Slide 1: Earnings Conference Call and Webcast Fourth Quarter and Full-Year 2005
Laureate Education, Inc. Earnings Conference Call and Webcast Fourth Quarter and Full-Year 2005 February 27, 2006
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation includes information that could constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements may involve risk and uncertainties. Although the Compa
Slide 3: 2005 Highlights – Delivering Growth and Results
2005 Highlights – Delivering Growth and Results • Laureate’s Worldwide Student Enrollment - 217,429 – 41% Increase in Total Campus-Based Enrollment – 27% Increase in Total Online Enrollment • Latin American Region – New Enrollment Growth: 25% (30% including acquisitions) – Total Enrollment Growth: 1
Slide 4: 2005 Highlights – Network and Management Initiatives
2005 Highlights – Network and Management Initiatives • Network Initiatives: – U.S. and Spanish dual-degree programs launched throughout Latin America – Glion Hospitality Management programs now offered at 6 campuses in Mexico – Over 750 students studied abroad within the network in 2005 – Shared Bes
Slide 5: Key Campus-Based Successes in 2005
Key Campus-Based Successes in 2005 Working-Adults Grow to 16% of Total Campus-Based Enrollment First Mover in current markets Product leverages facilities, administration, and program content Working-adult is precursor to online UVM Ranked within Top 10 Best Universities in Mexico for Second Year by
Slide 6: Key Online Successes in 2005
Key Online Successes in 2005 Walden University’s Cohort Default Rate 1.2% Investments in Online Higher Education Opened enrollment advisor center in Phoenix, AZ Brand advertising doubled aided awareness as well as improved faculty recruitment efforts and faculty quality Pursuing Additional Professio
Slide 7: Year 2000: Building The Network
Year 2000: Building The Network 5 Countries 5 Institutions 15 Campuses and Distance Learning 54,800 Students CANTER UNITED STATES LES ROCHES HOTEL MANAGEMENT SCHOOL SWITZERLAND UNIVERSIDAD EUROPEA DE MADRID (“UEM”) SPAIN WORLDWIDE HEADQUARTERS BALTIMORE, MD UNIVERSIDAD DEL VALLE DE MEXICO (“UVM”) ME
Slide 8: Year 2005: International University Network
Year 2005: International University Network 15 Countries 24 Institutions 51 Campuses and Online 217,000 Students INSTITUT FRANCAIS DE GESTION (“IFG”) And ECOLE SUPERIEURE DU COMMERCE EXTERIEUR (“ESCE”) And ECOLE CENTRALE D’ELECTRONIQUE FRANCE Laureate Online Education NETHERLANDS GLION HOTEL SCHOOL
Slide 9: Laureate 2000-2005
Laureate 2000-2005 Enrollment 32% CAGR Revenue 37% CAGR Operating Income (1) 46% CAGR (1) Excludes Corporate G&A to allow for comparability prior to sale of K-12 business and excludes Non-Cash Compensation
Slide 10: Distinguishing Characteristics
Distinguishing Characteristics Global Network and Brand Laureate International Universities Strong local brands Accreditation at Highest Level Diversification By Country, market segment, and degree offerings First Mover Advantage Selecting the best acquisitions in each market Lessons learned and app
Slide 11: Forward Strategy and Objectives in 2006
Forward Strategy and Objectives in 2006 Expand Capacity at Existing Locations France, Peru, Ecuador, and Mexico/Central America Add 3-4 New Campuses (includes Build or Buy) Continue Preparations for China Entry Launch New Network Programs Expand study abroad and double-degree programs Increase progr
Slide 12: 2006 Financial Outlook (Excludes Acquisitions)
2006 Financial Outlook (Excludes Acquisitions) Revenue:$1.08 - 1.15 Billion An increase of 23% to 31% over 2005 14%-16% Campus-Based total enrollment growth 25+% Online total enrollment growth 4%-5% Price improvement Margin Improvement(1) : 60 - 120 bps Campus-based operational leverage Online margi
