mission statement
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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
New Corporate Identity
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