Learning transforms lives. Kaplan builds futures one success story at a time. KAPLAN, INC. LETTER FROM ’05 ’05CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Most of us vividly remember a great teacher who made 1,135 Kaplan Revenue Growth a difference in our lives—someone who inspired and

1995-2004 motivated us, ignited our sense of curiosity, or gave us (in millions of dollars) 838 confidence. Those teachers had a lasting impact because they gave us tools that would help us succeed, not only in the classroom, but beyond. 621 Kaplan’s revenue grew by At Kaplan, we seek to do just that. We help education, K12 programs, and professional train- 494 35% in 2004 to more than people transform their lives through education. ing. We have entered new markets across the 354 globe, on the ground and online. We serve both

Whether teaching a second-grader who is traditional and nontraditional students, many in 257 $1.1 billion 195 struggling to read, a working mother earning a communities and demographic groups with lim- 117 89 94 bachelor’s degree, or a financial analyst looking ited access to educational opportunities. In to acquire the highest professional designation, years to come, we will continue to expand our

we provide individuals with the resources they scope with new offerings, each one designed to

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 need to achieve their goals. help our students successfully reach an

important milestone.

Kaplan 2004 Revenue by Business Unit Doing that requires talent, and we have lots of it: professors, technologists, product developers, On these pages, you will learn about Kaplan, Kaplan helps individuals administrators, financial aid experts, mathemati- our students and our employees. Through cians and psychometricians. Kaplan is filled with them, we hope that you will arrive at a better achieve their educational Kaplan Higher Education people who are committed to creating positive understanding of our business and the and career goals. We Kaplan Test Prep and Admissions experiences for our students. Because when our power of education. students succeed, we succeed. build futures one success Kaplan Professional story at a time. SCORE! Today, Kaplan is a very different company from

the one people remember as synonymous with JONATHAN N. GRAYER

“test prep.” We are now leaders in postsecondary Chairman and Chief Executive Officer ’05KAPLAN, INC. OVERVIEW Redefining an industry KAPLAN HAS 20,000 Kaplan annually reaches 900,000 EMPLOYEES IN students around the globe IN MORE THAN 3,000 500 CLASSROOMS Kaplan has come a long way since its founding LOCATIONS WORLDWIDE as a test preparation business in 1938. Today Kaplan, Inc. is a global education company that offers a wide array of programs and services to individuals, schools and businesses.

During the last 10 years, Kaplan has grown international programs have enabled us to We’re built from an $80 million test prep company to a serve students and professionals in locations as Kaplan Higher Kaplan Professional $1 billion international corporation that offers varied as and Kuala Lumpur. for success. Education Securities and Insurance postsecondary education, K12 services for chil- Through our four business Real Estate, Home Inspection dren and schools, and professional training. As While we have dramatically expanded the Diplomas and Certificates units we provide high-quality and Appraisal Undergraduate Programs a wholly owned subsidiary of The Washington breadth of our business, we have retained educational services, assist- Accounting Graduate Programs ing students throughout Architecture, Engineering and Contracting Post Company, we are its largest revenue pro- many of our original values and characteristics. Foundation Programs their schooling and careers. Information Technology ducer and fastest growing division. We are student-focused, results-driven, and Legal committed to helping individuals realize their Compliance Solutions for Companies Our largest business is higher education. We dreams through education. We broaden access

serve 58,000 students through 75 campuses to educational and professional opportunities in

and online programs in the United States and new communities, including many that have SCORE! Kaplan Test Prep

abroad. Kaplan also offers a broad range of been underserved. We help people acquire and Admissions After-School Learning Programs services for children and schools, including new skills, needed credentials and better jobs.

curriculum and professional development for College Prep Programs Graduate Prep Programs teachers, after-school tutoring and academic English Language Programs coaching. Our professional training division Medical Licensing Programs provides more than half a million courses each K12 Offerings for Schools

year, many to the world’s leading financial insti-

tutions. We continue to lead the test preparation

industry. And we are expanding globally. Our

4 5 1KAPLAN HIGHER EDUCATION Opening doors to careers

Kaplan Higher Education offers certificate and

degree programs, on campus and online, that

prepare students for employment in fields

including healthcare, business, criminal

justice, fashion, design and graphic arts, and

information technology, as well as paralegal

studies. At campuses in the United States and

abroad, as well as via online programs through

Kaplan University and ,

we offer people educational opportunities that

help them advance their careers and better

their lives. Each of our schools is separately

accredited by one of several national or regional

accrediting agencies approved by the U.S.

