☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of Each Class | Trading | Name of Exchange on Which Registered | ||
American depositary shares, each representing one common | EDU | New York Stock Exchange | ||
Common shares, par value US$ share** | 9901 |
* | Effective on August 18, 2011, the ratio of ADSs to our common shares was changed from one ADS representing four common shares to one ADS representing one common share. |
** | Effective on March 10, 2021, we implemented a US$0.001 each.one-for-ten |
Large accelerated filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||
Emerging growth company | ☐ |
U.S. GAAP ☒ | International Financial Reporting Standards as issued | Other ☐ | ||||
by the International Accounting Standards Board |
1 | ||||||||
2 | ||||||||
ITEM 1. | ||||||||
ITEM 2. | ||||||||
ITEM 3. | 3 | |||||||
ITEM 4. | ||||||||
ITEM 4A. | ||||||||
ITEM 5. | ||||||||
ITEM 6. | ||||||||
ITEM 7. | ||||||||
ITEM 8. | ||||||||
ITEM 9. | ||||||||
ITEM 10. | ||||||||
ITEM 11. | ||||||||
ITEM 12. | ||||||||
144 |
ITEM 13. | ||||||||
ITEM 14. | ||||||||
ITEM 15. | ||||||||
ITEM 16A. | ||||||||
ITEM 16B. | ||||||||
ITEM 16C. | ||||||||
ITEM 16D. | ||||||||
ITEM 16E. | ||||||||
ITEM 16F. | ||||||||
ITEM 16G. | 152 | |||||||
ITEM 16H. | 153 | |||||||
ITEM 17. | 153 | |||||||
ITEM 18. | 153 | |||||||
ITEM 19. | 153 |
158 |
ACT | American College Test (US) | |
BEC | Business English Certificate (US) | |
CET 4 | College English Test Level 4 (PRC) | |
CET 6 | College English Test Level 6 (PRC) | |
GMAT | Graduate Management Admission Test (US) | |
GRE | Graduate Record Examination (US) | |
IELTS | International English Language Testing System (Commonwealth countries) | |
LSAT | Law School Admission Test (US) | |
PETS | Public English Test System (PRC) | |
SAT | SAT College Entrance Test (US) | |
TOEFL | Test of English as a Foreign Language (US) | |
TOEIC | Test of English for International Communication (US) | |
TSE | Test of Spoken English (US) |
ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. | KEY INFORMATION |
A. | Selected Financial Data |
For the Years Ended May 31, | ||||||||||||||||||||
( in thousands of US$ except share and per share dat a ) | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||
Selected Consolidated Statement of Operations Data: | ||||||||||||||||||||
Net revenues: | ||||||||||||||||||||
Educational programs and services | 1,309,339 | 1,608,954 | 2,165,152 | 2,785,254 | 3,230,378 | |||||||||||||||
Books and other services | 169,009 | 190,555 | 282,278 | 311,237 | 348,304 | |||||||||||||||
Total net revenues | 1,478,348 | 1,799,509 | 2,447,430 | 3,096,491 | 3,578,682 | |||||||||||||||
Operating cost and expenses: (1) | ||||||||||||||||||||
Cost of revenues | (614,364 | ) | (749,586 | ) | (1,065,740 | ) | (1,376,269 | ) | (1,588,899 | ) | ||||||||||
Selling and marketing | (197,897 | ) | (232,826 | ) | (324,249 | ) | (384,287 | ) | (445,259 | ) | ||||||||||
General and administrative | (471,010 | ) | (554,948 | ) | (794,482 | ) | (1,034,028 | ) | (1,145,521 | ) | ||||||||||
Total operating cost and expenses | (1,283,271 | ) | (1,537,360 | ) | (2,184,471 | ) | (2,794,584 | ) | (3,179,679 | ) | ||||||||||
Gain on disposal of a subsidiary | 3,760 | — | — | 3,627 | — | |||||||||||||||
Operating income | 198,837 | 262,149 | 262,959 | 305,534 | 399,003 | |||||||||||||||
Other income, net: | ||||||||||||||||||||
Interest income | 66,861 | 61,445 | 84,838 | 97,530 | 116,117 | |||||||||||||||
Interest expense | — | — | — | (1,615 | ) | (4,627 | ) | |||||||||||||
Realized gain from long-term investments | — | 7,086 | 7,366 | 26,379 | 407 | |||||||||||||||
Impairment loss from long-term investments | — | (2,338 | ) | (980 | ) | (5,919 | ) | (31,750 | ) | |||||||||||
Loss from fair value change of long-term investments | — | — | — | (104,636 | ) | (18,451 | ) | |||||||||||||
Miscellaneous income (loss), net | 1,586 | 2,367 | 2,841 | (1,424 | ) | 27,137 | ||||||||||||||
Provision for income taxes: | ||||||||||||||||||||
Current | (39,467 | ) | (51,142 | ) | (72,785 | ) | (103,031 | ) | (142,992 | ) | ||||||||||
Deferred | 1,936 | 518 | 13,377 | 17,317 | 8,630 | |||||||||||||||
Provision for income taxes | (37,531 | ) | (50,624 | ) | (59,408 | ) | (85,714 | ) | (134,362 | ) | ||||||||||
(Loss) gain from equity method investments | (4,425 | ) | (3,289 | ) | (379 | ) | (2,289 | ) | 1,385 | |||||||||||
Net income | 225,328 | 276,796 | 297,237 | 227,846 | 354,859 | |||||||||||||||
For the Years Ended May 31, | For the Years Ended May 31, | |||||||||||||||||||||||||||||||||||||||
( in thousands of US$ except share and per share dat a ) | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||||||||||||||||||||||
(in thousands of US$ except share and per share data) | 2017 | 2018 | 2019 | 2020 | 2021 | |||||||||||||||||||||||||||||||||||
Selected Consolidated Statement of Operations Data: | ||||||||||||||||||||||||||||||||||||||||
Net revenues: | ||||||||||||||||||||||||||||||||||||||||
Educational programs and services | 1,608,954 | 2,165,152 | 2,785,254 | 3,230,378 | 3,936,969 | |||||||||||||||||||||||||||||||||||
Books and other services | 190,555 | 282,278 | 311,237 | 348,304 | 339,570 | |||||||||||||||||||||||||||||||||||
Total net revenues | 1,799,509 | 2,447,430 | 3,096,491 | 3,578,682 | 4,276,539 | |||||||||||||||||||||||||||||||||||
Operating cost and expenses: (1) | ||||||||||||||||||||||||||||||||||||||||
Cost of revenues | (749,586 | ) | (1,065,740 | ) | (1,376,269 | ) | (1,588,899 | ) | (2,036,875 | ) | ||||||||||||||||||||||||||||||
Selling and marketing | (232,826 | ) | (324,249 | ) | (384,287 | ) | (445,259 | ) | (600,778 | ) | ||||||||||||||||||||||||||||||
General and administrative | (554,948 | ) | (794,482 | ) | (1,028,783 | ) | (1,145,521 | ) | (1,489,826 | ) | ||||||||||||||||||||||||||||||
Impairment loss on intangible assets and goodwill | — | — | (5,245 | ) | — | (31,794 | ) | |||||||||||||||||||||||||||||||||
Total operating cost and expenses | (1,537,360 | ) | (2,184,471 | ) | (2,794,584 | ) | (3,179,679 | ) | (4,159,273 | ) | ||||||||||||||||||||||||||||||
Gain on disposal of a subsidiary | — | — | 3,627 | — | — | |||||||||||||||||||||||||||||||||||
Operating income | 262,149 | 262,959 | 305,534 | 399,003 | 117,266 | |||||||||||||||||||||||||||||||||||
Other income, net: | ||||||||||||||||||||||||||||||||||||||||
Interest income | 61,445 | 84,838 | 97,530 | 116,117 | 141,511 | |||||||||||||||||||||||||||||||||||
Interest expense | — | — | (1,615 | ) | (4,627 | ) | (6,747 | ) | ||||||||||||||||||||||||||||||||
Realized gain from long-term investments | 7,086 | 7,366 | 26,379 | 407 | 3,535 | |||||||||||||||||||||||||||||||||||
Impairment loss from long-term investments | (2,338 | ) | (980 | ) | (5,919 | ) | (31,750 | ) | (40,207 | ) | ||||||||||||||||||||||||||||||
Loss from fair value change of long-term investments | — | — | (104,636 | ) | (18,451 | ) | (3,824 | ) | ||||||||||||||||||||||||||||||||
Miscellaneous income (loss), net | 2,367 | 2,841 | (1,424 | ) | 27,137 | 103,443 | ||||||||||||||||||||||||||||||||||
Provision for income taxes: | ||||||||||||||||||||||||||||||||||||||||
Current | (51,142 | ) | (72,785 | ) | (103,031 | ) | (142,992 | ) | (127,313 | ) | ||||||||||||||||||||||||||||||
Deferred | 518 | 13,377 | 17,317 | 8,630 | 43,725 | |||||||||||||||||||||||||||||||||||
Provision for income taxes | (50,624 | ) | (59,408 | ) | (85,714 | ) | (134,362 | ) | (83,588 | ) | ||||||||||||||||||||||||||||||
(Loss) gain from equity method investments | (3,289 | ) | (379 | ) | (2,289 | ) | 1,385 | (1,368 | ) | |||||||||||||||||||||||||||||||
Net income | 276,796 | 297,237 | 227,846 | 354,859 | 230,021 | |||||||||||||||||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | 444 | 2,339 | 1,107 | (10,219 | ) | (58,474 | ) | 2,339 | 1,107 | (10,219 | ) | (58,474 | ) | (104,393 | ) | |||||||||||||||||||||||||
Net income attributable to New Oriental Education & Technology Group Inc.’s shareholders | 224,884 | 274,457 | 296,130 | 238,065 | 413,333 | 274,457 | 296,130 | 238,065 | 413,333 | 334,414 | ||||||||||||||||||||||||||||||
Net income per common share attributable to shareholders of New Oriental Education & Technology Group Inc. (2) | ||||||||||||||||||||||||||||||||||||||||
Net income per common share attributable to shareholders of New Oriental Education & Technology Group Inc. (2) (3) | ||||||||||||||||||||||||||||||||||||||||
-Basic | 1.43 | 1.74 | 1.87 | 1.50 | 2.61 | 0.17 | 0.19 | 0.15 | 0.26 | 0.20 | ||||||||||||||||||||||||||||||
-Diluted | 1.43 | 1.74 | 1.87 | 1.50 | 2.59 | 0.17 | 0.19 | 0.15 | 0.26 | 0.20 | ||||||||||||||||||||||||||||||
Weighted average shares used in calculating basic net income per common share | 156,782,439 | 157,551,320 | 158,168,794 | 158,293,890 | 158,429,576 | |||||||||||||||||||||||||||||||||||
Weighted average shares used in calculating diluted net income per common share | 157,391,686 | 157,986,394 | 158,556,500 | 159,039,345 | 159,536,890 | |||||||||||||||||||||||||||||||||||
Weighted average shares used in calculating basic net income per common share (3) | 1,575,513,200 | 1,581,687,940 | 1,582,938,900 | 1,584,295,760 | 1,645,463,440 | |||||||||||||||||||||||||||||||||||
Weighted average shares used in calculating diluted net income per common share (3) | 1,579,863,940 | 1,585,565,000 | 1,590,393,450 | 1,595,368,900 | 1,651,982,384 |
(1) | Share-based compensation expenses are included in our operating cost and expenses as follows: |
(2) | Each ADS represents one common share. |
(3) | For the years ended May 31, 2017, 2018, 2019 and 2020, the number of shares used in calculating basic and diluted net income per common share have been retrospectively adjusted to reflect the 1-for-10 |
For the Years Ended May 31, | ||||||||||||||||||||
(in thousands of US$) | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||
Cost of revenues | — | — | — | 134 | 2,224 | |||||||||||||||
Selling and marketing | — | — | — | 1,205 | 4,227 | |||||||||||||||
General and administrative | 16,810 | 20,287 | 57,443 | 69,997 | 55,606 | |||||||||||||||
Total | 16,810 | 20,287 | 57,443 | 71,336 | 62,057 | |||||||||||||||
For the Years Ended May 31, | ||||||||||||||||||||
(in thousands of US$) | 2017 | 2018 | 2019 | 2020 | 2021 | |||||||||||||||
Cost of revenues | — | — | 134 | 2,224 | 6,698 | |||||||||||||||
Selling and marketing | — | — | 1,205 | 4,227 | 6,922 | |||||||||||||||
General and administrative | 20,287 | 57,443 | 69,997 | 55,606 | 55,260 | |||||||||||||||
Total | 20,287 | 57,443 | 71,336 | 62,057 | 68,880 | |||||||||||||||
As of May 31, | ||||||||||||||||||||
(in thousands of US$) | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||
Selected Consolidated Balance Sheet Data: | ||||||||||||||||||||
Cash and cash equivalents | 709,209 | 641,018 | 983,319 | 1,414,171 | 915,057 | |||||||||||||||
Total assets | 2,354,834 | 2,924,979 | 3,977,712 | 4,646,559 | 6,556,885 | |||||||||||||||
Total current liabilities | 918,190 | 1,202,681 | 1,750,884 | 2,006,224 | 2,479,364 | |||||||||||||||
Total liabilities | 920,172 | 1,204,901 | 1,763,017 | 2,121,462 | 3,687,074 | |||||||||||||||
Total mezzanine equity | — | — | 206,624 | — | — | |||||||||||||||
Total New Oriental Education & Technology Group Inc. shareholders’ equity | 1,404,572 | 1,680,948 | 1,991,589 | 2,360,686 | 2,733,295 | |||||||||||||||
Noncontrolling interests | 30,090 | 39,130 | 16,482 | 164,411 | 136,516 | |||||||||||||||
Total equity | 1,434,662 | 1,720,078 | 2,008,071 | 2,525,097 | 2,869,811 |
As of May 31, | ||||||||||||||||||||
(in thousands of US$) | 2017 | 2018 | 2019 | 2020 | 2021 | |||||||||||||||
Selected Consolidated Balance Sheet Data: | ||||||||||||||||||||
Cash and cash equivalents | 641,018 | 983,319 | 1,414,171 | 915,057 | 1,612,211 | |||||||||||||||
Total assets | 2,924,979 | 3,977,712 | 4,646,559 | 6,556,885 | 10,151,053 | |||||||||||||||
Total current liabilities | 1,202,681 | 1,750,884 | 2,006,224 | 2,479,364 | 3,471,445 | |||||||||||||||
Total liabilities | 1,204,901 | 1,763,017 | 2,121,462 | 3,687,074 | 5,132,877 | |||||||||||||||
Total mezzanine equity | — | 206,624 | — | — | — | |||||||||||||||
Total New Oriental Education & Technology Group Inc. shareholders’ equity | 1,680,948 | 1,991,589 | 2,360,686 | 2,733,295 | 4,913,275 | |||||||||||||||
Noncontrolling interests | 39,130 | 16,482 | 164,411 | 136,516 | 104,901 | |||||||||||||||
Total equity | 1,720,078 | 2,008,071 | 2,525,097 | 2,869,811 | 5,018,176 |
B. | Capitalization and Indebtedness |
C. | Reasons for the Offer and Use of Proceeds |
D. | Risk Factors |
ITEM 4. | INFORMATION ON THE COMPANY |
A. | History and Development of the Company |
B. | Business Overview |
City | Number of Schools | Number of learning centers | Number of bookstores | |||||||||
Beijing | 6 | 111 | 1 | |||||||||
Shanghai | 1 | 69 | 1 | |||||||||
Guangzhou | 1 | 49 | 1 | |||||||||
Wuhan | 1 | 58 | 1 | |||||||||
Yangzhou | 3 | 2 | — | |||||||||
Tianjin | 1 | 41 | — | |||||||||
Xi’an | 1 | 48 | 1 | |||||||||
Nanjing | 3 | 51 | — | |||||||||
Shenyang | 1 | 20 | — | |||||||||
Chongqing | 1 | 31 | 1 | |||||||||
Chengdu | 1 | 44 | — | |||||||||
Shenzhen | 1 | 21 | — | |||||||||
Xiangyang | 1 | 15 | — | |||||||||
Taiyuan | 1 | 35 | — | |||||||||
Haerbin | 1 | 16 | 1 | |||||||||
Changsha | 1 | 41 | — | |||||||||
Jinan | 1 | 30 | — | |||||||||
Zhengzhou | 1 | 41 | — |
City | Number of Schools | Number of learning centers | Number of bookstores | |||||||||
Beijing | 6 | 120 | 1 | |||||||||
Shanghai | 1 | 82 | 1 | |||||||||
Guangzhou | 1 | 60 | 1 | |||||||||
Wuhan | 1 | 47 | 1 | |||||||||
Yangzhou | 3 | 3 | — | |||||||||
Tianjin | 1 | 45 | — | |||||||||
Xi’an | 2 | 54 | 1 | |||||||||
Nanjing | 3 | 65 | — | |||||||||
Shenyang | 1 | 20 | — | |||||||||
Chongqing | 1 | 30 | 1 | |||||||||
Chengdu | 1 | 49 | — | |||||||||
Shenzhen | 1 | 23 | — | |||||||||
Xiangyang | 1 | 18 | — | |||||||||
Taiyuan | 1 | 31 | — | |||||||||
Haerbin | 1 | 21 | 1 | |||||||||
Changsha | 1 | 38 | — | |||||||||
Jinan | 1 | 43 | — | |||||||||
Zhengzhou | 1 | 42 | — | |||||||||
Hangzhou | 1 | 93 | — | |||||||||
Changchun | 3 | 27 | 1 | |||||||||
Shijiazhuang | 1 | 19 | — | |||||||||
Suzhou | 2 | 69 | 1 | |||||||||
Zhuzhou | 1 | 2 | — | |||||||||
Anshan | 1 | — | — | |||||||||
Hefei | 1 | 67 | — | |||||||||
Kunming | 1 | 12 | — | |||||||||
Wuxi | 1 | 24 | — | |||||||||
Foshan | 1 | 14 | — | |||||||||
Fuzhou | 1 | 37 | — | |||||||||
Yichang | 1 | 5 | — | |||||||||
Nanchang | 1 | 46 | — | |||||||||
Jingzhou | 1 | 3 | — | |||||||||
Dalian | 1 | 6 | 1 | |||||||||
Lanzhou | 1 | 14 | 1 | |||||||||
Huangshi | 1 | 3 | — | |||||||||
Ningbo | 1 | 9 | — | |||||||||
Xiamen | 1 | 30 | — | |||||||||
Qingdao | 2 | 32 | — | |||||||||
Nanning | 1 | 20 | — | |||||||||
Xuzhou | 1 | 6 | — | |||||||||
Zhenjiang | 1 | 8 | — | |||||||||
Xiangtan | 1 | 3 | — | |||||||||
Luoyang | 1 | 16 | — | |||||||||
Nantong | 1 | 8 | — | |||||||||
Hohhot | 1 | 14 | — | |||||||||
