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Mission Statement Kaplan helps individuals achieve their educational and career goals. We build futures one success story at a time.

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Presentation on theme: "Mission Statement Kaplan helps individuals achieve their educational and career goals. We build futures one success story at a time."— Presentation transcript:

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2 Mission Statement Kaplan helps individuals achieve their educational and career goals. We build futures one success story at a time.

3 Higher Education Supplemental Education

4 Kaplan Year-to-Date Results 2005 (6 months) Revenue (in thousands) % Change Supplemental education$329,044$279,01018 Higher education342,119255,95734 $671,163$534,96725

5 Kaplan Year-to-Date Results 2005 (6 months) Operating income (loss) (in thousands) % Change Supplemental education$53,900$45,69418 Higher education46,99843,5158 Kaplan corporate overhead(22,034)(15,190) (45) Other*(12,110)(23,939)49 $66,754$50,08033 *Other includes charges accrued for stock-based incentive compensation and amortization of certain intangibles.

6 Kaplan Revenue ($ in millions)

7 Revenue by Business Unit $621M $1,135M

8 Areas of Kaplans Growth Since 2002 Acquired 27 businesses for $365M Expanded international presence Nearly doubled number of higher education campuses Grew online operations

9 Drivers of Growth in Education Market

10 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 Bachelors or advanced degree Associates 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%

11 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

12 Competition for University Admissions Projected number of U.S. high school graduates Source: National Center for Education Statistics, Projections of Education Statistics to 2013, 2003 Number of students (in millions)

13 International Student Growth Global demand for international higher education Source: IDP Education Australia, Global Student Mobility 2025, 2002 Number of students (in millions)

14 Acceptance of Online Learning Students enrolled in 100% online education Source: Eduventures, Online Distance Education Market Update 2005, 2005 Number of students (in millions)

15 Units of Kaplan

16 Kaplan Test Prep and Admissions 159 centers, 280,000 students K12 Pre-College Graduate Medical English Language

17 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

18 K12 Learning Services Seven of nations ten largest school districts since 2002 Curriculum development and support Teacher training After-school instruction

19 K12 Highlights Increased revenue 125% from 2002 to 2004 Helped New Yorks Region 5 achieve citys 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

20 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

21 Kaplan Professional 51 locations, 500,000 courses sold in 2004 Financial services Real estate IT Publishing

22 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

23 KP Challenges Sustainable growth in highly cyclical markets Integration of acquisitions Maximizing return on technology investments

24 Financial Services Training 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

25 SCORE! 167 centers, 82,000 students Computer-based programs and personal tutoring Positive reinforcement and feedback Enrichment and remediation

26 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

27 SCORE! Challenges Reinventing curriculum and establishing internet delivery Staffing strategy reliant on recent college graduates Center redesign and technology upgrade

28 Kaplan Higher Education Campus-based 76 campuses, 32,000 students Market-driven education Career-focused programs in allied health, business, legal, IT Certificate, associates and bachelors programs

29 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

30 KHE – Campus Challenges Reduction in unemployment rates Increased competition Industry players under increased scrutiny Rapid growth challenges management capacities

31 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

32 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 masters degree programs KU Ft. Lauderdale

33 KU Challenges Higher Education Act reauthorization Higher cost per lead Student retention in online environment Faculty and administrator recruitment KU Ft. Lauderdale

34 Concord Law School 1,600 students Worlds first fully online law school Among largest law schools in the U.S. More than half of students already have advanced degrees

35 Concord Law School The process inevitably loses something vital when students learn in isolation. Justice Ginsburg discussing Concord Law School in remarks at Rutgers Law School September 9, 1999 Source: Legal Times

36 Concord Law School Justice Scalia participated in an online chat with Concord students on June 25, 2004

37 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

38 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)

39 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

40 KI Challenges Potential tightening of visa policies New management at several businesses Maintaining relationships with university partners Limited experience in international markets

41 Evolving the Kaplan Brand

42 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

43 Kaplan Today

44 New Corporate Identity


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