Department of Education.

We are responsive to the needs of adult

learners juggling work, family and other respon-

sibilities. Our comprehensive support system

provides financial aid counseling, academic

advising, study skills workshops, time manage-

ment guidance and more. Our faculty, many of

“THROUGH MY MEDICAL ASSISTANT PROGRAM, I whom hold master’s and doctoral degrees, is

DEVELOPED GREAT RELATIONSHIPS WITH MY committed to ensuring that our students get the

PROFESSORS AND GAINED THE SKILLS I NEEDED TO maximum value from their academic experience. land a better job AT A LOCAL HOSPITAL.” ROUCHEL MOSSMAN,

MARIC COLLEGE—POMONA CAMPUS

6 7 1KAPLAN HIGHER EDUCATION

IN 2004, REVENUE

FOR KAPLAN’S HIGHER

EDUCATION DIVISION

GREW BY 35% “Preparing students to excel in their professions is our focus at . Our faculty carefully guides students through every stage of the learning process. Our goal is to deliver a tremendous support network to Revenue for people with busy lives who need a quality education in Kaplan University’s a flexible format.” Dave Clinefelter, Ph.D., Kaplan University ONLINE PROGRAMS more

Kaplan entered the postsecondary education Kaplan University, which houses our online than doubled industry in 2000 with the acquisition of higher education programs, now serves in 2004 Quest Education Corporation, a network of approximately 20,000 students online and

30 schools. Since then, we have more than recently introduced its first master’s degree

doubled our number of campuses, where programs.

we now serve more than 32,000 students. We

are market-driven, adding locations and Concord Law School, the world’s first fully

programs in areas that will best serve local online law school, and the second largest part- Kaplan Higher Education employment needs. time law program in the country with 1,600

students, offers working adults around the Kaplan Higher Education has 75 campuses country the flexibility and convenience they 58,000 in 18 states and abroad, as well as online need to obtain law degrees. STUDENTS programs through Kaplan University and Concord Law School. Kaplan has also expanded its higher education 75 CAMPUSES programs to individuals abroad through Dublin The division is one of the largest for-profit Business School, Ireland’s largest private and online providers of postsecondary education in the undergraduate college with 4,000 students, Dave Clinefelter, Ph.D. United States. It is also the leading revenue and Kaplan International Colleges, which Vice President for Academic Affairs producer for Kaplan, Inc. collaborate with U.K.-based universities. and Provost, Kaplan University

8 9 2KAPLAN PROFESSIONAL Customizing solutions for clients

Kaplan Professional provides comprehensive

education and training solutions to businesses

and individuals in the securities, insurance,

real estate, information technology and legal

industries. Through an array of tools—

including classroom instruction, more than

600 online courses and study materials—

Kaplan Professional serves both corporate

clients and individuals in international, national

and regional markets.

Kaplan Professional provides 500,000

licensing and continuing education courses

annually to some of the world’s leading

financial institutions, including Goldman

Sachs, Credit Suisse First Boston,

A.G. Edwards and World Financial Group. We

also offer compliance management solutions

that enable companies to better track essential

employee information—a critical aspect of

doing business in an increasingly complex

regulatory environment. Using leading

“PASSING THE CFA EXAM REQUIRES AN OCEAN OF technology, we deliver a broad range of

KNOWLEDGE. SCHWESER HAS GIVEN ME THE DISCIPLINE AND educational offerings that help our clients lower

CONFIDENCE I NEED TO BE WELL-PREPARED. risk, improve accuracy and reduce costs.

THE PROGRAM IS MORE THAN JUST STUDY NOTES; it’s an investment in my future.” JEROME CASAMATTA, FIXED INCOME SPECIALIST

11 2KAPLAN PROFESSIONAL

KAPLAN PROFESSIONAL SCHOOLS serve 132,000 customers ANNUALLY,

ONLINE AND THROUGH A NETWORK

OF CLASSROOMS IN 15 STATES

“Today’s businesses need quality training that can quickly adapt to organizational or regulatory changes. Kaplan Professional helps busy people prepare for demanding exams with structured courses in a convenient format, Dearborn and we provide companies with the comprehensive tools Publishing offers they need to track employee certification.” titles for Andrea Mainelli, Kaplan Professional 400

Kaplan Professional is comprised of some of the Study Program, the market leader in Chartered professionals most recognized names in corporate training. Financial Analyst (CFA) training; and the in real estate- We are among the market leaders in all Financial Training Company, which offers

segments of the real estate industry, including accountancy training in the U.K. and Asia (see related fields

architecture, engineering and contracting, agent page 12). To address the growing demand for

and broker services, home inspection and accountants and wealth managers, we offer

appraisal. Our Dearborn Publishing unit provides Certified Public Accountant (CPA) and Certified

curriculum to educators and consumers in print, Financial Planner (CFP) exam preparation. Kaplan Professional software and online formats. As one of the Through Perfect Access Speer, we provide soft-

nation’s leading business publishers, Dearborn ware training to some of the top law firms in Trade publishes approximately 70 new books the United States. 600 each year. Kaplan Professional Schools serve PRODUCT OFFERINGS 132,000 customers annually with licensing and Kaplan Professional is also home to the top continuing education courses online and two training providers for IT certification, 500,000 through a network of classrooms in 15 states. Transcender and Self Test Software. These COURSES SOLD TO INSTITUTIONS businesses offer in-depth practice exams to AND INDIVIDUALS We also prepare professionals for exams in the technology professionals seeking advanced

financial services industry through: Dearborn certifications and make Kaplan the leading Andrea Mainelli Financial Services, the premier provider of provider of test preparation for software profes- Chief Operating Officer, securities and insurance education; Schweser sionals around the world. Kaplan Professional

12 13 KAPLAN INTERNATIONAL DEMAND FOR PROFESSIONAL Growth around AND HIGHER EDUCATION IS the globe INCREASING, DRIVEN BY A RIS- 3 ING MIDDLE CLASS AND THE Broadening GROWTH OF “KNOWLEDGE” opportunities JOBS. WITH LOCATIONS IN 21 IS THE worldwide COUNTRIES, KAPLAN IS WELL POSITIONED TO MEET THE LARGEST PRIVATE POSTSECONDARY NEEDS OF INTERNATIONAL STUDENTS. INSTITUTION IN IRELAND AND SERVES

STUDENTS. CAMPUSES ARE Kaplan International brings our heritage of quality LONDON 4,000

education to new markets across the globe. We first SINGAPORE expanded beyond our United States operations in IN DUBLIN, DUBAI AND KUALA LUMPUR. 1993 with a test prep center in London. Today, Kaplan offers test prep in 18 countries, as well as higher education programs and professional training in the U.K., Ireland, Asia and the Middle East. Kaplan Test Prep and In 2003, Kaplan acquired the London-based Kaplan acquired Dublin Business School, Admissions serves Financial Training Company (FTC), a leading established in 1975, which enrolls 4,000 stu-

provider of accountancy and financial services dents in undergraduate, postgraduate, profes- students in 18 countries

training. Each year FTC, founded in 1958, sional and executive education programs in

trains more than 40,000 students at blue chip fields such as business, information technology

companies, government agencies, and and psychology. Dublin Business School has

accountancy practices. FTC has 22 training recently expanded with campuses in Kuala

centers in the U.K. and operations in Hong Lumpur and Dubai. Financial Training Company Kong, Shanghai and Singapore.

Kaplan International Colleges collaborates with FTC prepares students for professional exams U.K.-based universities to offer international 40,000 such as the Association of Chartered Certified students academic preparation programs and STUDENTS Accountants (ACCA), the Institute of Chartered language training required for admission to

Accountants in England and Wales (ICAEW), U.K. universities. Our first such venture, DUBLIN

the Chartered Institute of Management formed as an associated college of Nottingham 22 TRAINING CENTERS IN THE U.K. Accountants (CIMA), the Chartered Financial Trent University, provides students with inten-

Analyst (CFA), and the Association of sive coursework in English and study skills OPERATIONS IN HONG KONG, SHANGHAI Accounting Technician (AAT). designed to help them obtain the requisite cre- AND SINGAPORE dentials for admission to the University. HONG KONG

14 15 “KAPLAN WAS THE ONLY INSTITUTION KAPLAN TEST PREP AND ADMISSIONS THAT IMPRESSED ME. WITH PRIVATE TUTORING, ONLINE

AND CLASSROOM SESSIONS, AND A HIGHER SCORE GUARANTEE, I knew I would get the I NEEDED FOR MY BUSINESS SCHOOL OF CHOICE.” 4 results Helping students GEMYMA NORVILLE, GMAT STUDENT achieve

When Stanley H. Kaplan first started tutoring

students for standardized tests in 1938, he

gave birth to a new industry that equipped

people with the resources to realize their

dreams of higher education. His commitment

to preparing students for high-stakes tests

helped tens, then hundreds, then thousands of

students master the skills needed to gain

access to competitive universities.

Nearly 70 years and more than three million

students later, Kaplan Test Prep and

Admissions continues to open doors for

students to academic and professional

opportunities. Today, middle school students,

college-bound teens, graduate school

prospects, aspiring doctors and English

language learners rely on Kaplan to help them

reach their potential. With 3,000 classroom

locations worldwide, we offer preparation for

35 standardized tests for college and graduate

school admissions, English language proficiency

and professional licensing.

17 4KAPLAN TEST PREP AND ADMISSIONS

KAPLAN TEST PREP AND

ADMISSIONS IS 2x the size of ITS

NEAREST COMPETITOR “We are absolutely committed to our students’ success. This means providing the highest quality test preparation available – not through a one-size-fits-all approach, but by working in partnership with our students to ensure

they have every opportunity to learn in the way that IN 2004, TEST PREP suits them.” Leigh-Ellen Louie, Kaplan Test Prep and Admissions REVENUE GREW BY

As the world leader in test preparation, our state-of-the-art diagnostic and prescriptive tools % depth of knowledge, experience and resources created to help students achieve their best in helping students succeed is unparalleled. results, each student receives his or her own 15 Our comprehensive menu of online offerings, study plan, and teachers fine-tune lessons to

extensive library of books and software, popular ensure progress along the way.

classroom-based courses, array of private

tutoring programs and admissions consulting As our students have excelled and succeeded,

services all have proven success in helping so has Kaplan. More than twice the size of Kaplan Test Prep students achieve their goals. In addition, our our nearest competitor, Kaplan has seen

K12 Learning Services partners with schools enrollment in its courses nearly double in the

and school districts around the country to pro- past five years—from 150,000 in 1999 to PROGRAMS FOR 35 vide them with the resources that will enable all more than 280,000 students and profession- STANDARDIZED TESTS students to succeed (see page 18). als in 2004, including over 87,000 taking part in online programs. Students can also enroll 280,000 We maintain our leadership position by using a in one of our 159 centers or thousands of STUDENTS ANNUALLY collaborative, customized, results-oriented satellite locations throughout the United

approach. Kaplan understands that every stu- States and abroad.

dent is unique, and provides extensive options Leigh-Ellen Louie 3,000 Executive Vice President, CLASSROOM LOCATIONS tailored to meet individual learning needs. With Kaplan Test Prep and Admissions

18 19 5KAPLAN K12 LEARNING SERVICES K12CASE STUDY Partnering

with schools K12 Learning Services

HELP EDUCATORS IMPROVE

ACADEMIC ACHIEVEMENT FOR ALL

STUDENTS

Kaplan K12 Learning Services provides solutions to school The 2005 school year brought a change to districts’ toughest challenges. Partnering with hundreds high school classrooms throughout Philadelphia: a new standardized, mandated, college-prep of districts, we provide educational materials and services, curriculum—conceived, written, and administered by Kaplan WE PROVIDE SCHOOLS WITH including a comprehensive managed curriculum, for grades K12 Learning Services. custom-designed K through 12. We help educators improve academic achievement for students of all learning levels to meet Philadelphia’s public high schools had a curriculum with programs more than a thousand different courses, usually with a vari- Adequate Yearly Progress goals required by the No Child ety of textbooks being used for the same course—sometimes TO HELP THEM MEET STATE

Left Behind Act. Our programs are custom-designed to meet a skills, while staff development workshops teach within the same classroom. Administrators realized that too EDUCATIONAL STANDARDS

district’s specific needs. School administrators strategies for integrating our technologies into many of the city’s 214,000 high schoolers were suffering from gaps and inconsistencies in curriculum—aggravated by can choose from a myriad of Kaplan K12 classrooms. an exceptionally high mobility rate, with 30% of students programs to help students master state-defined transferring schools annually. Philadelphia turned to learning standards, improve critical thinking skills, Students benefit from Kaplan K12’s print mate- Kaplan for help. boost performance on standardized tests, and rials, online instruction, supplemental tutoring, increase college opportunities. Our programs can diagnostic testing, intensive individual reading Kaplan K12 provided a managed instructional system that be taught by Kaplan K12 teachers or by a school’s and math interventions, and ongoing formative includes curriculum materials aligned to state standards, Kaplan K12 Learning teaching staff supported by our professional assessment. Fundamental reading and math professional development, and frequent diagnostic tests. In Services development team. Our approach allows us to skills are taught in a “scaffolded” instructional consultation with Philadelphia’s curriculum department, our team developed a comprehensive curriculum for the ten core address each district’s unique challenges. model, which builds students’ confidence as courses in science, math, social studies, and literature that HELPS STUDENTS improve they learn. Instructional materials are supported are required to earn a Pennsylvania high school diploma. CRITICAL THINKING SKILLS Kaplan K12 provides school districts with the by practice tests that mirror the format and con- capacity and expertise to support a variety of tent of state and college entrance exams. Kaplan’s Philadelphia effort is a groundbreaking, model boosts PERFORMANCE ON initiatives. Our solutions enable educators to partnership that plays a pivotal role in the district’s plans to STANDARDIZED TESTS provide ongoing, formative benchmark tests, Working together, Kaplan K12 Learning Services help its high schools meet the state’s educational standards.

with results reported at the district, school, and our school partners are making great strides AND INCREASES COLLEGE class and student levels. Our daily lesson plans in teaching and learning.

help teachers target and close gaps in student opportunities

20 21 “WE DECIDED TO ENROLL OUR DAUGHTER EMILY IN SCORE! SCORE! AFTER WE REALIZED THE KIND OF POSITIVE IMPACT

THE PROGRAM WOULD HAVE ON HER LEARNING AT

SCHOOL. SHE LOVES THE STAFF AND COMPLETING THE GOALS IN EACH LESSON. EMILY NOW 6 Creating a love excels in all subjects AND TRULY ENJOYS LEARNING.” of learning CHARLES MOBBS, PARENT OF EMILY MOBBS,

SECOND GRADER, AGE 8

SCORE! Educational Centers offers parents the

opportunity to provide their children in grades

pre-K through 10 with customized, engaging

after-school learning programs that build critical

reading, writing and math skills in a fun and

motivating environment. We believe that aca-

demic growth comes from students understand-

ing basic principles, applying learned concepts,

and experiencing positive reinforcement.

At 165 centers nationwide, SCORE! provides

tutoring and academic coaching to 82,000

students a year while boosting children’s

self-confidence and helping them to build a

lifelong passion for learning. Our current

offerings include early reading programs,

writing courses, and skills-based learning in a

range of subjects such as reading, math,

science and language arts that build students’

logical and critical thinking abilities.

