Houghton Mifflin Harcourt Announces Successful Completion of Balance Sheet Recapitalization

Moves forward on strongest financial footing in Company’s history with approximately 60 percent less debt, reduced annual interest expense, stronger balance sheet and substantially increased liquidity

BOSTON — March 10, 2010 — Houghton Mifflin Harcourt Publishing Company (HMH) today announced the successful completion of its balance sheet recapitalization in which HMH is receiving a $650-million investment of new equity capital from a deep institutionalized investor base. These activities strengthen HMH’s balance sheet, significantly reduce its debt by approximately 60 percent and its annual interest expense by more than 75 percent, and provide for greater liquidity for growth.

Barry O’Callaghan, Chief Executive Officer of Houghton Mifflin Harcourt, said, “together with the substantial new equity investment, this comprehensive balance sheet restructuring enables HMH to move forward with the strongest capital structure in its history and the financial flexibility to continue to build the world’s leading education company. Thanks to the overwhelming support of our investor base, their confidence, financial backing and commitment to our future, alongside our talented and dedicated employees and loyal customers, HMH is extremely well-positioned to serve our customers, grow as the preeminent pre-K–12 publisher and lead the global transformation of educational solutions.”

HMH’s legal advisor is Paul, Weiss, Rifkind, Wharton & Garrison LLP, and its financial advisors are Perella Weinberg Partners and Goldman Sachs & Co. The lenders were advised by Akin Gump Strauss Hauer & Feld LLP, Houlihan Lokey and Citigroup, Inc.

About Houghton Mifflin Harcourt
Boston-based Houghton Mifflin Harcourt Publishing Company is a global education leader and the world’s largest publisher of educational materials for pre-K–12 schools. The Company publishes a comprehensive set of best-in-class educational solutions, ranging from research-based textbook programs to instructional technology to standards-based assessments for students and educators. The Company also publishes an extensive line of reference works and award-winning literature for adults and young readers. With origins dating back to 1832, Houghton Mifflin Harcourt combines its tradition of excellence with a commitment to innovation. To learn more about Houghton Mifflin Harcourt, visit www.hmhpub.com.

CONTACT:
Josef Blumenfeld
Vice President, Communications
Houghton Mifflin Harcourt
617-351-5432
josef.blumenfeld@hmhpub.com