Mission Statement Kaplan helps individuals achieve their

educational and career goals.  We build futures

one success story at a time.

Higher Education Supplemental Education

Kaplan Year-to-Date Results 2005(6 months)

Revenue(in thousands)

2005 2004 % Change

Supplemental education $329,044 $279,010 18

Higher education 342,119 255,957 34

              $671,163 $534,967 25

Kaplan Year-to-Date Results 2005(6 months)

Operating income (loss)(in thousands)

2005 2004 % Change

Supplemental education $53,900 $45,694 18

Higher education 46,998 43,515 8

Kaplan corporate overhead (22,034) (15,190) (45)

Other* (12,110) (23,939) 49

             $66,754 $50,080 33

*Other includes charges accrued for stock-based incentive compensation and amortization of certain intangibles.

Kaplan Revenue 2000-2004 ($ in millions)

Revenue by Business Unit

2002 2004

$621M $1,135M

Areas of Kaplan’s Growth Since 2002

Acquired 27 businesses for $365M

Expanded international presence

Nearly doubled number of higher education campuses

Grew online operations

Drivers of Growth in Education Market

“Knowledge Economy”In 1973… By contrast, in 1998…

Source: Anthony P. Carnevale, Donna M. Desrochers, Richard A. Fry, & Stephen R. Rose, Educational Testing Service Office of Public Leadership: “ETS analysis of Current Population Survey (March 1994 & 1999),” 2001

Bachelor’s or advanced degree

Associate’s degree

Some college

Finished high school and stopped there

Workers that had not completed high school

32%

40%

12%

16%

33%

18%

30%

10%

9%

No Child Left Behind Increased spending on assessments and remediation

Market size ($ in millions)

Source: Eduventures, “Testing in Flux: Future Directions in the Pre-K-12 Assessment Market,” 2004; Eduventures, “K-12 Solutions Learning Markets & Opportunities 2004,” 2004

Competition for University Admissions Projected number of U.S. high school graduates 2005-2009

Source: National Center for Education Statistics, “Projections of Education Statistics to 2013,” 2003

Number of students (in millions)

International Student Growth

Global demand for international higher education

Source: IDP Education Australia, “Global Student Mobility 2025,” 2002

Number of students (in millions)

Acceptance of Online Learning

Students enrolled in 100% online education

Source: Eduventures, “Online Distance Education Market Update 2005,” 2005

Number of students (in millions)

Units of Kaplan

Kaplan Test Prep and Admissions

159 centers, 280,000 students

K12    

Pre-College

Graduate

Medical

English Language

KTPA Highlights

Increased revenue 25% from 2002 to 2004

In 2004, grew revenue at nearly twice the rate of The Princeton Review

Expanded international presence with Kidum acquisition

Launched programs for new UK postsecondary exams

K12 Learning Services

Seven of nation’s ten largest school districts since 2002

Curriculum development and support

Teacher training

After-school instruction

K12 Highlights

Increased revenue 125% from 2002 to 2004

Helped New York’s Region 5 achieve city’s greatest math and reading improvements

Developed new curriculum for high schools in Philadelphia and Camden, NJ

Created after-school program for Los Angeles public schools

KTPA Challenges

Growth of local competitors focused on single products

Declining numbers of test-takers for some graduate admissions exams

Scaling up to meet growing demand for K12 services in response to NCLB

Kaplan Professional

51 locations, 500,000 courses sold in 2004

Financial services

Real estate

IT

Publishing

KP Highlights

Increased revenue 35% from 2002 to 2004

Acquired 12 companies since 2002

Achieved solid growth in real estate and publishing

Diversified into new professional market segments

KP Challenges

Sustainable growth in highly cyclical markets

Integration of acquisitions

Maximizing return on technology investments

Financial ServicesTraining and Compliance

Modest growth in insurance and securities education

Industry shift from education to compliance services

No providers successfully serving both segments

Acquisition of BISYS Education and eMind

Consolidation enables Kaplan to become “one-stop-shop”

SCORE!

167 centers, 82,000 students

Computer-based programs and personal tutoring

Positive reinforcement and feedback

Enrichment and remediation

SCORE! Highlights

Increased revenue 15% from 2002 to 2004

Opened 25 new centers since 2002

Doubled number of students in last five years

Expanded early learning services through Headsprout partnership

SCORE! Challenges

Reinventing curriculum and establishing internet delivery

Staffing strategy reliant on recent college graduates

Center redesign and technology upgrade

Kaplan Higher Education Campus-based

76 campuses, 32,000 students

Market-driven education

Career-focused programs in allied health, business, legal, IT

Certificate, associate’s and bachelor’s programs

KHE – Campus Highlights

Increased revenue 83% from 2002 to 2004

Since 2002:– Acquired or opened 30 campuses– Added 11,400 students– Introduced 125 new programs

KHE – Campus Challenges

Reduction in unemployment rates

Increased competition

Industry players under increased scrutiny

Rapid growth challenges management capacities

Kaplan University

19,000 students online

Career-oriented programs for working adults

Extensive support network for students

Major economic force in South Florida

KU Ft. Lauderdale

KU Highlights

More than tripled revenue from 2002 to 2004

Doubled enrollment each year since 2002

Added 10 degree programs since 2002

Achieved university status with introduction of master’s degree programs

KU Ft. Lauderdale

KU Challenges

Higher Education Act reauthorization

Higher cost per lead

Student retention in online environment

Faculty and administrator recruitment

KU Ft. Lauderdale

Concord Law School

1,600 students

World’s first fully online law school

Among largest law schools in the U.S.

More than half of students already have advanced degrees

Concord Law School

“The process inevitably loses something

vital when students learn in isolation.” “The process inevitably loses something

vital when students learn in isolation.”

Justice Ginsburgdiscussing Concord Law School in remarks

at Rutgers Law SchoolSeptember 9, 1999

Source: Legal Times

Concord Law School

Justice Scaliaparticipated in an

online chat with Concord studentson June 25, 2004

KHE Management

Kaplan President Andy Rosen to oversee both domestic higher education businesses

New management structure to:– Combine expertise of campus and

online leadership– Increase collaboration on lead sharing,

curriculum, hybrid programs– Provide strong platform for long-term

growth

Kaplan International

29 locations, 46,600 students

Financial Training Company (UK, Asia)

Dublin Business School (Ireland)

Asia Pacific Management Institute (Singapore, Hong Kong)

Kaplan International Colleges (UK)

KI Highlights

Increased FTC revenue 32% in first full year of ownership (2004)

Through first six months 2005, FTC achieved equal market share with BPP

Expanded higher education presence in UK and Asia

Created partnerships with UK universities to serve international students

KI Challenges

Potential tightening of visa policies

New management at several businesses

Maintaining relationships with university partners

Limited experience in international markets

Evolving the Kaplan Brand

The Kaplan Brand

Kaplan still struggles to overcome perception as test prep company

Multiple brand identities confuse customers

Recognition as a global education provider requires unifying the Kaplan brand

Kaplan Today

New Corporate Identity