Slide 13: Vision for 2010
Vision for 2010 Revenue: $2 Billion Operating Margin: 20% EPS: $5.00 per share (25%+ CAGR) Assumptions: 18% to 20% annual revenue growth (based on 13% to 15% enrollment growth) and 100+bps annual operating margin improvement Positioned for 15% to 20% earnings growth 2010 to 2015 Highest growers in 2
Slide 14: Financial Overview
LAUREATE EDUCATION, INC. Financial Overview
Slide 15: Fourth Quarter 2005 Financial Summary
Fourth Quarter 2005 Financial Summary Laureate reported earnings of $0.91 per diluted share in its seasonally strongest and most significant quarter Results in line with Company’s previously issued financial outlook Industry-leading predictability and visibility Strong 3Q 2005 enrollment High retent
Slide 16: Full-Year 2005 Financial Summary
Full-Year 2005 Financial Summary Reported 2005 earnings of $1.65 per diluted share 29% EPS growth ( $1.65 in 2005 compared to $1.28 in 2004 - excluding the early repayment of K-12 seller note and UEM land divestment) Mid-point of previously issued financial outlook (which was increased by $0.02 in M
Slide 17: Non-Cash Compensation
Non-Cash Compensation In 2005, $4.6 million (approximately $0.07 per share) of expenses related to equity based compensation were reported as operating expenses in a separate line item - “Non-Cash Stock Compensation Expense”. The Company’s historical financial statements and outlook already include
Slide 18: Tax Issues Primarily Related to Divested Businesses
Tax Issues Primarily Related to Divested Businesses 1997 IRS issue concerning tax treatment of a specific item Awaiting formal notification from the IRS; Company expects no material EPS impact IRS proposed adjustments to 1998 & 1999 federal income tax return Related to transfer pricing and timing of
Slide 19: Best Practices - Revenue Recognition
Best Practices - Revenue Recognition Voluntarily adopting improved revenue recognition method Weekly revenue recognition across all Laureate universities Implementation has no material effect on future earnings per share New revenue recognition method impacts seasonality Reducing profit in Q1, Q3 an
Slide 20: Best Practices Seasonality
Best Practices Seasonality 2005 Revenue and Operating Profit BEFORE and AFTER Implementation of Improved Revenue Recognition Method Full-Year Revenue and Operating Profit Operating Profit as % of Full-Year Total EPS current $1.65; EPS re-presented $1.66 Operating Profit Includes Corporate G&A Re-pre
Slide 21: First Quarter 2006 Financial Outlook
First Quarter 2006 Financial Outlook Revenue ($ in millions) Campus-Based Revenue: $165 - $180 Online Revenue: $50 - $55 Total Revenue: $215 - $235 Operating Margin Campus-Based: 3% - 4% Online: 7% - 8% Corporate G&A Expense: ~$9 Diluted Earnings Per Share(1): ($0.01) - ($0.03) Effect of SFAS123(R)
Slide 22: 2006 Financial Outlook (Excludes Acquisitions)
2006 Financial Outlook (Excludes Acquisitions) 2006 Expected Earnings Per Share Under New Revenue Recognition Method 2006 Expected EPS Range by Quarter (as % of Full-Year EPS) First Quarter Second Quarter Third Quarter Fourth Quarter (2%) - 0% 32% - 35% 8% - 11% 53% - 58%
Slide 23: 2006 Financial Outlook (Excludes Acquisitions)
2006 Financial Outlook (Excludes Acquisitions) Re-presented 2006 2005 % Change Revenue ($ in millions): $1,080 - 1,150 $875.8 23%-31% 14%-16% Campus-Based total enroll. growth 25+% Online total enrollment growth 4%-5% Price improvement Margin Improvement(1) : 60 - 120 bps 105bps Campus-based operati
Slide 24: Questions & Answers
LAUREATE EDUCATION, INC. Questions & Answers