Document and Entity Information
Document and Entity Information | 12 Months Ended |
Feb. 29, 2020shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Feb. 29, 2020 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-34900 |
Entity Registrant Name | TAL Education Group |
Entity Incorporation, State or Country Code | KY |
Entity Address, Address Line One | 15/F, Danling SOHO |
Entity Address, Address Line Two | 6 Danling Street |
Entity Address, Address Line Three | Haidian District |
Entity Address, City or Town | Beijing |
Entity Address, Postal Zip Code | 100080 |
Entity Address, Country | CN |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Central Index Key | 0001499620 |
Current Fiscal Year End Date | --02-29 |
Amendment Flag | false |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2020 |
ADS | |
Document Information [Line Items] | |
Title of 12(b) Security | American Depositary Shares, each three representing one Class A common share* |
Trading Symbol | TAL |
Security Exchange Name | NYSE |
Common Class A | |
Document Information [Line Items] | |
Title of 12(b) Security | Class A common shares, par value $0.001 per share** |
Trading Symbol | TAL |
Security Exchange Name | NYSE |
Entity Common Stock, Shares Outstanding | 132,895,675 |
Common Class B | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 66,941,204 |
Business Contact [Member] | |
Document Information [Line Items] | |
Contact Personnel Name | Rong Luo |
Entity Address, Address Line One | 15/F, Danling SOHO |
Entity Address, Address Line Two | 6 Danling Street |
Entity Address, Address Line Three | Haidian District |
Entity Address, City or Town | Beijing |
Entity Address, Postal Zip Code | 100080 |
Entity Address, Country | CN |
Contact Personnel Email Address | ir@100tal.com |
City Area Code | 8610 |
Local Phone Number | 52926658 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Feb. 29, 2020USD ($) | Feb. 28, 2019USD ($) |
Current assets | ||
Cash and cash equivalents | $ 1,873,866 | $ 1,247,140 |
Restricted cash-current | 28,084 | 9,227 |
Short-term investments | 345,457 | 268,424 |
Inventory | 25,832 | 7,750 |
Amounts due from related parties-current | 3,642 | 3,341 |
Income tax receivables | 11,548 | 7,204 |
Prepaid expenses and other current assets | 207,352 | 202,630 |
Total current assets | 2,495,781 | 1,745,716 |
Restricted cash-non-current | 13,235 | 7,334 |
Amounts due from related parties-non-current | 1,747 | |
Property and equipment, net | 366,656 | 287,877 |
Deferred tax assets | 79,534 | 29,179 |
Rental deposits | 72,721 | 56,135 |
Intangible assets, net | 58,985 | 74,776 |
Land use rights, net | 204,853 | |
Goodwill | 378,913 | 414,228 |
Long-term investments | 571,601 | 850,695 |
Long-term prepayments and other non-current assets | 85,275 | 267,404 |
Operating lease right-of-use assets | 1,243,692 | |
Total assets | 5,571,246 | 3,735,091 |
Current liabilities | ||
Accounts payable (including accounts payable of the consolidated VIEs without recourse to TAL Education Group of $98,436 and $104,231 as of February 28, 2019 and February 29, 2020, respectively) | 117,770 | 106,493 |
Deferred revenue-current (including deferred revenue-current of the consolidated VIEs without recourse to TAL Education Group of $401,027 and $733,253 as of February 28, 2019 and February 29, 2020, respectively) | 780,167 | 433,610 |
Amounts due to related parties-current (including amounts due to related parties-current of the consolidated VIEs without recourse to TAL Education Group of $18,504 and $4,264 as of February 28, 2019 and February 29, 2020, respectively) | 4,361 | 24,375 |
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIEs without recourse to TAL Education Group of $291,728 and $470,519 as of February 28, 2019 and February 29, 2020, respectively) | 552,650 | 365,195 |
Income tax payable (including income tax payable of the consolidated VIEs without recourse to TAL Education Group of $36,670 and $43,233 as of February 28, 2019 and February 29, 2020, respectively) | 46,650 | 38,743 |
Short-term debt and current portion of long-term debt (including short-term debt and current portion of long-term debt of the consolidated VIEs without recourse to TAL Education Group of nil and nil as of February 28, 2019 and February 29, 2020, respectively) | 210,027 | |
Bond payable, current portion (including bond payable, current portion of the consolidated VIEs without recourse to TAL Education Group of nil and nil as of February 28, 2019 and February 29, 2020, respectively) | 5,275 | |
Operating lease liabilities, current portion (including operating lease liabilities current portion of the consolidated VIEs without recourse to TAL Education Group of nil and $276,712 as of February 28, 2019 and February 29, 2020, respectively) | 304,960 | |
Total current liabilities | 1,806,558 | 1,183,718 |
Deferred revenue-non-current (including deferred revenue-non-current of the consolidated VIEs without recourse to TAL Education Group of $2,497 and $833 as of February 28, 2019 and February 29, 2020, respectively) | 833 | 2,497 |
Amounts due to related parties-non-current (including amounts due to related parties-non-current of the consolidated VIEs without recourse to TAL Education Group of $106 and nil as of February 28, 2019 and February 29, 2020, respectively) | 196 | |
Deferred tax liabilities (including deferred tax liabilities of the consolidated VIEs without recourse to TAL Education Group of $16,951 and $7,197 as of February 28, 2019 and February 29, 2020, respectively) | 7,789 | 17,738 |
Long-term debt (including long-term debt of the consolidated VIEs without recourse to TAL Education Group of nil and nil as of February 28, 2019 and February 29, 2020, respectively) | 261,950 | |
Other non-current liabilities (including other non-current liabilities of the consolidated VIEs without recourse to TAL Education Group of $465 and nil as of February 28, 2019 and February 29, 2020, respectively) | 465 | |
Operating lease liabilities, non-current portion (including operating lease liabilities, non-current portion of the consolidated VIEs without recourse to TAL Education Group of nil and $883,603 as of February 28, 2019 and February 29, 2020, respectively) | 949,919 | |
Total liabilities | 3,027,049 | 1,204,614 |
Equity | ||
Class A common shares issuable | 1,977 | |
Additional paid-in capital | 1,675,640 | 1,485,521 |
Statutory reserve | 82,712 | 58,690 |
Retained earnings | 786,097 | 920,314 |
Accumulated other comprehensive income / (loss) | (28,913) | 17,047 |
Total TAL Education Group shareholder's equity | 2,515,736 | 2,483,747 |
Noncontrolling interests | 28,461 | 46,730 |
Total equity | 2,544,197 | 2,530,477 |
Total liabilities and equity | 5,571,246 | 3,735,091 |
Common Class A | ||
Equity | ||
Common shares | 133 | 127 |
Total equity | 133 | 127 |
Common Class B | ||
Equity | ||
Common shares | 67 | 71 |
Total equity | $ 67 | $ 71 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Feb. 29, 2020 | Feb. 28, 2019 |
Accounts payable | $ 117,770 | $ 106,493 |
Deferred revenue - current | 780,167 | 433,610 |
Amounts due to related parties | 4,361 | 24,375 |
Accrued expenses and other current liabilities | 552,650 | 365,195 |
Income tax payable | 46,650 | 38,743 |
Short-term Debt | 210,027 | |
Operating lease liability - current | 304,960 | |
Deferred revenue - non-current | 833 | 2,497 |
Due to related parties, noncurrent | 196 | |
Deferred tax liabilities - non-current | 7,789 | 17,738 |
Long-term Debt | 261,950 | |
Other Liabilities, Noncurrent | 465 | |
Operating lease liability - noncurrent | 949,919 | |
VIE's | ||
Accounts payable | 104,231 | 98,436 |
Deferred revenue - current | 733,253 | 401,027 |
Amounts due to related parties | 4,264 | 18,504 |
Accrued expenses and other current liabilities | 470,519 | 291,728 |
Income tax payable | 43,233 | 36,670 |
Short-term Debt | 0 | 0 |
Bond payable - current | 0 | 0 |
Operating lease liability - current | 276,712 | 0 |
Deferred revenue - non-current | 833 | 2,497 |
Due to related parties, noncurrent | 0 | 106 |
Deferred tax liabilities - non-current | 7,197 | 16,951 |
Long-term Debt | 0 | 0 |
Other Liabilities, Noncurrent | 0 | 465 |
Operating lease liability - noncurrent | $ 883,603 | $ 0 |
Common Class A | ||
Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common shares, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common shares, shares issued (in shares) | 132,895,675 | 126,501,071 |
Common shares, shares outstanding (in shares) | 126,501,071 | 118,401,821 |
Common Class B | ||
Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common shares, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common shares, shares issued (in shares) | 66,941,204 | 70,556,000 |
Common shares, shares outstanding (in shares) | 66,941,204 | 70,556,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Consolidated Statements of Operations | |||
Net revenues | $ 3,273,308 | $ 2,562,984 | $ 1,715,016 |
Cost of revenues | (1,468,569) | (1,164,454) | (882,316) |
Gross profit | 1,804,739 | 1,398,530 | 832,700 |
Operating expenses | |||
Selling and marketing | (852,808) | (484,000) | (242,102) |
General and administrative | (794,957) | (579,672) | (386,287) |
Impairment loss on intangible assets and goodwill | (28,998) | 0 | (358) |
Total operating expenses | (1,676,763) | (1,063,672) | (628,747) |
Government subsidies | 9,467 | 6,724 | 4,651 |
Income from operations | 137,443 | 341,582 | 208,604 |
Interest income | 72,991 | 59,614 | 39,837 |
Interest expense | (11,820) | (17,628) | (16,640) |
Other income / (loss) | (95,297) | 131,727 | 17,406 |
Impairment loss on long-term investments | (153,970) | (58,091) | (2,213) |
Income / (loss) before provision for income tax and loss from equity method investments | (50,653) | 457,204 | 246,994 |
Income tax expense | (69,328) | (76,504) | (44,653) |
Loss from equity method investments | (7,670) | (16,186) | (7,678) |
Net income / (loss) | (127,651) | 364,514 | 194,663 |
Add: Net loss attributable to noncontrolling interests shareholders | 17,456 | 2,722 | 3,777 |
Net income / (loss) attributable to TAL Education Group's shareholders | $ (110,195) | $ 367,236 | $ 198,440 |
Net income / (loss) per common share | |||
Basic | $ (0.56) | $ 1.93 | $ 1.13 |
Diluted | $ (0.56) | $ 1.83 | $ 1.03 |
Weighted average shares used in calculating net income / (loss) per common share | |||
Basic | 198,184,370 | 189,951,643 | 174,979,574 |
Diluted | 198,184,370 | 200,224,934 | 194,331,305 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Consolidated Statements of Comprehensive Income/(Loss) | |||
Net income / (loss) | $ (127,651) | $ 364,514 | $ 194,663 |
Other comprehensive income / (loss) , net of tax | |||
Foreign currency translation adjustment | (48,947) | (35,823) | 47,469 |
Unrealized gains on available-for-sale investments: | |||
Net unrealized gains on available-for-sale investments, net of tax effect of $10,007, $2,018 and $(2,371) for the years ended February 28, 2018, 2019 and , February 29, 2020, respectively | 1,122 | 15,837 | 34,556 |
Less: Transfer to statements of operations of realized gains on available-for-sale investments, net of tax effect of nil, nil and nil for the years ended February 28, 2018, 2019 and February 29, 2020 | (96,251) | (4,245) | |
Other comprehensive income / (loss) | (47,825) | (116,237) | 77,780 |
Comprehensive income / (loss) | (175,476) | 248,277 | 272,443 |
Add: Comprehensive loss attributable to noncontrolling interests shareholders | 19,321 | 3,681 | 2,453 |
Comprehensive income / (loss) attributable to TAL Education Group's shareholders | $ (156,155) | $ 251,958 | $ 274,896 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Consolidated Statements of Comprehensive Income/(Loss) | |||
Net unrealized gains on available-for-sale investments, net | $ (2,371) | $ 2,018 | $ 10,007 |
Transfer to statements of operations of realized gains on available-for-sale, net | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Additional paid-in capital | Statutory reserve | Retained earnings | Accumulated other comprehensive income /(loss) | Total TAL Education Group shareholders' equity | Noncontrolling Interest | Common Class A | Common Class B | Class A common shares Issuable | Total |
Balance at Feb. 28, 2017 | $ 141,968 | $ 28,407 | $ 417,836 | $ 55,869 | $ 644,245 | $ 36,619 | $ 93 | $ 72 | $ 680,864 | |
Balance (in shares) at Feb. 28, 2017 | 93,130,615 | 71,456,000 | ||||||||
Conversion of Class B common shares to Class A common shares | $ 1 | $ (1) | ||||||||
Conversion of Class B common shares to Class A common shares (in shares) | 900,000 | (900,000) | ||||||||
Net income / (loss) | 198,440 | 198,440 | (3,777) | 194,663 | ||||||
Provision for statutory reserve | 9,908 | (9,908) | ||||||||
Issuance of common shares in connection with vesting of non-vested shares | (14,000) | (13,998) | $ 2 | (13,998) | ||||||
Issuance of common shares in connection with vesting of non-vested shares (in shares) | 2,314,190 | |||||||||
Share-based compensation | 47,150 | 47,150 | 47,150 | |||||||
Exercise of share options | 2,127 | 2,127 | 2,127 | |||||||
Exercise of share options (in shares) | 76,491 | |||||||||
Foreign currency translation adjustment | 46,145 | 46,145 | 1,324 | 47,469 | ||||||
Net unrealized gains on available-for-sale investments, net | 34,556 | 34,556 | 34,556 | |||||||
Conversion of convertible bond to Class A common shares | 214,406 | 214,422 | $ 16 | 214,422 | ||||||
Conversion of convertible bond to Class A common shares (in shares) | 16,380,780 | |||||||||
Purchase of noncontrolling interests of consolidated subsidiaries | (6,928) | (6,928) | (18,113) | (25,041) | ||||||
Purchase of noncontrolling interests of consolidated subsidiaries (in shares) | 135,264 | |||||||||
Business acquisitions | 3,643 | 3,643 | ||||||||
Stock consideration (in shares) | 0 | |||||||||
Transfer to statements of operations of realized gains on available-for-sale investments, net of tax effect of $nil | (4,245) | (4,245) | (4,245) | |||||||
Capital injection from noncontrolling interests shareholders | 20 | 20 | ||||||||
Class A Common shares issued under private placement | 499,994 | 500,000 | $ 6 | 500,000 | ||||||
Class A Common shares issued under private placement (in shares) | 5,464,481 | |||||||||
Cash dividend to shareholders | (41,166) | (41,166) | (41,166) | |||||||
Balance at Feb. 28, 2018 | 884,717 | 38,315 | 565,202 | 132,325 | 1,620,748 | 19,716 | $ 118 | $ 71 | 1,640,464 | |
Balance (in shares) at Feb. 28, 2018 | 118,401,821 | 70,556,000 | ||||||||
Net income / (loss) | 367,236 | 367,236 | (2,722) | 364,514 | ||||||
Provision for statutory reserve | 20,375 | (20,375) | ||||||||
Issuance of common shares in connection with vesting of non-vested shares | (2) | $ 2 | ||||||||
Issuance of common shares in connection with vesting of non-vested shares (in shares) | 2,073,711 | |||||||||
Share-based compensation | 76,720 | 76,720 | 76,720 | |||||||
Exercise of share options | 3,296 | 3,297 | $ 1 | 3,297 | ||||||
Exercise of share options (in shares) | 232,024 | |||||||||
Foreign currency translation adjustment | (34,864) | (34,864) | (959) | (35,823) | ||||||
Net unrealized gains on available-for-sale investments, net | 15,837 | 15,837 | 15,837 | |||||||
Conversion of convertible bond to Class A common shares | 5,799 | 5,800 | $ 1 | 5,800 | ||||||
Conversion of convertible bond to Class A common shares (in shares) | 443,091 | |||||||||
Exercise of capped call option | 13,270 | 13,270 | 13,270 | |||||||
Business acquisitions | 1,726 | 3,703 | 29,658 | $ 1,977 | 33,361 | |||||
Stock consideration (in shares) | 20,502 | |||||||||
Transfer to statements of operations of realized gains on available-for-sale investments, net of tax effect of $nil | (96,251) | (96,251) | (96,251) | |||||||
Capital injection from noncontrolling interests shareholders | 15 | 15 | ||||||||
Class A Common shares issued under private placement | 499,995 | 500,000 | $ 5 | 500,000 | ||||||
Class A Common shares issued under private placement (in shares) | 5,329,922 | |||||||||
Cash dividend to shareholders | 0 | |||||||||
Cumulative effect of initially applying new standard at Feb. 28, 2019 | 8,251 | 8,251 | 1,022 | 9,273 | ||||||
Balance at Feb. 28, 2019 | 1,485,521 | 58,690 | 920,314 | 17,047 | 2,483,747 | 46,730 | $ 127 | $ 71 | 1,977 | 2,530,477 |
Balance (in shares) at Feb. 28, 2019 | 126,501,071 | 70,556,000 | ||||||||
Conversion of Class B common shares to Class A common shares | $ 4 | $ (4) | ||||||||
Conversion of Class B common shares to Class A common shares (in shares) | 3,614,796 | (3,614,796) | ||||||||
Net income / (loss) | (110,195) | (110,195) | (17,456) | (127,651) | ||||||
Provision for statutory reserve | 24,022 | (24,022) | ||||||||
Issuance of common shares in connection with vesting of non-vested shares | (2) | $ 2 | ||||||||
Issuance of common shares in connection with vesting of non-vested shares (in shares) | 2,239,239 | |||||||||
Share-based compensation | 116,703 | 116,703 | 116,703 | |||||||
Exercise of share options | 2,550 | 2,550 | 2,550 | |||||||
Exercise of share options (in shares) | 114,793 | |||||||||
Foreign currency translation adjustment | (47,082) | (47,082) | (1,865) | (48,947) | ||||||
Net unrealized gains on available-for-sale investments, net | 1,122 | 1,122 | 1,122 | |||||||
Conversion of convertible bond to Class A common shares | 5,250 | 5,250 | 5,250 | |||||||
Conversion of convertible bond to Class A common shares (in shares) | 401,074 | |||||||||
Exercise of capped call option | 66,346 | 66,346 | 66,346 | |||||||
Acquisition of noncontrolling interests | (672) | (672) | (1,755) | (2,427) | ||||||
Business acquisitions | 2,741 | 764 | $ 1,977 | 764 | ||||||
Stock consideration (in shares) | 24,702 | |||||||||
Capital injection from noncontrolling interests shareholders | (2,797) | (2,797) | 2,807 | 10 | ||||||
Cash dividend to shareholders | 0 | |||||||||
Balance at Feb. 29, 2020 | $ 1,675,640 | $ 82,712 | $ 786,097 | $ (28,913) | $ 2,515,736 | $ 28,461 | $ 133 | $ 67 | $ 2,544,197 | |
Balance (in shares) at Feb. 29, 2020 | 132,895,675 | 66,941,204 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Consolidated Statements of Changes in Equity | ||
Net unrealized gains on available-for-sale investments, net | $ 2,018 | $ 10,007 |
Transfer to statements of operations of realized gains on available for sale securities, net | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Cash flows from operating activities | |||
Net income / (loss) | $ (127,651) | $ 364,514 | $ 194,663 |
Adjustments to reconcile net income / (loss) to net cash provided by operating activities | |||
Depreciation of property and equipment | 99,511 | 76,669 | 50,907 |
Amortization of intangible assets | 15,677 | 12,166 | 8,307 |
Amortization of land use rights | 2,804 | ||
Loss on disposal of property and equipment | 934 | 187 | 48 |
Share-based compensation | 117,943 | 77,277 | 47,150 |
Impairment loss on operating assets, intangible assets and goodwill | 63,420 | 2,569 | 701 |
Impairment loss on long-term investments | 153,970 | 58,091 | 2,213 |
Loss from equity method investments | 7,670 | 16,186 | 7,678 |
(Gain) / loss from fair value change of investments | 104,239 | (16,394) | (937) |
Gain recognized for the conversion of debt securities to equity securities | (95,491) | ||
Gain from remeasuring fair value of previously held equity interests upon business acquisitions | (26,397) | ||
Gain from disposal of long-term investments | (25,002) | (3,363) | (9,026) |
Changes in operating assets and liabilities | |||
Inventory | (18,333) | (2,368) | (2,498) |
Amounts due from related parties | (1,589) | (690) | 369 |
Prepaid expenses and other current assets | (24,981) | (34,584) | (47,295) |
Income tax receivables | (4,344) | 7,889 | (12,848) |
Deferred income taxes | (58,339) | (19,786) | 5,181 |
Rental deposits | (16,587) | (8,745) | (14,673) |
Other non-current assets | 256 | 1,033 | (195) |
Accounts payable | 693 | 49,286 | 30,978 |
Deferred revenue | 343,555 | (407,150) | 323,050 |
Amounts due to related parties | 424 | 610 | 3,133 |
Accrued expenses and other current liabilities | 204,352 | 117,796 | 105,232 |
Income tax payable | 7,906 | 25,056 | (6,845) |
Operating lease right-of-use assets | (218,829) | ||
Operating lease liabilities | 228,151 | ||
Net cash provided by operating activities | 855,850 | 194,361 | 685,293 |
Cash flows from investing activities | |||
Loan to third parties | (13,590) | (33,700) | (5,531) |
Repayment of loan to third parties | 5,231 | 74,902 | |
Loan to related parties | (31,681) | (3,989) | (2,641) |
Repayment of loan to related parties | 2,146 | 2,322 | 2,759 |
Loan to employees | (2,373) | (2,660) | (5,918) |
Repayment of loan to employees | 5,486 | 6,269 | 5,762 |
Prepayment for investments | (18,489) | (2,562) | (43,572) |
Prepayments for purchase of land use right | (6,780) | (209,865) | |
Purchase of property and equipment | (178,071) | (138,406) | (126,344) |
Purchase of intangible assets | (3,213) | (6,738) | (2,079) |
Purchase of short-term investments | (546,747) | (581,204) | (1,197,155) |
Proceeds from maturity of short-term investments | 517,001 | 1,103,252 | 657,532 |
Proceeds from disposal of property and equipment | 543 | 1,709 | 928 |
Business acquisitions, net of cash acquired | (7,026) | (66,921) | (14,009) |
Payments for long-term investments | (117,508) | (243,542) | (196,559) |
Proceeds from disposal of long-term investments | 61,487 | 4,220 | 19,352 |
Net cash used in investing activities | (338,815) | (166,584) | (832,573) |
Cash flows from financing activities | |||
Net proceeds from long-term debt and short-term debt | 270,000 | 189,932 | |
Repayment of long-term debt and short-term debt | (209,308) | (205,000) | |
Payment for upfront fee in related to long term debt (Note 14) | (12,600) | ||
Payments for purchasing noncontrolling interests | (5,183) | (4,407) | (18,832) |
Cash dividend to shareholders (Note 26) | (41,166) | ||
Capital injection from noncontrolling interests shareholders | 10 | 15 | 20 |
Cash received from exercise of capped call option (Note 13) | 73,247 | 6,369 | |
Proceeds from private placement (Note 18) | 500,000 | 500,000 | |
Proceeds from exercise of share options | 2,490 | 710 | 2,127 |
Repayment of convertible bond | (25) | ||
Cash paid for employee taxes on withheld shares from share-based awards | (13,998) | ||
Net cash provided by financing activities | 131,231 | 475,019 | 428,151 |
Effect of exchange rate changes | 3,218 | 33,208 | (31,785) |
Net increase in cash, cash equivalents and restricted cash | 651,484 | 536,004 | 249,086 |
Cash, cash equivalents and restricted cash at the beginning of year | 1,263,701 | 727,697 | 478,611 |
Cash, cash equivalents and restricted cash at the end of year | 1,915,185 | 1,263,701 | 727,697 |
Supplemental disclosure of cash flow information: | |||
Interest paid | 6,707 | 12,556 | 13,805 |
Income tax paid | 122,266 | 61,811 | 71,021 |
Non-cash investing and financing activities: | |||
Payable for purchase of property and equipment | 24,145 | 8,466 | 9,923 |
Payable for purchase of intangible assets | 1,436 | 2,688 | 3,450 |
Payable for investments and acquisitions | 404 | 38,630 | 14,276 |
Conversion of convertible bond to Class A common shares | $ 5,250 | 5,800 | 214,422 |
Class A Common shares issued and issuable for business acquisitions | 3,703 | ||
Class A Common shares issued for purchase of noncontrolling interests | $ 10,887 | ||
Receivable for exercise of capped call option | $ 6,901 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Feb. 29, 2020 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES TAL Education Group (the “Company” or “TAL”) was incorporated in the Cayman Islands on January 10, 2008 to be the holding company for a group of companies engaged in the provision of high quality after-school tutoring programs for primary and secondary school students in the People’s Republic of China (the “PRC”). At the time of its incorporation and through the Variable Interest Entities (“VIEs”) arrangements as described below, the ownership interest of the Company was held by Bangxin Zhang, Yundong Cao, Yachao Liu and Yunfeng Bai (collectively, “the founding shareholders”). The Company, its subsidiaries, its consolidated VIEs and VIEs’ subsidiaries and schools are collectively referred to as the “Group”. As of February 29, 2020, details of the Company’s major subsidiaries, VIEs and VIEs’ subsidiaries and schools are as follows: Name Later of date of Place of incorporation Percentage of Principal activities Nature of TAL Holding Limited (“TAL Hong Kong”) March 11, 2008 Hong Kong 100% Intermediate holding company Subsidiary Beijing Century TAL Education Technology Co., Ltd. (“TAL Beijing”) May 8, 2008 Beijing 100% Software sales, and consulting service Subsidiary Beijing Huanqiu Zhikang Shidai Education Consulting Co., Ltd. (“Huanqiu Zhikang”) September 17, 2009 Beijing 100% Education and management consulting service Subsidiary Yidu Huida Education Technology (Beijing) Co., Ltd. (“Yidu Huida”) November 11, 2009 Beijing 100% Software sales and consulting service Subsidiary Beijing Xintang Sichuang Education Technology Co., Ltd. (“Beijing Xintang Sichuang”) August 27, 2012 Beijing 100% Software and Network development, sales, and consulting service Subsidiary Zhixuesi Education Consulting (Beijing) Co., Ltd. (“Zhixuesi Beijing”) October 23, 2012 Beijing 100% Software and Network development, sales, and consulting service Subsidiary Pengxin TAL Industrial investment (Shanghai) Co., Ltd. (“Pengxin TAL”) June 26, 2014 Shanghai 100% Investment management and consulting services Subsidiary Firstleap Education (“Firstleap”) January 22, 2016 Cayman Islands 100% Intermediate holding company Subsidiary 1. ORGANIZATION AND PRINCIPAL ACTIVITIES - continued Name Later of date of Place of incorporation Percentage of Principal activities Nature of Firstleap Education (HK) Limited (“Firstleap Hong Kong”) January 22, 2016 Hong Kong 100% Intermediate holding company Subsidiary Beijing Lebai Information Consulting Co., Ltd. (“Lebai Information”) January 22, 2016 Beijing 100% Education and management consulting service Subsidiary Beijing Yizhen Xuesi Education Technology Co., Ltd. (“Yizhen Xuesi”) November 3, 2016 Beijing 100% Software and Network development,sales and consulting service Subsidiary Beijing Xueersi Education Technology Co., Ltd. (“Xueersi Education”) December 31, 2005 Beijing N/A* Sales of educational materials and products VIE Beijing Xueersi Network Technology Co., Ltd. (“Xueersi Network”) August 23, 2007 Beijing N/A* Technology development and Educational consulting service VIE Xinxin Xiangrong Education Technology (Beijing) Co., Ltd. (“Xinxin Xiangrong”) June 23, 2015 Beijing N/A* Technology development and Educational consulting service VIE Beijing Lebai Education Consulting Co., Ltd. (“Lebai Education”) January 22, 2016 Beijing N/A* Educational consulting service VIE Beijing Haidian District Xueersi Training School ("Beijing Haidian School" ) July 3, 2006 Beijing N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Beijing Xicheng District Xueersi Training School ("Beijing Xicheng School" ) April 2, 2009 Beijing N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Beijing Haidian District Lejiale Training School ("Beijing Haidian Lejiale" ) March 22, 2010 Beijing N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Beijing Chaoyang District Xueersi Training School ("Beijing Chaoyang School") January 17, 2011 Beijing N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Beijing Xueersi Nanjing Education Technology Co., Ltd. ("Beijing Xueersi Nanjing Education") January 24, 2011 Beijing N/A* Educational consulting service VIE’s subsidiaries and schools 1. ORGANIZATION AND PRINCIPAL ACTIVITIES - continued Name Later of date of Place of incorporation Percentage of Principal activities Nature of Shanghai Xueersi Education Training Co., Ltd. ("Shanghai Education") July 2, 2009 Shanghai N/A* Educational information consulting and educational software development VIE’s subsidiaries and schools Shenzhen Xueersi Education Technology Co., Ltd. ("Shenzhen Education") December 22, 2009 Shenzhen N/A* Teaching software research, and development VIE’s subsidiaries and schools Wuhan Jiang’an District Xueersi Education Training School ("Wuhan Jiang’an School") December 16, 2010 Wuhan N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Zhengzhou Jinshui District Xueersi Education Training School ("Zhengzhou Jinshui School") June 18, 2012 Zhengzhou N/A* After-school tutoring for primary and secondary school students VIE's subsidiaries and schools Guangzhou Tianhe District Xueersi Training Center ("Guangzhou Tianhe School") July 12, 2012 Guangzhou N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Guangzhou Yuexiu District Xueersi Training School ("Guangzhou Yuexiu School") March 20, 2013 Guangzhou N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Nanjing Xueersi Education Training School ("Nanjing School") April 19, 2013 Nanjing N/A* After-school tutoring for primary and secondary school students VIE's subsidiaries and schools Shenzhen Xueersi Training Center ("Shenzhen School") November 12, 2013 Shenzhen N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools 1. ORGANIZATION AND PRINCIPAL ACTIVITIES - continued Name Later of date of Place of incorporation Percentage of Principal activities Nature of Hangzhou Xueersi Training School ("Hangzhou School") November 14, 2013 Hangzhou N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Xi’an Beilin District Xueersi Education Training Center ("Xi'an Beilin School") April 2, 2015 Xi’an N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Xi’an Yanta District Xueersi Training Center ("Xi'an Yanta School") September 22, 2016 Xi’an N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools TAL Training School (Shanghai) Co., Ltd. (“TAL Shanghai”) February 20, 2019 Shanghai N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools * 1. ORGANIZATION AND PRINCIPAL ACTIVITIES - continued The VIE arrangements Due to PRC legal restrictions on foreign ownership and investment in the education business in China, aside from the Group’s small portion of personalized premium tutoring services in Beijing conducted by the Company’s wholly owned PRC subsidiaries, Huanqiu Zhikang and Zhixuesi Beijing, the Group provides most of its services in the PRC through its VIEs including Xueersi Education, Xueersi Network, Xinxin Xiangrong, Lebai Education and their subsidiaries and schools. To provide the Company the power to control and the ability to receive the expected residual returns of the VIEs and their subsidiaries and schools, the Company's wholly owned subsidiary, TAL Beijing, entered into a series of contractual arrangements with Xueersi Education, Xueersi Network and their respective shareholders on February 12, 2009 and August 12, 2009, including exclusive business service agreements, which were superseded by the Exclusive Business Cooperation Agreement entered into on June 25, 2010. TAL Beijing also entered into a series of contractual arrangements with Xinxin Xiangrong on August 4, 2015. The Company acquired Firstleap during fiscal year 2016. Lebai Information, a wholly owned PRC subsidiary of Firstleap, entered into a series of contractual arrangements on October 26, 2015 with Lebai Education and its sole shareholder. After the acquisition, Xueersi Education, a VIE of the Group became the sole shareholder of Lebai Education. The VIEs and their subsidiaries and schools hold various licenses upon which the Group’s business depends. A substantial majority of the Group’s employees who provide the Group’s services are hired by the VIEs and their subsidiaries and schools, and the VIEs and their subsidiaries and schools lease a substantial portion of the properties upon which the Group’s services are delivered. The net revenue from the VIEs and their subsidiaries and schools accounted for 93.4% of the Group’s total net revenue for the fiscal year ended February 29, 2020. Through the contractual arrangements below, TAL Beijing and Lebai Information have (1) the power to direct the activities of the VIEs and their subsidiaries and schools that most significantly affect their economic performance and (2) the right to receive substantially all the benefits from the VIEs and their subsidiaries and schools. They are therefore considered the primary beneficiaries of the VIEs and their subsidiaries and schools, and accordingly, the results of operations, assets and liabilities of the VIEs and their subsidiaries and schools are consolidated in the Group’s financial statements. Series of exclusive technology support and service agreements: Lebai Information, Lebai Education and its sole shareholder, subsidiaries and schools have entered into an Exclusive Business Service Agreement on October 26, 2015, the terms of which are substantially the same as the agreement of Xinxin Xiangrong summarized above. The term of such agreement is 10 years and will be renewed for another 10 years at Lebai Information’s discretion. 1. ORGANIZATION AND PRINCIPAL ACTIVITIES - continued The VIE arrangements - continued The services under each of these agreements include, but are not limited to, employee training, technology development, transfer and consulting services, public relation services, market survey, research and consulting services, market development and planning services, human resource and internal information management, network development, upgrade and ordinary maintenance services, and software and trademark licensing and other additional services as the parties may mutually agree from time to time. TAL Beijing, Lebai Information or their designated affiliates, owns the exclusive intellectual property rights developed in the performance of these agreements. As consideration for these services, TAL Beijing, Lebai Information or their designated affiliates are entitled to charge the VIEs and VIEs’ subsidiaries and schools service fees annually or regularly, and adjust the service fee rates from time to time at their discretion. Call option agreement: TAL Beijing, Xinxin Xiangrong and the shareholders of Xinxin Xiangrong have entered into a call option agreement on August 4, 2015. Lebai Information, Lebai Education and the sole shareholder of Lebai Education have entered into a call option agreement on October 26, 2015, the terms of which are substantially the same as the call option agreement summarized above. Under each of these agreements, TAL Beijing or Lebai Information has the sole discretion to decide when to exercise the option, and whether to exercise the option in part or in full. Unless terminated early by mutual agreement of all parties, these agreements shall remain effective until TAL Beijing and Lebai Information exercise their purchase right to purchase all the VIEs’ equity interests according to these agreements. Equity pledge agreement: TAL Beijing, Xinxin Xiangrong and the shareholders of Xinxin Xiangrong have entered into an equity pledge agreement on August 4, 2015. Lebai Information, Lebai Education and the sole shareholder of Lebai Education have entered into an equity pledge agreement on October 26, 2015, the terms of which are substantially the same as the agreements summarized above. These agreements are effective on the date of execution and terminate when all the secured rights under the relevant agreements, as the case may be, are completely fulfilled or terminated in accordance thereof. 1. ORGANIZATION AND PRINCIPAL ACTIVITIES - continued The VIE arrangements - continued Letter of Undertaking: Power of attorney: The articles of associations of each of the VIEs state that the major rights of the shareholders in shareholders’ meeting include the power to approve the operating strategy and investment plan, elect the members of board of directors and approve their compensation and review and approve annual budget and earning distribution plan. Therefore, through the irrevocable power of attorney arrangement TAL Beijing or Lebai Information has the ability to exercise effective control over each of the VIEs respectively through shareholder votes and, through such votes, to also control the composition of the board of directors. As a result of these contractual rights, the Company has the power to direct the activities of each of the VIEs that most significantly impact their economic performance. Spousal consent letter: 1. ORGANIZATION AND PRINCIPAL ACTIVITIES - continued The VIE arrangements - continued Deed of undertaking: ● as long as Mr. Bangxin Zhang owns shares in the Company, whether legally or beneficially, and directly or indirectly (including shares held through Mr. Bangxin Zhang’s personal holding company Bright Unison Limited or any other company, trust, nominee or agent, if any), representing more than 50% of the aggregate voting power of the then total issued and outstanding shares of the Company; ● Mr. Bangxin Zhang will not, directly or indirectly, (i) request or call any meeting of shareholders for the purpose of removing or replacing any of existing directors or appointing any new director, or (ii) propose any resolution at any of shareholders meetings to remove or replace any of existing directors or appoint any new director; and should any meeting of shareholders be called by the board of directors or requisitioned or called by shareholders for the purpose of removing or replacing any of the directors or appointing any new director, or if any resolution is proposed at any of shareholder meetings to remove or replace any of the directors or appoint any new director, the maximum number of votes which Mr. Bangxin Zhang will be permitted to exercise shall be equal to the total aggregate number of votes of the then total issued and outstanding shares of the Company held by all members of the Company, other than shares which are owned, whether legally or beneficially, and directly or indirectly by Mr. Bangxin Zhang, less one vote; and ● Mr. Bangxin Zhang will not cast any votes he has as a director or shareholder (if applicable) on any resolutions or matters concerning enforcing, amending or otherwise relating to the Deed being considered or voted upon by board of directors or shareholders, as the case may be. In the opinion of Maples and Calder (Hong Kong) LLP, the Company’s Cayman Islands legal counsel, the deed of undertaking constitutes the legal, valid and binding obligations of Mr. Bangxin Zhang, which cannot be unilaterally revoked by Mr. Bangxin Zhang, and is enforceable in accordance with its terms under existing Cayman Islands laws. Risks in relation to the VIE structure The Company believes that TAL Beijing and Lebai Information’s contractual arrangements with the VIEs and their respective subsidiaries, schools and shareholders are in compliance with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the Group would be subject to fines or potential actions by the relevant PRC regulatory authorities with broad discretions, which could include: ● revoke the Group’s business and operating licenses; ● require the Group to discontinue or restrict its operations; ● limit the Group’s business expansion in China by way of entering into contractual arrangements; ● restrict the Group’s right to collect revenues or impose fines; ● block the Group’s websites; ● require the Group to restructure the operations in such a way as to compel the Group to establish a new enterprise, re-apply for the necessary licenses or relocate its businesses, staff and assets; ● impose additional conditions or requirements with which the Group may not be able to comply; or ● take other regulatory or enforcement actions against the Group that could be harmful to its business. 1. ORGANIZATION AND PRINCIPAL ACTIVITIES - continued Risks in relation to the VIE structure - continued The imposition of any of these penalties could result in a material adverse effect on the Company’s ability to conduct the Group’s business. In addition, if the imposition of any of these penalties causes the Company to lose the rights to direct the activities of the VIEs, and the VIEs’ subsidiaries and schools, or the right to receive their economic benefits, the Company would no longer be able to consolidate the VIEs, and the VIEs’ subsidiaries and schools. The Company does not believe that any penalties imposed or actions taken by the PRC government would result in the liquidation or dissolution of the Company, TAL Beijing, Lebai Information, or the VIEs and their respective subsidiaries and schools. The four legal owners of Xueersi Education and Xueersi Network are Mr. Bangxin Zhang, Mr. Yachao Liu, Mr. Yunfeng Bai, and Mr. Yundong Cao, and the three legal owners of Xinxin Xiangrong are Mr. Bangxin Zhang, Mr. Yachao Liu and Mr. Yunfeng Bai and the sole legal owner of Lebai Education is Xueersi Education. Mr. Bangxin Zhang, Mr. Yachao Liu and Mr. Yunfeng Bai are shareholders and directors or officers of TAL Education Group. Xueersi Education is a VIE of the Group. The interests of Mr. Bangxin Zhang, Mr. Yachao Liu, Mr. Yunfeng Bai and Mr. Yundong Cao as beneficial owners of Xueersi Education, Xueersi Network and Xinxin Xiangrong may differ from the interests of the Group as a whole, since these parties’ respective equity interests in Xueersi Education, Xueersi Network and Xinxin Xiangrong may conflict with their respective equity interests in the Group. When conflicts of interest arise, it is possible that any or all of these individuals may not act in the best interests of the Group, and such conflicts may not be resolved in the Group’s favor. In addition, these individuals may breach, or cause Xueersi Education, Xueersi Network and Xinxin Xiangrong, their subsidiaries and schools to breach, or refuse to renew, the existing contractual arrangements the Group has with them and Xueersi Education, Xueersi Network and Xinxin Xiangrong, their subsidiaries and schools. Other than the aforementioned deed of undertaking the Group entered with Mr. Bangxin Zhang, the Group currently does not have any arrangements to address potential conflicts of interest between these individuals and the Company. To a large extent, the Group relies on the legal owners of Xueersi Education, Xueersi Network and Xinxin Xiangrong to abide by the laws of the Cayman Islands and China, which provide that directors and officers owe a fiduciary duty to the Company that requires them to act in good faith and in the best interests of the Company and not to use their positions for personal gains. If the Group cannot resolve any conflict of interest or dispute between it and these individuals, the Group would have to rely on legal proceedings, which could result in disruption of its business and subject it to substantial uncertainty as to the outcome of any such legal proceedings. 1. ORGANIZATION AND PRINCIPAL ACTIVITIES - continued The VIE arrangements The following consolidated financial statement balances and amounts of the Company’s VIEs and their subsidiaries and schools, were included in the accompanying consolidated financial statements after the elimination of intercompany balances and transactions amongst the Company, its subsidiaries, its VIEs and VIEs’ subsidiaries and schools in the Group. As of February 28, As of February 29, 2019 2020 Cash and cash equivalents $ 249,108 $ 350,035 Short-term investments 11,956 — Other current assets 154,977 159,706 Total current assets 416,041 509,741 Property and equipment, net 229,518 286,982 Other non-current assets 953,393 2,038,941 Total assets 1,598,952 2,835,664 Deferred revenue-current 401,027 733,253 Other current liabilities 445,338 898,959 Total current liabilities 846,365 1,632,212 Total non-current liabilities 20,019 891,633 Total liabilities $ 866,384 $ 2,523,845 For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Net revenues $ 1,614,512 $ 2,406,642 $ 3,058,285 Net income $ 378,975 $ 606,560 $ 534,070 For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Net cash provided by operating activities $ 325,799 $ 409,103 $ 215,892 Net cash used in investing activities $ (211,755) $ (346,183) $ (134,936) Net cash used in financing activities $ (26,965) $ (4,392) $ (5,173) 1. ORGANIZATION AND PRINCIPAL ACTIVITIES - continued The VIE arrangements - continued As of February 28, 2018, 2019 and February 29, 2020, the balance of the amount payable by the VIEs and their subsidiaries and schools to TAL Beijing, Lebai Information or their designated affiliates related to the service fees was $60,336, $128,088 and $78,357, respectively, and was eliminated upon consolidation. There are no consolidated VIEs’ assets that are collateral for the VIEs’ obligations and can only be used to settle the VIEs’ obligation. Relevant PRC laws and regulations restrict the VIEs from transferring a portion of their net assets, equivalent to the balance of their paid-in capital and statutory reserve, to the Company in the form of loans and advances or cash dividends. Please refer to Note 24 for disclosure of restricted net assets. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Feb. 29, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). Basis of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, which are accounted for under the voting interest model, and its VIEs, VIEs’ subsidiaries and schools consolidated under the variable interest entity consolidation model. All inter-company transactions and balances have been eliminated upon consolidation. Consolidation of Variable Interest Entities The Company through TAL Beijing and Lebai Information, wholly owned foreign enterprises, has executed a series of contractual agreements with its VIEs, the VIEs’ subsidiaries and schools and the VIEs’ nominee shareholders. For a description of these contractual arrangements, see “Note 1 Organization and Principal Activities—The VIE Arrangements”. These contractual agreements do not provide TAL Beijing and Lebai Information with an equity interest in legal form in the VIEs. As the Company holds no legal form of equity ownership in the VIEs, the Company applied the variable interest entity consolidation model as set forth in Accounting Standards Codification 810, Consolidation (“ASC 810”) instead of the voting interest model of consolidation. By design, the contractual agreements provide TAL Beijing and Lebai Information with the right to receive benefits equal to substantially all of the net income of these entities, and thus under ASC 810, these agreements are considered variable interests. Subsequent to identifying any variable interests, any party holding such variable interests must determine if the entity in which the interest is held is a variable interest entity and subsequently which reporting entity is the primary beneficiary of, and should therefore consolidate the variable interest entity. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Consolidation of Variable Interest Entities - continued The contractual arrangements, by design, enable TAL Beijing and Lebai Information to have (a) the power to direct the activities that most significantly impact the economic performance of the VIEs and (b) the right to receive substantially all the benefits of the VIEs. As a result, the VIEs are considered to be variable interest entities under ASC 810 and TAL Beijing and Lebai Information are considered to be the primary beneficiary of the VIEs and consolidate the VIEs’ financial position and results of operations. Determining whether TAL Beijing and Lebai Information are the primary beneficiaries requires a careful evaluation of the facts and circumstances, including whether the contractual agreements are substantive under the applicable legal and financial reporting frameworks, i.e. PRC law and U.S. GAAP. The Company continually reviews its corporate governance arrangements to ensure that the contractual agreements are indeed substantive. The Company has determined that the contractual agreements are in fact valid and legally enforceable. Such arrangements were entered into in order to comply with the underlying legal and/or regulatory restrictions that govern the ownership of a direct equity interest in the VIEs. In the opinion of the Company’s PRC counsel, Tian Yuan Law Firm, the contracts are legally enforceable under PRC law. See “Note 1 Organization and Principal Activities—The VIE Arrangements”. On June 24, 2013 and July 29, 2013, the Company and Mr. Bangxin Zhang executed a deed of undertaking dated June 24, 2013 and a side letter dated July 29, 2013, respectively (collectively, the “Deed”). Pursuant to the terms of the Deed, as long as Mr. Bangxin Zhang owns a majority voting interest, whether legally or beneficially, and directly or indirectly, in the Company, (1) Mr. Bangxin Zhang cannot request or call a meeting of shareholders or propose a shareholders resolution to appoint or remove a director, (2) if shareholders are asked to appoint or remove a director, the maximum number of votes which Mr. Bangxin Zhang will be permitted to exercise in connection with such shareholder approval is equal to the total aggregate number of votes of the then total issued and outstanding shares of the Company held by all members of the Company, other than shares which are owned, whether legally or beneficially, and directly or indirectly by Mr. Bangxin Zhang, less one vote and (3) if shareholders or board of directors are asked to consider or approve any matter related to the Deed, Mr. Bangxin Zhang cannot exercise his voting power. Upon execution of the Deed, despite his ownership of and as long as he holds a majority voting interest, whether legally or beneficially, and directly or indirectly, in the Company, Mr. Bangxin Zhang will (1) not be permitted to requisition or call a meeting of shareholders or propose a shareholders resolution to appoint or remove a director, (2) in relation to any shareholder approvals to appoint or remove a director, only be permitted to exercise up to the number of votes equal to the total aggregate number of votes of the then total issued and outstanding shares of the Company held by all members of the Company, other than shares which are owned, whether legally or beneficially, and directly or indirectly by Mr. Bangxin Zhang, less one vote and (3) in relation to shareholders’ or board of directors’ consideration or approval of any matter related to the Deed, Mr. Bangxin Zhang cannot exercise his voting power. The terms of the Deed prevents Mr. Bangxin Zhang from controlling the rights of the Company as it relates to the contractual agreements, and accordingly, the Company retains a controlling financial interest in the VIEs and would consolidate them as the VIEs’ primary beneficiary. Please see Note 1 for the presentation of abbreviated financial information of the VIEs and VIEs’ subsidiaries and schools, after elimination of intercompany balances and transactions. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenue, costs, and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Significant accounting estimates reflected in the Group’s consolidated financial statements include purchase price allocation relating to business acquisitions, valuation allowance for deferred tax assets, the useful lives of property and equipment and intangible assets, impairment of intangible assets, long-lived assets, goodwill and long term investments, fair value assessment of long-term investments, discount rate for leases and consolidation of variable interest entities. Cash and cash equivalents Cash and cash equivalents consist of cash on hand, demand deposits and highly liquid investments, which are unrestricted as to withdrawal or use, or have original maturities of three months or less when purchased. Restricted cash Cash that is restricted as to withdrawal or for use or pledged as security is separately reported. The Group’s restricted cash mainly represents security deposits held in designated bank accounts for future transactions, deposits required by PRC government authorities for establishing new schools and subsidiaries and deposits in connection with the term and revolving facilities agreement disclosed in Note 14. Short-term investments Short-term investments include wealth management products, which are mainly deposits with variable interest rates placed with financial institutions and are restricted as to withdrawal and use. The Group classifies the wealth management products as held-to-maturity securities. The original maturities of the short-term investments are greater than three months, but less than twelve months. For investment products indexed to an underlying stock or stock market, the Group elects the fair value method to record them at fair value in accordance with ASC 825 Financial Instruments. Changes in the fair value are reflected in the consolidated statements of operations. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight-line basis over the following estimated useful lives: Building 35 Computer, network equipment and software 3 years Vehicles 4 Office equipment and furniture 3 Leasehold improvement Shorter of the lease term or estimated useful lives Construction in progress represents buildings and related premises under construction, which is stated at actual construction cost less any impairment loss. Construction in progress is transferred to building when completed and ready for its intended use. Business combinations Business combinations are recorded using the acquisition method of accounting. The assets acquired, the liabilities assumed and any noncontrolling interests of the acquiree at the acquisition date, if any, are measured at their fair values as of the acquisition date. Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any noncontrolling interests of the acquiree and fair value of previously held equity interest in the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Common forms of the consideration made in acquisitions include cash and common equity instruments. Consideration transferred in a business acquisition is measured at the fair value as of the date of acquisition. Where the consideration in an acquisition includes contingent consideration the payment of which depends on the achievement of certain specified conditions post-acquisition, the contingent consideration is recognized and measured at its fair value at the acquisition date and if recorded as a liability, it is subsequently carried at fair value with changes in fair value reflected in the consolidated statements of operations. In a business combination achieved in stages, the Group remeasures the previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the remeasurement gain or loss, if any, is recognized in the consolidated statements of operations. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Acquired intangible assets, net Acquired intangible assets other than goodwill consist of trade name and domain names, copyrights, teaching materials, user base, customer relationships, technology, partnership agreements, school cooperation agreements, licenses, etc., and are carried at cost, less accumulated amortization and impairment. Amortization of finite-lived intangible assets is computed using the straight-line method over the estimated useful lives. The amortization periods by intangible asset classes are as follows: Trade name and domain names 3 Copyrights and teaching materials 3 User base and customer relationships 2 Technology 4 Partnership agreements and school cooperation agreements 3 Licenses 2 Others 2 Land use rights, net All land in the PRC is owned by PRC government, which, according to the relevant PRC law, may grant the right to use the land for a specified period of time. Payment for acquiring land use rights are recorded at cost and amortized on a straight line basis over the term of the land certificates. Impairment of long-lived assets The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the fair value of the assets. Goodwill The excess of the purchase price over the fair value of net assets acquired is recorded on the consolidated balance sheets as goodwill. Goodwill is not amortized, but tested for impairment annually or more frequently if event and circumstances indicate that it might be impaired. ASC 350-20 permits the Group to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The Group early adopted ASU 2017-04: Intangibles-Goodwill and Other (Topic 350), which eliminated Step 2 from the goodwill impairment test on a prospective basis. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Goodwill - continued The Group does not choose to perform the qualitative assessment for goodwill impairment. For fiscal year 2020, the Group performs its annual impairment test by comparing the fair value of a reporting unit with its carrying amount. The Group should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Group recognized impairment loss on goodwill of $28,998 in fiscal year ended February 29, 2020. Long-term investments The Group’s long-term investments include equity securities without readily determinable fair values, equity securities with readily determinable fair values, equity method investments, available-for-sale investments, fair value option investments and held-to-maturity investments. Equity securities without readily determinable fair values The Group adopted ASC Topic 321, Investments—Equity Securities (“ASC 321”) on March 1, 2018. Prior to fiscal year 2019, for investee companies over which the Group does not have significant influence or a controlling interest, equity securities of privately-held companies were accounted for using the cost method of accounting, measured at cost less other-than-temporary impairment. Starting from fiscal year 2019, for equity securities without readily determinable fair value that qualify for the practical expedient to estimate fair value using net asset value per share, the Group estimates the fair value using net asset value per share and recorded the cumulative effect of the adjustment of $4,163 to the opening balance of retained earnings upon adoption of the new standard. For other equity securities without readily determinable fair value, the Group elected to use the measurement alternative to measure those investments at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The Group reviews its equity securities without readily determinable fair value for impairment at each reporting period. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss in net income / (loss) equal to the difference between the carrying value and fair value. Equity securities with readily determinable fair values Equity securities with readily determinable fair value are measured at fair values, and any changes in fair value are recognized in the consolidated statements of operations. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Long-term investments-continued Equity method investments Investee companies over which the Group has the ability to exercise significant influence, but does not have a controlling interest through investment in common shares or in-substance common shares, are accounted for using the equity method. Significant influence is generally considered to exist when the Group has an ownership interest in the voting stock of the investee between 20% and 50%, and other factors, such as representation on the investee’s board of directors, voting rights and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate. For certain investments in limited partnerships, where the Group holds less than a 20% equity or voting interest, the Group may also have significant influence. Under the equity method, the Group initially records its investment at cost and subsequently recognizes the Group’s proportionate share of each equity investee’s net income or loss after the date of investment into the consolidated statements of operations and accordingly adjusts the carrying amount of the investment. If financial statements of an investee cannot be made available within a reasonable period of time, the Group records its share of the net income or loss of an investee on a one quarter lag basis in accordance with ASC 323-10-35-6. The Group reviews its equity method investments for impairment whenever an event or circumstance indicates that an other-than-temporary impairment has occurred. The Group considers available quantitative and qualitative evidence in evaluating potential impairment of its equity method investments. An impairment charge is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. Available-for-sale investments For investments in investees’ shares which are determined to be debt securities, the Group accounts for them as available-for-sale investments when they are not classified as either trading or held-to-maturity investments. Available-for-sale investments are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income as a component of shareholders’ equity. Realized gains and losses and provision for decline in value determined to be other than temporary, if any, are recognized in the consolidated statements of operations. Fair value option investments The Group elected the fair value option to account for certain investments whereby the change in fair value is recognized in the consolidated statements of operations. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Long-term investments - continued Held-to-maturity investments Long-term investments include wealth management products, which are mainly deposits with variable interest rates placed with financial institutions and are restricted as to withdrawal and use. The Group classifies the wealth management products as “held-to-maturity” securities. Fair value Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Fair value of financial instruments is disclosed in Note 15. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition On March 1, 2018, the Group adopted Revenue from Contracts with Customers (“Topic 606”), applying the modified retrospective method to all contracts that were not completed as of March 1, 2018. Results for reporting periods beginning on March 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior periods. Revenue is recognized when control of promised goods or services is transferred to the Group’s customers in an amount of consideration to which the Group expects to be entitled to in exchange for those goods or services. The Group follows the five steps approach for revenue recognition under Topic 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Group satisfies a performance obligation. The Group generates substantially all of its revenues through tutoring service with individual students in the PRC, in which revenue is recognized over time. In addition, the Group generates revenues from sales of products, consist primarily of books, which were insignificant for the year ended February 28, 2019 and February 29, 2020, and were included in Small class tutoring services, personalized premium services and others below. The following table presents the Group’s revenues disaggregated by revenue sources. The Group’s revenue is reported net of discounts, value added tax and surcharges. For the year ended February 28, 2019 Disaggregation of net revenues -Small class tutoring services, personalized premium services and others $ 2,223,347 -Online education services through www.xueersi.com 339,637 Total $ 2,562,984 For the year ended February 29, 2020 Disaggregation of net revenues -Small class tutoring services, personalized premium services and others $ 2,655,323 -Online education services through www.xueersi.com 617,985 Total $ 3,273,308 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition - continued The primary sources of the Group’s revenues are as follows: (a) Small class tutoring services, personalized premium services and others Small class tutoring services primarily consist of Xueersi Peiyou small class, Firstleap and Mobby. Personalized premium services is referring to Zhikang after-school one-on-one tutoring services. Each contract of small class tutoring service or personalized premium service is accounted for as a single performance obligation which is satisfied proportionately over the service period. Tuition fee is generally collected in advance and is initially recorded as deferred revenue. Tuition revenue is recognized proportionately as the tutoring sessions are delivered. Generally, for small class tutoring services except for Mobby courses, the Group offers refunds for any remaining classes to students who decide to withdraw from a course. The refund is equal to and limited to the amount related to the undelivered classes. For most Mobby courses, the Group offers refunds equal to and limited to the amount related to the undelivered classes to students who withdraw from a course, provided the course is less than two-third completed at the time of withdrawal. After two-third of the course is completed, no refund will be granted. For personalized premium services, a student can withdraw at any time and receive a refund equal to and limited to the amount related to the undelivered classes. Historically, the Group has not had material refunds. The Group distributes coupons to attract both existing and prospective students to enroll in its courses. The coupon has fixed dollar amounts and can only be used against future courses. The coupon is not considered a material right to the customer and accounted for as a reduction of transaction price of the service contract. Other revenues are primarily derived from advertising services provided on the Group’s online platforms and consulting service and test preparation courses related to overseas study. Revenue is recognized when control of promised goods or services is transferred to the Group’s customers in an amount of consideration to which the Group expects to be entitled to in exchange for those goods or services. Upon the adoption of Topic 606, the Group estimates the variable consideration to be earned and recognizes revenue over the service period for overseas study consulting service. Under the prior revenue recognition standard, such revenue is deferred and recognized when student admission is reasonably assured. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition - continued (b) Online education services through www.xueersi.com The Group provides online education services, including live class and pre-recorded course content, to its students through www.xueersi.com. Students enroll for online courses through www.xueersi.com by the use of prepaid study cards or payment to the Group’s online accounts. Each contract of the online education service is accounted for as single performance obligation which is satisfied ratably over the service period. The proceeds collected are initially recorded as deferred revenue. For live class courses, revenues are recognized proportionately as the tutoring sessions are delivered. For pre-recorded course content, revenues are recognized on a straight line basis over the subscription period from the date in which the students activate the courses to the date in which the subscribed courses end. Refunds are provided to the students who decide to withdraw from the subscribed courses within the course offer period and a proportional refund is based on the percentage of untaken courses to the total courses purchased. Historically, the Group has not experienced material refunds. As a practical expedient, the Group elects to record the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. In addition, the Group determines the transaction price to be earned by estimating the refund liability based on historical refund ratio on a portfolio basis using the expected value method. Reclassification was made from deferred revenue to refund liabilities, which was recorded under accrued expenses and other current liabilities, for tuition collected that expected to be refunded to the customers in the future if students withdraw from a course for the remaining classes. The contract liabilities of deferred revenue was $436,107 as of February 28, 2019, substantially all of which was recognized as revenue during the year ended February 29, 2020. As of February 29, 2020, the contract liabilities of deferred revenue was $781,000. The difference between the opening and closing balances of the Group’s contract liabilities primarily results from the timing difference between the Group’s satisfaction of performance obligation and the customer’s payment. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Share-based compensation Share-based payment transactions with employees are measured based on the grant date fair value of the equity instrument and recognized as compensation expense on a straight-line basis over the requisite service period, with a corresponding impact reflected in additional paid-in capital. Forfeitures are recognized as they occur. Liability-classified awards are remeasured at their fair-value-based measurement as of each reporting date until settlement. Value added tax Pursuant to the PRC tax laws, in case of any product sales, the VAT rate is 3% of the gross sales for small scale VAT payer and 16% (13% starting April 1, 2019) of the gross sales for general VAT payer. TAL Beijing and Xueersi Education are deemed as general VAT payer since January 2010, and August 2010, respectively, for the sales of guidance materials and the intercompany sales of self-developed software. For general VAT payer, VAT on sales is calculated at 16% (13% starting April 1, 2019) on revenue from product sales and paid after deducting input VAT on purchases. The net VAT balance between input VAT and output VAT is reflected in the accounts under other taxes payable. The Group’s online education services and inter-company technical services are subject to VAT at the rate of 6% of revenue for general VAT payer, Beijing Xintang Sichuang, TAL Beijing, Xueersi Education and Yidu Huida are deemed as general VAT payers at the rate of 6% since September 2012. Zhixuesi Beijing was deemed as general VAT payer at the rate of 6% since August 2013 and elected a simple VAT collection method at the rate of 3% since November 2016. Xinxin Xiangrong and Pengxin TAL were deemed general VAT payers at the rate of 6% since June 2015 Xueersi Education enjoyed VAT exemption for book sales from February 2014 to December 2017. Pursuant to Cai Shui [2018] No. 53 in June 2018, it can continue to enjoy VAT exemption from 2018 to 2020 for its book sales. Since May 2016, in accordance with Cai Shui [2016] No. 68, non-academic education service providers who are general VAT payer could elect a simple VAT collection method and apply for a 3% VAT rate. The Group’s schools which were previously subject to business tax are now subject to a VAT rate of 3%. Since May 2018, in accordance with Cai Shui [2018] No.32, the VAT rate decreased to 16% of the gross sales for general VAT payer. For general VAT payer of the Group, VAT on sales is calculated at 16% on revenue from product sales and paid after deducting input VAT on purchases starting on May 1, 2018. In accordance with Cai Shui [2019] No.39, the VAT rate above decreased to 13% starting on April 1, 2019. Since January 2020, in accordance with Cai Shui [2020] No.8, due to the COVID-19 pandemic, the VAT on certain services was temporarily exempted for calendar year 2020. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Operating leases On March 1, 2019, the Group adopted New Leasing Standard (“ASC 842”), using the modified retrospective transition method resulting in the recording of operating lease right-of-use (ROU) assets of $1,024,863 and operating lease liabilities of $1,026,728 upon adoption. Prior period amounts have not been adjusted and continue to be reported in accordance with the previous accounting guidance. The adoption of the new guidance did not have a material effect on the consolidated statements of operations. As of February 29, 2020, the Group recognized operating lease ROU assets of $1,243,692 and total lease liabilities $1,254,879, including current portion at the amount of $304,960. The Group determines if an arrangement is a lease or contains a lease at lease inception. Operating leases are required to record in the statement of financial position as right-of-use assets and lease liabilities, initially measured at the present value of the lease payments. The Group has elected the package of practical expedients, which allows the Group not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any expired or existing leases as of the adoption date. The Group also elected the practical expedient not to separate lease and non-lease components of contracts. Lastly, for lease assets other than real estate, such as printing machine and electronic appliances, the Group elected the short-term lease exemption as their lease terms are 12 months or less. As the rate implicit in the lease is not readily determinable, the Group estimates its incremental borrowing rate based on the information available at the commencement date in determining |
BUSINESS ACQUISITION
BUSINESS ACQUISITION | 12 Months Ended |
Feb. 29, 2020 | |
BUSINESS ACQUISITION | |
BUSINESS ACQUISITION | 3. BUSINESS ACQUISITION Business acquisitions in fiscal year 2020: During the year ended February 29, 2020, the Group made two acquisitions with total purchase price of $2,853, all for cash consideration. The intangible assets and goodwill acquired from the acquisitions were $321 and $3,999, respectively. The acquired goodwill is not deductible for tax purposes. The results of operations for all these acquired entities have been included in the Group’s consolidated financial statements from their respective acquisition dates. The following summarized unaudited pro forma results of operations for the years ended February 28, 2019 and February 29, 2020 assuming that these acquisitions during the year ended February 29, 2020 occurred as of March 1, 2018. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which actually would have resulted had the acquisitions occurred as of March 1, 2018, nor is it indicative of future operating results. For the years ended February 28/29 2019 2020 (Unaudited) (Unaudited) Pro forma net revenues $ 2,563,413 $ 3,273,549 Pro forma net income / (loss) attributable to TAL Education Group $ 367,041 $ (110,263) Pro forma net income / (loss) per share - basic $ 1.93 $ (0.56) Pro forma net income / (loss) per share - diluted $ 1.83 $ (0.56) Business acquisitions in fiscal year 2019: Acquisition of Shanghai Xiaoxin Information and Technology Co., Ltd ("Shanghai Xiaoxin") As of February 28, 2018, the Group held 39.7% equity interest in Shanghai Xiaoxin, which was accounted for as equity method investment. Shanghai Xiaoxin is an education technology company primarily engaged in the development of communication tools between teachers and students. On January 24, 2019, the Group increased its shareholding to 69.2% with additional cash consideration of $69,798 and obtained control of Shanghai Xiaoxin. The purchase price consisted of the following: US$ Cash consideration $ 69,798 Fair value of the previously held 39.7% equity interest: Carrying amount 2,035 Gain on remeasurement of fair value as of acquisition date 26,291 Total $ 98,124 3. BUSINESS ACQUISITION – continued Business acquisitions in fiscal year 2019 – continued: The acquisition was recorded using the acquisition method of accounting. Accordingly, the acquired assets and liabilities were recorded at fair value at the date of acquisition. The acquisition-date fair value of the equity interest held by the Group immediately prior to the acquisition was measured at fair value using the discounted cash flow method and taking into account certain factors including the management projection of discounted future cash flow and an appropriate discount rate. The purchase price was allocated as of January 24, 2019, the date of acquisition, as follows: Amortization US$ period Cash and cash equivalents $ 11,310 Net assets acquired, excluding cash and cash equivalents, intangible assets and related deferred tax liabilities 19,860 Intangible assets User base 8,152 7 years Technology 1,283 5 years Goodwill 89,536 Deferred tax liabilities (2,359) Noncontrolling interests (29,658) Total purchase consideration $ 98,124 The purchase price allocation, as disclosed, was determined by the Group with the assistance of an independent valuation appraiser. The fair value of the purchased intangible assets was measured by using the “replacement cost” and “relief from royalty” valuation methods. The acquired goodwill is not deductible for tax purposes. The goodwill was primarily attributable to intangible assets that cannot be recognized separately as identifiable assets under GAAP, and comprise (a) the assembled workforce and (b) the expected but unidentifiable business growth as a result of the synergy resulting from the acquisition. Other acquisitions During the year ended February 28, 2019, the Group made several other acquisitions with total purchase price of $54,289, including cash consideration of $44,356, stock consideration valued at $3,703 and previously held equity interests in the investees at fair value of $6,230. $1,726 of the stock consideration had been settled through the issuance of 20,502 Class A common shares in fiscal year 2019 and the remaining $1,977 stock consideration was recorded as Class A common shares issuable as of February 28, 2019. The intangible assets and goodwill acquired from the acquisitions were $11,943 and $40,238, respectively. The acquired goodwill is not deductible for tax purposes. The results of operations for all these acquired entities have been included in the Group’s consolidated financial statements from their respective acquisition dates. 3. BUSINESS ACQUISITION - continued Business acquisitions in fiscal year 2019 – continued: The following summarized unaudited pro forma results of operations for the years ended February 28, 2019 and February 29, 2020 assuming that these acquisitions during the year ended February 28, 2019 occurred as of March 1, 2017. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which actually would have resulted had the acquisitions occurred as of March 1, 2017, nor is it indicative of future operating results. For the years ended February 28, 2018 2019 (Unaudited) (Unaudited) Pro forma net revenues $ 1,725,115 $ 2,570,616 Pro forma net income attributable to TAL Education Group $ 187,607 $ 357,886 Pro forma net income per share - basic $ 1.07 $ 1.88 Pro forma net income per share - diluted $ 0.98 $ 1.79 Business acquisitions in fiscal year 2018: During the year ended February 28, 2018, the Group made several business acquisitions. Each acquisition has been recorded using the acquisition method of accounting, and accordingly, the acquired assets and liabilities assumed were recorded at their fair value at the date of acquisition. The results of these acquired entities’ operations have been included in the consolidated financial statements since the date of acquisitions. Goodwill primarily represents the expected synergies from combining the acquired businesses with the business of the Group. The total consideration of business acquisitions made during the year ended February 28, 2018, included cash totaling $16,165, of which $15,866 was paid during fiscal year 2018. The intangible assets, goodwill and noncontrolling interests acquired from these business acquisitions were $5,782, $12,622 and $3,643, respectively. The purchase price allocation was determined by the Group with the assistance of an independent valuation appraiser. The results of operations for all these acquired entities have been included in the Group’s consolidated financial statements from their respective acquisition dates. The acquired goodwill is not deductible for tax purposes. 3. BUSINESS ACQUISITION - continued Business acquisitions in fiscal year 2018-continued The following summarized unaudited pro forma results of operations for the years ended February 28, 2017 and 2018 assuming that these acquisitions during the year ended February 28, 2018 occurred as of March 1, 2016. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which actually would have resulted had the acquisitions occurred as of March 1, 2016, nor is it indicative of future operating results. For the years ended February 28, 2017 2018 (Unaudited) (Unaudited) Pro forma net revenues $ 1,043,718 $ 1,715,774 Pro forma net income attributable to TAL Education Group $ 115,055 $ 198,105 Pro forma net income per share - basic $ 0.71 $ 1.13 Pro forma net income per share - diluted $ 0.65 $ 1.03 |
SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS | 12 Months Ended |
Feb. 29, 2020 | |
SHORT-TERM INVESTMENTS | |
SHORT-TERM INVESTMENTS | 4. SHORT-TERM INVESTMENTS Short-term investments consisted of the following: As of As of February 28, February 29, 2019 2020 Held-to-maturity investments (1) $ 168,761 $ 345,457 Variable-rate financial instruments (2) 99,663 — $ 268,424 $ 345,457 (1) The Group purchased wealth management products from financial institutions in China and classified them as held-to-maturity investments as the Group has the positive intent and ability to hold the investments to maturity. The maturities of these financial products range from three months to twelve months . The Group estimated that their fair value approximate their amortized costs. (2) The Group purchased several investment products indexed to certain stock or stock markets with maturities less than one year. The Group accounted for them at fair value and recognized a loss of $337 and nil resulting from changes in fair value for the years ended February 28, 2019 and February 29, 2020, respectively. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Feb. 29, 2020 | |
PREPAID AND OTHER CURRENT ASSETS | |
PREPAID AND OTHER CURRENT ASSETS | 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: As of As of February 28, February 29, 2019 2020 Accounts receivables $ 50,222 $ 42,654 Prepayments to suppliers (1) 45,525 55,342 Interest receivable 5,848 22,108 Staff advances (2) 4,636 3,206 Loan to employees, current portion (3) 5,467 4,413 Other deposits 3,179 7,550 Prepaid VAT 5,643 6,284 Prepaid rental (4) 45,107 7,335 Receivables from investees (5) — 13,304 Loans to third-parties (6) 24,410 5,883 Receivables of withholding tax from employees for option exercise (7) — 34,720 Receivable for exercise of capped call option (Note 13) 6,901 — Others 5,692 4,553 $ 202,630 $ 207,352 (1) Prepayments to suppliers are primarily for student recruitment services, advertising fees and server hosting fees. Student recruitment service fees are prepaid by the Group’s study abroad business to recruitment agencies. Such prepayments are generally short-term and refundable if performance condition is not met. (2) Staff advances are provided to employees primarily for traveling, office expenses and other expenditures which are subsequently expensed as incurred. (3) The Group offers housing benefit plan to employees who have been employed by the Group for three years or more and met certain performance criteria. Under this benefit plan, the eligible employees receive interest-free loans for purposes of property purchases. Each loan has a term of four years and must be repaid by equal annual installments. (4) The Group adopted ASC 842 on March 1, 2019, using the modified retrospective transition approach allowed under ASU 2018-11 as described in Note 2. After the adoption of ASC 842, the prepaid rental are included in the Group's operating lease right-of-use assets on its consolidated balance except for the prepaid rental related to the contract that has been entered into but not yet commenced. (5) In fiscal year 2020, two domestic investees of the Group initiated setting up their VIEs which is a process of re-organization under common control. The original investment amount would be returned from PRC investees and the same amount has already been reinvested to the overseas holding companies of the two investees. (6) Loans to third-parties are generally mature in less than one year, and certain loan was guaranteed by the borrower's equity interests in other investees. (7) The Group pays for withholding tax on behalf of employees who exercised their options and agreed to repay the tax by deduction from the proceeds of shares sold subsequent to the option exercise. As of February 29, 2020, such proceeds were in transit due to wire transfer processing and the withholding tax paid on behalf of employees was recorded as other receivables. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Feb. 29, 2020 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 6. PROPERTY AND EQUIPMENT, NET Property and equipment, net, consisted of the following: As of As of February 28, February 29, 2019 2020 Building $ 62,151 $ 59,489 Leasehold improvement 247,898 316,528 Computer, network equipment and software 121,967 178,876 Vehicles 598 704 Office equipment and furniture 30,169 30,596 Construction in progress — 16,025 Total cost of property and equipment 462,783 602,218 Less: accumulated depreciation (174,906) (235,562) $ 287,877 $ 366,656 For the years ended February 28, 2018, 2019 and February 29, 2020, depreciation expenses were $50,907, $76,669 and $99,511, respectively. In December 2019, the Group has entered into contracts for the development of office space on parcels in Beijing and Jiangsu. The direct costs related to the construction were capitalized as construction in progress for the year ended February 29, 2020. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Feb. 29, 2020 | |
INTANGIBLE ASSETS, NET | |
INTANGIBLE ASSETS, NET | 7. INTANGIBLE ASSETS, NET Intangible assets, net, consisted of the following: As of As of February 28, February 29, 2019 2020 Trade name and domain names $ 27,225 $ 27,982 Copyrights and teaching materials 5,974 5,974 User base and customer relationships 24,628 24,803 Technology 13,230 13,230 Partnership agreements and school cooperation agreements 4,858 4,858 Licenses 27,023 28,476 Others 2,542 2,687 Total cost of intangible assets 105,480 108,010 Less: accumulated amortization (30,253) (45,930) Less: accumulated impairment loss (358) (358) Add: foreign exchange difference (93) (2,737) $ 74,776 $ 58,985 The Group recorded amortization expense of $8,307, $12,166 and $15,677 for the years ended February 28, 2018, 2019 and February 29, 2020, respectively. Estimated amortization expense of the existing intangible assets for the next five years is $15,108, $12,052, $9,907, $7,338 and $5,829, respectively. The impairment loss on acquired intangible assets was $358, nil and nil for the years ended February 28, 2018, 2019 and February 29, 2020, respectively. |
LAND USE RIGHTS, NET
LAND USE RIGHTS, NET | 12 Months Ended |
Feb. 29, 2020 | |
LAND USE RIGHTS, NET | |
LAND USE RIGHTS, NET | 8. LAND USE RIGHTS, NET Land use rights, net, consisted of the following: As of As of February 28, February 29, 2019 2020 Land use rights $ — $ 207,657 Less: accumulated amortization — (2,804) Add: foreign exchange difference — — Land use rights, net $ — $ 204,853 The Group acquired two land use rights. The first one is at total cost of approximately RMB92 million for approximately 83,025 square meters of land in Zhenjiang, Jiangsu on March 19, 2019, for the development of office space. The second one was acquired at RMB1,360 million for approximately 28,600 square meters of land in Beijing on July 8, 2019, for the development of office space. According to land use right policy in the PRC, the Group has a 50-year use right over the land in Zhenjiang and in Beijing, which are used as the basis for amortization, respectively. Amortization for land use rights for the year ended February 29, 2020, was $2,804. The Group expects to recognize $4,195 in amortization expense for |
GOODWILL
GOODWILL | 12 Months Ended |
Feb. 29, 2020 | |
GOODWILL | |
GOODWILL | 9. GOODWILL Changes in the carrying amount of goodwill for the years ended February 28, 2019 and February 29, 2020 consisted of the following: As of As of February 28, February 29, 2019 2020 Beginning balance $ 292,906 $ 415,752 Addition (Note 3) 129,774 3,999 Accumulated impairment loss (1,524) (30,522) Exchange difference (6,928) (10,316) Goodwill, net $ 414,228 $ 378,913 In the annual goodwill impairment assessment for the year ended February 29, 2020, the Group concluded that the carrying amount of a reporting unit exceeded its fair value and recognized an impairment loss of US$28,998. The Group recorded impairment losses of nil, nil and US$28,998 for the years ended February 28, 2018, 2019 and February 29, 2020, respectively. The fair value of the reporting units was determined by the Group with the assistance of independent valuation appraisers using the income-based valuation methodology. |
LONG-TERM INVESTMENTS
LONG-TERM INVESTMENTS | 12 Months Ended |
Feb. 29, 2020 | |
LONG-TERM INVESTMENTS | |
LONG-TERM INVESTMENTS | 10. LONG-TERM INVESTMENTS Long-term investments consisted of the following: As of As of February 28, February 29, 2019 2020 Equity securities with readily determinable fair values BabyTree Inc. (“BabyTree”) (1) 132,143 26,696 Equity securities without readily determinable fair values Jiangsu Qusu Education and Technology Co., Ltd. (“Jiangsu Qusu”) (2) 48,704 — Xiamen Meiyou Information and Technology Co., Ltd. (“Xiamen Meiyou”) (3) — 47,068 Other investments (4) 81,968 84,681 Equity method investments Xiamen Meiyou Information and Technology Co., Ltd. (“Xiamen Meiyou”) (3) 48,639 — Other investments (5) 132,607 102,314 Fair value option investment Long-term investment in a third-party technology company 7,484 7,258 Available-for-sale investments Changing Education Inc. (“Changing”) (6) 102,581 148,405 Hyphen Education (Cayman) Limited ("Hyphen") (7) 50,808 — DaDa Education Group ("DaDa") (8) 80,115 — Ximalaya Inc. ("Ximalaya") (9) 20,017 46,612 Other investments (10) 92,664 108,567 Held-to-maturity investments 52,965 — Total $ 850,695 $ 571,601 (1) In January 2014, the Group acquired minority equity interests in BabyTree by purchasing its Series E convertible redeemable preferred shares with a total cash consideration of $23,475 . BabyTree is an online parenting community and an online retailer of maternity and kids products. In fiscal year 2018 and 2019, the Group recognized disposal gain of $3,044 and $760, respectively, due to the partial disposal of the equity interest in BabyTree Inc. to a related party. 10. LONG-TERM INVESTMENTS - continued On November 27, 2018, BabyTree was listed on the Hong Kong Stock Exchange and its preferred shares were converted to ordinary shares upon the completion of the listing. The investment was then reclassified from available-for-sale investment to equity security with readily determinable fair value upon the listing. Accordingly, $95,491 fair value changes of the investment was transferred from accumulated other comprehensive income to other income in the consolidated statements of operations in fiscal year ended February 28, 2019. In fisical year 2020, the stock price of BabyTree declined from HK$7.18 to HK$1.44, the Group recognized loss of $105,447 due to the fair value change. (2) In July 2018, the Group acquired 33.99% equity interest in Jiangsu Qusu, a leading K-12 service platform for targeted teaching and learning. The Group accounted for the investment using the measurement alternative as Jiangsu Qusu is a private company without readily determinable fair value. In September 2019, the Group disposed the investment and recognized a disposal gain of $16,670 . (3) In December 2018, the Group acquired 15.32% equity interest in Xiamen Meiyou, an internet company focusing on providing services to female clients. Since June 2019, the investment was reclassified from equity method to equity investment without readily determinable fair value as the Group no longer has the ability to exercise significant influence due to the restructured capital of Xiamen Meiyou. As of February 29, 2020, no impairment loss has been recorded in regard to the investment. (4) The Group holds equity interests in certain third-party private companies through investments in their common shares or in-substance common shares, which were accounted for using the cost method prior to the adoption of ASC 321. After the adoption of ASC 321, the Group accounted for these equity investments using the measurement alternative when equity method is not applicable and there is no readily determinable fair value for the investments. The Group recorded nil , $14,489 and $3,444 impairment loss on these investments during the fiscal years ended February 28, 2018, 2019 and February 29, 2020, respectively. (5) The Group holds minority equity interests in several third-party private companies through investments in their common shares or in-substance common shares. Majority of the long-term investments are companies which engage in online education services. The Group accounts for these investments under the equity method because the Group has the ability to exercise significant influence but does not have control over the investees. The Group recorded $409, $8,719 and $17,198 impairment loss for its equity method investments during the fiscal years ended February 28, 2018, 2019 and February 29, 2020, respectively. (6) In fiscal year 2016 through 2018, the Group acquired Series B+, Series C and Series D convertible redeemable preferred shares of Changing which operates a customer-to-customer mobile tutoring platform in China. In fiscal year 2020, the Group made additional investment in Changing by purchasing its Series E convertible redeemable preferred shares. As of February 29, 2020, the Group held 34.55% equity interest of Changing. The Group accounted for the investment as available-for-sale investments since the investee’s preferred shares held are determined to be debt securities. 10. LONG-TERM INVESTMENTS - continued (7) In fiscal year 2019, the Group completed three transactions with Hyphen, an online one-on-one teaching platform, to acquire its Series C+ convertible redeemable preferred shares. The Group accounted for the investment as available-for-sale investments since the investee’s preferred shares held are determined to be debt securities. The Group fully impaired the investment during the fiscal year ended February 29, 2020. (8) In fiscal year 2019, the Group completed two transactions with DaDa, a company providing children one-on-one online English tutoring, to acquire its series C and D redeemable preferred shares. The Group accounted for the investment as available-for-sale investments since the investee’s preferred shares held are determined to be debt securities. The Group fully impaired the investment during the fiscal year ended February 29, 2020. (9) In fiscal year 2017 and 2020, the Group completed two transactions with Ximalaya, a professional audio sharing platform, to acquire its Series C+ and E-2 convertible redeemable preferred shares. As of February 29, 2020, the Group held 1.73% equity interest of Ximalaya, and accounted for the investment as available-for-sale investments since the investee’s preferred shares held are determined to be debt securities. (10) The Group acquired minority equity interest in several third-party private companies, the majority of which are engaged in online platform or online education services. The Group holds minority equity interests of these companies through purchasing of their convertible redeemable preferred shares. The Group accounted for these investments as available-for-sale investments since the investee’s preferred shares held are determined to be debt securities. The Group recorded $1,804 , $34,883 and $2,137 impairment loss during the years ended February 28, 2018, 2019 and February 29, 2020, respectively. |
LONG-TERM PREPAYMENTS AND OTHER
LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS | 12 Months Ended |
Feb. 29, 2020 | |
LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS | |
LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS | 11. LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS Long-term prepayments and other non-current assets consisted of the following: As of As of February 28, February 29, 2019 2020 Long-term prepayments (1) $ 2,562 $ 36,989 Loan to employees (2) 6,512 3,940 Loan receivable (3) 32,069 32,661 Prepayment for land use rights (4) 209,865 — Other non-current assets (5) 16,396 11,685 $ 267,404 $ 85,275 (1) The balances at February 28, 2019 and February 29, 2020 represented the Group’s prepayments to acquire equity interests in several third-party companies. (2) Please see Note 5(3) for details of loan to employees. 11. LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS - continued (3) The balances represented long-term loans to several third parties with original maturity over one year. Interest income of $3,555 and $5,368 was accrued for the fiscal years ended February 28, 2019 and February 29, 2020, respectively. The loan principals and all interests will be received upon maturity. The third parties pledged their equity interests in other companies to the Group to guarantee the loan principals and interests. (4) The balances as of February 29, 2019 represented the Group's prepayment for purchase of land use rights in Beijing and deposit payment of land use rights in Jiangsu. As of February 29, 2020, the amount were fully transferred to land use rights, net. Please see Note 8 for details. (5) As of February 28, 2019 and February 29, 2020, other non-current assets were primarily made up of prepayment for property and equipment, the construction in process and long-term service fees. The Group recognized $260, nil and nil impairment loss of long-term prepayments and other non-current assets during the fiscal years ended February 28, 2018, 2019 and February 29, 2020, respectively. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Feb. 29, 2020 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: As of As of February 28, February 29, 2019 2020 Accrued employee payroll and welfare benefits $ 208,897 $ 292,001 Refund liabilities 73,184 168,118 Other taxes payable 33,099 7,826 Accrued operating expenses 9,508 40,323 Payable for investments and acquisitions 17,530 404 Professional service fee payable 2,199 13,994 Payable for acquisitions of intangible assets 2,688 1,436 Interest payable 1,698 1,267 Others 16,392 27,281 Total $ 365,195 $ 552,650 |
BOND PAYABLE
BOND PAYABLE | 12 Months Ended |
Feb. 29, 2020 | |
BOND PAYABLE & LONG-TERM DEBT AND SHORT-TERM DEBT | |
BOND PAYABLE | 13. BOND PAYABLE On May 21, 2014, the Company issued $230,000 in aggregate principal amount of convertible bond due on May 15, 2019 (“the Bond”), unless earlier repurchased, converted or redeemed. The Bond bears interest at a rate of 2.5% per year, payable semiannually in arrears on May 15 and November 15 of each year, beginning on November 15, 2014. The net proceeds from the Bond, after deducting the issuance costs, were $224,723. The Company has accounted for the Bond as a single instrument as bond payable. The value of the Bond is measured by the cash received. As of May 15, 2019, the bond payable was fully paid by cash or through issuance of Company's shares upon conversion to the ADS. Interest expense of $162 and $27 were recognized for the years ended February 28, 2019 and February 29, 2020, respectively. The debt issuance costs of $5,277 were recorded as a reduction of the bond payable and amortized using the effective interest method over the period from issuance date to the earliest redemption date, May 15, 2017. The main terms of the Bond are summarized as follows: Conversion The Bond are convertible into the Company’s ADSs, at the option of the holders, in integral multiples of one thousand dollars principal amount, at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. The conversion rate equals 229.1856 ADSs per one thousand dollars principal amount of the Bond, which represents the adjusted conversion price of $4.36 per ADS. During the years ended February 28, 2019 and February 29, 2020, certain bond holders converted their bonds with carrying amount of $5,800 and $5,250 to 1,329,273 and 1,203,222 ADSs, respectively. Fractional ADSs were settled in cash upon conversion. Redemption The Company does not have the right to redeem the Bond prior to maturity except for certain circumstances involving changes in the tax laws for the relevant tax jurisdiction. Holders of the Bond have the right to require the Company to repurchase in cash all or part of their Bond on May 15, 2017 or upon the occurrence of certain fundamental changes at a repurchase price equal to 100% of the principal amount of the Bond to be repurchased, plus any accrued and unpaid interest to, but excluding, the repurchase date. Effective on August 16, 2017, the Company adjusted the ratio of its American Depositary Shares (“ADSs”) to Class A common shares from one ADS representing two Class A common shares to three ADSs representing one Class A common shares. The information disclosed below have been given effect to the foregoing ADS to share ratio change (“Ratio Change”). In addition, as disclosed in Note 26, the Company declared and paid a cash dividend, which triggered the conversion adjustment provisions of the Bond. Concurrently with the issuance of the Bond in May 2014, the Company entered into capped call transactions (each a “Capped Call Transaction”) with three initial purchasers or their affiliates by purchasing 52,712,642 options, which is the number of adjusted ADS issuable upon conversion of the Bond in full, for $22,885. The Capped Call Transactions are expected generally to reduce the potential dilution to the Class A common shares and ADSs upon conversion of the Bond. The strike price of the Capped Call Transactions corresponds to the adjusted conversion price of the Bond and the cap price is $5.87 per ADS and has been adjusted under the terms of the Capped Call Transactions. The Group accounted for the capped call transactions as equity transactions and recorded the $22,885 purchase price as a deduction of additional paid in capital. The options became exercisable in February 2019 and the Capped Call Transaction terminated upon the maturity date of the Bond in May 2019. The Group elected the cash settlement method and recorded $13,270 and $66,346 as a credit to additional paid in capital for the exercise of the capped call options during fiscal year 2019 and 2020, respectively. |
LONG-TERM DEBT AND SHORT-TERM D
LONG-TERM DEBT AND SHORT-TERM DEBT | 12 Months Ended |
Feb. 29, 2020 | |
BOND PAYABLE & LONG-TERM DEBT AND SHORT-TERM DEBT | |
LONG-TERM DEBT AND SHORT-TERM DEBT | 14. LONG-TERM DEBT AND SHORT-TERM DEBT Facilities Agreement of 2016 On June 30, 2016, the Company entered into a three-year $400,000 term and revolving facilities agreement (the “Facilities Agreement”) with a group of arrangers led by Deutsche Bank AG, Singapore Branch. The facilities, a $225,000 three-year bullet maturity term loan and a $175,000 three-year revolving facility, are priced at 250 The debt issuance cost of $12,000 for the Facilities Agreement of 2016 was amortized over the period from June 30, 2016 to June 30, 2019, the termination date of the Facilities Agreement. The Facilities Agreement contains financial covenants on the Group’s tangible net worth, interest cover and leverage, and also it has acceleration clauses about the occurrence of an event of default. The Company is required to maintain restricted cash equivalent to a three-month period of interest expense for the duration of the Facilities Agreement. In connection with the facilities agreement, the Company entered into three interest rate swap agreements, of which the notional amount is $30,000, $30,000 and $50,000, respectively. Pursuant to the interest rate swap agreements, the loans will be settled with a fixed annual interest rate of 3.46%, 4.10% and 4.14% respectively, during the respective term of the loans. The interest rate swap agreements meet the definition of a derivative in accordance with ASC815. The fair value and the change in fair value of the derivatives related to the interest rate swap agreements were insignificant for the years ended February 28, 2019 and February 29, 2020. As of February 28, 2019, the balance of the loans under the Facilities Agreement of 2016 was $195,000 with maturity dated June 30, 2019. The facilities had been fully repaid and the interest rate swap agreements were settled and terminated with an immaterial gain recognized during fiscal year 2020. Facilities Agreement of 2019 On February 1, 2019, the Company entered into a three-year $600,000 term and revolving facilities agreement (the “Facilities Agreement of 2019”) with a group of arrangers led by Deutsche Bank AG, Singapore Branch. The facilities, a $270,000 three-year bullet maturity term loan and a $330,000 three-year revolving facility, are priced at 175 basis points over LIBOR. The interest is payable on a quarterly basis. The Company also paid commitment fee of 0.35% per annum based on the undrawn portion of the facilities for the period commencing on the commitment fee accrual commencement date to the end of the availability period applicable to the facilities. The use of proceeds of the facilities are for general corporate purposes. The Facilities Agreement of 2019 contains financial covenants on the Group’s equity, interest cover and leverage, and also it has acceleration clauses about the occurrence of an event of default. The Company is required to maintain restricted cash equivalent to a three-month period of interest expense on the draw down for the duration of the Facilities Agreement of 2019. 14. LONG-TERM DEBT AND SHORT-TERM DEBT - continued Facilities Agreement of 2019 - continued The debt issuance cost of $12,600 for the Facilities Agreement of 2019 was amortized over the period from February 1, 2019 to January 31, 2022, and it was presented in the balance sheets as a direct deduction from the principal amount of the loan. As of February 28, 2019, no draw down of loans was made under the Facilities Agreement of 2019. As of February 29, 2020, the Company had drawn down $270,000 three-year bullet maturity term loan under the facility commitment. Facilities Agreement of Zhenjiang In December 2019, the Group signed a RMB1,800 million loan facilities agreement with a group of arrangers led by a PRC bank. The facilities have a term of eight years and an effective drawdown period of three years. The interest rate is prime minus 39 basis points where prime is based on Loan Prime Rate released by the National Inter-Bank Funding Center of the PRC. The interest is payable on a quarterly basis. The principal of the loan facilities is to be repaid on a proportional basis semiannually after the 3-year drawdown period. The use of proceeds of the facilities are for the construction of buildings in the city of Zhenjiang. The loan facilities are collateralized by a pledge of the construction project and the land use rights in Zhenjiang. As of February 29, 2020, the Group had not made any draw down of the loan under the facilities agreement. Short-term Loan Agreement In June 2018, the Group entered into a one-year loan agreement with a PRC bank for amount of $14,945. The use of proceeds of the loan are for general corporate purposes. The loan matured in June 2019 and had been fully repaid as of February 29, 2020. |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Feb. 29, 2020 | |
FAIR VALUE | |
FAIR VALUE | 15. FAIR VALUE (a) In accordance with ASC 820-10, the Group measures financial products, available-for-sale investments, fair value option investments and equity securities with readily determinable fair value at fair value on a recurring basis. Equity securities classified within Level 1 are valued using quoted market prices currently available on the Hong Kong Stock Exchange. Variable-rate financial instruments classified within Level 2 are valued using directly or indirectly observable inputs in the market place. The available-for-sale investments and fair value option investments classified within Level 3 are valued using income approach in discounted cash flow method. The discounted cash flow analysis requires the use of significant unobservable inputs (Level 3 inputs), including projected revenue, operating expenses, capital expenditures and a discount rate calculated based on the weighted average cost of capital. 15. FAIR VALUE – continued (a) As of February 28, 2019 and February 29, 2020, information about inputs for the fair value measurements of the Group’s assets that are measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows: Fair Value Measurement at Reporting Date Using Quoted Prices in Significant Other Significant February 28, Active Market for Observable Unobservable Description 2019 Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Short-term investments Variable-rate financial instruments $ 99,663 — $ 99,663 — Long-term investments Equity securities with readily determinable fair values $ 132,143 $ 132,143 — — Fair value option investments $ 7,484 — — $ 7,484 Available-for-sale investments $ 346,185 — — $ 346,185 Total $ 585,475 $ 132,143 $ 99,663 $ 353,669 Fair Value Measurement at Reporting Date Using Quoted Prices in Significant Other Significant February 29, Active Market for Observable Unobservable Description 2020 Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Long-term investments Equity securities with readily determinable fair values $ 26,696 $ 26,696 — — Fair value option investments $ 7,258 — — $ 7,258 Available-for-sale investments $ 303,584 — — $ 303,584 Total $ 337,538 $ 26,696 — $ 310,842 15. FAIR VALUE - continued (a) Assets and liabilities measured at fair value on a recurring basis-continued The roll forward of Level 3 investments are as following: US$ Balance as of February 28, 2018 $ 330,564 Purchase 186,628 Disposal (3,890) Transfer out due to reclassification (129,287) Changes in fair value 12,047 Impairment loss (34,883) Foreign exchange difference (7,510) Balance as of February 28, 2019 $ 353,669 Purchase 95,269 Disposal (1,512) Changes in fair value (45) Impairment loss (133,329) Foreign exchange difference (3,210) Balance as of February 29, 2020 $ 310,842 (b) The Group's goodwill and intangible assets are primarily acquired through business acquisitions. Purchase price allocation are measured at fair value on a nonrecurring basis as of the acquisition dates. The Group measures its goodwill and intangible assets at fair value on a nonrecurring basis annually or whenever events or changes in circumstances indicate that carrying amount of a reporting unit exceeds its fair value. Acquired intangible assets are measured using the income approach - discounted cash flow method when events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. The Group recognized impairment loss related to goodwill and acquired intangible assets arising from acquisitions of $358, nil and $28,998 for the years ended February 28, 2018, 2019 and February 29, 2020, respectively. The Group measures long-term investments (excluding the equity securities with readily determinable fair values, available-for-sale investments and fair value option investments) at fair value on a nonrecurring basis only if an impairment or observable price adjustment is recognized in the current period. Please see Note 10(4) and Note 10(5). For equity securities without readily determinable fair values, the fair value was determined using directly or indirectly observable inputs in the market place (Level 2 inputs). Whenever events or changes in circumstances indicate that the carrying value may no longer be recoverable, the fair value of aforementioned long term investments was determined using models with significant unobservable inputs (Level 3 inputs), primarily the management projection of discounted future cash flow and the discount rate. |
LEASES
LEASES | 12 Months Ended |
Feb. 29, 2020 | |
LEASES | |
LEASES | 16. LEASES The Group has operating leases for learning centers, service centers and office spaces. Certain leases include renewal options and/or termination options, which are factored into the Group’s determination of lease payments when appropriate. Operating lease cost for the year ended February 29, 2020 was $338,593, which excluded cost of short-term contracts. Short-term lease cost for the year ended February 29, 2020 was $1,184. As of February 29, 2020, the weighted average remaining lease term was 4.9 years and weighted average discount rate was 4.8% for the Group's operating leases. Supplemental cash flow information of the leases were as follows: For the year ended , February 29, 2020 Cash payments for operating leases $ 314,099 Right-of-use assets obtained in exchange for new operating lease liabilities $ 770,942 The following is a maturity analysis of the annual undiscounted cash flows for lease liabilities as of February 29, 2020: As of February 29, Fiscal year ending 2020 February 2021 $ 313,953 February 2022 329,556 February 2023 276,063 February 2024 210,742 February 2025 144,840 Thereafter 168,232 Total future lease payments $ 1,443,386 Less: Imputed interest (188,507) Present value of operating lease liabilities $ 1,254,879 As of February 29, 2020, the Group has lease contract that has been entered into but not yet commenced amounted to $39,944, and these contracts will commence during fiscal year 2021. 16. LEASES - continued As of February 28, 2019, the future minimum lease payments under non-cancellable operating lease contracts under ASC 840 were as follows: As of February 28, Fiscal year ending 2019 February 2020 $ 270,093 February 2021 285,653 February 2022 258,355 February 2023 207,371 February 2024 143,145 Thereafter 178,642 Total future lease payments $ 1,343,259 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Feb. 29, 2020 | |
INCOME TAXES | |