Jilin | 1 | 9 | — | |||||||||
Guiyang | 1 | 6 | — | |||||||||
Tangshan | 1 | 16 | — | |||||||||
Urumqi | 1 | 10 | — | |||||||||
Shiyan | 1 | 4 | — | |||||||||
Quanzhou | 1 | 4 | — | |||||||||
Wenzhou | 1 | 12 | — | |||||||||
Weifang | 1 | 6 | — | |||||||||
Zhuhai | 1 | 5 | — | |||||||||
Jinzhou | 1 | 7 | — | |||||||||
Baoding | 1 | 6 | — |
City | Number of Schools | Number of learning centers | Number of bookstores | |||||||||
Hangzhou | 1 | 79 | — | |||||||||
Changchun | 3 | 21 | 1 | |||||||||
Shijiazhuang | 1 | 20 | — | |||||||||
Suzhou | 2 | 60 | 1 | |||||||||
Zhuzhou | 1 | 3 | — | |||||||||
Anshan | 1 | 0 | — | |||||||||
Hefei | 1 | 63 | — | |||||||||
Kunming | 1 | 12 | — | |||||||||
Wuxi | 1 | 21 | — | |||||||||
Foshan | 1 | 10 | — | |||||||||
Fuzhou | 1 | 30 | — | |||||||||
Yichang | 1 | 5 | — | |||||||||
Nanchang | 1 | 45 | — | |||||||||
Jingzhou | 1 | 3 | — | |||||||||
Dalian | 1 | 6 | 1 | |||||||||
Lanzhou | 1 | 12 | 1 | |||||||||
Huangshi | 1 | 3 | — | |||||||||
Ningbo | 1 | 11 | — | |||||||||
Xiamen | 1 | 27 | — | |||||||||
Qingdao | 2 | 30 | — | |||||||||
Nanning | 1 | 20 | — | |||||||||
Xuzhou | 1 | 6 | — | |||||||||
Xiangtan | 1 | 3 | — | |||||||||
Zhenjiang | 1 | 4 | — | |||||||||
Luoyang | 1 | 12 | — | |||||||||
Nantong | 1 | 6 | — | |||||||||
Jilin | 1 | 10 | — | |||||||||
Guiyang | 1 | 7 | — | |||||||||
Hohhot | 1 | 10 | 1 | |||||||||
Tangshan | 1 | 12 | — | |||||||||
Urumqi | 1 | 8 | — | |||||||||
Shiyan | 1 | 4 | — | |||||||||
Quanzhou | 1 | 4 | — | |||||||||
Wenzhou | 1 | 11 | — | |||||||||
Weifang | 1 | 5 | — | |||||||||
Zhuhai | 1 | 4 | — | |||||||||
Jinzhou | 1 | 7 | — | |||||||||
Baoding | 1 | 4 | — | |||||||||
Yantai | 1 | 6 | — | |||||||||
Taian | 1 | — | — | |||||||||
Kaifeng | 1 | 1 | — | |||||||||
Cangzhou | 1 | — | — | |||||||||
Qinhuangdao | 1 | — | — | |||||||||
Anyang | 1 | — | — | |||||||||
Handan | 1 | 1 | — | |||||||||
Zhangzhou | 1 | 1 | — | |||||||||
Nanyang | 1 | 1 | — | |||||||||
Zhongshan | 1 | — | — | |||||||||
Yinchuan | 1 | 1 | — | |||||||||
Shaoxing | 1 | 8 | — | |||||||||
Huzhou | 1 | 1 | — | |||||||||
Hong Kong | 1 | — | — | |||||||||
Yancheng | 1 | 2 | — | |||||||||
Lianyungang | 1 | 1 | — | |||||||||
Jiaozuo | 1 | 6 | — |
City | Number of Schools | Number of learning centers | Number of bookstores | |||||||||
Yantai | 1 | 8 | — | |||||||||
Taian | 1 | 1 | — | |||||||||
Kaifeng | 1 | 2 | — | |||||||||
Cangzhou | 1 | 1 | — | |||||||||
Qinhuangdao | 1 | 2 | — | |||||||||
Anyang | 1 | 1 | — | |||||||||
Handan | 1 | 1 | — | |||||||||
Zhangzhou | 1 | 1 | — | |||||||||
Nanyang | 1 | 2 | — | |||||||||
Zhongshan | 1 | 2 | — | |||||||||
Yinchuan | 1 | 1 | — | |||||||||
Shaoxing | 1 | 7 | — | |||||||||
Huzhou | 1 | 2 | — | |||||||||
Hong Kong | 1 | — | — | |||||||||
Yancheng | 1 | 3 | — | |||||||||
Lianyungang | 1 | 3 | — | |||||||||
Jiaozuo | 1 | 8 | — | |||||||||
Dongguan | 1 | 2 | — | |||||||||
Haikou | 1 | 2 | — | |||||||||
Yiwu | 1 | 5 | — | |||||||||
Jinhua | 1 | 6 | — | |||||||||
Xining | 1 | 1 | — | |||||||||
Mianyang | 1 | — | — | |||||||||
Xinxiang | 1 | 1 | — | |||||||||
Baotou | 1 | 1 | — | |||||||||
Changshu | 1 | 3 | — | |||||||||
Yuci | 1 | — | — | |||||||||
Huizhou | 1 | — | — | |||||||||
Chengde | 1 | 1 | — | |||||||||
Zhangjiagang | 1 | — | — | |||||||||
Hebi | 1 | — | — | |||||||||
Zhumadian | 1 | — | — | |||||||||
Weihai | 1 | — | — | |||||||||
Xuchang | 1 | — | — | |||||||||
Xingtai | 1 | 1 | — | |||||||||
Changzhou | 1 | — | — | |||||||||
Huaian | 1 | — | — | |||||||||
Tàizhou | 1 | 4 | — | |||||||||
Táizhou | 1 | 1 | — | |||||||||
Yixing | 1 | — | — | |||||||||
Wuhu | 1 | 1 | — | |||||||||
Jiaxing | 1 | 4 | — | |||||||||
Langfang | 1 | 2 | — | |||||||||
Kunshan | 1 | 1 | — | |||||||||
Danyang | 1 | — | — | |||||||||
Dongyang | 1 | �� | — | — | ||||||||
Jiujiang | 1 | 1 | — | |||||||||
Hengshui | 1 | 1 | — | |||||||||
Xianyang | 1 | 1 | — | |||||||||
Zhoukou | 1 | — | — | |||||||||
Shangqiu | 1 | — | — | |||||||||
Baoji | 1 | — | — | |||||||||
Total | 122 | 1,547 | 11 | |||||||||
City | Number of Schools | Number of learning centers | Number of bookstores | |||||||||
Dongguan | 1 | — | — | |||||||||
Haikou | 1 | 1 | — | |||||||||
Yiwu | 1 | 2 | — | |||||||||
Jinhua | 1 | 4 | — | |||||||||
Xining | 1 | 1 | — | |||||||||
Mianyang | 1 | — | — | |||||||||
Xinxiang | 1 | — | — | |||||||||
Baotou | 1 | — | — | |||||||||
Changshu | 1 | 3 | — | |||||||||
Yuci | 1 | — | — | |||||||||
Chengde | 1 | — | — | |||||||||
Huizhou | 1 | — | — | |||||||||
Zhangjiagang | 1 | — | — | |||||||||
Hebi | 1 | — | — | |||||||||
Zhumadian | 1 | — | — | |||||||||
Weihai | 1 | — | — | |||||||||
Xuchang | 1 | — | — | |||||||||
Xingtai | 1 | — | — | |||||||||
Total | 104 | 1,361 | 12 | |||||||||
(1) | Direct investment made by overseas investors with the profits distributed thereto, includes their activities of equity investment with the distributed profits such as capital increase, new establishment and equity purchase and excludes the increase through purchase or distribution and purchase of the shares of listed companies (excluding the conforming strategic investment), specifically including: (i) Increasing through purchase or distribution of the paid-in capital or capital reserve of resident enterprises within PRC; (ii) Investing in new establishment of resident enterprises within PRC; (iii) Purchasing the shares of resident enterprises within China from nonaffiliated parties; and (iv) Other methods prescribed by the Ministry of Finance and the SAT. The enterprises in which overseas investors invest through above investment activities shall be collectively referred to the invested enterprises. |
(2) | The profits distributed to overseas investors fall under the dividends, bonus and other equity investment income formed from the actual distribution of the retained income already realized by resident enterprises within China to investors. |
(3) | Where the profits used by overseas investors for direct investment are paid in cash, relevant amounts shall be transferred directly from the accounts of the profits distributing enterprises to the accounts of the invested enterprises or equity transferors and shall not be circulated among other domestic and overseas accounts before direct investment; where the profits used by overseas investors for direct investment are paid in kind, negotiable securities and other non-cash form, the ownership to relevant assets shall be transferred directly from the profits distributing enterprises to the invested enterprises or equity transferors and shall not be held by other enterprises and individuals on behalf thereof or temporarily. |
C. | Organizational Structure |
Equity interest for companies. | ||
Sponsorship interest for schools. | ||
Contractual arrangements including equity pledge agreements, option agreement and proxy agreement, power of attorney, master exclusive service agreement and related service agreements. See “—C. Organizational Structure—Contractual Arrangements with New Oriental China, Its Schools and Subsidiaries and Its Shareholder.” | ||
Contractual arrangements including equity pledge agreements, option agreement and proxy agreement, power of attorney, master exclusive service agreement and related service agreements. See “—C. Organizational Structure—Contractual Arrangements with Beijing Xuncheng, Its Subsidiaries and Shareholders.” |
(1) | Beijing Century Friendship Education Investment Co., Ltd, or Century Friendship, is 99% owned by Mr. Michael Minhong Yu, our founder and executive chairman, and 1% owned by Mr. Zhihui Yang, our executive president and chief financial officer. In November 2019, Ms. Bamei Li, Mr. Yu’s mother, completed the transfer of the equity interest in Century Friendship held by her to Mr. Michael Minhong Yu and Mr. Zhihui Yang, prior to such transfer, Century Friendship was 80% owned by Mr. Yu and 20% owned by Ms. Bamei Li. |
(2) | Excluding certain schools that are separate legal entities but have been counted to our learning centers and certain schools that have been counted as the same school in the same city or region from the perspective of our internal management and our kindergartens. |
(3) | Consisting of various PRC companies operating our educational content and other technology development and distribution business, and overseas studies consulting business in China. |
D. | Property, Plants and Equipment |
ITEM 4A. | UNRESOLVED STAFF COMMENTS |
ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
A. | Operating Results |
For the Years Ended May 31, | ||||||||||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||||||||||
(in thousands, except percentages) | US$ | % | US$ | % | US$ | % | ||||||||||||||||||
Net revenues | 2,447,430 | 100.0 | 3,096,491 | 100.0 | 3,578,682 | 100.0 | ||||||||||||||||||
Operating cost and expenses: | ||||||||||||||||||||||||
Cost of revenues | (1,065,740 | ) | (43.5 | ) | (1,376,269 | ) | (44.5 | ) | (1,588,899 | ) | (44.4 | ) | ||||||||||||
Selling and marketing | (324,249 | ) | (13.2 | ) | (384,287 | ) | (12.4 | ) | (445,259 | ) | (12.4 | ) | ||||||||||||
General and administrative | (794,482 | ) | (32.5 | ) | (1,034,028 | ) | (33.4 | ) | (1,145,521 | ) | (32.0 | ) | ||||||||||||
Total operating cost and expenses | (2,184,471 | ) | (89.2 | ) | (2,794,584 | ) | (90.3 | ) | (3,179,679 | ) | (88.9 | ) | ||||||||||||
For the Years Ended May 31, | ||||||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||||||
(in thousands, except percentages) | US$ | % | US$ | % | US$ | % | ||||||||||||||||||
Net revenues | 3,096,491 | 100.0 | 3,578,682 | 100.0 | 4,276,539 | 100.0 | ||||||||||||||||||
Operating cost and expenses: | ||||||||||||||||||||||||
Cost of revenues | (1,376,269 | ) | (44.5 | ) | (1,588,899 | ) | (44.4 | ) | (2,036,875 | ) | (47.6 | ) | ||||||||||||
Selling and marketing | (384,287 | ) | (12.4 | ) | (445,259 | ) | (12.4 | ) | (600,778 | ) | (14.0 | ) | ||||||||||||
General and administrative | (1,028,783 | ) | (33.2 | ) | (1,145,521 | ) | (32.0 | ) | (1,489,826 | ) | (34.8 | ) | ||||||||||||
Impairment loss on intangible assets and goodwill | (5,245 | ) | (0.2 | ) | — | — | (31,794 | ) | (0.7 | ) | ||||||||||||||
Total operating cost and expenses | (2,794,584 | ) | (90.3 | ) | (3,179,679 | ) | (88.9 | ) | (4,159,273 | ) | (97.3 | ) | ||||||||||||
For the Years Ended May 31, | ||||||||||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||||||||||
(in thousands, except percentages) | US$ | % | US$ | % | US$ | % | ||||||||||||||||||
Allocation of Share-based Compensation Expense: | ||||||||||||||||||||||||
Cost of revenues | — | — | 134 | 0.2 | 2,224 | 3.6 | ||||||||||||||||||
Selling and marketing | — | — | 1,205 | 1.7 | 4,227 | 6.8 | ||||||||||||||||||
General and administrative | 57,443 | 100.0 | 69,997 | 98.1 | 55,606 | 89.6 | ||||||||||||||||||
Total | 57,443 | 100.0 | 71,336 | 100.0 | 62,057 | 100.0 | ||||||||||||||||||
(1) | paid-in capital or capital reserve of resident enterprises within PRC; (ii) Investing in new establishment of resident enterprises within PRC; (iii) Purchasing the shares of resident enterprises within China from nonaffiliated parties; and |
(2) | The profits distributed to overseas investors fall under the dividends, bonus and other equity investment income formed from the actual distribution of the |
(3) | Where the non-cash form, the ownership to relevant assets shall be transferred directly from the profits distributing enterprises to the invested enterprises or equity transferors and shall not be held by other enterprises and individuals on behalf thereof or temporarily. |
C. |
Equity interest for companies. | ||
Sponsorship interest for schools. | ||
Contractual arrangements including equity pledge agreements, option agreement and proxy agreement, power of attorney, master exclusive service agreement and related service agreements. See “—C. Organizational Structure—Contractual Arrangements with New Oriental China, Its Schools and Subsidiaries and Its Shareholder.” | ||
Contractual arrangements including equity pledge agreements, option agreement and proxy agreement, power of attorney, master exclusive service agreement and related service agreements. See “—C. Organizational Structure—Contractual Arrangements with Beijing Xuncheng, Its Subsidiaries and Shareholders.” |
(1) | Beijing Century Friendship Education Investment Co., Ltd, or Century Friendship, is 99% owned by Mr. Michael Minhong Yu, our founder and executive chairman, and 1% owned by Mr. Zhihui Yang, our executive president and chief financial officer. In November 2019, Ms. Bamei Li, Mr. Yu’s mother, completed the transfer of the equity interest in Century Friendship held by her to Mr. Michael Minhong Yu and Mr. Zhihui Yang, prior to such transfer, Century Friendship was 80% owned by Mr. Yu and 20% owned by Ms. Bamei Li. |
(2) | Excluding certain schools that are separate legal entities but have been counted to our learning centers and certain schools that have been counted as the same school in the same city or region from the perspective of our internal management and our kindergartens. |
(3) | Consisting of various PRC companies operating our educational content and other technology development and distribution business, and overseas studies consulting business in China. |
D. | Property, Plants and Equipment |
ITEM 4A. | UNRESOLVED STAFF COMMENTS |
ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
A. | Operating Results |
For the Years Ended May 31, | ||||||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||||||
(in thousands, except percentages) | US$ | % | US$ | % | US$ | % | ||||||||||||||||||
Net revenues | 3,096,491 | 100.0 | 3,578,682 | 100.0 | 4,276,539 | 100.0 | ||||||||||||||||||
Operating cost and expenses: | ||||||||||||||||||||||||
Cost of revenues | (1,376,269 | ) | (44.5 | ) | (1,588,899 | ) | (44.4 | ) | (2,036,875 | ) | (47.6 | ) | ||||||||||||
Selling and marketing | (384,287 | ) | (12.4 | ) | (445,259 | ) | (12.4 | ) | (600,778 | ) | (14.0 | ) | ||||||||||||
General and administrative | (1,028,783 | ) | (33.2 | ) | (1,145,521 | ) | (32.0 | ) | (1,489,826 | ) | (34.8 | ) | ||||||||||||
Impairment loss on intangible assets and goodwill | (5,245 | ) | (0.2 | ) | — | — | (31,794 | ) | (0.7 | ) | ||||||||||||||
Total operating cost and expenses | (2,794,584 | ) | (90.3 | ) | (3,179,679 | ) | (88.9 | ) | (4,159,273 | ) | (97.3 | ) | ||||||||||||
(1) | Direct investment made by overseas investors with the profits distributed thereto, includes their activities of equity investment with the distributed profits such as capital increase, new establishment and equity purchase and excludes the increase through purchase or distribution and purchase of the shares of listed companies (excluding the conforming strategic investment), specifically including: (i) Increasing through purchase or distribution of the paid-in capital or capital reserve of resident enterprises within PRC; (ii) Investing in new establishment of resident enterprises within PRC; (iii) Purchasing the shares of resident enterprises within China from nonaffiliated parties; and (iv) Other methods prescribed by the Ministry of Finance and the |
(2) | The profits distributed to overseas investors fall under the dividends, bonus and |
(3) | Where the profits used by overseas investors for direct investment are paid in cash, relevant amounts shall be transferred directly from the accounts of non-cash form, the ownership to relevant assets shall be transferred directly from the profits distributing enterprises to the invested enterprises or equity transferors and shall not be held by other enterprises and individuals on behalf thereof or temporarily. |
C. | Organizational Structure |
Equity interest for companies. | ||
Sponsorship interest for schools. | ||
Contractual arrangements including equity pledge agreements, option agreement and proxy agreement, power of | ||
Contractual arrangements including equity pledge agreements, option agreement and proxy agreement, power of |
(1) |
(2) | Excluding certain schools that are separate legal entities but have been counted to our learning centers and certain schools that have been counted as the |
(3) | Consisting of |
D. | Property, Plants and Equipment |
UNRESOLVED STAFF COMMENTS
|
ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
A. | Operating Results |
For the Years Ended May 31, | ||||||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||||||
(in thousands, except percentages) | US$ | % | US$ | % | US$ | % | ||||||||||||||||||
Net revenues | 3,096,491 | 100.0 | 3,578,682 | 100.0 | 4,276,539 | 100.0 | ||||||||||||||||||
Operating cost and expenses: | ||||||||||||||||||||||||
Cost of revenues | (1,376,269 | ) | (44.5 | ) | (1,588,899 | ) | (44.4 | ) | (2,036,875 | ) | (47.6 | ) | ||||||||||||
Selling and marketing | (384,287 | ) | (12.4 | ) | (445,259 | ) | (12.4 | ) | (600,778 | ) | (14.0 | ) | ||||||||||||
General and administrative | (1,028,783 | ) | (33.2 | ) | (1,145,521 | ) | (32.0 | ) | (1,489,826 | ) | (34.8 | ) | ||||||||||||
Impairment loss on intangible assets and goodwill | (5,245 | ) | (0.2 | ) | — | — | (31,794 | ) | (0.7 | ) | ||||||||||||||
Total operating cost and expenses | (2,794,584 | ) | (90.3 | ) | (3,179,679 | ) | (88.9 | ) | (4,159,273 | ) | (97.3 | ) | ||||||||||||
For the Years Ended May 31, | ||||||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||||||
(in thousands, except percentages) | US$ | % | US$ | % | US$ | % | ||||||||||||||||||
Allocation of Share-based Compensation Expense: | ||||||||||||||||||||||||
Cost of revenues | 134 | 0.2 | 2,224 | 3.6 | 6,698 | 9.7 | ||||||||||||||||||
Selling and marketing | 1,205 | 1.7 | 4,227 | 6.8 | 6,922 | 10.1 | ||||||||||||||||||
General and administrative | 69,997 | 98.1 | 55,606 | 89.6 | 55,260 | 80.2 | ||||||||||||||||||
Total | 71,336 | 100.0 | 62,057 | 100.0 | 68,880 | 100.0 | ||||||||||||||||||
For the Years Ended May 31, | ||||||||||||
(in thousands of US$ except share and per share data) | 2019 | 2020 | 2021 | |||||||||
Net revenues: | ||||||||||||
Educational programs and services | 2,785,254 | 3,230,378 | 3,936,969 | |||||||||
Books and other services | 311,237 | 348,304 | 339,570 | |||||||||
Total net revenues | 3,096,491 | 3,578,682 | 4,276,539 | |||||||||
Operating cost and expenses: (1) | ||||||||||||
Cost of revenues | (1,376,269 | ) | (1,588,899 | ) | (2,036,875 | ) | ||||||
Selling and marketing | (384,287 | ) | (445,259 | ) | (600,778 | ) | ||||||
General and administrative | (1,028,783 | ) | (1,145,521 | ) | (1,489,826 | ) | ||||||
Impairment loss on intangible assets and goodwill (4) | (5,245 | ) | — | (31,794 | ) | |||||||
Total operating cost and expenses | (2,794,584 | ) | (3,179,679 | ) | (4,159,273 | ) | ||||||
Gain on disposal of a subsidiary | 3,627 | — | — | |||||||||
Operating income | 305,534 | 399,003 | 117,266 | |||||||||
For the Years Ended May 31, | ||||||||||||
(in thousands of US$ except share and per share data) | 2019 | 2020 | 2021 | |||||||||
Other income, net: | ||||||||||||
Interest income | 97,530 | 116,117 | 141,511 | |||||||||
Interest expense | (1,615 | ) | (4,627 | ) | (6,747 | ) | ||||||
Realized gain from long-term investments | 26,379 | 407 | 3,535 | |||||||||
Impairment loss from long-term investments | (5,919 | ) | (31,750 | ) | (40,207 | ) | ||||||
Loss from fair value change of long-term investments | (104,636 | ) | (18,451 | ) | (3,824 | ) | ||||||
Miscellaneous income, net | (1,424 | ) | 27,137 | 103,443 | ||||||||
Provision for income (loss) taxes: | ||||||||||||
Current | (103,031 | ) | (142,992 | ) | (127,313 | ) | ||||||
Deferred | 17,317 | 8,630 | 43,725 | |||||||||
Provision for income taxes | (85,714 | ) | (134,362 | ) | (83,588 | ) | ||||||
(Loss) gain from equity method investments | (2,289 | ) | 1,385 | (1,368 | ) | |||||||
Net income | 227,846 | 354,859 | 230,021 | |||||||||
Less: Net income (loss) attributable to noncontrolling interests | (10,219 | ) | (58,474 | ) | (104,393 | ) | ||||||
Net income attributable to New Oriental Education & Technology Group Inc.’s shareholders | 238,065 | 413,333 | 334,414 | |||||||||
Net income per common share attributable to shareholders of New Oriental Education & Technology Group Inc. (2)(3) | ||||||||||||
-Basic | 0.15 | 0.26 | 0.20 | |||||||||
-Diluted | 0.15 | 0.26 | 0.20 | |||||||||
Weighted average shares used in calculating basic net income per common share (3) | 1,582,938,900 | 1,584,295,760 | 1,645,463,440 | |||||||||
Weighted average shares used in calculating diluted net income per common share (3) | 1,590,393,450 | 1,595,368,900 | 1,651,982,384 |
(1) | Share-based compensation expenses are included in |
For the Years Ended May 31, | ||||||||||||
(in thousands of US$) | 2018 | 2019 | 2020 | |||||||||
Cost of revenues | — | 134 | 2,224 | |||||||||
Selling and marketing | — | 1,205 | 4,227 | |||||||||
General and administrative | 57,443 | 69,997 | 55,606 | |||||||||
Total | 57,443 | 71,336 | 62,057 | |||||||||
For the Years Ended May 31, | ||||||||||||
(in thousands of US$) | 2019 | 2020 | 2021 | |||||||||
Cost of revenues | 134 | 2,224 | 6,698 | |||||||||
Selling and marketing | 1,205 | 4,227 | 6,922 | |||||||||
General and administrative | 69,997 | 55,606 | 55,260 | |||||||||
Total | 71,336 | 62,057 | 68,880 | |||||||||
(2) | Each ADS represents one common share |
(3) | For the years ended May 31, 2019 and 2020, 1-for-10 |
(4) |
For the Years Ended May 31, | For the Years Ended May 31, | |||||||||||||||||||||||
(in thousands of US$) | 2018 | 2019 | 2020 | 2019 | 2020 | 2021 | ||||||||||||||||||
Net revenues of the reportable segment: | ||||||||||||||||||||||||
K-12 AST, test preparation, and other courses | 2,022,978 | 2,605,829 | 3,040,741 | 2,605,829 | 3,040,741 | 3,667,270 | ||||||||||||||||||
Online education | 132,844 | 152,542 | 210,591 | |||||||||||||||||||||
Total net revenues of the reportable segment | 2,022,978 | 2,605,829 | 3,040,741 | 2,738,673 | 3,193,283 | 3,877,861 | ||||||||||||||||||
Total net revenues of our company | 2,447,430 | 3,096,491 | 3,578,682 | 3,096,491 | 3,578,682 | 4,276,539 | ||||||||||||||||||
Operating cost and expenses of the reportable segment: | ||||||||||||||||||||||||
Cost of revenues: | ||||||||||||||||||||||||
K-12 AST, test preparation, and other courses | (869,012 | ) | (1,128,355 | ) | (1,304,239 | ) | (1,128,355 | ) | (1,304,239 | ) | (1,680,779 | ) | ||||||||||||
Online education | (59,878 | ) | (84,896 | ) | (145,428 | ) | ||||||||||||||||||
Selling and marketing: | ||||||||||||||||||||||||
K-12 AST, test preparation, and other courses | (193,851 | ) | (212,170 | ) | (218,739 | ) | (212,170 | ) | (218,739 | ) | (326,708 | ) | ||||||||||||
Online education | (65,289 | ) | (126,471 | ) | (175,092 | ) | ||||||||||||||||||
General and administrative: | ||||||||||||||||||||||||
K-12 AST, test preparation, and other courses | (504,985 | ) | (675,315 | ) | (729,125 | ) | (675,315 | ) | (729,125 | ) | (955,211 | ) | ||||||||||||
Total operating cost and expenses of the reportable segment | (1,567,848 | ) | (2,015,840 | ) | (2,252,103 | ) | ||||||||||||||||||
Online education | (40,773 | ) | (69,060 | ) | (124,897 | ) | ||||||||||||||||||
Total operating cost and expenses of the reportable segments | (2,181,780 | ) | (2,532,530 | ) | (3,408,115 | ) | ||||||||||||||||||
Total operating cost and expenses of our company | (2,184,471 | ) | (2,794,584 | ) | (3,179,679 | ) | (2,794,584 | ) | (3,179,679 | ) | (4,159,273 | ) | ||||||||||||
B. | Liquidity and Capital Resources |
For the Years Ended May 31, | ||||||||||||
(in thousands of US$) | 2018 | 2019 | 2020 | |||||||||
Net cash provided by operating activities (1) | 781,127 | 805,648 | 804,455 | |||||||||
Net cash used in investing activities | (407,143 | ) | (574,712 | ) | (1,256,370 | ) | ||||||
Net cash (used in) provided by financing activities (1) | (74,881 | ) | 266,649 | (17,862 | ) | |||||||
Effect of foreign exchange rate changes | 42,992 | (66,123 | ) | (29,026 | ) | |||||||
Net change in cash and cash equivalents | 342,095 | 431,462 | (498,803 | ) | ||||||||
Cash and cash equivalents and restricted cash at beginning of the period | 644,670 | 986,765 | 1,418,227 | |||||||||
Cash and cash equivalents and restricted cash at end of the period | 986,765 | 1,418,227 | 919,424 | |||||||||
For the Years Ended May 31, | ||||||||||||
(in thousands of US$) | 2019 | 2020 | 2021 | |||||||||
Net cash provided by operating activities | 805,648 | 804,455 | 1,130,085 | |||||||||
Net cash used in investing activities | (574,712 | ) | (1,256,370 | ) | (2,177,639 | ) | ||||||
Net cash (used in) provided by financing activities | 266,649 | (17,862 | ) | 1,654,084 | ||||||||
Effect of foreign exchange rate changes | (66,123 | ) | (29,026 | ) | 106,173 | |||||||
Net change in cash and cash equivalents | 431,462 | (498,803 | ) | 712,703 | ||||||||
Cash and cash equivalents and restricted cash at beginning of the period | 986,765 | 1,418,227 | 919,424 | |||||||||
Cash and cash equivalents and restricted cash at end of the period | 1,418,227 | 919,424 | 1,632,127 | |||||||||
C. | Research and Development, Patents and Licenses, etc. |
D. | Trend Information |
E. | Off-balance Sheet Arrangements |
F. | Tabular Disclosure of Contractual Obligations |
Payment due by period | ||||||||||||||||||||
(in thousands of US$) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Operating Lease Obligations (1) | 1,611,210 | 407,854 | 670,795 | 355,577 | 176,984 | |||||||||||||||
Purchase and Leasehold Improvements Obligations (2) | 33,049 | 33,049 | — | — | — | |||||||||||||||
Long-Term Loan Obligations | 120,000 | — | 120,000 | — | — | |||||||||||||||
Other Commitment (3) | 5,095 | 3,309 | 1,786 | — | — | |||||||||||||||
Total | 1,769,354 | 444,212 | 792,581 | 355,577 | 176,984 | |||||||||||||||
Payment due by period | ||||||||||||||||||||
(in thousands of US$) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Operating Lease Obligations (1) | 2,113,799 | 552,470 | 890,290 | 475,857 | 195,182 | |||||||||||||||
Purchase and Leasehold Improvements Obligations (2) | 55,601 | 55,601 | — | — | — | |||||||||||||||
Unsecured Senior Notes Obligations | 300,000 | — | — | 300,000 | — | |||||||||||||||
Other Commitment (3) | 28,688 | 6,375 | 12,750 | 9,563 | — | |||||||||||||||
Total | 2,498,088 | 614,446 | 903,040 | 785,420 | 195,182 | |||||||||||||||
(1) | Represents lease obligations under our facility leases. |
(2) | Represents leasehold improvement obligations in connection with renovations of the leased facilities and purchase of property and equipment. |
(3) | Represents interests to be paid for the |
ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
A. | Directors and Senior Management |
Name | Age | Position/Title | ||
Michael Minhong Yu | Executive Chairman | |||
Chenggang Zhou | Director and Chief Executive Officer | |||
Zhihui Yang | Executive President and Chief Financial Officer | |||
Louis T. Hsieh | Director | |||
Robin Yanhong Li | Independent Director | |||
Denny Ting Bun Lee | Independent Director | |||
John Zhuang Yang | Independent Director |
B. | Compensation of Directors and Executive Officers |
Name | Common Shares Underlying Outstanding NES | Exercise Price (US$/ Share) | Date of Grant | Date of Expiration | |||||||||
Michael Minhong Yu | * | † | 05/14/2021 | 06/30/2022 | |||||||||
* | † | 05/14/2021 | 06/30/2023 | ||||||||||
* | † | 05/14/2021 | 06/30/2024 | ||||||||||
Chenggang Zhou | * | † | 05/14/2021 | ||||||||||
* | † | 05/14/2021 | 06/30/2023 | ||||||||||
* | † | 05/14/2021 | 06/30/2024 | ||||||||||
Zhihui Yang | * | † | 05/14/2021 | ||||||||||
* | † | 05/14/2021 | 06/30/2023 | ||||||||||
* | † | 05/14/2021 | 06/30/2024 | ||||||||||
Louis T. Hsieh | * | † | 05/14/2021 | ||||||||||
* | † | 05/14/2021 | 06/30/2023 | ||||||||||
* | † | 05/14/2021 | 06/30/2024 | ||||||||||
Robin Yanhong Li | * | † | 05/14/2021 | 06/30/2022 | |||||||||
* | † | 05/14/2021 | 06/30/2023 | ||||||||||
* | † | 05/14/2021 | 06/30/2024 | ||||||||||
Denny Ting Bun Lee | * | † | 05/14/2021 | 06/30/2022 | |||||||||
* | † | 05/14/2021 | 06/30/2023 | ||||||||||
* | † | 05/14/2021 | 06/30/2024 | ||||||||||
John Zhuang Yang | * | † | 05/14/2021 | 06/30/2022 | |||||||||
* | † | 05/14/2021 | 06/30/2023 | ||||||||||
* | † | 05/14/2021 | 06/30/2024 |
* | Less than 1% of our total outstanding voting securities. |
† | Non-vested equity share awards. |
C. | Board Practices |
D. | Employees |
E. | Share Ownership |
Shares Beneficially Owned | ||||||||
Number (1) | % (2) | |||||||
Directors and Executive Officers: | ||||||||
Michael Minhong Yu (3) | 19,750,272 | 12.4 | % | |||||
Chenggang Zhou | * | * | ||||||
Zhihui Yang | * | * | ||||||
Louis T. Hsieh | * | * | ||||||
Robin Yanhong Li | * | * | ||||||
Denny Lee | * | * | ||||||
John Zhuang Yang | * | * | ||||||
All Directors and Executive Officers as a Group (4) | 20,450,883 | 12.9 | % | |||||
Principal Shareholders: | ||||||||
Tigerstep Developments Limited (5) | 19,750,272 | 12.4 | % |
Shares Beneficially Owned | ||||||||
Number (1) | % (2) | |||||||
Directors and Executive Officers: | ||||||||
Michael Minhong Yu (3) | 197,634,600 | 11.6 | ||||||
Chenggang Zhou | * | * | ||||||
Zhihui Yang | * | * | ||||||
Louis T. Hsieh | * | * | ||||||
Robin Yanhong Li | * | * | ||||||
Denny Ting Bun Lee | * | * | ||||||
John Zhuang Yang | * | * | ||||||
All Directors and Executive Officers as a Group (4) | 205,483,315 | 12.1 | ||||||
Principal Shareholders: | ||||||||
Tigerstep Developments Limited (5) | 197,385,540 | 11.6 |
* Less than 1% |
(1) | Beneficial ownership is determined in accordance with the rules of the SEC. |
(2) | For each person and group included in this table, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of (i) non-vested equity shares held by such person or group that will vest within 60 days after September |
(3) | Includes |
(4) | Includes (i) common shares and (ii) non-vested equity shares that will vest within 60 days after September |
(5) | Tigerstep Developments Limited, a company incorporated in the British Virgin Islands, is wholly owned by Mr. Michael Minhong Yu. The registered address of Tigerstep Developments Limited is Marcy Building, 2nd Floor, P.O. Box |
ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
A. | Major Shareholders |
B. | Related Party Transactions |
C. | Interests of Experts and Counsel |
ITEM 8. | FINANCIAL INFORMATION |
A. | Consolidated Statements and Other Financial Information |
B. | Significant Changes |
ITEM 9. | THE OFFER AND LISTING |
A. | Offering and Listing Details |
B. | Plan of Distribution |
C. | Markets |
D. | Selling Shareholders |
E. | Dilution |
F. | Expenses of the Issue |
ITEM 10. | ADDITIONAL INFORMATION |
A. | Share Capital |
B. | Memorandum and Articles of Association |
C. | Material Contracts |
D. | Exchange Controls |
E. | Taxation |
F. | Dividends and Paying Agents |
G. | Statement by Experts |
H. | Documents on Display |
I. | Subsidiary Information |
ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
A. | Debt Securities |
B. | Warrants and Rights |
C. | Other Securities |
D. | American Depositary Shares |
ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15. | CONTROLS AND PROCEDURES |
ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16B. | CODE OF ETHICS |
ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
For the Years Ended May 31, | For the Years Ended May 31, | |||||||||||||||
(in thousands of US$) | 2019 | 2020 | 2020 | 2021 | ||||||||||||
Audit fees (1) | 2,138 | 2,363 | 2,363 | 2,629 | ||||||||||||
Audit related fees (2) | 736 | 570 | 570 | 1,717 | ||||||||||||
Tax fees (3) | 71 | 202 | 202 | 31 | ||||||||||||
All other fees | 83 | 54 | 54 | 195 |
(1) | “Audit fees” means the aggregate fees billed for professional services rendered by our independent registered public accounting firm for the audit of our annual consolidated financial statements and the review of our comparative interim financial information. |
(2) | “Audit related fees” means the fees billed for the audit services provided for issuing comfort letter, rendering of listing advice and other audit related services to our |
(3) | “Tax fees” represents the aggregated fees billed for professional services rendered by our independent registered public accounting firm for tax compliance, tax advice, and tax planning. The policy of our audit committee is to pre-approve all audit andnon-audit services provided by Deloitte Touche Tohmatsu Certified Public Accountants LLP, including audit services, audit-related services, tax services and other services as described above, other than those for de minimis services which are approved by the audit committee prior to the completion of the audit. |
ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
ITEM 16F. | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANTS |
ITEM 16G. | CORPORATE GOVERNANCE |
ITEM 16H. | MINE SAFETY DISCLOSURE |
ITEM 17. | FINANCIAL STATEMENTS |
ITEM 18. | FINANCIAL STATEMENTS |
ITEM 19. | EXHIBITS |
15.1* | Consent of Tian Yuan Law Firm | |
15.2* | Consent of Deloitte Touche Tohmatsu Certified Public Accountants LLP | |
101.INS* | Inline XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104* | Cover Page Interactive Data File — the cover page XBRL tags are embedded within the Exhibit 101 Inline XBRL document set |
* | Filed herewith. |
** | Furnished herewith. |
NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC. | ||
By: | /s/ Chenggang Zhou | |
Name: | Chenggang Zhou | |
Title: | Chief Executive Officer |
CONTENTS | PAGE(S) | |
F-2 - F-3 | ||
F-4 - F-5 | ||
F-6 | ||
F-7 | ||
F-8 - F-10 | ||
F-11 - F-12 | ||
F-13 - |
As of May 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
US$ | US$ | US$ | ||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | 983,319 | 1,414,171 | 915,057 | |||||||||
Restricted cash | 47 | 43 | 0 | |||||||||
Term deposits | 107,741 | 108,672 | 284,793 | |||||||||
Short-term investments | 1,623,763 | 1,668,689 | 2,318,280 | |||||||||
Accounts receivable, net of allowance of US$485 , , 2019 and 2020, respectively | 3,179 | 3,300 | 4,178 | |||||||||
Inventory, net | 40,175 | 29,046 | 31,324 | |||||||||
Prepaid expenses and other current assets, net of allowance of US$914 , US$248 and US$149, 2019 and 2020, respectively | 182,095 | 199,677 | 199,404 | |||||||||
Amounts due from related parties, current | 1,595 | 42,644 | 3,384 | |||||||||
Total current assets | 2,941,914 | 3,466,242 | 3,756,420 | |||||||||
Restricted cash, non-current | 3,399 | 4,013 | 4,367 | |||||||||
Property and equipment, net | 449,592 | 532,015 | 672,455 | |||||||||
Land use rights, net | 3,785 | 6,405 | 6,037 | |||||||||
Amounts due from related parties, non-current | 2,226 | 1,204 | 22,709 | |||||||||
Long-term deposits | 40,099 | 49,742 | 62,116 | |||||||||
Long-term prepaid rents | 191 | 442 | 0 | |||||||||
Intangible assets, net | 8,544 | 13,935 | 10,246 | |||||||||
Goodwill, net | 31,729 | 79,614 | 80,366 | |||||||||
Long-term investments, net | 433,333 | 404,704 | 431,101 | |||||||||
Deferred tax assets, non-current, net | 43,323 | 61,467 | 63,324 | |||||||||
Right-of-use assets | 0 | 0 | 1,425,466 | |||||||||
Other non-current assets | 19,577 | 26,776 | 22,278 | |||||||||
Total assets | 3,977,712 | 4,646,559 | 6,556,885 | |||||||||
LIABILITIES, MEZZANINE EQUITY AND EQUITY | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable (including accounts payable of the consolidated variable interest entities without recourse to the Company of US$39,279 , US$33,646 and US$31,658 as of May 31, 2018, 2019 and 2020, respectively) | 39,889 | 34,057 | 33,147 | |||||||||
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated variable interest entities without recourse to the Company of US$335,955 , , 2019 and 2020, respectively) | 373,537 | 576,521 | 634,619 | |||||||||
Income taxes payable (including income taxes payable of the consolidated variable interest entities without recourse to the Company of US$54,844 , US$79,067 and US$87,331, 2019 and 2020, respectively) | 67,233 | 94,071 | 101,385 | |||||||||
Amounts due to related parties (including amounts due to related parties of the consolidated variable interest entities without recourse to the Company of US$30 , US$472 and US$1,590 as of May 31, 2018, 2019 and 2020, respectively) | 30 | 472 | 1,590 | |||||||||
Deferred revenue (including deferred revenue of the consolidated variable interest entities without recourse to the Company of US$1,244,748 , US$1,268,318 and US$1,317,645 as of May 31, 2018, 2019 and 2020, respectively) | 1,270,195 | 1,301,103 | 1,324,384 | |||||||||
Operating l easeliabilities -current (including operating lease liabilities-current of the consolidated variable interest entities without recourse to the Company of NaN , NaN and US$376,177 as of May 31,2018, 2019 and 2020, respectively) | 0 | 0 | 384,239 | |||||||||
Total current liabilities | 1,750,884 | 2,006,224 | 2,479,364 | |||||||||
Deferred tax liabilities, non-current (including deferred tax liabilities, non-current of the consolidated variable interest entities without recourse to the Company of US$13,782 , US$18,607 and US$12,392 as of May 31, 2018, 2019 and 2020, respectively) | 12,133 | 18,781 | 11,906 | |||||||||
Long - term loan (includinglong- term loan of the consolidated variable interest entities without recourse to the Company of NaN , NaN and NaN as of May 31,2018 2019 and 2020, respectively), | — | 96,457 | 117,881 | |||||||||
Operating lease liabilities (including operating lease liabilities of the consolidated variable interest entities without recourse to the Company of NaN , NaN and US$2018 , 2019 and 2020, respectively) | 0 | 0 | 1,077,923 | |||||||||
Total liabilities | 1,763,017 | 2,121,462 | 3,687,074 | |||||||||
As of May 31, | ||||||||
2020 | 2021 | |||||||
US$ | US$ | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | 915,057 | 1,612,211 | ||||||
Term deposits | 284,793 | 1,214,025 | ||||||
Short-term investments | 2,318,280 | 3,434,726 | ||||||
Accounts receivable, net of allowance of US$557 and US$1,613 as of May 31, 2020 and 2021, respectively | 4,178 | 8,667 | ||||||
Inventory, net | 31,324 | 31,175 | ||||||
Prepaid expenses and other current assets, net of allowance of US$149 and US$215 as of May 31, 2020 and 2021, respectively | 199,404 | 269,233 | ||||||
Amounts due from related parties, current | 3,384 | 4,118 | ||||||
Total current assets | 3,756,420 | 6,574,155 | ||||||
Restricted cash, non-current | 4,367 | 19,916 | ||||||
Property and equipment, net | 672,455 | 865,030 | ||||||
Land use rights, net | 6,037 | 13,989 | ||||||
Amounts due from related parties, non-current | 22,709 | 4,157 | ||||||
Long-term deposits | 62,116 | 74,796 | ||||||
Intangible assets, net | 10,246 | 4,836 | ||||||
Goodwill, net | 80,366 | 73,254 | ||||||
Long-term investments, net (including available-for-sale investment of US$201,815 and US$224,315 as of May 31, 2020 and 2021, respectively) | 431,101 | 537,749 | ||||||
Deferred tax assets, non-current, net | 63,324 | 103,587 | ||||||
Right-of-use | 1,425,466 | 1,857,533 | ||||||
Other non-current assets | 22,278 | 22,051 | ||||||
Total assets | 6,556,885 | 10,151,053 | ||||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable (including accounts payable of the consolidated variable interest entities without recourse to the Company of US$31,658 and US$36,032 as of May 31, 2020 and 2021, respectively) | 33,147 | 38,441 | ||||||
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated variable interest entities without recourse to the Company of US$581,576 and US$900,877 as of May 31, 2020 and 2021, respectively) | 634,619 | 908,231 | ||||||
Income taxes payable (including income taxes payable of the consolidated variable interest entities without recourse to the Company of US$87,331 and US$46,248 as of May 31, 2020 and 2021, respectively) | 101,385 | 84,321 | ||||||
Amounts due to related parties (including amounts due to related parties of the consolidated variable interest entities without recourse to the Company of US$1,590 and US$33 as of May 31, 2020 and 2021, respectively) | 1,590 | 33 | ||||||
Deferred revenue (including deferred revenue of the consolidated variable interest entities without recourse to the Company of US$1,317,645 and US$1,923,007 as of May 31, 2020 and 2021, respectively) | 1,324,384 | 1,926,386 | ||||||
Operating lease liabilities-current (including operating lease liabilities-current of the consolidated variable interest entities without recourse to the Company of US$376,177 and US$501,049 as of May 31, 2020 and 2021, respectively) | 384,239 | 514,033 | ||||||
Total current liabilities | 2,479,364 | 3,471,445 | ||||||
Deferred tax liabilities, non-current (including deferred tax liabilities,non-current of the consolidated variable interest entities without recourse to the Company of US$12,392 and US$12,924 as of May 31, 2020 and 2021, respectively) | 11,906 | 13,172 | ||||||
Long-term loan (including long-term loan of the consolidated variable interest entities without recourse to the Company of NaN and NaN as of May 31, 2020 and 2021, respectively) | 117,881 | 0 | ||||||
Unsecured senior notes (including unsecured senior notes of the consolidated variable interest entities without recourse to the Company of NaN and NaNas of May 31, 2020 and May 31, 2021, respectively) | 0 | 297,631 | ||||||
Operating lease liabilities (including operating lease liabilities of the consolidated variable interest entities without recourse to the Company of US$1,054,149 and US$1,333,961 as of May 31, 2020 and 2021, respectively) | 1,077,923 | 1,350,629 | ||||||
Total liabilities | 3,687,074 | 5,132,877 | ||||||
As of May 31 , | As of May 31, | |||||||||||||||||||
2018 | 2019 | 2020 | 2020 | 2021 | ||||||||||||||||
US$ | US$ | US$ | US$ | US$ | ||||||||||||||||
Commitments and contingencies (Note 2 1 ) | ||||||||||||||||||||
Mezzanine equity | ||||||||||||||||||||
Redeemable non-controlling interests | 206,624 | 0 | 0 | |||||||||||||||||
Commitments and contingencies (Note 21) | 0 | 0 | ||||||||||||||||||
Equity | ||||||||||||||||||||
Common shares (US$0.01 par value; 300,000,000 shares authorized as of May 31, 2018 , 2019 and 2020 ; 158,379,387, 158,801,714 , 2019 and2020 ; 158,319,910, | 1,584 | 1,588 | 1,588 | |||||||||||||||||
Common shares (US$0.001 par value; 3,000,000,000 shares authorized as of May 31, 2020 and 2021; 1,588,017,140 and 1,690,082,150 shares issued as of May 31, 2020 and 2021; 1,585,400,800 and 1,690,082,150 shares outstanding as of May 31, 2020 and 2021 respectively)* | 1,588 | 1,690 | ||||||||||||||||||
Treasury stock | (1 | ) | (10 | ) | (3 | ) | (3 | ) | 0 | |||||||||||
Additional paid-in capital | 129,059 | 428,959 | 456,088 | 456,088 | 1,948,884 | |||||||||||||||
Statutory reserves | 263,518 | 305,529 | 380,078 | 380,078 | 447,504 | |||||||||||||||
Retained earnings | 1,352,543 | 1,647,627 | 1,986,411 | 1,986,411 | 2,253,399 | |||||||||||||||
Accumulated other comprehensive income (loss) | 244,886 | (23,007 | ) | (90,867 | ) | |||||||||||||||
Accumulated other comprehensive (loss) income | (90,867 | ) | 261,798 | |||||||||||||||||
Total New Oriental Education & Technology Group Inc. shareholders’ equity | 1,991,589 | 2,360,686 | 2,733,295 | 2,733,295 | 4,913,275 | |||||||||||||||
Non-controlling interests | 16,482 | 164,411 | 136,516 | 136,516 | 104,901 | |||||||||||||||
Total equity | 2,008,071 | 2,525,097 | 2,869,811 | 2,869,811 | 5,018,176 | |||||||||||||||
Total liabilities, mezzanine equity and equity | 3,977,712 | 4,646,559 | 6,556,885 | |||||||||||||||||
Total liabilities and equity | 6,556,885 | 10,151,053 | ||||||||||||||||||
* | Retrospectively restated for the effect of stock split. (Note 16) |
For the years ended May 31, | For the years ended May 31, | |||||||||||||||||||||||
2018 | 2019 | 2020 | 2019 | 2020 | 2021 | |||||||||||||||||||
US$ | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||
Net revenues | ||||||||||||||||||||||||
Educational programs and services | 2,165,152 | 2,785,254 | 3,230,378 | 2,785,254 | 3,230,378 | 3,936,969 | ||||||||||||||||||
Books and other services | 282,278 | 311,237 | 348,304 | 311,237 | 348,304 | 339,570 | ||||||||||||||||||
Total net revenues | 2,447,430 | 3,096,491 | 3,578,682 | 3,096,491 | 3,578,682 | 4,276,539 | ||||||||||||||||||
Operating cost and expenses | ||||||||||||||||||||||||
Cost of revenues | (1,065,740 | ) | (1,376,269 | ) | (1,588,899 | ) | (1,376,269 | ) | (1,588,899 | ) | (2,036,875 | ) | ||||||||||||
Selling and marketing | (324,249 | ) | (384,287 | ) | (445,259 | ) | (384,287 | ) | (445,259 | ) | (600,778 | ) | ||||||||||||
General and administrative | (794,482 | ) | (1,034,028 | ) | (1,145,521 | ) | (1,028,783 | ) | (1,145,521 | ) | (1,489,826 | ) | ||||||||||||
Impairment loss on intangible assets and goodwill | (5,245 | ) | — | (31,794 | ) | |||||||||||||||||||
Total operating cost and expenses | (2,184,471 | ) | (2,794,584 | ) | (3,179,679 | ) | (2,794,584 | ) | (3,179,679 | ) | (4,159,273 | ) | ||||||||||||
Gain on disposal of a subsidiary | — | 3,627 | — | 3,627 | — | — | ||||||||||||||||||
Operating income | 262,959 | 305,534 | 399,003 | 305,534 | 399,003 | 117,266 | ||||||||||||||||||
Other income, net | ||||||||||||||||||||||||
Interest income | 84,838 | 97,530 | 116,117 | 97,530 | 116,117 | 141,511 | ||||||||||||||||||
Interest expense | — | (1,615 | ) | (4,627 | ) | (1,615 | ) | (4,627 | ) | (6,747 | ) | |||||||||||||
Realized gain from long-term investments | 7,366 | 26,379 | 407 | 26,379 | 407 | 3,535 | ||||||||||||||||||
Impairment loss from long-term investments | (980 | ) | (5,919 | ) | (31,750 | ) | (5,919 | ) | (31,750 | ) | (40,207 | ) | ||||||||||||
Loss from fair value change of long-term investments | — | (104,636 | ) | (18,451 | ) | (104,636 | ) | (18,451 | ) | (3,824 | ) | |||||||||||||
Miscellaneous income (loss), net | 2,841 | (1,424 | ) | 27,137 | ||||||||||||||||||||
Miscellaneous (loss) income, net | (1,424 | ) | 27,137 | 103,443 | ||||||||||||||||||||
Income before income taxes and loss from equity method investments | 357,024 | 315,849 | 487,836 | 315,849 | 487,836 | 314,977 | ||||||||||||||||||
Provision for income taxes: | ||||||||||||||||||||||||
Current | (72,785 | ) | (103,031 | ) | (142,992 | ) | (103,031 | ) | (142,992 | ) | (127,313 | ) | ||||||||||||
Deferred | 13,377 | 17,317 | 8,630 | 17,317 | 8,630 | 43,725 | ||||||||||||||||||
Provision for income taxes | (59,408 | ) | (85,714 | ) | (134,362 | ) | (85,714 | ) | (134,362 | ) | (83,588 | ) | ||||||||||||
(Loss) gain from equity method investments | (379 | ) | (2,289 | ) | 1,385 | (2,289 | ) | 1,385 | (1,368 | ) | ||||||||||||||
Net income | 297,237 | 227,846 | 354,859 | 227,846 | 354,859 | 230,021 | ||||||||||||||||||
Less: Net income | 1,107 | (10,219 | ) | (58,474 | ) | |||||||||||||||||||
Less: Net loss attributable to non-controlling interests | (10,219 | ) | (58,474 | ) | (104,393 | ) | ||||||||||||||||||
Net income attributable to New Oriental Education & Technology Group Inc.’s shareholders | 296,130 | 238,065 | 413,333 | 238,065 | 413,333 | 334,414 | ||||||||||||||||||
Net income per common share (Note 19 ) | ||||||||||||||||||||||||
Net income per common share*(Note 19) | ||||||||||||||||||||||||
- Basic | 1.87 | 1.50 | 2.61 | 0.15 | 0.26 | 0.20 | ||||||||||||||||||
- Diluted | 1.87 | 1.50 | 2.59 | 0.15 | 0.26 | 0.20 | ||||||||||||||||||
Weighted average shares used in calculating basic and diluted net income per comm shareon | ||||||||||||||||||||||||
Weighted average shares used in calculating basic and diluted net income per common share* | ||||||||||||||||||||||||
- Basic | 158,168,794 | 158,293,890 | 158,429,576 | 1,582,938,900 | 1,584,295,760 | 1,645,463,440 | ||||||||||||||||||
- Diluted | 158,556,500 | 159,039,345 | 159,536,890 | 1,590,393,450 | 1,595,368,900 | 1,651,982,384 |
* | Retrospectively restated for the effect of stock split. (Note 16) |
For the years ended May 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
US$ | US$ | US$ | ||||||||||
Net income | 297,237 | 227,846 | 354,859 | |||||||||
Other comprehensive income (loss), net of tax | ||||||||||||
Foreign currency translation adjustment | 79,293 | (190,358 | ) | (67,529 | ) | |||||||
Unrealized gain (loss) on available-for-sale investments, net of tax effect of US$8,825, US$3,463 and US$60for the years ended May 31, 2018, 2019 and 2020, respectively | 129,545 | 19,483 | (748 | ) | ||||||||
Other comprehensive income (loss), net of tax | 208,838 | (170,875 | ) | (68,277 | ) | |||||||
Comprehensive income | 506,075 | 56,971 | 286,582 | |||||||||
Comprehensive income (loss) attributable to non-controlling interests | 4,220 | (11,130 | ) | (58,891 | ) | |||||||
Comprehensive income attributable to New Oriental Education & Technology Group Inc.’s shareholders | 501,855 | 68,101 | 345,473 | |||||||||
For the years ended May 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
US$ | US$ | US$ | ||||||||||
Net income | 227,846 | 354,859 | 230,021 | |||||||||
Other comprehensive (loss) income, net of tax | ||||||||||||
Foreign currency translation adjustment | (190,358 | ) | (67,529 | ) | 327,236 | |||||||
Purchase of non-controlling interests | — | — | 59 | |||||||||
Unrealized gain (loss) on available-for-sale , 2019, 2020 and 2021, respectively | 19,483 | (748 | ) | 27,318 | ||||||||
Other comprehensive (loss) income, net of tax | (170,875 | ) | (68,277 | ) | 354,613 | |||||||
Comprehensive income | 56,971 | 286,582 | 584,634 | |||||||||
Comprehensive loss attributable to non-controlling interests | (11,130 | ) | (58,891 | ) | (102,445 | ) | ||||||
Comprehensive income attributable to New Oriental Education & Technology Group Inc.’s shareholders | 68,101 | 345,473 | 687,079 | |||||||||
Total New Oriental Education & | ||||||||||||||||||||||||||||||||||||||||
Accumulated | Technology | |||||||||||||||||||||||||||||||||||||||
other | Group Inc. | Non- | Total | |||||||||||||||||||||||||||||||||||||
Additional | Treasury | comprehensive | Statutory | Retained | shareholders’ | controlling | shareholders’ | |||||||||||||||||||||||||||||||||
Common shares | paid-in capital | stock | income | reserves | earnings | equity | interests | equity | ||||||||||||||||||||||||||||||||
Number | US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||||||||||||||
Balance as of June 1, 2017 | 157,687,444 | 1,584 | 249,126 | (7 | ) | 39,161 | 219,975 | 1,171,109 | 1,680,948 | 39,130 | 1,720,078 | |||||||||||||||||||||||||||||
Reissuance of treasury stock for the exercises of options | 500 | — | 1 | — | — | — | — | 1 | — | 1 | ||||||||||||||||||||||||||||||
Reissuance of treasury stock for non-vested equity shares (“NES”) | 631,966 | — | (6 | ) | 6 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Share-based compensation expenses | — | — | 57,443 | — | — | — | — | 57,443 | — | 57,443 | ||||||||||||||||||||||||||||||
Transfer to statutory reserves | — | — | — | — | — | 43,543 | (43,543 | ) | — | |||||||||||||||||||||||||||||||
Dividend declared (a) | — | — | — | — | — | — | (71,153 | ) | (71,153 | ) | (231 | ) | (71,384 | ) | ||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 296,130 | 296,130 | 1,107 | 297,237 | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | 76,344 | — | — | 76,344 | 2,949 | 79,293 | ||||||||||||||||||||||||||||||
Unrealized gain on available-for-sale investments, net of tax effect of US$8,825 | — | — | — | — | 129,381 | — | — | 129,381 | 164 | 129,545 | ||||||||||||||||||||||||||||||
Impact from reclassification of non-controlling interests and new non-controlling interests recognized in acquisitions | — | — | (113,784 | ) | — | — | — | — | (113,784 | ) | 2,015 | (111,769 | ) | |||||||||||||||||||||||||||
Capital reduction of non-controlling interests | — | — | (63,721 | ) | — | — | — | — | (63,721 | ) | (28,652 | ) | (92,373 | ) | ||||||||||||||||||||||||||
Balance as of May 31, 2018 | 158,319,910 | 1,584 | 129,059 | (1 | ) | 244,886 | 263,518 | 1,352,543 | 1,991,589 | 16,482 | 2,008,071 | |||||||||||||||||||||||||||||
Common shares | Additional paid-in capital | Treasury stock | Accumulated other comprehensive income (loss) | Statutory reserves | Retained earnings | Total New Oriental Education & Technology Group Inc. shareholders’ equity | Non- controlling interests | Total shareholders’ equity | ||||||||||||||||||||||||||||||||
Number* | US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||||||||||||||
Balance as of May 31, 2018 | 1,583,199,100 | 1,584 | 129,059 | (1 | ) | 244,886 | 263,518 | 1,352,543 | 1,991,589 | 16,482 | 2,008,071 | |||||||||||||||||||||||||||||
Issuance of treasury stock and common shares for nonvested equity shares (“NES”) | 4,818,040 | 4 | (5 | ) | 1 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Shares repurchase | (9,520,000 | ) | — | (55,952 | ) | (10 | ) | — | — | — | (55,962 | ) | — | (55,962 | ) | |||||||||||||||||||||||||
Share-based compensation expenses | — | — | 71,336 | — | — | — | — | 71,336 | — | 71,336 | ||||||||||||||||||||||||||||||
Transfer to statutory reserves | — | — | — | — | — | 42,011 | (42,011 | ) | — | — | — | |||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 238,065 | 238,065 | (10,219 | ) | 227,846 | |||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (188,982 | ) | — | — | (188,982 | ) | (1,376 | ) | (190,358 | ) | ||||||||||||||||||||||||||
Unrealized gain on available-for-sale | — | — | — | — | 19,018 | — | — | 19,018 | 465 | 19,483 | ||||||||||||||||||||||||||||||
Capital contribution from non-controlling interests | — | — | 15,181 | — | — | — | — | 15,181 | 5,317 | 20,498 | ||||||||||||||||||||||||||||||
Change in non-controlling interests resulting from the initial public offering (the “IPO”) of Koolearn Technology Holding Limited (“Koolearn Holding”), net of issuance cost | — | — | 139,211 | — | — | — | — | 139,211 | 94,136 | 233,347 | ||||||||||||||||||||||||||||||
Reclassification of redeemable non-controlling interests | — | — | 145,690 | — | — | — | — | 145,690 | 60,934 | 206,624 | ||||||||||||||||||||||||||||||
Purchase of non-controlling interests | — | — | (15,190 | ) | — | — | — | — | (15,190 | ) | (1,696 | ) | (16,886 | ) | ||||||||||||||||||||||||||
Non-controlling interests arising from acquisitions | — | — | — | — | — | — | — | — | 288 | 288 | ||||||||||||||||||||||||||||||
Disposal of a subsidiary | — | — | (371 | ) | — | — | — | — | (371 | ) | 80 | (291 | ) | |||||||||||||||||||||||||||
Cumulative-effect adjustment upon adoption of ASU 2016-01 | — | — | — | — | (97,929 | ) | — | 97,929 | — | — | — | |||||||||||||||||||||||||||||
Cumulative-effect adjustment upon adoption of ASC Topic 606 | — | — | — | — | — | — | 1,101 | 1,101 | — | 1,101 | ||||||||||||||||||||||||||||||
Balance as of May 31, 2019 | 1,578,497,140 | 1,588 | 428,959 | (10 | ) | (23,007 | ) | 305,529 | 1,647,627 | 2,360,686 | 164,411 | 2,525,097 | ||||||||||||||||||||||||||||
Common shares | Additional paid-in capital | Treasury stock | Accumulated other comprehensive loss | Statutory reserves | Retained earnings | Total New Oriental Education & Technology Group Inc. shareholders’ equity | Non- controlling interests | Total shareholders’ equity | ||||||||||||||||||||||||||||||||
Number* | US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||||||||||||||
Balance as of May 31, 2019 | 1,578,497,140 | 1,588 | 428,959 | (10 | ) | (23,007 | ) | 305,529 | 1,647,627 | 2,360,686 | 164,411 | 2,525,097 | ||||||||||||||||||||||||||||
Issuance of treasury stock and common shares for NES | 6,903,660 | — | (7 | ) | 7 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Share-based compensation expenses | — | — | 41,326 | — | — | — | — | 41,326 | 20,731 | 62,057 | ||||||||||||||||||||||||||||||
Exercise of share options in Koolearn Holding | — | — | — | — | — | — | — | — | 3,629 | 3,629 | ||||||||||||||||||||||||||||||
Transfer to statutory reserves | — | — | — | — | — | 74,549 | (74,549 | ) | — | — | — | |||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 413,333 | 413,333 | (58,474 | ) | 354,859 | |||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (67,112 | ) | — | — | (67,112 | ) | (417 | ) | (67,529 | ) | ||||||||||||||||||||||||||
Unrealized gain on available-for-sale | — | — | — | — | (748 | ) | — | — | (748 | ) | — | (748 | ) | |||||||||||||||||||||||||||
Purchase of non-controlling interests | — | — | (20,045 | ) | — | — | — | — | (20,045 | ) | 6,675 | (13,370 | ) | |||||||||||||||||||||||||||
Share option gain | — | — | 5,752 | — | — | — | — | 5,752 | — | 5,752 | ||||||||||||||||||||||||||||||
Capital contribution from non-controlling interests | — | — | 103 | — | — | — | — | 103 | (39 | ) | 64 | |||||||||||||||||||||||||||||
Balance as of May 31, 2020 | 1,585,400,800 | 1,588 | 456,088 | (3 | ) | (90,867 | ) | 380,078 | 1,986,411 | 2,733,295 | 136,516 | 2,869,811 | ||||||||||||||||||||||||||||
Total New Oriental Education & | ||||||||||||||||||||||||||||||||||||||||
Accumulated | Technology | |||||||||||||||||||||||||||||||||||||||
other | Group Inc. | Non- | Total | |||||||||||||||||||||||||||||||||||||
Additional | Treasury | comprehensive | Statutory | Retained | shareholders’ | controlling | shareholders’ | |||||||||||||||||||||||||||||||||
Common shares | paid-in capital | stock | income (loss) | reserves | earnings | equity | interests | equity | ||||||||||||||||||||||||||||||||
Number | US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||||||||||||||
Balance as of May 31, 2018 | 158,319,910 | 1,584 | 129,059 | (1 | ) | 244,886 | 263,518 | 1,352,543 | 1,991,589 | 16,482 | 2,008,071 | |||||||||||||||||||||||||||||
Issuance of treasury stock and common shares for NES | 481,804 | 4 | (5 | ) | 1 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Shares repurchase | (952,000 | ) | — | (55,952 | ) | (10 | ) | — | — | — | (55,962 | ) | — | (55,962 | ) | |||||||||||||||||||||||||
Share-based compensation expenses | — | — | 71,336 | — | — | — | — | 71,336 | — | 71,336 | ||||||||||||||||||||||||||||||
Transfer to statutory reserves | — | — | — | — | — | 42,011 | (42,011 | ) | — | — | — | |||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 238,065 | 238,065 | (10,219 | ) | 227,846 | |||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (188,982 | ) | — | — | (188,982 | ) | (1,376 | ) | (190,358 | ) | ||||||||||||||||||||||||||
Unrealized gain on available-for-sale investments, net of tax effect of US$3,463 | — | — | — | — | 19,018 | — | — | 19,018 | 465 | 19,483 | ||||||||||||||||||||||||||||||
Capital contribution from non-controlling interests | — | — | 15,181 | — | — | — | — | 15,181 | 5,317 | 20,498 | ||||||||||||||||||||||||||||||
Change in non-controlling interests resulting from the initial public offering (the “IPO”) of Koolearn Technology Holding Limited (“Koolearn Holding”), net of issuance cost | — | — | 139,211 | — | — | — | — | 139,211 | 94,136 | 233,347 | ||||||||||||||||||||||||||||||
Reclassification of redeemable non-controlling interests | — | — | 145,690 | — | — | — | — | 145,690 | 60,934 | 206,624 | ||||||||||||||||||||||||||||||
Purchase of non-controlling interests | — | — | (15,190 | ) | — | — | — | — | (15,190 | ) | (1,696 | ) | (16,886 | ) | ||||||||||||||||||||||||||
Non-controlling interests arising from acquisitions | — | — | — | — | — | — | — | — | 288 | 288 | ||||||||||||||||||||||||||||||
Disposal of a subsidiary | — | — | (371 | ) | — | — | — | — | (371 | ) | 80 | (291 | ) | |||||||||||||||||||||||||||
Cumulative-effect adjustment upon adoption of ASU 2016-01 | — | — | — | — | (97,929 | ) | — | 97,929 | — | — | — | |||||||||||||||||||||||||||||
Cumulative-effect adjustment upon adoption of ASC Topic 606 | — | — | — | — | — | — | 1,101 | 1,101 | — | 1,101 | ||||||||||||||||||||||||||||||
Balance as of May 31, 2019 | 157,849,714 | 1,588 | 428,959 | (10 | ) | (23,007 | ) | 305,529 | 1,647,627 | 2,360,686 | 164,411 | 2,525,097 | ||||||||||||||||||||||||||||
Common shares | Additional paid-in capital | Treasury stock | Accumulated other comprehensive (loss)/income | Statutory reserves | Retained earnings | Total New Oriental Education & Technology Group Inc. shareholders’ equity | Non- controlling interests | Total shareholders’ equity | ||||||||||||||||||||||||||||||||
Number* | US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||||||||||||||
Balance as of May 31, 2020 | 1,585,400,800 | 1,588 | 456,088 | (3 | ) | (90,867 | ) | 380,078 | 1,986,411 | 2,733,295 | 136,516 | 2,869,811 | ||||||||||||||||||||||||||||
Issuance of treasury stock and common shares for NES | 5,706,350 | 3 | (6 | ) | 3 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Vested NES | 1,110,000 | 1 | (1 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
HK initial public offering, net of issuance cost | 97,865,000 | 98 | 1,482,670 | — | — | — | — | 1,482,768 | — | 1,482,768 | ||||||||||||||||||||||||||||||
Share-based compensation expenses | — | — | 29,353 | — | — | — | — | 29,353 | 39,527 | 68,880 | ||||||||||||||||||||||||||||||
Exercise of share options in Koolearn Holding | — | — | — | — | — | — | — | — | 1,929 | 1,929 | ||||||||||||||||||||||||||||||
Transfer to statutory reserves | — | — | — | — | — | 67,426 | (67,426 | ) | — | — | — | |||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 334,414 | 334,414 | (104,393 | ) | 230,021 | |||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | 325,288 | — | — | 325,288 | 1,948 | 327,236 | ||||||||||||||||||||||||||||||
Unrealized gain on available-for-sale | — | — | — | — | 27,318 | — | — | 27,318 | — | 27,318 | ||||||||||||||||||||||||||||||
Purchase of non-controlling interests | — | — | (19,092 | ) | — | 59 | — | — | (19,033 | ) | (626 | ) | (19,659 | ) | ||||||||||||||||||||||||||
Shares issuance of Koolearn Holdings | — | — | (128 | ) | — | — | — | — | (128 | ) | 30,000 | 29,872 | ||||||||||||||||||||||||||||
Balance as of May 31, 2021 | 1,690,082,150 | 1,690 | 1,948,884 | 0 | 261,798 | 447,504 | 2,253,399 | 4,913,275 | 104,901 | 5,018,176 | ||||||||||||||||||||||||||||||
Total New Oriental Education & | ||||||||||||||||||||||||||||||||||||||||
Accumulated | Technology | |||||||||||||||||||||||||||||||||||||||
other | Group Inc. | Non- | Total | |||||||||||||||||||||||||||||||||||||
Additional | Treasury | comprehensive | Statutory | Retained | shareholders’ | controlling | shareholders’ | |||||||||||||||||||||||||||||||||
Common shares | paid-in capital | stock | loss | reserves | earnings | equity | interests | equity | ||||||||||||||||||||||||||||||||
Number | US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||||||||||||||
Balance as of May 31, 2019 | 157,849,714 | 1,588 | 428,959 | (10 | ) | (23,007 | ) | 305,529 | 1,647,627 | 2,360,686 | 164,411 | 2,525,097 | ||||||||||||||||||||||||||||
Issuance of treasury stock and common shares for NES | 690,366 | — | (7 | ) | 7 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Share-based compensation expenses | — | — | 41,326 | — | — | — | — | 41,326 | 20,731 | 62,057 | ||||||||||||||||||||||||||||||
Exercise of share options in Koolearn Holding | — | — | — | — | — | — | — | — | 3,629 | 3,629 | ||||||||||||||||||||||||||||||
Transfer to statutory reserves | — | — | — | — | — | 74,549 | (74,549 | ) | — | — | — | |||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 413,333 | 413,333 | (58,474 | ) | 354,859 | |||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (67,112 | ) | — | — | (67,112 | ) | (417 | ) | (67,529 | ) | ||||||||||||||||||||||||||
Unrealized gain on available-for-sale investments, net of tax effect of US$60 | — | — | — | — | (748 | ) | — | — | (748 | ) | — | (748 | ) | |||||||||||||||||||||||||||
Purchase of non-controlling interests | — | — | (20,045 | ) | — | — | — | — | (20,045 | ) | 6,675 | (13,370 | ) | |||||||||||||||||||||||||||
Share option gain | — | — | 5,752 | — | — | — | — | 5,752 | — | 5,752 | ||||||||||||||||||||||||||||||
Capital contribution from non-controlling interests | — | — | 103 | — | — | — | — | 103 | (39 | ) | 64 | |||||||||||||||||||||||||||||
Balance as of May 31, 2020 | 158,540,080 | 1,588 | 456,088 | (3 | ) | (90,867 | ) | 380,078 | 1,986,411 | 2,733,295 | 136,516 | 2,869,811 | ||||||||||||||||||||||||||||
* | Retrospectively restated for the effect of stock split. (Note 16) |
For the years ended May 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
US$ | US$ | US$ | ||||||||||
Cash flows from operating activities | ||||||||||||
Net income | 297,237 | 227,846 | 354,859 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||
Depreciation of property and equipment | 77,081 | 110,042 | 146,310 | |||||||||
Amortization of intangible assets | 1,839 | 3,699 | 4,530 | |||||||||
Amortization of land use rights | 110 | 263 | 162 | |||||||||
Loss on disposal of property and equipment | 2,032 | 10,685 | 4,866 | |||||||||
Gain on disposal of a subsidiary | — | (3,627 | ) | — | ||||||||
Goodwill impairment | — | 5,245 | — | |||||||||
Impairment loss from long-term investments | 980 | 5,919 | 31,750 | |||||||||
Realized gain from long-term investments | (7,366 | ) | (26,379 | ) | (407 | ) | ||||||
Loss from fair value change of long-term investments | — | 104,636 | 18,451 | |||||||||
Share-based compensation expenses | 57,443 | 71,336 | 62,057 | |||||||||
Allowance for doubtful accounts | 576 | 146 | 329 | |||||||||
Loss (gain) from equity method investments | 379 | 2,289 | (1,385 | ) | ||||||||
Deferred income taxes | (14,821 | ) | (17,273 | ) | (8,566 | ) | ||||||
Changes in operating assets and liabilities | ||||||||||||
Accounts receivable | 767 | (509 | ) | (1,422 | ) | |||||||
Inventory | (6,316 | ) | 6,032 | (3,278 | ) | |||||||
Prepaid expenses and other current assets | (51,738 | ) | (23,624 | ) | (40,713 | ) | ||||||
Amounts due from related parties | 4,250 | (3,022 | ) | 14,106 | ||||||||
Long-term deposits | (14,300 | ) | (12,622 | ) | (14,266 | ) | ||||||
Long-term prepaid rents | 1,185 | 858 | 658 | |||||||||
Operating lease rights - of- use assets | — | — | (170,871 | ) | ||||||||
Accounts payable | 13,728 | (2,747 | ) | 82 | ||||||||
Accrued expenses and other current liabilities | 68,226 | (18,321 | ) | 63,667 | ||||||||
Income taxes payable | 15,473 | 27,210 | 56,372 | |||||||||
Amounts due to related parties | (21 | ) | 670 | 1,152 | ||||||||
Deferred revenue | 334,383 | 336,896 | 61,930 | |||||||||
Operating lease liabilities | — | — | 224,082 | |||||||||
Net cash provided by operating activities | 781,127 | 805,648 | 804,455 | |||||||||
Cash flows from investing activities | ||||||||||||
Purchase of term deposits | (117,166 | ) | (104,178 | ) | (249,048 | ) | ||||||
Proceeds from maturity of term deposits | 212,690 | 95,402 | 69,740 | |||||||||
Payments for short-term investments | (1,250,239 | ) | (3,595,634 | ) | (2,964,402 | ) | ||||||
Proceeds from maturity of short-term investments | 1,025,721 | 3,432,981 | 2,248,486 | |||||||||
Purchase of property and equipment | (214,255 | ) | (269,140 | ) | (309,548 | ) | ||||||
Proceeds from disposal of property and equipment | 9,812 | 17,238 | 24,477 | |||||||||
Payments for long-term investments | (67,350 | ) | (128,970 | ) | (92,087 | ) | ||||||
Proceeds from disposal of long-term investments | — | 46,956 | 8,480 | |||||||||
Business acquisitions, net of cash acquired of US$12,210, US$2,697 and US$1,419 | (999 | ) | (36,367 | ) | 1,073 | |||||||
Purchase of land use rights | (5,357 | ) | (7,738 | ) | — | |||||||
Loans provided to related parties | — | (61,155 | ) | (7,128 | ) | |||||||
Repayment of loan provided to related parties | — | 45,682 | 712 | |||||||||
Disposal of subsidiaries, net of cash disposed of NaN, US$12,050 and US$665 | — | (9,789 | ) | 12,875 | ||||||||
Net cash used in investing activities | (407,143 | ) | (574,712 | ) | (1,256,370 | ) | ||||||
For the years ended May 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
US$ | US$ | US$ | ||||||||||
Cash flows from operating activities | ||||||||||||
Net income | 227,846 | 354,859 | 230,021 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||
Depreciation of property and equipment | 110,042 | 146,310 | 225,657 | |||||||||
Amortization of intangible assets | 3,699 | 4,530 | 4,524 | |||||||||
Amortization of land use rights | 263 | 162 | 262 | |||||||||
Loss on disposal of property and equipment | 10,685 | 4,866 | 5,380 | |||||||||
Gain on disposal of a subsidiary | (3,627 | ) | — | — | ||||||||
Goodwill impairment | 5,245 | — | 28,858 | |||||||||
Impairment loss from intangible assets | — | — | 2,936 | |||||||||
Impairment loss from long-term investments | 5,919 | 31,750 | 40,207 | |||||||||
Impairment loss from long-lived assets | — | — | 33,769 | |||||||||
Realized gain from long-term investments | (26,379 | ) | (407 | ) | (3,535 | ) | ||||||
Loss from fair value change of long-term investments | 104,636 | 18,451 | 3,824 | |||||||||
Share-based compensation expenses | 71,336 | 62,057 | 68,880 | |||||||||
Allowance for doubtful accounts | 146 | 329 | 3,106 | |||||||||
Loss (gain) from equity method investments | 2,289 | (1,385 | ) | 1,368 | ||||||||
Deferred income taxes | (17,273 | ) | (8,566 | ) | (44,644 | ) | ||||||
Amortization of discounts and issuance costs of the unsecured senior notes | — | — | 548 | |||||||||
Changes in operating assets and liabilities | ||||||||||||
Accounts receivable | (509 | ) | (1,422 | ) | (4,627 | ) | ||||||
Inventory | 6,032 | (3,278 | ) | 3,752 | ||||||||
Prepaid expenses and other current assets | (23,624 | ) | (40,713 | ) | (15,229 | ) | ||||||
Amounts due from related parties | (3,022 | ) | 14,106 | (661 | ) | |||||||
Long-term deposits | (12,622 | ) | (14,266 | ) | (5,020 | ) | ||||||
Long-term prepaid rents | 858 | 658 | — | |||||||||
Operating lease rights-of-use | — | (170,871 | ) | (252,297 | ) | |||||||
Accounts payable | (2,747 | ) | 82 | 12,809 | ||||||||
Accrued expenses and other current liabilities | (18,321 | ) | 63,667 | 122,147 | ||||||||
Income taxes payable | 27,210 | 56,372 | 33,533 | |||||||||
Amounts due to related parties | 670 | 1,152 | (1,667 | ) | ||||||||
Deferred revenue | 336,896 | 61,930 | 420,340 | |||||||||
Operating lease liabilities | — | 224,082 | 215,844 | |||||||||
Net cash provided by operating activities | 805,648 | 804,455 | 1,130,085 | |||||||||
Cash flows from investing activities | ||||||||||||
Purchase of term deposits | (104,178 | ) | (249,048 | ) | (1,203,630 | ) | ||||||
Proceeds from maturity of term deposits | 95,402 | 69,740 | 296,077 | |||||||||
Payments for short-term investments | (3,595,634 | ) | (2,964,402 | ) | (4,253,957 | ) | ||||||
Proceeds from maturity of short-term investments | 3,432,981 | 2,248,486 | 3,452,642 | |||||||||
Purchase of property and equipment | (269,140 | ) | (309,548 | ) | (429,197 | ) | ||||||
Proceeds from disposal of property and equipment | 17,238 | 24,477 | 45,392 | |||||||||
Payments for long-term investments | (128,970 | ) | (92,087 | ) | (106,965 | ) | ||||||
Proceeds from disposal of long-term investments | 46,956 | 8,480 | 24,623 | |||||||||
Business acquisitions, net of cash acquired of US$2,697, US$1,419 and US$430 for the years ended May 31, 2019, 2020 and 2021, respectively (Note 3) | (36,367 | ) | 1,073 | (12,701 | ) | |||||||
Purchase of land use rights | (7,738 | ) | — | (7,151 | ) | |||||||
Loans provided to related parties | (61,155 | ) | (7,128 | ) | (10,486 | ) | ||||||
Repayment of loan provided to related parties | 45,682 | 712 | 27,714 | |||||||||
Disposal of subsidiaries, net of cash disposed of US$12,050, US$665 and NaN for the years ended May 31, 2019, 2020 and 2021, respectively | (9,789 | ) | 12,875 | — | ||||||||
Net cash used in investing activities | (574,712 | ) | (1,256,370 | ) | (2,177,639 | ) | ||||||
For the years ended May 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
US$ | US$ | US$ | ||||||||||
Cash flows from financing activities | ||||||||||||
Proceeds from issuances of common shares upon exercise of share option s | 1 | — | 3,629 | |||||||||
Proceeds from issuance of ordinary shares relating to the IPO of Koolearn Holding | — | 233,347 | — | |||||||||
Cash paid for employee s ’ individual income taxes on withheld shares from exercise of NES | (7,241 | ) | (12,085 | ) | (9,853 | ) | ||||||
Contingent consideration payments made after a business combination | — | — | (18,332 | ) | ||||||||
Cash paid for dividend | (71,153 | ) | — | — | ||||||||
Proceeds from long-term loan | — | 96,457 | 20,000 | |||||||||
Cash paid for shares repurchase | — | (55,962 | ) | — | ||||||||
Capital contribution from non-controlling interests | 93,159 | 20,498 | 64 | |||||||||
Purchase of non-controlling interests | (89,647 | ) | (15,606 | ) | (13,370 | ) | ||||||
Net cash (used in) provided by financing activities | (74,881 | ) | 266,649 | (17,862 | ) | |||||||
Effects of exchange rate changes | 42,992 | (66,123 | ) | (29,026 | ) | |||||||
Net change in cash, cash equivalents and restricted cash | 342,095 | 431,462 | (498,803 | ) | ||||||||
Cash, cash equivalents and restricted cash at beginning of year | 644,670 | 986,765 | 1,418,227 | |||||||||
Cash, cash equivalents and restricted cash at end of year | 986,765 | 1,418,227 | 919,424 | |||||||||
Supplement disclosure of cash flow information: | ||||||||||||
Income taxes paid | 57,005 | 75,346 | 135,678 | |||||||||
Interests paid | — | 833 | 4,665 | |||||||||
Non-cash investing and financing activities | ||||||||||||
Payable for investments and acquisitions | 5,420 | 21,962 | 3,917 | |||||||||
Payable for purchase of property and equipment | 45,590 | 44,445 | 65,335 | |||||||||
Receivable from the disposal of a subsidiary | — | 13,760 | — | |||||||||
For the years ended May 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
US$ | US$ | US$ | ||||||||||
Cash flows from financing activities | ||||||||||||
Net proceeds from HK initial public offering | — | — | 1,482,768 | |||||||||
Proceeds from issuances of common shares upon exercise of share options | — | 3,629 | 1,929 | |||||||||
Proceeds from issuance of ordinary shares relating to the IPO of Koolearn Holding | 233,347 | — | — | |||||||||
Cash paid for employees’ individual income taxes on withheld shares from exercise of NES | (12,085 | ) | (9,853 | ) | (16,168 | ) | ||||||
Payments made after a business combination | — | (18,332 | ) | (1,741 | ) | |||||||
Repayment of long-term debt | — | — | (120,000 | ) | ||||||||
Proceeds from long-term loan | 96,457 | 20,000 | 297,083 | |||||||||
Cash paid for shares repurchase | (55,962 | ) | — | — | ||||||||
Capital contribution from non-controlling interests | 20,498 | 64 | — | |||||||||
Share issuances of Koolearn Holdings | — | — | 29,872 | |||||||||
Purchase of non-controlling interests | (15,606 | ) | (13,370 | ) | (19,659 | ) | ||||||