SCORE! develops a comprehensive learning

plan tailored to each child’s needs that adjusts

over time, motivating students to progress

toward long-term objectives. By eliminating the

barriers that hinder children from learning, we

help them catch up, keep up and get ahead.

23 6SCORE! SCORE!

REACHES FAMILIES

from Harlem to

“SCORE! makes a difference in the lives of children. Beverly Hills Students gain in so many ways though our programs— they improve basic academic skills, build self-confidence, and work with terrific role models. SCORE!’s mission is in line with mine—to give students every opportunity IN THE PAST FIVE YEARS, SCORE! HAS to succeed in school and in life.” Oliver Delgado, SCORE!

MORE THAN doubled THE NUMBER SCORE!’s unique teaching methods employ a What sets SCORE! apart is our broad reach

proven formula that produces results. Our and educational philosophy. We create great OF STUDENTS IT SERVES Advantage Program uses an engaging, interac- learning and growth opportunities for all kinds

tive curriculum as the basis for instruction, of families, serving communities from Harlem

which continually assesses and adapts to each to Beverly Hills. We understand the needs of

student’s changing needs. Using computer- each student, fine-tune lessons to reflect

based, multimedia courses supplemented with progress, and teach students to set and

direct instruction from our Academic Coaches, achieve goals. Our coaches are excellent role SCORE! children work at their own pace, and become models who exemplify academic achievement

independent learners by applying general prin- and reward students with positive feedback. ciples to specific problems. By making learning fun for kids, SCORE! 165 empowers children to build the foundation for CENTERS Our Personal Academic Tutoring is a more their future growth. intensive program for students who need a 82,000 higher level of one-on-one instruction. It STUDENTS EACH YEAR improves confidence, increases motivation to

learn, and results in rapid progress in math,

reading and writing. 12 Oliver Delgado STATES Regional Director, SCORE!

24 25 ’05KAPLAN, INC. KAPLAN, INC. Turning dreams Useful information into reality

KAPLAN, INC. SCHWESER STUDY PROGRAM KAPLAN, INC.

kaplan.com schweser.com Headquarters

“YOUR CPA COURSE WAS WHAT I 888 Seventh Avenue MY DAUGHTER IS NOW EXCITED TO DO MATH. I NEVER NEEDED TO PASS. IT GAVE ME the KAPLAN HIGHER EDUCATION KAPLAN CPA REVIEW New York, NY 10106 THOUGHT I WOULD SEE THE DAY. HER NEWFOUND ability flexibility TO STUDY WHEN TIME WAS kaplanhighereducation.com kaplancpareview.com to face challenges—AND MEET THEM—HAS MADE AVAILABLE." A DEFINITE IMPROVEMENT IN HER CONFIDENCE.” RICH, KAPLAN UNIVERSITY SELF TEST SOFTWARE GAIL, SCORE! PARENT KAPLAN PROFESSIONAL STUDENT kaplan.edu selftestsoftware.com

CONCORD LAW SCHOOL TRANSCENDER

concordlawschool.com transcender.com

“MY MEDICAL KAPLAN PROFESSIONAL PERFECT ACCESS SPEER

EXTERNSHIP HELPED ME TO kaplanprofessional.com paspeer.com

DECIDE WHAT STEPS I NEEDED DEARBORN FINANCIAL SERVICES KAPLAN TEST PREP AND ADMISSIONS TO TAKE TO become a dearborn.com kaptest.com professional IN THE DEARBORN REAL ESTATE EDUCATION SCORE! MEDICAL FIELD. NOW I’M recampus.com escore.com BACK IN SCHOOL AND ON THE

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dearborntrade.com dbs.edu GEORGE, KAPLAN “KAPLAN’S EXCELLENT STRATEGIES AND

TEACHERS HIGHER EDUCATION got me into my first-choice KAPLAN PROFESSIONAL SCHOOLS FINANCIAL TRAINING COMPANY PH.D. PROGRAM.” STUDENT kaplanprofessionalschools.com financial-training.com ANDREA, KAPLAN TEST PREP AND ADMISSIONS STUDENT

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