INCOME TAXES | 17. INCOME TAXES Cayman Islands The Company and Firstleap are tax-exempted companies incorporated in the Cayman Islands. Hong Kong TAL Hong Kong and Firstleap Hong Kong were established in Hong Kong and are subject to a two-tiered income tax rate for taxable income earned in Hong Kong effectively since April 1, 2018. The first 2 million Hong Kong dollars of profits earned by a company are subject to be taxed at an income tax rate of 8.25%, while the remaining profits will continue to be taxed at the existing tax rate, 16.5%. No provision for Hong Kong profits tax has been made in the consolidated financial statements as it has no assessable income for the years ended February 28, 2018, 2019 and February 29, 2020. PRC Effective from January 1, 2008, a new Enterprise Income Tax Law, or (“the New EIT Law”), combined the previous income tax laws for foreign invested and domestic invested enterprises in the PRC by the adoption of a unified tax rate of 25% for most enterprises with the following exceptions. TAL Beijing was qualified as a High and New Technology Enterprises (“HNTE”) and was accordingly entitled to a preferential tax rate of 15% from calendar years 2014 through 2019 and is expected to be subject to an EIT rate of 15% as long as it maintains its status as an HNTE. TAL Beijing applied for Key Software Enterprise status for calendar year 2018 and was approved in June 2019 which entitled TAL Beijing at the preferential tax rate of 10%. TAL Beijing applied 10% for calendar year 2018 under the qualification of Key Software Enterprise and 15% for calendar year 2019 as a HNTE. For calendar year 2019, TAL Beijing applied for the qualification of Key Software Enterprise to enjoy the preferential tax rate of 10%, which is still subject to the review by the tax authorities. 17. INCOME TAXES - continued PRC - continued Yidu Huida was qualified as a HNTE and was accordingly entitled to a preferential tax rate of 15% from calendar years 2015 through 2020 and is expected to be subject to an EIT rate of 15% as long as it maintains its status as a HNTE. Yidu Huida applied for Key Software Enterprise status for calendar year 2016, 2017 and 2018 and was approved in May 2017, July 2018 and June 2019, respectively, which entitled Yidu Huida at the preferential tax rate of 10%. Accordingly, Yidu Huida applied 10% for calendar year 2016 to 2018 under the qualification of Key Software Enterprise and 15% for calendar year 2019 as a HNTE. For calendar year 2019, Yidu Huida applied for the qualification of Key Software Enterprise to enjoy the preferential tax rate of 10%, which is still subject to the review by the tax authorities. Beijing Xintang Sichuang was qualified as “Newly Established Software Enterprise” in calendar year 2013 and therefore was entitled to a two-year exemption from EIT and a further reduction to 12.5% from calendar years 2015 through 2017. It applied and was qualified as a HNTE and was subject to an EIT rate of 15% from calendar years 2017 through 2019. It is expected to be subject to an EIT rate of 15% as long as it maintains its status as a HNTE. Beijing Xintang Sichuang applied for Key Software Enterprise status for calendar year 2018 and was approved in June 2019 which entitled Beijing Xintang Sichuang at the preferential tax rate of 10%.Beijing Xintang Sichuang applied an EIT rate of 10% for calendar year 2018 under the qualification of Key Software Enterprise and an EIT rate of 15% for calendar year 2019 as a HNTE. For calendar year 2019, Xintang Sichuang applied for the qualification of Key Software Enterprise to enjoy the preferential tax rate of 10%, which is still subject to the review by the tax authorities. Beijing Yinghe Youshi Technology Co., Ltd. ("Yinghe Youshi") was also qualified as HNTE and was accordingly entitled to a preferential tax rate of 15% from calendar years 2016 through 2021. It is expected to be subject to an EIT rate of 15% as long as it maintains its status as a HNTE. Yizhen Xuesi was qualified as “Newly Established Software Enterprise” in calendar year 2017 and therefore it was entitled to a two-year exemption from EIT and a further reduction of tax rate to 12.5% from calendar years 2019 through 2021. Beijing Lebai Information Consulting Co., Ltd. ("Lebai Information") was qualified as "Newly Established Software Enterprise" in calendar year 2018 and therefore it was entitled to a two-year exemption from EIT and a further reduction of tax rate to 12.5% from calendar years 2020 through 2022. Provision (credit) for income tax consisted of the following: For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Current - PRC income tax expenses $ 48,958 $ 94,722 $ 127,731 Deferred - PRC income tax expenses (4,305) (18,218) (58,403) Total $ 44,653 $ 76,504 $ 69,328 17. INCOME TAXES - continued Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Group’s deferred tax assets and liabilities were as follows: As of As of February 29, February 29, 2019 2020 Deferred tax assets: Prepaid rental and advertising 9,763 50,187 Property and equipment 1,877 2,576 Impairment loss on long-term investments 6,563 4,559 Others 8,121 19,526 Tax losses carry-forward 44,376 84,007 Less: valuation allowance (41,521) (81,321) Deferred tax assets, net $ 29,179 $ 79,534 Deferred tax liabilities: Intangible assets 8,869 6,984 Property and equipment 249 805 Long-term investments 8,620 — Deferred tax liabilities $ 17,738 $ 7,789 As of February 29, 2020, the Group had operating loss carry-forward of $84,007 from entities in PRC, which will expire on various dates from the end of calendar year 2020 to the end of calendar year 2025. The Company operates its business through its subsidiaries, its VIEs and VIEs' subsidiaries and schools. The Group does not file combined or consolidated tax returns, therefore, losses from individual subsidiaries or the VIEs and their subsidiaries and schools may not be used to offset other subsidiaries' or VIEs' earnings within the Group. Valuation allowance is considered on each individual subsidiary and VIE basis. Valuation allowance of $41,521 and $81,321 had been established as of February 28, 2019 and February 29, 2020, respectively, in respect of certain deferred tax assets as it is considered more likely than not that the relevant deferred tax assets will not be realized in the foreseeable future. Under U.S. GAAP, a deferred tax liability should be recorded for taxable temporary differences attributable to the excess of financial reporting amounts over tax basis amounts, including those differences attributable to a more than 50% interest in a domestic subsidiary. However, recognition is not required in situations where the tax law provides a means by which the reported amount of that investment can be recovered tax-free and the enterprise expects that it will ultimately use that means. The Company has not recorded any such deferred tax liability attributable to the undistributed earnings of its financial interest in VIEs because it believes such excess earnings can be distributed in a manner that would not be subject to income tax. 17. INCOME TAXES - continued The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. The Group has concluded that there are no significant uncertain tax positions requiring recognition in financial statements for the years ended February 28, 2018, 2019 and February 29, 2020. The Group did not incur any significant interest and penalties related to potential underpaid income tax expenses and also does not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months. The Group has no material unrecognized tax benefits which would favorably affect the effective income tax rate in future years. According to the PRC Tax Administration and Collection Law, the tax authority may require the taxpayer or the withholding agent to make delinquent tax payment within three years if the underpayment of taxes is resulted from the tax authority’s act or error. No late payment surcharge will be assessed under such circumstances. The statute of limitation will be three years if the underpayment of taxes is due to the computational errors made by the taxpayer or the withholding agent. Late payment surcharge will be assessed in such case. The statute of limitation will be extended to five years under special circumstances which are not clearly defined (but an underpayment of tax liability exceeding RMB0.1 million is specifically listed as a “special circumstance”). The statute of limitation for transfer pricing related issue is ten years. There is no statute of limitation in the case of tax evasion. Therefore, the Group is subject to examination by the PRC tax authorities based on the above. Reconciliation between the provision for income taxes computed by applying the PRC EIT rates of 25% in fiscal year 2018, 2019 and 2020 to income before provision for income tax and the actual provision for income tax was as follows: For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Income before provision for income tax $ 246,994 $ 457,204 $ (50,653) PRC statutory income tax rate 25 % 25 % 25 % Income tax at statutory income tax rate 61,748 114,301 (12,663) Effect of non-deductible and super deduction expenses (2,244) (6,252) (18,117) Effect of income tax exemptions and preferential tax rates (37,390) (45,625) (36,750) Effect of income tax rate difference in other jurisdictions 14,949 5,214 97,058 Change in valuation allowance 7,590 8,866 39,800 Provision for income tax $ 44,653 $ 76,504 $ 69,328 17. INCOME TAXES - continued If Yidu Huida, TAL Beijing, Beijing Xintang Sichuang, Yinghe Youshi, Lebai Information and Yizhen Xuesi did not enjoy income tax exemptions and preferential tax rates for the years ended February 28, 2018, 2019 and February 29, 2020, the increase in income tax expenses and net income/(loss) per share amounts would be as follows: For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Increase in income tax expenses $ 37,390 $ 45,625 $ 36,750 Net income / (loss) per common share-basic $ 0.90 $ 1.69 $ (0.74) Net income / (loss) per common share-diluted $ 0.82 $ 1.61 $ (0.74) New EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered residents for Chinese Income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the New EIT Law provide that non-resident legal entities will be considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc., occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Group does not believe that the legal entities organized outside of the PRC within the Group should be treated as residents for EIT law purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiaries registered outside the PRC should be deemed a resident enterprise, the Company and its subsidiaries registered outside the PRC will be subject to the PRC income tax at a rate of 25% with the statute subject to the determination by PRC tax authorities. If the Company were to be non-resident for PRC tax purpose, dividends paid to it out of profits earned after January 1, 2008 would be subject to a withholding tax. In the case of dividends paid by PRC subsidiaries, the withholding tax would be 10%. The Chinese tax authorities clarified that distributions made out of earnings prior to but distributed after January 1, 2008 will not be subject to withholding tax. The aggregate undistributed earnings of the Company’s subsidiaries, VIEs and VIEs’ subsidiaries and schools located in the PRC that are available for distribution are $1,337,157 and $1,807,724 as of February 28, 2019 and February 29, 2020, respectively. Upon distribution of such earnings, the Company will be subject to PRC taxes, the amount of which is impractical to estimate. The Company did not record any withholding tax on any of the aforementioned undistributed earnings because it intends to permanently reinvest all earnings in China and the aforementioned subsidiaries do not intend to declare dividends to the Company. |
COMMON SHARES
COMMON SHARES | 12 Months Ended |
Feb. 29, 2020 | |
COMMON SHARES | |
COMMON SHARES | 18. COMMON SHARES The Company has two classes of common shares, namely, Class A and Class B common shares, following the issuance of Class A common shares upon the IPO in October 2010. Holders of Class A common shares and Class B common shares have the same rights except for voting and conversion rights. In respect of matters requiring shareholders’ vote, each Class A common share is entitled to one vote, and each Class B common share is entitled to ten votes. Each Class B common share is convertible into one Class A common share at any time by the holder thereof. Class A common shares are not convertible into Class B common shares under any circumstances. The computation of ADSs below have been given effect to the Ratio Change as disclosed in Note 13. During the years ended February 28, 2018, 2019 and February 29, 2020, 900,000, nil and 3,614,796 Class B common shares were converted into 900,000, nil and 3,614,796 Class A common shares, respectively. During the years ended February 28, 2018, 2019 and February 29, 2020, 2,314,190, 2,073,711 and 2,239,239 Class A common shares were issued in connection with vested shares, representing 6,942,570, 6,221,133 and 6,717,717 ADSs, respectively. During the years ended February 28, 2018, 2019 and February 29, 2020, 76,491, 232,024 and 114,793 Class A common shares were issued upon exercise of share options, representing 229,473, 696,072 and 344,379 ADSs, respectively. During the years ended February 28, 2018, 2019 and February 29, 2020, nil, 20,502 and 24,702 Class A common shares were issued as consideration for the business acquisitions, respectively. During the years ended February 28, 2018, 2019 and February 29, 2020, 16,380,780, 443,091 and 401,074 Class A common shares issued to bond holders were converted into 49,142,340, 1,329,273 and 1,203,222 ADSs, respectively. During the year ended February 28, 2018, the Company issued 135,264 common shares to noncontrolling shareholders in relation to the purchase of the remaining noncontrolling interests of certain consolidated subsidiaries. On January 5, 2018, the Company entered into a subscription agreement with certain investors (the “Purchasers”), pursuant to which the Company issued 5,464,481 Class A common shares to the Purchasers in a private placement for aggregate proceeds of $500,000 which was received on January 12, 2018. On February 18, 2019, the Company entered into another subscription agreement with the Purchasers, pursuant to which the Company issued 5,329,922 Class A common shares to the Purchasers in a private placement for aggregate proceeds of $500,000 which was received on February 25, 2019. |
NET INCOME _ (LOSS) PER SHARE
NET INCOME / (LOSS) PER SHARE | 12 Months Ended |
Feb. 29, 2020 | |
NET INCOME / (LOSS) PER SHARE | |
NET INCOME / (LOSS) PER SHARE | 19. NET INCOME / (LOSS) PER SHARE For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Numerator: Net income/(loss) attributable to TAL Education Group’s shareholders $ 198,440 $ 367,236 $ (110,195) Eliminate the dilutive effect of interest expense of the bond payable 2,465 162 27 Numerator for diluted net income/(loss) per share $ 200,905 $ 367,398 $ (110,168) Denominator: Weighted average shares outstanding Basic 174,979,574 189,951,643 198,184,370 Effect of dilutive securities: Dilutive effect of non-vested shares and options (i) 11,084,069 9,689,955 — Dilutive effect of the bond payable 8,267,662 583,336 — Denominator for diluted net income/(loss) per share 194,331,305 200,224,934 198,184,370 Net income/(loss) per common share attributable to TAL Education Group’s shareholders-basic (ii) $ 1.13 $ 1.93 $ (0.56) Net income/(loss) per common share attributable to TAL Education Group’s shareholders-diluted $ 1.03 $ 1.83 $ (0.56) (i) For the years ended February 28, 2018 and 2019, 381,426 and 2,559,254 non-vested shares and share options were excluded from the calculation, respectively, as their effect was anti-dilutive. For the year ended February 29, 2020, potential shares outstanding of 11,319,817 are excluded from the calculation due to their anti-dilutive effect resulted from net loss reported in fiscal year 2020. (ii) The Company’s common shares are divided into Class A and Class B common shares. Holders of Class A and Class B common shares have the same dividend rights. Therefore, the Company does not present earnings per share for each separate class. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Feb. 29, 2020 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 20. RELATED PARTY TRANSACTIONS The Group had the following balances and transactions with related parties: Balances: As of As of February 28, February 29, 2019 2020 Amounts due from related parties-current (i) $ 3,341 $ 3,642 Amounts due from related parties-non-current (i) $ 1,747 $ — Amounts due to related parties-current (ii) $ 24,375 $ 4,361 Amounts due to related parties-non-current (ii) $ 196 $ — Transactions: For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Services fees $ 880 $ 1,888 $ 6,350 Other revenue $ 1,016 $ 1,374 $ 4,113 Purchase of equipment $ 947 $ 1,068 $ 120 Disposal gain (iii) $ 3,044 $ 760 $ — (i) The amounts due from related parties represent loans and prepayments to certain investees for service fees received by an investee on behalf of the Group. In fiscal year 2020, the Group recorded $33,184 impairment loss on the amounts due from related parties, substantially all was provided during the year ended February 29, 2020. (ii) The amounts due to related parties include $20,635 and nil investment payable to related parties as of February 28, 2019 and February 29, 2020, respectively. The remaining amounts due to related parties primarily related to service fees payable to related parties. (iii) As disclosed in Note 10(1), in fiscal year 2018 and 2019, the Group disposed certain equity interests in BabyTree to a related party and recognized disposal gains of $3,044 and $ 760 , respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Feb. 29, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 21. COMMITMENTS AND CONTINGENCIES Capital commitment The Group had outstanding capital commitments mainly relating to capital expenditures of office space construction in Beijing and Jiangsu. As of February 29, 2020, the payment due within one year was $150,556 and $253,510 thereafter. Lease property management fee commitment Future minimum payments under non-cancelable agreements for property management fees as of February 29, 2020 were as follows: Fiscal year ending February 2021 $ 22,729 February 2022 23,873 February 2023 19,451 February 2024 15,041 February 2025 10,514 Thereafter 16,015 Total $ 107,623 Upon the adoption of ASC 842 on March 1, 2019, future minimum lease payments for operating lease commitments as of February 29, 2020 are disclosed in Note 16. Investment commitment The Group was obligated to pay $28,646 for several long-term investments under various arrangements as of February 29, 2020 with payment due within one year. Contingencies As of February 29, 2020, the Group remains in the process of preparing filings and applying for permits of certain learning centers. The Group cannot reasonably estimate the contingent liability of without the filling of the permit, no liabilities is recorded as of February 29, 2020. From time to time, the Group is subject to legal proceedings and claims incidental to the conduct of its business. The Group accrues the liability when the loss is probable and reasonably estimable. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Feb. 29, 2020 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 22. SEGMENT INFORMATION The Group is mainly engaged in after-school tutoring in the PRC. The Group’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer. The CODM currently regularly reviews the consolidated financial results of the Group. Therefore, the Group has one single |
MAINLAND CHINA CONTRIBUTION PLA
MAINLAND CHINA CONTRIBUTION PLAN | 12 Months Ended |
Feb. 29, 2020 | |
MAINLAND CHINA CONTRIBUTION PLAN | |
MAINLAND CHINA CONTRIBUTION PLAN | 23. MAINLAND CHINA CONTRIBUTION PLAN Full time employees of the Group in the PRC participate in a government-mandated multi-employer 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. Total provisions for such employee benefits were $108,463, $173,050 and $220,366 for the years ended February 28, 2018, 2019 and February 29, 2020, respectively. |
STATUTORY RESERVES AND RESTRICT
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 12 Months Ended |
Feb. 29, 2020 | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 24. STATUTORY RESERVES AND RESTRICTED NET ASSETS As stipulated by the relevant PRC laws and regulations, PRC entities are required to make appropriations from net income as determined in accordance with the PRC GAAP to non-distributable statutory reserve, which includes a statutory surplus reserve and a statutory welfare reserve (the “reserve fund”), and a development fund. The PRC laws and regulations require that annual appropriations of 10% of after-tax income should be set aside prior to payments of dividends as statutory surplus reserve until the balance reaches 50% of the PRC entity registered capital. In private school sector, the PRC laws and regulations require that certain amount should be set aside as development fund prior to payments of dividends. In the case of private school that requires reasonable returns, this amount should be no less than 25% of the annual net income of the school, while in the case of a private school that does not require reasonable returns, this amount should be no less than 25% of annual increase in the net assets of the school, if any. The statutory reserve may be applied against prior year losses, if any, and may be used for general business expansion and production or increase in registered capital of the entities. For the years ended February 28, 2019 and February 29, 2020, the Group made apportions of $1,519 and $2,709 to the statutory surplus reserve, respectively, and $18,856 and $21,313 to the development fund, respectively. As a result of these PRC laws and regulations and the requirement that distribution by PRC entities can only be paid out of distributable profits computed in accordance with PRC GAAP, the PRC entities are restricted from transferring a portion of their net assets to the Group. Amounts restricted include paid-in capital and the statutory reserve of the Company’s PRC subsidiaries, the VIEs and VIEs’ subsidiaries and schools. As of February 28, 2019 and February 29, 2020, paid-in capital balance of such entities was $390,762 and $580,551, respectively, and statutory reserve balance was $58,690 and $82,712, respectively. The total of restricted net assets as of February 28, 2019 and February 29, 2020 was therefore $449,452 and $663,263, respectively. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Feb. 29, 2020 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 25. SHARE-BASED COMPENSATION In June 2010, the Company adopted the 2010 Share Incentive Plan. The plan permits the grant of options to purchase the Class A common shares, share appreciation rights, restricted shares, restricted share units, dividend equivalent rights and other instruments as deemed appropriate by the administrator under the plans. In August 2013, the Company amended and restated the 2010 Share Incentive Plan (the "Amendment"). Pursuant to the Amendment, the maximum aggregate number of Class A common shares that may be issued pursuant to all awards under the share incentive plan is equal to five percent (5%) of the total issued and outstanding shares as of the date of the Amendment. However, the shares reserved may be increased automatically if and whenever the unissued share reserve accounts for less than one percent (1%) of the total then issued and outstanding shares, so that after the increase, the shares unissued and reserved under this plan immediately after each such increase shall equal five percent (5%) of the then issued and outstanding shares. 