 30, 2025, 78% of revenue was from U.S. domestic sales and the remaining 22% of revenue was generated from non-U.S. sales. For the three and six months ended June 30, 2026, the Company recognized 51% and 52%, respectively, of its revenue over time as control of the services and goods transferred to the customer, and the remaining 49% and 48% at a point in time, when the customer obtained control of the promised goods. For the three and six months ended June 30, 2025, the Company recognized 54% of its revenue over time, and the remaining 46% at a point in time. Contract Assets. As of June 30, 2026, the Company recognized a contract asset of $33.2 million related to a contract at a Kaplan International business, of which $5.9 million is included in Other current assets and $27.3 million is included in Deferred Charges and Other Assets. The Company expects to recognize an additional $199.8 million related to the remaining performance obligation in the contract over the next three years. As of December 31, 2025, the contract asset was $36.5 million, of which $4.4 million was included in Other current assets and $32.1 million was include …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

BUSINESS SEGMENTS The Company has seven reportable segments: Kaplan International, Kaplan Higher Education, Kaplan Supplemental Education, Television Broadcasting, CSI, Manufacturing and Automotive. As of June 30, 2026, Kaplan had a total outstanding accounts receivable balance of $25.5 million from Purdue Global related to amounts due for reimbursements for services. Included in this total, Kaplan has a $3.7 million short-term receivable balance due from Purdue Global at June 30, 2026 related to the advance of $20.0 million during the initial KU Transaction. The Companys segment information is as follows: Three Months Ended June 30, 2026 (in thousands) Education Television Broadcasting Healthcare Manufacturing Automotive Total Segments Operating Revenues $ 417,808 $ 109,630 $ 247,651 $ 133,280 $ 301,352 $ 1,209,721 Reconciliation of Revenue Other Businesses and Corporate Office Revenues (1) 93,562 Intersegment Elimination (777) Total Consolidated Revenues $ 1,302,506 Less: Significant Expenses (2) Cost of Revenue (3) 159,247 162,496 98,107 254,956 674,806 Payroll and Fringe Benefits Expense (4) 113,770 27,745 21,086 162,601 Occupancy Expense 25,497 2,009 27,506 Advertising and Marketing Expense 19,569 19,569 Networking and Programming Expense 29,846 29,846 Management Services (5) 2,325 2,325 Other Segment Items (6) 38,875 16,232 56,899 20,037 10,918 142,961 Earnings Before Interest, Income Taxes, Depreciation, Amortization and Pension Service Cost (EBITDAP) $ 60,850 $ 35,807 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing