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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

Form 10-K

(Mark One)

For the fiscal year ended December 31, 2004

OR

For the transition period from to

Commission File Numbers: 333-110720 and 333-105746

HM PUBLISHING CORP.

HOUGHTON MIFFLIN COMPANY

(Exact Name of Registrant Issuer as Specified in Its Charter)

222 Berkeley Street

Boston, Massachusetts 02116

(617) 351-5000

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether HM Publishing Corp. (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether Houghton Mifflin Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrants are accelerated filers (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

The aggregate market value of the Common Stock held by non-affiliates of the registrant on March 25, 2005 was zero.

The number of shares outstanding of HM Publishing Corp.’s common stock as of March 25, 2005 was 1,000 shares.

The number of shares outstanding of Houghton Mifflin Company’s common stock as of March 25, 2005 was 1,000 shares.

Houghton Mifflin Company meets the conditions set forth in general instruction I(1)(b) of Form 10-K and is therefore filing this form with the reduced disclosure format.

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HM PUBLISHING CORP.

HOUGHTON MIFFLIN COMPANY

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Form 10-K

This Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Houghton Mifflin’s actual results could differ materially from the expectations described in the forward-looking statements. Some of the factors that might cause such a difference are discussed in the sections entitled “‘Safe Harbor’ Statement under Private Securities Litigation Reform Act of 1995” on page 34 and “Factors Affecting Future Operating Results” beginning on page 34 of this Form 10-K, respectively.

This Form 10-K is a combined report being filed separately by two registrants: HM Publishing Corp. and Houghton Mifflin Company. Unless the context indicates otherwise, any reference to “Publishing” refers to HM Publishing Corp., a wholly-owned subsidiary of Houghton Mifflin Holdings, Inc. (“Holdings”), and any reference to “Houghton Mifflin” refers to Houghton Mifflin Company and its wholly-owned subsidiaries, the wholly-owned subsidy of Publishing. The “Company,” “we,” “us,” and “our” refer to HM Publishing Corp. together with Houghton Mifflin Company.

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PART I

Item 1. Business

General Development of Business

Houghton Mifflin Company was incorporated in 1908 in Massachusetts as the successor to a partnership formed in 1880. Antecedents of the partnership date back to 1832. The Company is a leading publisher in the pre-kindergarten through grade twelve (“K-12”) and college education, trade and reference, and educational, clinical, and professional testing markets in the United States. The K-12 education market focuses on core subjects such as reading, language arts, literature, mathematics, world languages, and social studies, which represents that market’s largest and highest priority funding areas. Houghton Mifflin also provides K-12 educational and clinical assessments and related services. The college education market primarily targets introductory courses with the largest enrollments. The trade and reference market publishes an extensive line of fiction and non-fiction books for adults and children, dictionaries, and other reference materials. The professional testing markets provide various testing and assessment products and services. Houghton Mifflin’s diverse product offerings are classified into four reporting segments:

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Ownership Structure

Publishing was incorporated on September 12, 2003 and is the wholly owned subsidiary of Holdings. Holdings is a company beneficially owned by Thomas H. Lee Partners, L.P. and its affiliates (“THL”), Bain Capital, LLC and its affiliates (“Bain Capital”), and the Blackstone Group and its affiliates (“Blackstone”; collectively the “Sponsors”). Holdings contributed 100% of its interest in Houghton Mifflin to Publishing on September 17, 2003. Publishing and Houghton Mifflin are companies organized under the common control of Holdings. The historical consolidated financial statements of Houghton Mifflin have become the historical consolidated financial statements of Publishing. The historical results of operations for all periods prior to September 12, 2003 are of Houghton Mifflin and its subsidiaries. Publishing conducts all its business through Houghton Mifflin. The Company has elected to present dual consolidated financial statements for Publishing and Houghton Mifflin. The chart below illustrates in summary form the ownership and corporate structure.

Financial Information About Segments

Financial information about Houghton Mifflin’s reporting segments is in Part II, Item 6, Selected Financial Data beginning on page 11 and Part II, Item 8, Notes to Consolidated Financial Statements in Note 16 under the heading “Segment Information” beginning on page F-47.

Description of Business

As a publisher, Houghton Mifflin shapes ideas, information, and instructional methods into various media that satisfy the lifelong need of people to learn, gain proficiency, and be entertained. Houghton Mifflin seeks out, selects, and generates worthwhile concepts and then enhances their value and accessibility through creative development, design, production, marketing, sales, and distribution. While Houghton Mifflin’s works have been published principally in printed form, programs or works are also published in other formats, including computer software, laser discs, CD-ROM, and Internet-based platforms.

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Business Segments

K-12 Publishing

Overview

The K-12 Publishing segment develops and markets comprehensive educational programs and assessments targeted to the more than 54 million students in over 119,000 elementary and secondary schools in the United States, principally in core academic subjects. Products and services include textbooks, workbooks, supplemental materials, technology-based products, teaching guides and other resources, and teacher training as part of a full-service offering to schools, educators, and students. With an in-house editorial staff supplemented by external specialists, Houghton Mifflin develops programs that can be aligned to state standards and customized for specific state requests. In addition, through Riverside and Edusoft, the K-12 Publishing segment offers a wide range of educational, cognitive, and developmental standardized testing products in print, CD-ROM, and online formats, targeting the educational and clinical assessment markets.

In the educational publishing industry, materials are often described as “basal” or “supplemental.” Basal materials are comprehensive programs intended to provide a complete course of study in a subject, either at a single grade level or across grade levels, and are the primary source of classroom instruction. They typically include a student textbook and a variety of ancillary materials, such as teacher’s editions, charts, classroom displays, classroom handouts, workbooks, tests, CD-ROMs, and online materials. Supplemental materials provide focused information about a topic or practice in a particular skill, but not the comprehensive system of materials offered in a basal program. These materials are used both as alternatives and as supplements to core basal textbooks, enabling local educators to cost-effectively tailor standard programs to the specific needs of their students. Supplementals are generally purchased irrespective of adoption schedules, creating net sales and earnings that do not vary greatly with the adoption cycle. In addition, the development of supplemental materials tends to require significantly less capital investment than the development of a basal program.

Adoption Process

Adoption is the process by which public elementary and secondary schools select and purchase new instructional materials. The terms “adopt” and “adoption” are often used to describe the overall process of a state governing body’s official approval of basal programs for selection and purchase by that state’s school districts, or an individual school or school district’s selection and purchase of basal programs.

Twenty states approve basal programs on a statewide basis for a particular subject (“adoption states”). These states represent approximately one-half of the U.S. elementary and secondary school-age population. The selections typically occur every five to seven years according to a schedule publicized years in advance. Historically, deviations from announced adoptions have been minimal. The funding for the purchase of the materials in an adoption state is approved at the state level and is appropriated by subject. Typically, a school or school district within an adoption state may use state funding to purchase instructional materials only from the list of programs that have been adopted by the particular state’s governing body. After the state entities have approved instructional materials, individual schools later decide the quantity and timing of their purchases.

In the other states, referred to as “open states” or “open territories,” each individual school or school district can purchase materials without restrictions. Schools and school districts in open territories often consider decisions made in large adoption states when making their own purchasing decisions.

In adoption states, the state school board’s decision to approve a certain program developed by an educational publisher depends on recommendations from textbook committees, which are often comprised of educators and curriculum specialists. To ensure the approval and subsequent success of a new textbook program, extensive market research is conducted, including: (i) discussions of the planned curriculum with the state level curriculum advisors to secure their support; (ii) development of prototype textbooks that are focus-tested with

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educators, often against competing programs, to gather feedback on the program’s content and design; and (iii) incorporation of qualitative input from existing customers in terms of classroom needs. Historically, it has been rare that any of the major educational publishers has failed to have a program listed in a state for which it has invested significantly in development. However, a publisher’s ultimate market share in a given state will generally depend on the quality of its program and materials, the magnitude of its marketing and sales efforts, and the strength and nature of its relationships with key decision-makers at the district level.

Generally, a national edition is developed for sale in open territories and smaller adoption states, while programs for states that represent large purchasing opportunities are customized. The sales organization presents to school boards and textbook selection committees, which in turn make recommendations to departments of education in adoption states and to district level school boards in open territories. It is the Company’s belief that documented success in adoption states, especially California, Texas, and Florida, which in the aggregate comprised almost 28% of the market in recent years, can often positively influence a publisher’s sales efforts in open territories.

Once an adoption schedule is set, Houghton Mifflin analyzes upcoming opportunities and begins to develop content for basal programs. The preparation for any new program includes an upfront investment in research and editorial costs, which generally begins up to three years before a major new adoption. Additional investment is required to tailor content to specific adoption states, with the amount of the investment depending upon the potential size of the opportunity, but generally being less than the initial investment. Because the adoption cycle is staggered by subject, positive cash flows from existing programs are used to finance spending for new program development.

Supplementary materials and assessments are generally not adopted through this process. Supplementary materials are sold as off-the-shelf materials to schools and districts. Assessment programs are either bought as custom programs for statewide assessment, following a request for proposal process, or as off-the-shelf products in schools and districts.

Operations

The K-12 Publishing segment operates through five primary divisions: School Division, McDougal Littell, Great Source Education Group (including Cognitive Concepts, Inc. (“CCI”)), Riverside, and Edusoft. Each division benefits from strong relationships with its customers, most of which have been developed over many years through a service-based approach to designing, marketing, and implementing its programs.

School. The School Division develops and markets leading basal programs for the kindergarten through grade eight market utilizing the Houghton Mifflin brand. The division focuses its publishing portfolio on the subjects that have consistently received the highest priority from educators and politicians, namely reading, language arts (including spelling and English), mathematics, science, and social studies. In each subject, comprehensive learning programs are designed and then marketed with a variety of proprietary products to maximize teaching effectiveness, including textbooks, workbooks, teachers’ guides and resources, audio/visual aids, and technology-based products.

McDougal Littell. The McDougal Littell Division develops and markets basal programs for the grades six through twelve market, utilizing the McDougal Littell brand. The division publishes products and provides services in five of the six major educational subjects: literature/language arts, mathematics, social studies, world languages, and science. Vocational studies is the only subject in which McDougal Littell does not offer products and services. The editorial process, like that of the School Division, involves significant market research. McDougal Littell designs broad programs for middle school grades and course-specific products for high school.

Great Source Education Group. The Great Source Education Group Division develops and markets instructional, curriculum-based educational supplements for the pre-kindergarten through grade twelve market, utilizing various brands, including the Write Source and Earobics brands. The division offers such products as

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handbooks, instructional kits, summer school and after-school curricula, consumable student practice books, and test review books, as well as other resources. These materials supplement the core curriculum, allowing local educators to cost-effectively tailor standard programs for the specific needs of their students in the areas of intervention, special education, and early language learning. Many of Great Source Education Group’s product lines sell well outside the adoption cycle, creating a revenue stream that does not vary greatly with the adoption schedule.

Riverside. The Riverside Division develops and markets testing and assessment products for the grades K-12 and clinical markets and offers scoring and reporting services. The division’s tests include: (i) norm- referenced tests, or NRTs, which compare students to national performance levels; (ii) criterion-referenced tests, or CRTs, which are standards-based educational assessments, frequently customized for state educational entities; and (iii) clinical tests, which assess intellectual, cognitive, and behavioral development.

Edusoft. The Edusoft Division develops and sells testing technology to the K-12 market. The Edusoft product is a paper-to-web-based assessment platform that helps school districts, administrators, teachers, and parents track student performance on state standards through three kinds of tests: state exams, district benchmarks, and in-class teacher tests. The division’s testing and reporting solution gives districts the information they need to help improve instruction and student performance.

Sales and Marketing

Major regional sales offices for the K-12 Publishing segment are in California, Georgia, and Texas. Each division in the K-12 Publishing segment has its own dedicated sales force, comprised largely of former educators. The School and McDougal Littell Divisions employ a combined sales force in excess of 500 people. The Great Source Education Group, Riverside, and Edusoft sales forces are smaller. The Great Source Education Group sales force works with the School and McDougal Littell Divisions to maximize customer relationships. McDougal Littell also markets the College Division’s texts for high school advanced placement courses.

The sales force focuses on maintaining strong relationships with decision-makers in the adoption states, including teachers, district administrators, and state policymakers. In open territory states the sales force uses canvassing to strengthen relationships with decision-makers. Marketing efforts begin at the conception of the development of a new program. In the case of states where programs are already established, marketing efforts are continuous. Formal market research efforts include educator focus groups, prototypes of student and ancillary materials, and comparisons against competing products. Additional informal market research includes ongoing feedback from the sales force in identifying teachers’ and students’ requirements. The marketing and editorial staffs work closely together to incorporate the results of research into products, developing the most updated, research- and needs-based curricula. Once product development is complete, the sales campaign involves product presentations and sampling along with presentations by key authors. Sending sample copies is an essential part of marketing instructional materials. In addition, once a program is purchased, a variety of additional materials may be provided to purchasers at no cost. These additional materials, usually called “implementation” materials, are a cost of doing business. Training sessions are also conducted within a school district that has purchased the materials to help teachers learn to use the products effectively and to provide professional development services for which fees are charged.

