While overall results improved at KTP in 2012, Kaplan recorded a $111.6 million noncash goodwill and other long-lived assets impairment charge in connection with KTP in the fourth quarter of 2012. This impairment charge was determined as part of the Company’s annual goodwill and intangible assets impairment testing based on KTP operating losses for the past three years and a recent slowdown in enrollment growth. KTP produced positive cash flow from operations in 2012.

Kaplan International includes English-language programs, and postsecondary education and professional training businesses outside the United States. In May 2011, Kaplan Australia acquired Franklyn Scholar and Carrick Education Group, national providers of vocational training and higher education in Australia. In June 2011, Kaplan acquired Structuralia, a provider of e-learning for the engineering and infrastructure sector in Spain. Kaplan International revenue increased 8% and 9% in 2012 and the fourth quarter of 2012, respectively. Excluding revenue from acquired businesses, Kaplan International revenue increased 4% in 2012 due to enrollment growth in the English-language and Singapore higher education programs. Excluding revenue from acquired businesses, Kaplan International revenue increased 6% in the fourth quarter of 2012 due to enrollment growth in the pathways and Singapore higher education programs.

Kaplan International operating income increased in 2012 due largely to strong results in Singapore, offset by combined losses from businesses acquired in 2011. These losses occurred primarily at certain businesses in Australia where Kaplan has been consolidating and restructuring its businesses to optimize operations. Restructuring costs at Kaplan International totaled $16.4 million in 2012 ($14.9 million in the fourth quarter of 2012). These restructuring costs were largely in Australia and included lease obligations, accelerated depreciation and severance charges. The decline in Kaplan International operating income in the fourth quarter of 2012 is due to these restructuring costs.

Corporate represents unallocated expenses of Kaplan, Inc.’s corporate office and other minor shared activities.

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