25. SHARE-BASED COMPENSATION - continued Non-vested shares During the year ended February 28, 2018, the Company granted 1,111,836 non-vested shares to employees and directors which generally vest annually in equal batches over a period of 1 to 10 years . During the year ended February 28, 2019, the Company granted 2,801,437 non-vested shares to employees and directors which generally vest annual in equal batches over a period of 1 to 13 years . During the year ended February 29, 2020, the Company granted 1,376,628 non-vested shares to employees and directors which generally vest annual in equal batches over a period of 1 to 8 years . The activities of non-vested shares granted under the 2010 Share Incentive Plan are summarized as follows: Number of Weighted non-vested average grant date shares fair value Outstanding as of February 28, 2017 13,101,006 15.62 Granted 1,111,836 74.63 Forfeited 187,719 27.95 Vested 2,375,107 14.81 Outstanding as of February 28, 2018 11,650,016 21.21 Granted 2,801,437 86.95 Forfeited 370,028 44.33 Vested 2,095,211 19.82 Outstanding as of February 28, 2019 11,986,214 36.11 Granted 1,376,628 121.85 Forfeited 813,036 40.86 Vested 2,277,114 33.82 Outstanding as of February 29, 2020 10,272,692 47.73 The Company recorded compensation expense of $44,330, $74,231 and $114,027 for the years ended February 28, 2018, 2019 and February 29, 2020 related to non-vested shares, respectively. As of February 29, 2020, the unrecognized compensation expense related to the non-vested share awards amounted to $406,824, which will be recognized over a weighted-average period of 4.8 years. The total fair value of non-vested shares that vested during the years ended February 28, 2018, 2019 and February 29, 2020 was $35,175, $41,527 and $77,012, respectively. 25. SHARE-BASED COMPENSATION - continued Share options Share options granted to employees and directors expire ranging from 10 During the year ended February 28, 2018, the Company granted 89,160 share options to employees at exercise prices ranging from $40.05 to $102.00. These share options vest annually in equal batches over 4 years . During the year ended February 28, 2019, the Company granted 23,000 share options to employees at exercise prices ranging from $107.67 to $109.98. These share options vest annually in equal batches over a period from 3 to 4 years . During the year ended February 29, 2020, the Company granted 203,179 share options to employees at exercise prices ranging from $63.00 to $115.80. These share options vest annually in equal batches over a period from 3 to 4 years . The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions used for grants during the applicable periods: For the year ended For the year ended For the year ended February 28, 2018 February 28, 2019 February 29, 2020 Risk-free interest rate (1) 1.99%‑2.55 % 2.89%‑2.92 % 1.63%‑2.35 % Expected life (years) (2) 6.17‑6.25 6.00‑6.25 6.00‑6.25 Expected dividend yield (3) 0 % 0 % 0 % Volatility (4) 32.8%‑33.8 % 34.0%‑34.5 % 34.2%‑35.1 % Fair value of options at grant date per share $28.69 to $38.71 $42.09 to $42.55 $43.53 to $72.09 (1) Risk-free interest rate Risk-free interest rate for periods within the contractual life of the option is based upon the U.S. treasury yield curve in effect at the time of grant. (2) Expected life (years) Assumption of the expected term were based on the vesting and contractual terms and employee demographics. (3) Expected dividend yield The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the options. (4) Volatility The volatility assumption was estimated based on historical volatility of the Company’s share price applying the guidance provided by ASC 718. The Company begins to estimate the volatility assumption solely based on its historical information since October 2010. 25. SHARE-BASED COMPENSATION-continued Share options - continued Share options activity for the years ended February 28, 2018, 2019 and February 29, 2020 was as follows: Weighted Weighted Aggregate average average remaining intrinsic Number exercise price contractual value Share options of shares (US$) life (Years) (US$) Outstanding as of February 28, 2017 1,338,882 20.12 9.48 30,954 Granted 89,160 59.50 Exercised 76,491 18.46 Forfeited 23,850 19.44 Outstanding as of February 28, 2018 1,327,701 22.87 8.56 120,040 Granted 23,000 108.57 Exercised 232,024 16.85 Forfeited 69,740 31.55 Outstanding as of February 28, 2019 1,048,937 25.50 7.73 85,318 Granted 203,179 79.42 Exercised 114,793 21.79 Forfeited 90,198 41.11 Outstanding as of February 29, 2020 1,047,125 35.03 7.25 134,183 Vested and expected to vest as of February 29, 2020 1,047,125 35.03 7.25 134,183 Exercisable as of February 29, 2020 366,547 24.27 6.37 50,914 The Company recorded compensation expense of $2,820, $3,046 and $3,916 for the years ended February 28, 2018, 2019 and February 29, 2020 related to share options, respectively. Total intrinsic value of options exercised for the years ended February 28, 2018, 2019 and February 29, 2020 was $5,811, $19,863 and $12,139, respectively. The total fair value of options vested during the years ended February 28, 2018, 2019 and February 29, 2020 was $2,256, $2,764 and $3,225, respectively. As of February 29, 2020, there was $15,643 unrecognized share-based compensation expense related to share options, which will be recognized over a weighted-average vesting period of 3.8 years. The total compensation expense is recognized on a straight-line basis over the respective vesting periods. The Group recorded the related compensation expense of $47,150, $77,277 and $117,943 for the years ended February 28, 2018, 2019 and February 29, 2020, respectively. 25. SHARE-BASED COMPENSATION - continued Share options - continued Table below shows the summary of share-based compensation expense: For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Cost of revenues $ 366 $ 706 $ 1,074 Selling and marketing expenses 5,037 10,454 19,356 General and administrative expenses 41,747 66,117 97,513 Total $ 47,150 $ 77,277 $ 117,943 |
DISTRIBUTION TO SHAREHOLDERS
DISTRIBUTION TO SHAREHOLDERS | 12 Months Ended |
Feb. 29, 2020 | |
DISTRIBUTION TO SHAREHOLDERS | |
DISTRIBUTION TO SHAREHOLDERS | 26. DISTRIBUTION TO SHAREHOLDERS On April 27, 2017, the Company declared a cash dividend of $0.25 per share to the Company’s common shareholders recorded at the close of business on May 11, 2017. $41,166 cash dividend was paid in full in May 2017 and was recorded as a reduction of retained earnings. No dividend has been declared during the year ended February 28, 2019 and February 29, 2020. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Feb. 29, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 27. SUBSEQUENT EVENTS Novel coronavirus (“COVID-19”) has spread rapidly to many parts of China and other parts of the world in the first quarter of calendar year 2020. The epidemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and facilities in China and elsewhere. Substantially all of the Group’s revenue and workforce are concentrated in China. Consequently, the COVID-19 outbreak may affect the Group’s offline business operations and its financial condition and operating results for fiscal year 2021, including but not limited to negative impact to the Group’s total revenues and downward adjustments or impairment to the Group’s long-lived assets and long term investments. Because of the significant uncertainties surrounding the COVID-19 outbreak, the extent of the business disruption and the related financial impact cannot be reasonably estimated at this time. In March 2020, the Company had entered into a definitive agreement to further invest US$10.4 million of cash in exchange of controlling equity interests in an online provider of one-on-one English tutoring services with material deferred revenue liability. Before the completion of the foregoing transaction, the Company has minority equity interests in the investee. On April 28, 2020, the Company’s board of directors authorized the repurchase of up to US$500 million of the Company's common shares over the next 12 months, subject to the applicable rules under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition, the Company's management, informed the Company of their intention to repurchase up to a total US$100 million of the Company's common shares, subject to the applicable rules under the Exchange Act. In May 2020, the Company has repurchased 185,001 ADSs equal to 61,667 common shares in the open market, at an average price of US$53.23 per ADS for an aggregate consideration of approximately US$9.85 million. Such common shares were cancelled upon the completion of the transaction. In June 2020, the Group adopted the 2020 Share Incentive Plan and as of the date of this annual report, the Group has not granted any awards under this plan. The 2010 Share Incentive Plan has a term of 10 years, and will terminate as of June 30, 2020. |
Schedule I Condensed Financial
Schedule I Condensed Financial Information of Parent Company | 12 Months Ended |
Feb. 29, 2020 | |
Schedule I Condensed Financial Information of Parent Company | |
Additional Information - Financial Statement Schedule I | TAL EDUCATION GROUP Additional Information - Financial Statement Schedule I Condensed Financial Information of Parent Company Balance Sheets (In thousands of U.S. dollars, except share and share related data or otherwise noted) As of As of February 28, February 29, 2019 2020 ASSETS Current assets Cash and cash equivalents $ 697,962 $ 442,001 Restricted cash-current 5,105 — Short-term investments 173,943 312,000 Amounts due from subsidiaries and related parties-current 77,396 308,831 Prepaid expenses and other current assets 38,261 21,410 Total current assets 992,667 1,084,242 Restricted cash-non-current — 2,589 Amounts due from subsidiaries and related parties-non-current 1,000 — Intangible assets, net 720 612 Goodwill 57,206 57,206 Long-term investments 645,328 454,746 Long-term prepayments and other non-current assets 8,060 24,675 Investments in its subsidiaries, and VIEs and the VIEs' subsidiaries and schools 1,137,833 1,336,905 Total assets $ 2,842,814 $ 2,960,975 LIABILITIES AND EQUITY Current liabilities Amounts due to subsidiaries and related parties-current 154,885 179,977 Accrued expenses and other current liabilities 3,907 3,312 Short-term debt and current portion of long-term debt 195,000 — Bond payable, current portion 5,275 — Total current liabilities 359,067 183,289 Long-term debt — 261,950 Total liabilities 359,067 445,239 Equity Class A common shares ($0.001 par value; 500,000,000 shares authorized, 126,501,071 shares and 132,895,675 shares issued and outstanding as of February 28, 2019 and February 29, 2020, respectively) 127 133 Class B common shares ($0.001 par value; 500,000,000 shares authorized, 70,556,000 shares and 66,941,204 shares issued and outstanding as of February 28, 2019 and February 29, 2020, respectively) 71 67 Class A common shares issuable 1,977 — Additional paid-in capital 1,485,521 1,675,640 Statutory reserve 58,690 82,712 Retained earnings 920,314 786,097 Accumulated other comprehensive income / (loss) 17,047 (28,913) Total TAL Education Group shareholders’ equity 2,483,747 2,515,736 Total liabilities and equity $ 2,842,814 $ 2,960,975 TAL EDUCATION GROUP Additional Information - Financial Statement Schedule I Condensed Financial Information of Parent Company Statements of Operations (In thousands of U.S. dollars, except share and share related data or otherwise noted) For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Cost of revenues (149) (605) (1,034) Operating expenses Selling and marketing (4,904) (10,447) (19,423) General and administrative (36,849) (62,084) (94,608) Operating loss (41,902) (73,136) (115,065) Interest income 5,240 13,114 27,813 Interest expense (16,640) (17,194) (11,730) Other income / (loss) 8,495 106,179 (131,283) Impairment loss on long-term investments — (29,382) (132,120) Income tax expense (2,268) (2,202) (2,689) Gain from equity method investments 1,295 1,409 995 Equity in earnings of its subsidiaries, the VIEs and the VIEs’ subsidiaries and schools 244,220 368,448 253,884 Net income / (loss) 198,440 367,236 (110,195) TAL EDUCATION GROUP Additional Information - Financial Statement Schedule I Condensed Financial Information of Parent Company Statements of Comprehensive Income (In thousands of U.S. dollars, except share and share related data or otherwise noted) For the year ended For the year ended For the year ended February 28, February 28, February 29 2018 2019 2020 Net income / (loss) $ 198,440 $ 367,236 $ (110,195) Other comprehensive income / (loss), net of tax Foreign currency translation adjustment 46,145 (34,864) (47,082) Unrealized gains on available-for-sale investments, net of tax 34,556 15,837 1,122 Less: Transfer to statements of operations of realized gains on available-for-sale investments, net of tax (4,245) (96,251) — Other comprehensive income / (loss) 76,456 (115,278) (45,960) Comprehensive income / (loss) attributable to TAL Education Group's shareholders $ 274,896 $ 251,958 $ (156,155) TAL EDUCATION GROUP Additional Information - Financial Statement Schedule I Condensed Financial Information of Parent Company Statements of Cash Flows (In thousands of U.S. dollars, except share and share related data or otherwise noted) For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Net cash provided by operating activities 14,141 64,362 (200,408) Cash flows from investing activities Loan to third parties — (22,940) (13,304) Repayment of loan to third parties 74,902 — — Loan to related parties — (1,000) (23,527) Prepayment for investments (11,068) — (6,175) Purchase of intangible assets — — (56) Purchase of short-term investments (370,000) (148,918) (312,000) Proceeds from maturity of short-term investments 60,776 371,001 224,943 Payments for long-term investments (117,868) (246,261) (84,929) Proceeds from disposal of long-term investments 6,376 578 7,504 Investment in subsidiaries (18,381) (36,754) (1,238) Net cash used in investing activities (375,263) (84,294) (208,782) Cash flows from financing activities Net proceeds from long-term debt and short-term debt — 175,000 270,000 Repayment of long-term debt — (205,000) (195,000) Payment for upfront fee in related to long term debt — (12,600) — Cash dividend to shareholders (41,166) — — Cash received from exercise of capped call option — 6,369 73,248 Proceeds from private placement 500,000 500,000 — Proceeds from exercise of share options 2,127 710 2,490 Repayment of convertible bond — — (25) Net cash provided by financing activities 460,961 464,479 150,713 Net change in cash, cash equivalents and restricted cash 99,839 444,547 (258,477) Cash, cash equivalents and restricted cash at the beginning of year 158,681 258,520 703,067 Cash, cash equivalents and restricted cash at the end of year 258,520 703,067 444,590 TAL EDUCATION GROUP Additional Information - Financial Statement Schedule I Condensed Financial Information of Parent Company Note to the Financial Statements 1. BASIS FOR PREPARATION The condensed financial information of the Company has been prepared using the same accounting policies as set out in the Group’s consolidated financial statements except that the Company used the equity method to account for investments in its subsidiaries, the VIEs and the VIEs’ subsidiaries and schools. The parent company’s condensed financial information should be read in conjunction with the Group’s consolidated financial statements. 2. INVESTMENTS IN SUBSIDIARIES AND VIEs The Company, its subsidiaries, the VIEs and the VIEs’ subsidiaries and schools were included in the consolidated financial statements where the inter-company balances and transactions were eliminated upon consolidation. For purpose of the Company’s stand-alone financial statements, its investments in subsidiaries, the VIEs and the VIEs’ subsidiaries and schools were reported using the equity method of accounting. The Company’s share of income from its subsidiaries, the VIEs and the VIEs’ subsidiaries and schools were reported as equity in earnings of its subsidiaries, the VIEs and the VIEs’ subsidiaries and schools in the condensed statements of operations. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Feb. 29, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Basis of consolidation | Basis of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, which are accounted for under the voting interest model, and its VIEs, VIEs’ subsidiaries and schools consolidated under the variable interest entity consolidation model. All inter-company transactions and balances have been eliminated upon consolidation. |
Consolidation of Variable Interest Entities | Consolidation of Variable Interest Entities The Company through TAL Beijing and Lebai Information, wholly owned foreign enterprises, has executed a series of contractual agreements with its VIEs, the VIEs’ subsidiaries and schools and the VIEs’ nominee shareholders. For a description of these contractual arrangements, see “Note 1 Organization and Principal Activities—The VIE Arrangements”. These contractual agreements do not provide TAL Beijing and Lebai Information with an equity interest in legal form in the VIEs. As the Company holds no legal form of equity ownership in the VIEs, the Company applied the variable interest entity consolidation model as set forth in Accounting Standards Codification 810, Consolidation (“ASC 810”) instead of the voting interest model of consolidation. By design, the contractual agreements provide TAL Beijing and Lebai Information with the right to receive benefits equal to substantially all of the net income of these entities, and thus under ASC 810, these agreements are considered variable interests. Subsequent to identifying any variable interests, any party holding such variable interests must determine if the entity in which the interest is held is a variable interest entity and subsequently which reporting entity is the primary beneficiary of, and should therefore consolidate the variable interest entity. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Consolidation of Variable Interest Entities - continued The contractual arrangements, by design, enable TAL Beijing and Lebai Information to have (a) the power to direct the activities that most significantly impact the economic performance of the VIEs and (b) the right to receive substantially all the benefits of the VIEs. As a result, the VIEs are considered to be variable interest entities under ASC 810 and TAL Beijing and Lebai Information are considered to be the primary beneficiary of the VIEs and consolidate the VIEs’ financial position and results of operations. Determining whether TAL Beijing and Lebai Information are the primary beneficiaries requires a careful evaluation of the facts and circumstances, including whether the contractual agreements are substantive under the applicable legal and financial reporting frameworks, i.e. PRC law and U.S. GAAP. The Company continually reviews its corporate governance arrangements to ensure that the contractual agreements are indeed substantive. The Company has determined that the contractual agreements are in fact valid and legally enforceable. Such arrangements were entered into in order to comply with the underlying legal and/or regulatory restrictions that govern the ownership of a direct equity interest in the VIEs. In the opinion of the Company’s PRC counsel, Tian Yuan Law Firm, the contracts are legally enforceable under PRC law. See “Note 1 Organization and Principal Activities—The VIE Arrangements”. On June 24, 2013 and July 29, 2013, the Company and Mr. Bangxin Zhang executed a deed of undertaking dated June 24, 2013 and a side letter dated July 29, 2013, respectively (collectively, the “Deed”). Pursuant to the terms of the Deed, as long as Mr. Bangxin Zhang owns a majority voting interest, whether legally or beneficially, and directly or indirectly, in the Company, (1) Mr. Bangxin Zhang cannot request or call a meeting of shareholders or propose a shareholders resolution to appoint or remove a director, (2) if shareholders are asked to appoint or remove a director, the maximum number of votes which Mr. Bangxin Zhang will be permitted to exercise in connection with such shareholder approval is equal to the total aggregate number of votes of the then total issued and outstanding shares of the Company held by all members of the Company, other than shares which are owned, whether legally or beneficially, and directly or indirectly by Mr. Bangxin Zhang, less one vote and (3) if shareholders or board of directors are asked to consider or approve any matter related to the Deed, Mr. Bangxin Zhang cannot exercise his voting power. Upon execution of the Deed, despite his ownership of and as long as he holds a majority voting interest, whether legally or beneficially, and directly or indirectly, in the Company, Mr. Bangxin Zhang will (1) not be permitted to requisition or call a meeting of shareholders or propose a shareholders resolution to appoint or remove a director, (2) in relation to any shareholder approvals to appoint or remove a director, only be permitted to exercise up to the number of votes equal to the total aggregate number of votes of the then total issued and outstanding shares of the Company held by all members of the Company, other than shares which are owned, whether legally or beneficially, and directly or indirectly by Mr. Bangxin Zhang, less one vote and (3) in relation to shareholders’ or board of directors’ consideration or approval of any matter related to the Deed, Mr. Bangxin Zhang cannot exercise his voting power. The terms of the Deed prevents Mr. Bangxin Zhang from controlling the rights of the Company as it relates to the contractual agreements, and accordingly, the Company retains a controlling financial interest in the VIEs and would consolidate them as the VIEs’ primary beneficiary. Please see Note 1 for the presentation of abbreviated financial information of the VIEs and VIEs’ subsidiaries and schools, after elimination of intercompany balances and transactions. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenue, costs, and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Significant accounting estimates reflected in the Group’s consolidated financial statements include purchase price allocation relating to business acquisitions, valuation allowance for deferred tax assets, the useful lives of property and equipment and intangible assets, impairment of intangible assets, long-lived assets, goodwill and long term investments, fair value assessment of long-term investments, discount rate for leases and consolidation of variable interest entities. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of cash on hand, demand deposits and highly liquid investments, which are unrestricted as to withdrawal or use, or have original maturities of three months or less when purchased. |
Restricted cash | Restricted cash Cash that is restricted as to withdrawal or for use or pledged as security is separately reported. The Group’s restricted cash mainly represents security deposits held in designated bank accounts for future transactions, deposits required by PRC government authorities for establishing new schools and subsidiaries and deposits in connection with the term and revolving facilities agreement disclosed in Note 14. |