Net cash provided by (used in) financing activities | 266,649 | (17,862 | ) | 1,654,084 | ||||||||
Effects of exchange rate changes | (66,123 | ) | (29,026 | ) | 106,173 | |||||||
Net change in cash, cash equivalents and restricted cash | 431,462 | (498,803 | ) | 712,703 | ||||||||
Cash, cash equivalents and restricted cash at beginning of year | 986,765 | 1,418,227 | 919,424 | |||||||||
Cash, cash equivalents and restricted cash at end of year | 1,418,227 | 919,424 | 1,632,127 | |||||||||
Supplement disclosure of cash flow information: | ||||||||||||
Income taxes paid | 75,346 | 135,678 | 144,377 | |||||||||
Interests paid | 833 | 4,665 | 4,219 | |||||||||
Non-cash investing and financing activities | ||||||||||||
Payable for investments and acquisitions | 21,962 | 3,917 | 6,536 | |||||||||
Payable for purchase of property and equipment | 44,445 | 65,335 | 79,132 | |||||||||
Receivable from the disposal of a subsidiary | 13,760 | — | — | |||||||||
1. | ORGANIZATION AND PRINCIPAL ACTIVITIES |
acquisition | (or establishment)/ operation | ownership | ||||||
Name | Date of incorporation or acquisition | Place of incorporation (or establishment)/ operation | Legal ownership | Principal activity | ||||
Major subsidiaries of the Company: | ||||||||
ownership | April 20, 2005 | PRC | 100% | Educational technology and | ||||
Beijing Hewstone Technology Company Limited (“Beijing Hewstone”) | April 20, 2005 | PRC | 100% | Educational software development | ||||
Elite Concept Holdings Limited (“Elite Concept”) | December 3, 2007 | Hong Kong | 100% | Educational consulting | ||||
Winner Park Limited (“Winner Park”) | December 9, 2008 | Hong Kong | 100% | Educational consulting | ||||
Smart Shine International Limited (“Smart Shine”) | December 9, 2008 | Hong Kong | 100% | Educational consulting | ||||
Beijing Pioneer Technology Company Limited (“Beijing Pioneer”) | January 8, 2009 | PRC | 100% | Educational software development | ||||
Beijing Smart Wood Software Technology Company Limited (“Beijing Smart Wood”) | December 21, 2011 | PRC | 100% | Educational consulting and software development | ||||
Koolearn Holding | February 7, 2018 | Cayman Islands | 55.68% | Online education service | ||||
New Oriental Xuncheng Technology (HK) Limited (“Koolearn Tech”) | March 2, 2018 | Hong Kong | 55.68% | Online education service | ||||
Beijing Dexin Dongfang Network Technology Co., Ltd. (“Dexin Dongfang”) | March 21, 2018 | PRC | 55.68% | Educational consulting and software development | ||||
Zhuhai Chongsheng Heli Network Technology Co., Ltd (“Zhuhai Chongsheng”) | July 23, 2019 | PRC | 55.68% | Educational consulting and software development | ||||
VIEs of the Company: | ||||||||
New Oriental Education & Technology Group Co., Ltd (“New Oriental China”) | August 2, 2001 | PRC | N/A | Education consulting, software development and distributions and other services | ||||
Beijing New Oriental Xuncheng Network Technology Co., Ltd. (“Xuncheng”) | March 11, 2005 | PRC | N/A | Online education service | ||||
Major subsidiaries and schools of the VIEs: | ||||||||
Beijing Haidian District Privately-Funded New Oriental School (“Beijing Haidian School”) | October 5, 1993 | PRC | N/A | Language training and test preparation | ||||
June 6, 2002 | PRC | N/A | Primary and secondary school education | |||||
Wuhan New Oriental Training School | April 28, 2002 | PRC | N/A | Language training and test preparation |
acquisition | (or establishment)/ operation | ownership | ||||||
Xi’an Yanta District New Oriental School | November 26, 2002 | PRC | N/A | Language training and test preparation | ||||
Nanjing Gulou New Oriental Advanced Study School | November 28, 2002 | PRC | N/A | Language training and test preparation | ||||
Beijing New Oriental Dogwood Cultural Communications Co., Ltd. (“Dogwood”) | May 16, 2003 | PRC | N/A | Content development and distribution | ||||
Beijing New Oriental Vision Overseas Consultancy | February 19, 2004 | PRC | N/A | Oversea study consulting service | ||||
Hangzhou New Oriental Advanced Study School | July 21, 2005 | PRC | N/A | Language training and test preparation | ||||
Beijing Chaoyang District Kindergarten of Stars | November 20, 2007 | PRC | N/A | Pre-school education |
(i) | Trademark license agreements. Pursuant to the trademark license agreement dated May 13, 2006 between the Company as the licensor and New Oriental China as the licensee, the Company has licensed the trademarks to New Oriental China for its use in China. The Company has also allowed New Oriental China to enter into sub-license agreements with its subsidiaries and schools pursuant to which each of the subsidiaries and schools may use the trademarks in China by paying license fees. This license is valid from May 14, 2006 to December 31, 2050, subject to the renewal every ten years upon the expiration of the trademark registration. |
(ii) | New enrollment system development service agreements. Beijing Decision has entered into new enrollment system development service agreements with the schools of New Oriental China, under which Beijing Decision agreed to provide new enrollment system development and regular maintenance services to those schools of New Oriental China for a fee equal to the applicable fee rate multiplied by the number of new student enrollments. These agreements can be renewed by both parties to the agreements. |
(iii) | Other operating service agreements. Pursuant to operating service agreements between certain WFOEs and the subsidiaries or schools of New Oriental China, the WFOEs have agreed to provide certain operating services to the subsidiaries or schools of New Oriental China for fees that are calculated based on a percentage, ranging from 2.0% to 6.0%, of respective revenues of each of the subsidiaries and schools. A majority of these agreements provide unlimited two-year or five-year automatic renewal without consent of the WFOEs. The remaining agreements can be renewed by both parties to the agreements. |
(iv) | Sale of educational software agreements. Ten WFOEs, namely Beijing Hewstone, Beijing Pioneer, Beijing Smart Wood, Beijing Joy Tend Technology Company Limited , Beijing magnificence Technology Company Limited (“Beijing Magnificence”), Beijing Top Technology Company Limited (“Beijing Top”), Beijng Shenghe Technology Company , Beijing Right Time Technology Company Limited (“Beijing Right Time”), Beijing Sincerity Technology Company Limited and Beijing Jinghong Software Technology Company Ltd. (“Beijing Jinghong”), entered into agreements whereby the WFOEs sell various self-developed educational software to the subsidiaries or schools of New Oriental China. Except for four agreements that are silent on renewal, these agreements provide unlimited two-year automatic renewal terms, and the subsidiaries and schools of New Oriental China cannot terminate the agreements without the consent of the WFOEs in China. |
(i) | Trademark license agreements. Pursuant to the trademark license agreement dated May 13, 2006 between the Company as the licensor and New Oriental China as the licensee, the Company has licensed the trademarks to New Oriental China for its use in China. The sub-license agreements with its subsidiaries and |
(ii) | New enrollment system development service agreements. Beijing Decision has entered into new enrollment system development service agreements |
(iii) | Other operating service agreements. Pursuant to operating service agreements between certain WFOEs and the two-year or five-year automatic renewal without consent of the
|
For the years ended May 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
US$ | US$ | US$ | ||||||||||
Net revenues | 2,417,203 | 3,056,537 | 3,453,555 | |||||||||
Net income | 479,190 | 575,614 | 575,210 | |||||||||
Net cash provided by operating activities | 711,591 | 536,631 | 675,015 | |||||||||
Net cash used in investing activities | (429,265 | ) | (450,569 | ) | (780,310 | ) | ||||||
Net cash used in financing activities | (96,429 | ) | (27,691 | ) | (45,188 | ) | ||||||
(iv) | two-year automatic renewal terms,
|
period | ||||||||
For the years ended May 31, | ||||||||
2017 | 2018 | |||||||
(unaudited) US$ | (unaudited) US$ | |||||||
Pro forma net revenues | 1,815,660 | 2,451,735 | ||||||
Pro forma net income attributable to New Oriental Education and Technology Group Inc. | 275,685 | 296,697 | ||||||
Pro forma net income per share – basic | 1.75 | 1.88 | ||||||
Pro forma net income per share – diluted | 1.75 | 1.87 |
period | ||||||||
period | ||||||||
For the years ended May 31, | ||||||||
2018 | 2019 | |||||||
(unaudited) US$ | (unaudited) US$ | |||||||
Pro forma net revenues | 2,451,735 | 3,100,364 | ||||||
Pro forma net income attributable to New Oriental Education and Technology Group Inc. | 296,697 | 238,794 | ||||||
Pro forma net income per share – basic | 1.88 | 1.51 | ||||||
Pro forma net income per share – diluted | 1.87 | 1.50 |
As of May 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
US$ | US$ | US$ | ||||||||||
Held-to-maturity investments | 1,623,763 | 1,668,689 | 2,318,280 | |||||||||
As of May 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
US$ | US$ | US$ | ||||||||||
Advances to suppliers | 43,913 | 45,665 | 49,547 | |||||||||
Prepaid rents (a) | 56,531 | 52,794 | 39,706 | |||||||||
Interest receivables | 23,647 | 23,856 | 33,488 | |||||||||
Staff advances (b) | 9,544 | 14,811 | 24,712 | |||||||||
Receivable from third parties’ platforms | 5,967 | 9,831 | 10,593 | |||||||||
Rental deposits | 10,953 | 9,539 | 10,326 | |||||||||
Prepaid advertising fees | 6,917 | 4,564 | 7,607 | |||||||||
VAT recoverable | 3,493 | 2,297 | 5,562 | |||||||||
Deposits of advertising and decoration | 3,342 | 3,020 | 2,594 | |||||||||
Prepaid property taxes and other taxes | 212 | 455 | 779 | |||||||||
Others ( c ) | 18,490 | 33,093 | 14,639 | |||||||||
183,009 | 199,925 | 199,553 | ||||||||||
Less: allowance for other receivables | (914 | ) | (248 | ) | (149 | ) | ||||||
182,095 | 199,677 | 199,404 | ||||||||||
As of May 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
US$ | US$ | US$ | ||||||||||
Buildings | 156,324 | 142,047 | 178,782 | |||||||||
Transportation equipment | 9,936 | 9,565 | 9,172 | |||||||||
Furniture and education equipment | 128,670 | 153,674 | 195,262 | |||||||||
Computer equipment and software | 65,227 | 70,995 | 95,385 | |||||||||
Leasehold improvements | 349,953 | 451,105 | 579,231 | |||||||||
Construction in progress | 30,921 | 36,376 | 44,856 | |||||||||
741,031 | 863,762 | 1,102,688 | ||||||||||
Less: accumulated depreciation | (275,940 | ) | (342,106 | ) | (453,218 | ) | ||||||
Exchange differences | (15,499 | ) | 10,359 | 22,985 | ||||||||
449,592 | 532,015 | 672,455 | ||||||||||
As of May 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
US$ | US$ | US$ | ||||||||||
Land use rights | 5,315 | 7,955 | 7,696 | |||||||||
Less: accumulated amortization | (1,417 | ) | (1,680 | ) | (1,842 | ) | ||||||
Exchange differences | (113 | ) | 130 | 183 | ||||||||
Land use rights, net | 3,785 | 6,405 | 6,037 | |||||||||
As of May 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
US$ | US$ | US$ | ||||||||||
Intangible assets with indefinite lives: | ||||||||||||
Trademark | 256 | 238 | 229 | |||||||||
Intangible assets with finite lives: | ||||||||||||
Trademark | 5,575 | 9,109 | 9,170 | |||||||||
Courseware | 129 | 120 | 116 | |||||||||
Student base | 7,014 | 12,223 | 12,719 | |||||||||
Favorable lease | 732 | 679 | 657 | |||||||||
License | 415 | 415 | 415 | |||||||||
14,121 | 22,784 | 23,306 | ||||||||||
Less: accumulated amortization | (5,272 | ) | (8,985 | ) | (13,515 | ) | ||||||
Exchange differences | (305 | ) | 136 | 455 | ||||||||
8,544 | 13,935 | 10,246 | ||||||||||
As of May 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
US$ | US$ | US$ | ||||||||||
Beginning balance | 15,765 | 33,411 | 86,541 | |||||||||
Acquisition | 16,192 | 55,632 | 2,815 | |||||||||
Exchange differences | 1,454 | (2,502 | ) | (2,063 | ) | |||||||
Ending balance | 33,411 | 86,541 | 87,293 | |||||||||
Accumulated impairment | (1,682 | ) | (6,927 | ) | (6,927 | ) | ||||||
Goodwill, net | 31,729 | 79,614 | 80,366 | |||||||||
As of May 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
US$ | US$ | US$ | ||||||||||
Equity securities with readily determinable fair value: | ||||||||||||
Sunlands Online Education Group (“Sunlands”) (a) | 134,423 | 37,802 | 21,440 | |||||||||
Beijing Shengtong Printing Co., Ltd (“Shengtong”) (b) | 9,261 | 6,839 | 4,066 | |||||||||
Tarena International, Inc. (“Tarena”) (c) | 9,610 | 3,200 | 2,190 | |||||||||
Equity securities without readily determinable fair value: | ||||||||||||
Tibet Tianli Education and Technology Co., Ltd (“Tibet Tianli”) (d) | — | 4,346 | 10,512 | |||||||||
EEO Education Technology Co., Ltd. (“EEO”) (e) | 9,767 | 9,069 | 8,774 | |||||||||
Other investments (f) | 28,740 | 30,663 | 30,797 | |||||||||
Equity method investments: | ||||||||||||
New Oriental Education and Culture Industry Fund (Zhangjiagang) Partnership (Limited Partnership) (“Education Industry Fund”) (g) | — | 67,834 | 67,057 | |||||||||
VM EDU Fund I, L.P.(h) | — | — | 56,734 | |||||||||
Other investments (i) | 9,131 | 20,191 | 27,716 | |||||||||
Available-for-sale investments: | ||||||||||||
Shanghai Golden Education & Training Co., Ltd. (“Golden Finance”) (j) | 86,937 | 61,963 | 59,947 | |||||||||
Tianjin Uhozz Internet Technology Co., Ltd (“Uhozz”) (k) | 12,826 | 16,350 | 16,350 | |||||||||
Shanghai ALO7 Technology Co., Ltd. (“Alo7.com”) (l) | 14,395 | 14,289 | 14,289 | |||||||||
Lele Global Limited (“Lele”) (m) | 9,157 | 11,251 | 11,680 | |||||||||
Other available-for-sale investments (n) | 109,086 | 120,907 | 99,549 | |||||||||
433,333 | 404,704 | 431,101 | ||||||||||
As of May 31, 2018 | ||||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||||
Active Market for | Observable | Unobservable | ||||||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
US$ | US$ | US$ | US$ | |||||||||||||
Long-term investments: | ||||||||||||||||
Available-for-sale investments | 153,294 | 98,504 | 133,897 | 385,695 | ||||||||||||
As of May 31, 2019 | ||||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||||
Active Market for | Observable | Unobservable | ||||||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
US$ | US$ | US$ | US$ | |||||||||||||
Long-term investments: | ||||||||||||||||
Equity securities with readily determinable fair values | 47,841 | — | — | 47,841 | ||||||||||||
Available-for-sale investments | — | 78,879 | 145,881 | 224,760 | ||||||||||||
Contingent consideration payable (Note 3) | — | — | 15,150 | 15,150 | ||||||||||||
Total | 47,841 | 78,879 | 161,031 | 287,751 | ||||||||||||
As of May 31, 2020 | ||||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||||
Active Market for | Observable | Unobservable | ||||||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