College Publishing

Overview

The College Publishing segment publishes textbooks, ancillary products, such as workbooks and study guides, technology-based instructional materials, teacher materials, and other materials, primarily for introductory college-level courses. This segment targets more than 16 million students in over 4,200 institutions in the post-secondary higher education market. Concentration is on college courses in core disciplines, such as

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mathematics, chemistry, history, psychology, modern languages, accounting, business, and remedial studies, although some recent growth has come from new publications for high school advanced placement courses. The library of titles for introductory college courses enables the College Publishing segment to generate considerable sales in the high school advanced placement market.

In the post-secondary market, the faculty generally selects the textbooks and other materials to be used in class, acting either as a committee or individually. Affiliated college bookstores and large retail chains order post-secondary educational materials based on professors’ selections for purchase by college students. Historically, approximately 30% of all student purchases in the college market are used books. In the private career school market, the institution generally purchases products directly from the publisher and requires students to purchase those products from the institution as part of the tuition. For high school advanced placement courses, which generate a considerable portion of the College Division’s net sales, the selection of college-level materials is made through the adoption or open-territory selection processes described above.

College textbooks generally are updated every three to four years by authors and publishers. Textbooks with a current-year copyright date are referred to in the industry as “frontlist,” textbooks with a subsequent year copyright date referred to as “early in-stock,” and textbooks with an older copyright date referred to as “backlist.” The success of each year’s frontlist and early in-stock titles significantly influences sales of backlist titles in subsequent years. Consequently, most of the selling and marketing activities of college publishers focus on promoting frontlist and early in-stock titles.

Operations

The College Division’s products are offered primarily to the post-secondary higher education market in traditional print, electronic, and Internet-based formats; virtually all major print textbooks now have an integrated technology component such as a website or multimedia CD-ROM. Many of the division’s products are sold to high school advanced placement courses and to certificate-granting, for-profit institutions that offer skill-based training and job placement.

The College Division’s portfolio consists of titles by highly regarded authors who are experts in their respective disciplines. The authors agree to certain non-compete provisions, as is common industry practice, that prevent them from authoring for other publishers’ books and technology-based products that directly compete with the products that they create for the Company. Authors who are experts in their field write the majority of a book while the in-house editorial staff focuses on pedagogical development, layout, graphics, and refinement.

A significant portion of the college content is digitally stored and indexed, which enables the efficient development of new electronic and print products, optimizes the customization process, and allows publication in concurrent multi-media formats. Additionally, with nearly all college students utilizing the Internet, the College Division supports more than 600 textbook-related websites for students and professors.

Sales and Marketing

The College Division employs a sales and marketing force in excess of 180 people that promotes products to college faculty through a combination of on-campus visits, shipments of sample products, and direct marketing. As professors have embraced e-mail and the Internet to a greater extent in recent years, the role of direct marketing, especially e-mail correspondence, has increased significantly. The sales force continually canvasses college faculty with products. In addition, a dedicated McDougall Littell sales force sells advanced placement products in the high school market.

Trade and Reference Publishing

Overview

Specializing in high-quality adult and children’s books that generate strong backlist sales, the Trade and Reference Publishing segment’s adult list includes fiction, non-fiction, field guides, and cookbooks. The children’s list includes board books, picture books, and young adult novels. The market for reference materials,

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including dictionaries and thesauruses, is characterized by stable spending patterns and significant concentration among a small number of well-recognized brands. Despite the growing accessibility and desirability of the Internet as an information source, the Internet has not significantly affected the usage levels of print dictionaries and thesauruses, which offer relative convenience and ease of use. Nevertheless, web-based and other electronic resources will continue to develop and drive industry growth by addressing changing consumer behavior. Moreover, certain reference publishers, including the Company, have taken steps to digitize existing content in order to exploit online opportunities. Typically, publishers will license their content to online providers.

Operations

The Trade and Reference Publishing segment publishes quality fiction and non-fiction books for adults and children, dictionaries, and other reference works under brands such as Houghton Mifflin, Mariner Books, Clarion Books, American Heritage dictionaries, and Kingfisher Publishing plc (“Kingfisher”), a U.K.-based publisher of children’s fiction and non-fiction titles and reference materials for the trade market worldwide. The Trade and Reference Publishing segment generates a majority of its sales from its backlist of more than 3,000 titles, thereby reducing its dependence on introducing bestsellers each year, which can be a volatile market.