US$ | US$ | US$ | US$ | |||||||||||||
Long-term investments: | ||||||||||||||||
Equity securities with readily determinable fair values | 27,696 | — | — | 27,696 | ||||||||||||
Available-for-sale investments | — | 41,889 | 159,926 | 201,815 | ||||||||||||
Total | 27,696 | 41,889 | 159,926 | 229,511 | ||||||||||||
As of May 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
US$ | US$ | US$ | ||||||||||
Accrued payroll | 212,677 | 285,329 | 331,172 | |||||||||
Refund liability (a) | — | 76,221 | 94,006 | |||||||||
Payable for purchase of property and equipment | 45,590 | 44,445 | 65,335 | |||||||||
Accrued advertising fees | 8,548 | 11,934 | 20,231 | |||||||||
Refundable fees received from students ( b ) | 11,541 | 15,783 | 15,955 | |||||||||
Refundable deposits ( c ) | 7,290 | 11,074 | 14,819 | |||||||||
Rent payable | 18,210 | 23,643 | 13,857 | |||||||||
Welfare payable | 9,187 | 12,897 | 12,612 | |||||||||
Amounts reimbursable to employees ( d ) | 16,157 | 19,366 | 12,674 | |||||||||
Royalty fees payable (e) | 4,410 | 7,724 | 6,696 | |||||||||
Accrued professional service fees | 1,134 | 1,943 | 6,199 | |||||||||
Payable for investments and acquisitions | 5,420 | 21,962 | 3,917 | |||||||||
VAT payable | 12,125 | 13,321 | 2,881 | |||||||||
Other taxes payable | 2,945 | 2,715 | 1,785 | |||||||||
Others (f) | 18,303 | 28,164 | 32,480 | |||||||||
Total | 373,537 | 576,521 | 634,619 | |||||||||
ended May 31, 2020 | ||||
May 31, 2020 | ||||
May 31, | ||||
As of May 31, | ||||||||
2019 | 2020 | |||||||
US$ | US$ | |||||||
Secured Bank Loan | 96,457 | 117,881 | ||||||
The carrying amounts of bank loans are repayable: | ||||||||
Within a period of more than one year but not exceeding two years | — | 117,881 | ||||||
Within a period of more than two years but not exceeding five years | 96,457 | — |
Number of common share | Number of treasury stock | |||||||
Shares outstanding as of June 1 , 2017 | 157,687,444 | 691,943 | ||||||
Reissuance of treasury stock for NES | 631,966 | (631,966 | ) | |||||
Reissuance of treasury stock for the exercises of options | 500 | (500 | ) | |||||
Shares outstanding as of May 31, 2018 | 158,319,910 | 59,477 | ||||||
Reissuance of treasury stock for NES | 59,477 | (59,477 | ) | |||||
Issuance of common share for NES | 422,327 | — | ||||||
Shares repurchase | (952,000 | ) | 952,000 | |||||
Shares outstanding as of May 31, 2019 | 157,849,714 | 952,000 | ||||||
Reissuance of treasury stock for NES | 690,366 | (690,366 | ) | |||||
Shares outstanding as of May 31, 2020 | 158,540,080 | 261,634 | ||||||
Number of NES | Weighted- average grant date fair value and intrinsic value | |||||||
US$ | ||||||||
NES outstanding as of June 1, 2019 | 1,908,900 | 66.89 | ||||||
Granted | 181,715 | 0 | ||||||
Vested | (690,366 | ) | 0 | |||||
Forfeited | (143,744 | ) | 0 | |||||
NES outstanding as of May 31, 2020 | 1,256,505 | 70.73 | ||||||
NES vested and expect to vest as of May 31, 2020 | 1,256,505 | |||||||
Number of share options | Weighted average exercise price per option (US$) | |||||||
Granted on March 7, 2019 | 47,836,985 | 1.13 | ||||||
Forfeited | (3,065,500 | ) | 1.13 | |||||
Cancelled | (31,000 | ) | 1.13 | |||||
Outstanding as of May 31, 2019 | 44,740,485 | 1.13 | ||||||
Forfeited | (2,360,000 | ) | 1.13 | |||||
Cancelled | (3,129,000 | ) | 1.13 | |||||
Outstanding as of May 31, 2020 | 39,251,485 | 1.13 | ||||||
(i) | Trademark license agreements. Pursuant to the trademark license agreement dated May 13, 2006 between the Company as the licensor and New Oriental China as the licensee, the Company has licensed the trademarks to New Oriental China for its use in China. The Company has also allowed New Oriental China to enter into sub-license agreements with its subsidiaries and schools pursuant to which each of the subsidiaries and schools may use the trademarks in China by paying license fees. This license is valid from May 14, 2006 to December 31, 2050, subject to the renewal every ten years upon the expiration of the trademark registration. |
Number of share options | Weighted average exercise price per option (US$) | |||||||
Granted on January 29, 2020 | 40,000,000 | 3.26 | ||||||
Forfeited | (1,801,000 | ) | 3.26 | |||||
Outstanding as of May 31, 2020 | 38,199,000 | 3.26 | ||||||
(ii) | New enrollment system development service agreements. Beijing Decision has entered into new enrollment system development service agreements with the schools of New Oriental China, under which Beijing Decision agreed to provide new enrollment system development and regular maintenance services to those schools of New Oriental China for a fee equal to the applicable fee rate multiplied by the number of new student enrollments. These agreements can be renewed by both parties to the agreements. |
(iii) | two-year or five-year automatic renewal without consent of the |
(iv) | Sale of two-year automatic renewal terms, and the subsidiaries and schools of New Oriental China cannot terminate the agreements without the consent of the |
As of May 31 | ||||||||
2020 | 2021 | |||||||
US$ | US$ | |||||||
Total current assets | 2,385,315 | 3,695,432 | ||||||
Total non-current assets | 2,463,751 | 3,207,820 | ||||||
Total assets | 4,849,066 | 6,903,252 | ||||||
Total current liabilities | 2,395,977 | 3,407,246 | ||||||
Total non-current liabilities | 1,066,541 | 1,346,885 | ||||||
Total liabilities | 3,462,518 | 4,754,131 | ||||||
For the years ended May 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
US$ | US$ | US$ | ||||||||||
Net revenues | 3,056,537 | 3,453,555 | 4,270,169 | |||||||||
Net income | 575,614 | 575,210 | 663,099 | |||||||||
Net cash provided by operating activities | 536,631 | 675,015 | 1,046,695 | |||||||||
Net cash used in investing activities | (450,569 | ) | (780,310 | ) | (789,120 | ) | ||||||
Net cash used in financing activities | (27,691 | ) | (45,188 | ) | (16,658 | ) | ||||||
2. | SIGNIFICANT ACCOUNTING POLICIES |
Buildings | 20-50 years | |
Transportation equipment | 10 years | |
Furniture and education equipment | 5 years | |
Computer equipment and software | 3 years | |
Leasehold improvements | Shorter of the |
Trade mark | 10 years | |
License | 20 years | |
Student base | 1.75 years | |
Favorable lease | 8.67 years | |
Courseware | 3 years |
(a) | Equity securities |
(b) | Equity method investments |
(c) | Available-for-sale |
(a) | Educational programs and |
(b) | Books and |
3. | BUSINESS ACQUISITIONS |
4.
Short-term investments consisted of the following:
Short-term investments mainly consist of various financial products purchased from Chinese banks and trusts and are classified as held-to-maturity F-3 0
Prepaid expenses and other current assets, net, consisted of the following:
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Property and equipment, net, consisted of the following:
Depreciation expenses for the years ended May 31, 2019, 2020 and 2021 were US$110,042, US$146,310 and US$225,657, respectively. During the year ended May 31, 2021, US$29,541 impairment loss was recorded in general and administrative expenses mainly related to leasehold improvements of selected learning centers. F-3 1
Land use rights, net, consisted of the following:
Amortization expenses for land use rights for the years ended May 31, 2019, 2020 and 2021 were US$263, US$162 and US$262, respectively. The Group expects to recognize $359 in amortization expense for each of the next five years and $12,194 thereafter.
Intangible assets, net, consisted of the following:
Amortization expenses for the intangible assets for the years ended May 31, 2019, 2020 and 2021, were US$3,699, US$4,530 and US$4,524, respectively. As of May 31, 2021, the Group expects to recognize amortization expenses of US$1,971, US$1,353, US$629, US$239 and US$206 for the next five years, respectively, and US$181 thereafter. The Group recorded an impairment of NaN, NaN and US$2,936 for the years ended May 31, 2019, 2020 and 2021, respectively.
Goodwill, net, consisted of the following:
The Group performed its annual goodwill impairment testing at the end of each reporting period or more frequently if events or changes in circumstances indicate that it might be impaired. In its goodwill impairment assessment, the Group concluded that the carrying amounts of certain reporting units exceeded their implied fair values and recorded the impairment losses of US$5,245, NaN and US$28,858for the years ended May 31, 2019, 2020 and 2021, respectively. The Group determined the fair value of the reporting units by using the income approach with significant unobservable inputs. As of May 31, 2021, the balance of goodwill mainly relates to the Group’s pre-school education and overseas consulting services reporting unit. F-3 2
Long-term investments, net, consisted of the following:
On March 23, 2018, Sunlands was listed in the New York Stock Exchange Market. All of the preferred shares were converted to 529,426 Class A ordinary shares immediately upon the completion of the listing. Subsequent to the listing, the Group invested an additional US$10,000 and obtained 34,783 Class A ordinary shares in April 2018 and held 8% aggregate equity interests in Sunlands. Losses of US$96,621, US$16,362 and US$5,501 were recorded in loss from fair value change of long-term investments for the years ended May 31, 2019, 2020 and 2021, respectively, on the Group’s consolidated statements of operations.
F-3 3
F-4 8
The effects of changes in the Company’s ownership interest in subsidiaries on the Company’s equity were as follows:
The Group’s chief operating decision maker has been identified as the Chief Executive Officer who reviews financial information of operating segments based on US GAAP amounts when making decisions about allocating resources and assessing performance of the Group. The Group identified seven operating segments, including K-12 AST, test preparation and other courses, primary and secondary school education, online education, content development and distribution, overseas study consulting services,pre-school education and study tour. During the years ended May 31, 2019 and 2020, the Group identifiedK-12 AST, test preparation and other courses, as a reportable segment. Online education, content development and distribution, overseas study consulting services,pre-school education, primary and secondary school education and study tour operating segments were aggregated as others because individually they did not exceed the 10% quantitative threshold. During the year ended May 31, 2021, Online education became a reportable segment as it individually exceeded the 10% quantitative threshold. As a result, prior period segment information has been restated to conform to the current year.The Group primarily operates in the PRC and substantially all of the Group’s long-lived assets are located in the PRC. The Group’s chief operating decision maker evaluates performance based on each reporting segment’s net revenue, operating cost and expenses, and operating income. Net revenues, operating cost and expenses, operating income, and total assets by segment were as follows: For the year ended May 31, 2019
F-5 0 For the year ended May 31, 2020
For the year ended May 31, 2021
The Group’s full time employees in the PRC participate in a government-mandated multiemployer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. The PRC labor regulations require the Group to accrue for these benefits based on certain percentages of the employees’ salaries. The total contributions for such employee benefits were US$178,057, US$217,127 and US$257,542 for the years ended May 31, 2019, 2020 and 2021, respectively.
Prior to payment of dividends, pursuant to the laws applicable to the PRC’s Foreign Investment Enterprises, the Company’s subsidiaries and the VIEs in the PRC must make appropriations from after-tax profit tonon-distributable reserve funds as determined by the board of directors of each company. These reserves include (i) general reserve and (ii) the development fund.Subject to certain cumulative limits, the general reserve requires annual appropriations of 10% of after-tax profits as determined under the PRC laws and regulations at eachyear-end until the balance reaches 50% of the PRC entity registered capital; the other reserve appropriations are at the Company’s discretion. These reserves can only be used for specific purposes of enterprise expansion and are not distributable as cash dividends. During the years ended May 31, 2019, 2020 and 2021, US$1,875, US$1,506 and US$3,302 were accrued for the general reserve, respectively.F-5 1 The PRC laws and regulations require private schools that require reasonable returns to make annual appropriations of 25% of after-tax income prior to payments of dividend to its development fund, which is to be used for the construction or maintenance of the school or procurement or upgrading of educational equipment, while in the case of a private school that does not require reasonable return, this amount should be equivalent to no less than 25% of the annual increase of net assets of the school as determined in accordance with generally accepted accounting principles in the PRC. During the years ended May 31, 2019, 2020 and 2021, appropriations to the development fund amounted to US$40,136, US$73,043 and US$64,124, respectively.These reserves are included as statutory reserves in the consolidated statements of changes in equity and comprehensive income. The Group allocated US$42,011, US$74,549 and US$67,426 to statutory reserves during the years ended May 31, 2019, 2020 and 2021, respectively.
Relevant PRC laws and regulations restrict the WFOEs and the VIEs from transferring a portion of their net assets, equivalent to the balance of their statutory reserves and their share capital, to the Company in the form of loans, advances or cash dividends, except in the event of liquidation. The balance of restricted net assets was US$472,924, US$513,721 and US$724,854, of which US$437,121, US$464,917 and US$681,309 was attributed to the paid-in capital, additionalpaid-in capital and statutory reserves of the VIEs and US$35,803, US$48,804 and US$43,545 was attributed to thepaid-in capital, additionalpaid-in capital and statutory reserves of the WFOEs, as of May 31, 2019, 2020 and 2021, respectively. The WFOEs’ accumulated profits may be distributed as dividends to the Company without the consent of a third party. The VIEs’ revenues and accumulated profits may be transferred to the Company through contractual arrangements without the consent of a third party. Underth applicable PRC law, loans from the PRC companies to their offshore affiliated entities require governmental approval, and advances by the PRC companies to their offshore affiliated entities must be supported by bona fide business transactions.e F-5 2
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