Sales and Marketing

The Trade and Reference Publishing segment’s marketing and publicity strategies focus on both booksellers and end consumers and contribute significantly to the success of an author and/or title. The Trade and Reference Publishing segment employs a sales force that principally covers the reseller marketplace, including retail chains, independent bookstores, online booksellers, wholesalers, and a variety of non-traditional book outlets. The sales forces of the other divisions are used to sell trade and reference products into the K-12 and college markets. Reference materials, in particular, are sold to K-12 schools and colleges, as well as to office supply distributors and businesses. The Trade and Reference Publishing segment also licenses book rights and content to paperback publishers, book clubs, websites, and other publishers as well as electronic businesses in the United States and abroad.

Other

Overview

Promissor is a developer and provider of testing services and products for professional certification and licensure. Generally, the professional assessment market has a highly fragmented customer base with numerous niche participants competing in various segments. Regulatory and professional associations typically select vendors based on detailed responses to extensive requests for proposals. The test-vendor selection process is generally based on a combination of variables that represent “best value” to the agency or organization, including the relationship developed with the key decision-maker and the vendor’s reputation as a quality service provider. Services are contracted for multiple years and are characterized by high renewal rates. This segment also includes unallocated corporate items.

Operations

Promissor provides testing services and products for professional certification and licensure, as well as employment screening, placement, evaluation, and fingerprinting in the United States and internationally. Promissor and its predecessors have operated in the licensing industry for more than twenty years. The division has 134 proprietary testing centers nationwide. In addition, it offers information technology and other certification testing services at over 1,500 locations internationally. It works with clients to design testing solutions, provide content management software tools, and deliver tests or support services. On behalf of its regulatory and professional association clients, Promissor provides the tests required to license or certify insurance brokers, nurse aides, real estate agents, and many other occupations and professions.

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Sales and Marketing

Promissor provides psychometric services, exam development, full examination and licensing administration services, and overall certification and licensing program management. Primary markets include licensing and certification bodies in North America and the United Kingdom.

Raw Materials, Printing and Binding

Paper is one of the principal raw materials used. Paper is purchased directly from a limited number of suppliers and paper merchants with whom the Company has various agreements that protect against price increases. The Company has not experienced and does not anticipate experiencing difficulty in obtaining adequate supplies of paper for operations, as agreements exist with reliable suppliers that assure availability on all main paper grades that the Company procures. While prices fluctuate depending upon market conditions, average market paper prices increased moderately in 2004.

The Company outsources the print, bind, and cover of its products, with approximately 80% of printing currently handled by Quebecor Publishing, R.R. Donnelley & Sons, Banta Corporation, Von Hoffman Press, Webcrafters, and Lehigh Press. The Company has a longstanding relationship with each printer.

Customers and Seasonality

In the K-12 market, the Company typically receives payments for products and services from individual school districts, and to a lesser extent individual schools and states. In the college and trade and reference markets, payment is received for products and services from book distributors and retail booksellers. In the case of the testing and assessment products and services, payment is received from the individually contracted parties.

Approximately 85% of revenues are derived from educational publishing in the K-12 and College Publishing segments, which are markedly seasonal businesses. Schools and colleges make most of their purchases in the second and third quarters of the calendar year in preparation for the beginning of the school year. Thus, approximately 75% of consolidated net sales are realized in these two quarters.

Sales of K-12 instructional materials and customized testing products are also cyclical, with some years offering more sales opportunities than others. The amount of funding available at the state level for educational materials also has a significant effect on year-to-year revenues. No single customer accounts for more than 10% of consolidated net sales. The Company’s largest single customer is Barnes & Noble, which purchases both College and Trade and Reference products. Although the loss of a single customer, including Barnes & Noble, or a few customers would not have a material adverse effect on the Company’s business, schedules of school adoptions and market acceptance of the Company’s products can materially affect year-to-year revenue performance.

Distribution

The Company operates five distribution facilities from which the Company coordinates its own distribution process: two in Indianapolis, Indiana and one each in Geneva, Illinois; Kennesaw, Georgia; and Dallas, Texas. Additionally, some adoption states require the use of in-state textbook depositories for educational materials sold in that particular state. Riverside ships its products primarily from a distribution vendor located in Green Bay, Wisconsin. The Company utilizes delivery firms including United Parcel Service, Inc., FedEx Corporation, and DHL Worldwide Express, Inc. to facilitate the principally ground transportation of products.

Competition

The Company sells its products in highly competitive markets. In these markets, product quality and customer service are major factors in generating sales growth. Other factors affecting sales growth in the K-12 market include the level of student enrollment in subjects that are up for adoption and the level of spending per

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student in each state and/or school district. Profitability is affected by industry developments including: (i) increasingly competitive selling, sampling, and implementation costs; (ii) rising development costs due to customer requirements for more customized instructional materials and assessment programs; and (iii) higher technology costs due to the increased number of textbook program components being developed in digital formats.

The Company competes with large publishers, such as Reed Elsevier plc, Pearson plc, The Thomson Corporation, and The McGraw-Hill Companies, Inc. The Company has three primary competitors in the K-12 market, seven in the college market, six in the trade and reference market, and two in the corporate certification and testing market.

Employees

As of December 31, 2004, the Company employed 3,554 regular employees. Approximately 1,354 of the employees are located in Boston, Massachusetts; 1,276 in the Chicago, Illinois metro area; 381 in Philadelphia, Pennsylvania; and 213 in Indianapolis, Indiana. The Company’s sales force makes up approximately 23% of all employees. None of the employees are subject to collective bargaining agreements. The Company believes that relations with employees are generally good.

Intellectual Property

The Company’s principal intellectual property assets consist of trademarks and copyrights in its content, as well as other rights in its brand names. Substantially all of the Company’s publications are protected by copyright, whether registered or unregistered, either in the Company’s name or in the name of the author of the work. Such copyrights protect the Company’s exclusive right to publish the work in the United States and in many countries abroad for specified periods. In most cases, protection extends for the author’s life plus 70 years, but in any event a minimum of 28 years for works published prior to 1978 and 95 years for works published thereafter.

The Company does not own any material patents, franchises, or concessions, but has registered certain trademarks and service marks in connection with its publishing businesses. The Company believes it has taken, and takes in the ordinary course of business, all appropriate available legal steps to protect its intellectual property in all relevant jurisdictions.

Environmental Matters

The Company generally contracts with independent printers and binders for their services, and operations are generally not otherwise affected by environmental laws and regulations. However, as the owner and lessee of real property, regardless of fault, it is possible that the Company could face liability if contamination were to be discovered on the properties it owns or leases. The Company is currently unaware of any material environmental liabilities or other material environmental issues relating to its properties or operations and anticipates no material expenditures for compliance with environmental laws or regulations.

Financial Information About Geographic Areas

Sales outside of the U.S. are not significant to Houghton Mifflin’s four reporting segments.

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Item 2. Properties

The principal executive office is located at 222 Berkeley Street, Boston, Massachusetts.

The following table describes the approximate building areas in square feet, principal uses, and the years of expiration on leased premises of the Company’s significant operating properties as of February 4, 2005. The Company believes that these properties are suitable and adequate for its present and anticipated business needs, satisfactory for the uses to which each is put, and, in general, fully utilized.

In addition, the Company leases 13 smaller sales offices. Promissor leases 134 additional smaller facilities for use as testing centers.

Item 3. Legal Proceedings

From time to time the Company is involved in litigation incidental to the conduct of business. The Company believes that no litigation currently pending against it, if adversely determined, would have a material adverse effect on its consolidated financial position or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders

There were no matters submitted to the sole stockholder in the fourth quarter of 2004.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Neither Publishing nor Houghton Mifflin has any publicly traded common stock.

Item 6. Selected Financial Data

The selected historical consolidated statement of operations data and consolidated statement of cash flow data for the years ended December 31, 2004, 2003, and 2002, and the selected historical consolidated balance sheet data as of December 31, 2004 and December 31, 2003 have been derived from the historical financial statements of Publishing, appearing elsewhere in this annual report on Form 10-K. The selected historical consolidated statement of operations data and consolidated statement of cash flow data for the periods of July 7, 2001 through December 31, 2001 and January 1, 2001 through July 6, 2001 and the year ended December 31, 2000, and the selected historical consolidated balance sheet data as of December 31, 2002, 2001, and 2000 have been derived from the historical financial statements of Publishing, which are not included in this Form 10-K.

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The selected historical consolidated financial data set forth below should be read in conjunction with, and the data is qualified by reference to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the audited consolidated financial statements and accompanying notes included elsewhere in this filing.