Short-term investments | Short-term investments Short-term investments include wealth management products, which are mainly deposits with variable interest rates placed with financial institutions and are restricted as to withdrawal and use. The Group classifies the wealth management products as held-to-maturity securities. The original maturities of the short-term investments are greater than three months, but less than twelve months. For investment products indexed to an underlying stock or stock market, the Group elects the fair value method to record them at fair value in accordance with ASC 825 Financial Instruments. Changes in the fair value are reflected in the consolidated statements of operations. |
Property and equipment, net | Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight-line basis over the following estimated useful lives: Building 35 Computer, network equipment and software 3 years Vehicles 4 Office equipment and furniture 3 Leasehold improvement Shorter of the lease term or estimated useful lives Construction in progress represents buildings and related premises under construction, which is stated at actual construction cost less any impairment loss. Construction in progress is transferred to building when completed and ready for its intended use. |
Business combinations | Business combinations Business combinations are recorded using the acquisition method of accounting. The assets acquired, the liabilities assumed and any noncontrolling interests of the acquiree at the acquisition date, if any, are measured at their fair values as of the acquisition date. Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any noncontrolling interests of the acquiree and fair value of previously held equity interest in the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Common forms of the consideration made in acquisitions include cash and common equity instruments. Consideration transferred in a business acquisition is measured at the fair value as of the date of acquisition. Where the consideration in an acquisition includes contingent consideration the payment of which depends on the achievement of certain specified conditions post-acquisition, the contingent consideration is recognized and measured at its fair value at the acquisition date and if recorded as a liability, it is subsequently carried at fair value with changes in fair value reflected in the consolidated statements of operations. In a business combination achieved in stages, the Group remeasures the previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the remeasurement gain or loss, if any, is recognized in the consolidated statements of operations. |
Acquired intangible assets, net | Acquired intangible assets, net Acquired intangible assets other than goodwill consist of trade name and domain names, copyrights, teaching materials, user base, customer relationships, technology, partnership agreements, school cooperation agreements, licenses, etc., and are carried at cost, less accumulated amortization and impairment. Amortization of finite-lived intangible assets is computed using the straight-line method over the estimated useful lives. The amortization periods by intangible asset classes are as follows: Trade name and domain names 3 Copyrights and teaching materials 3 User base and customer relationships 2 Technology 4 Partnership agreements and school cooperation agreements 3 Licenses 2 Others 2 |
Land use rights, net | Land use rights, net All land in the PRC is owned by PRC government, which, according to the relevant PRC law, may grant the right to use the land for a specified period of time. Payment for acquiring land use rights are recorded at cost and amortized on a straight line basis over the term of the land certificates. |
Impairment of long-lived assets | Impairment of long-lived assets The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the fair value of the assets. |
Goodwill | Goodwill The excess of the purchase price over the fair value of net assets acquired is recorded on the consolidated balance sheets as goodwill. Goodwill is not amortized, but tested for impairment annually or more frequently if event and circumstances indicate that it might be impaired. ASC 350-20 permits the Group to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The Group early adopted ASU 2017-04: Intangibles-Goodwill and Other (Topic 350), which eliminated Step 2 from the goodwill impairment test on a prospective basis. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Goodwill - continued The Group does not choose to perform the qualitative assessment for goodwill impairment. For fiscal year 2020, the Group performs its annual impairment test by comparing the fair value of a reporting unit with its carrying amount. The Group should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Group recognized impairment loss on goodwill of $28,998 in fiscal year ended February 29, 2020. |
Long-term investments | Long-term investments The Group’s long-term investments include equity securities without readily determinable fair values, equity securities with readily determinable fair values, equity method investments, available-for-sale investments, fair value option investments and held-to-maturity investments. Equity securities without readily determinable fair values The Group adopted ASC Topic 321, Investments—Equity Securities (“ASC 321”) on March 1, 2018. Prior to fiscal year 2019, for investee companies over which the Group does not have significant influence or a controlling interest, equity securities of privately-held companies were accounted for using the cost method of accounting, measured at cost less other-than-temporary impairment. Starting from fiscal year 2019, for equity securities without readily determinable fair value that qualify for the practical expedient to estimate fair value using net asset value per share, the Group estimates the fair value using net asset value per share and recorded the cumulative effect of the adjustment of $4,163 to the opening balance of retained earnings upon adoption of the new standard. For other equity securities without readily determinable fair value, the Group elected to use the measurement alternative to measure those investments at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The Group reviews its equity securities without readily determinable fair value for impairment at each reporting period. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss in net income / (loss) equal to the difference between the carrying value and fair value. Equity securities with readily determinable fair values Equity securities with readily determinable fair value are measured at fair values, and any changes in fair value are recognized in the consolidated statements of operations. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Long-term investments-continued Equity method investments Investee companies over which the Group has the ability to exercise significant influence, but does not have a controlling interest through investment in common shares or in-substance common shares, are accounted for using the equity method. Significant influence is generally considered to exist when the Group has an ownership interest in the voting stock of the investee between 20% and 50%, and other factors, such as representation on the investee’s board of directors, voting rights and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate. For certain investments in limited partnerships, where the Group holds less than a 20% equity or voting interest, the Group may also have significant influence. Under the equity method, the Group initially records its investment at cost and subsequently recognizes the Group’s proportionate share of each equity investee’s net income or loss after the date of investment into the consolidated statements of operations and accordingly adjusts the carrying amount of the investment. If financial statements of an investee cannot be made available within a reasonable period of time, the Group records its share of the net income or loss of an investee on a one quarter lag basis in accordance with ASC 323-10-35-6. The Group reviews its equity method investments for impairment whenever an event or circumstance indicates that an other-than-temporary impairment has occurred. The Group considers available quantitative and qualitative evidence in evaluating potential impairment of its equity method investments. An impairment charge is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. Available-for-sale investments For investments in investees’ shares which are determined to be debt securities, the Group accounts for them as available-for-sale investments when they are not classified as either trading or held-to-maturity investments. Available-for-sale investments are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income as a component of shareholders’ equity. Realized gains and losses and provision for decline in value determined to be other than temporary, if any, are recognized in the consolidated statements of operations. Fair value option investments The Group elected the fair value option to account for certain investments whereby the change in fair value is recognized in the consolidated statements of operations. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Long-term investments - continued Held-to-maturity investments Long-term investments include wealth management products, which are mainly deposits with variable interest rates placed with financial institutions and are restricted as to withdrawal and use. The Group classifies the wealth management products as “held-to-maturity” securities. |
Fair value | Fair value Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Fair value of financial instruments is disclosed in Note 15. |
Revenue recognition | 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition On March 1, 2018, the Group adopted Revenue from Contracts with Customers (“Topic 606”), applying the modified retrospective method to all contracts that were not completed as of March 1, 2018. Results for reporting periods beginning on March 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior periods. Revenue is recognized when control of promised goods or services is transferred to the Group’s customers in an amount of consideration to which the Group expects to be entitled to in exchange for those goods or services. The Group follows the five steps approach for revenue recognition under Topic 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Group satisfies a performance obligation. The Group generates substantially all of its revenues through tutoring service with individual students in the PRC, in which revenue is recognized over time. In addition, the Group generates revenues from sales of products, consist primarily of books, which were insignificant for the year ended February 28, 2019 and February 29, 2020, and were included in Small class tutoring services, personalized premium services and others below. The following table presents the Group’s revenues disaggregated by revenue sources. The Group’s revenue is reported net of discounts, value added tax and surcharges. For the year ended February 28, 2019 Disaggregation of net revenues -Small class tutoring services, personalized premium services and others $ 2,223,347 -Online education services through www.xueersi.com 339,637 Total $ 2,562,984 For the year ended February 29, 2020 Disaggregation of net revenues -Small class tutoring services, personalized premium services and others $ 2,655,323 -Online education services through www.xueersi.com 617,985 Total $ 3,273,308 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition - continued The primary sources of the Group’s revenues are as follows: (a) Small class tutoring services, personalized premium services and others Small class tutoring services primarily consist of Xueersi Peiyou small class, Firstleap and Mobby. Personalized premium services is referring to Zhikang after-school one-on-one tutoring services. Each contract of small class tutoring service or personalized premium service is accounted for as a single performance obligation which is satisfied proportionately over the service period. Tuition fee is generally collected in advance and is initially recorded as deferred revenue. Tuition revenue is recognized proportionately as the tutoring sessions are delivered. Generally, for small class tutoring services except for Mobby courses, the Group offers refunds for any remaining classes to students who decide to withdraw from a course. The refund is equal to and limited to the amount related to the undelivered classes. For most Mobby courses, the Group offers refunds equal to and limited to the amount related to the undelivered classes to students who withdraw from a course, provided the course is less than two-third completed at the time of withdrawal. After two-third of the course is completed, no refund will be granted. For personalized premium services, a student can withdraw at any time and receive a refund equal to and limited to the amount related to the undelivered classes. Historically, the Group has not had material refunds. The Group distributes coupons to attract both existing and prospective students to enroll in its courses. The coupon has fixed dollar amounts and can only be used against future courses. The coupon is not considered a material right to the customer and accounted for as a reduction of transaction price of the service contract. Other revenues are primarily derived from advertising services provided on the Group’s online platforms and consulting service and test preparation courses related to overseas study. Revenue is recognized when control of promised goods or services is transferred to the Group’s customers in an amount of consideration to which the Group expects to be entitled to in exchange for those goods or services. Upon the adoption of Topic 606, the Group estimates the variable consideration to be earned and recognizes revenue over the service period for overseas study consulting service. Under the prior revenue recognition standard, such revenue is deferred and recognized when student admission is reasonably assured. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition - continued (b) Online education services through www.xueersi.com The Group provides online education services, including live class and pre-recorded course content, to its students through www.xueersi.com. Students enroll for online courses through www.xueersi.com by the use of prepaid study cards or payment to the Group’s online accounts. Each contract of the online education service is accounted for as single performance obligation which is satisfied ratably over the service period. The proceeds collected are initially recorded as deferred revenue. For live class courses, revenues are recognized proportionately as the tutoring sessions are delivered. For pre-recorded course content, revenues are recognized on a straight line basis over the subscription period from the date in which the students activate the courses to the date in which the subscribed courses end. Refunds are provided to the students who decide to withdraw from the subscribed courses within the course offer period and a proportional refund is based on the percentage of untaken courses to the total courses purchased. Historically, the Group has not experienced material refunds. As a practical expedient, the Group elects to record the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. In addition, the Group determines the transaction price to be earned by estimating the refund liability based on historical refund ratio on a portfolio basis using the expected value method. Reclassification was made from deferred revenue to refund liabilities, which was recorded under accrued expenses and other current liabilities, for tuition collected that expected to be refunded to the customers in the future if students withdraw from a course for the remaining classes. The contract liabilities of deferred revenue was $436,107 as of February 28, 2019, substantially all of which was recognized as revenue during the year ended February 29, 2020. As of February 29, 2020, the contract liabilities of deferred revenue was $781,000. The difference between the opening and closing balances of the Group’s contract liabilities primarily results from the timing difference between the Group’s satisfaction of performance obligation and the customer’s payment. |
Share-based compensation | Share-based compensation Share-based payment transactions with employees are measured based on the grant date fair value of the equity instrument and recognized as compensation expense on a straight-line basis over the requisite service period, with a corresponding impact reflected in additional paid-in capital. Forfeitures are recognized as they occur. Liability-classified awards are remeasured at their fair-value-based measurement as of each reporting date until settlement. |
Value added tax | Value added tax Pursuant to the PRC tax laws, in case of any product sales, the VAT rate is 3% of the gross sales for small scale VAT payer and 16% (13% starting April 1, 2019) of the gross sales for general VAT payer. TAL Beijing and Xueersi Education are deemed as general VAT payer since January 2010, and August 2010, respectively, for the sales of guidance materials and the intercompany sales of self-developed software. For general VAT payer, VAT on sales is calculated at 16% (13% starting April 1, 2019) on revenue from product sales and paid after deducting input VAT on purchases. The net VAT balance between input VAT and output VAT is reflected in the accounts under other taxes payable. The Group’s online education services and inter-company technical services are subject to VAT at the rate of 6% of revenue for general VAT payer, Beijing Xintang Sichuang, TAL Beijing, Xueersi Education and Yidu Huida are deemed as general VAT payers at the rate of 6% since September 2012. Zhixuesi Beijing was deemed as general VAT payer at the rate of 6% since August 2013 and elected a simple VAT collection method at the rate of 3% since November 2016. Xinxin Xiangrong and Pengxin TAL were deemed general VAT payers at the rate of 6% since June 2015 Xueersi Education enjoyed VAT exemption for book sales from February 2014 to December 2017. Pursuant to Cai Shui [2018] No. 53 in June 2018, it can continue to enjoy VAT exemption from 2018 to 2020 for its book sales. Since May 2016, in accordance with Cai Shui [2016] No. 68, non-academic education service providers who are general VAT payer could elect a simple VAT collection method and apply for a 3% VAT rate. The Group’s schools which were previously subject to business tax are now subject to a VAT rate of 3%. Since May 2018, in accordance with Cai Shui [2018] No.32, the VAT rate decreased to 16% of the gross sales for general VAT payer. For general VAT payer of the Group, VAT on sales is calculated at 16% on revenue from product sales and paid after deducting input VAT on purchases starting on May 1, 2018. In accordance with Cai Shui [2019] No.39, the VAT rate above decreased to 13% starting on April 1, 2019. Since January 2020, in accordance with Cai Shui [2020] No.8, due to the COVID-19 pandemic, the VAT on certain services was temporarily exempted for calendar year 2020. |
Operating leases | Operating leases On March 1, 2019, the Group adopted New Leasing Standard (“ASC 842”), using the modified retrospective transition method resulting in the recording of operating lease right-of-use (ROU) assets of $1,024,863 and operating lease liabilities of $1,026,728 upon adoption. Prior period amounts have not been adjusted and continue to be reported in accordance with the previous accounting guidance. The adoption of the new guidance did not have a material effect on the consolidated statements of operations. As of February 29, 2020, the Group recognized operating lease ROU assets of $1,243,692 and total lease liabilities $1,254,879, including current portion at the amount of $304,960. The Group determines if an arrangement is a lease or contains a lease at lease inception. Operating leases are required to record in the statement of financial position as right-of-use assets and lease liabilities, initially measured at the present value of the lease payments. The Group has elected the package of practical expedients, which allows the Group not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any expired or existing leases as of the adoption date. The Group also elected the practical expedient not to separate lease and non-lease components of contracts. Lastly, for lease assets other than real estate, such as printing machine and electronic appliances, the Group elected the short-term lease exemption as their lease terms are 12 months or less. As the rate implicit in the lease is not readily determinable, the Group estimates its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is estimated in a portfolio approach to approximate the interest rate on a collateralized basis with similar terms and payments in a similar economic environment. The Group’s leases often include options to extend and lease terms include such extended terms when the Group is reasonably certain to exercise those options. Lease terms also include periods covered by options to terminate the leases when the Group is reasonably certain not to exercise those options. Lease expense is recorded on a straight-line basis over the lease term. |
Advertising costs | Advertising costs The Group expenses advertising costs as incurred. Total advertising costs incurred were $22,474, $114,697 and $248,807 for the years ended February 28, 2018, 2019 and February 29, 2020, respectively, and have been included in selling and marketing expenses in the consolidated statements of operations. |
Government subsidies | Government subsidies The Group reports government subsidies as other income when received from local government authority with no limitation on the use of the subsidies. From time to time, the Group receives government subsidies related to government sponsored projects and records such government subsidies as a liability when received and recognizes as other income when the performance obligation is met or fulfilled. |
Foreign currency translation | Foreign currency translation The functional and reporting currency of the Company is the United States dollar. The functional currency of the Company’s PRC subsidiaries, VIEs and VIEs’ subsidiaries and schools in the PRC is Renminbi (“RMB”). 2. SIGNIFICANT ACCOUNTING POLICIES - continued Foreign currency translation - continued Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currencies at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are remeasured into the applicable functional currencies at historical exchange rates. Transactions in currencies other than the applicable functional currencies during the year are converted into the functional currencies at the applicable rates of exchange prevailing at the transaction dates. Transaction gains and losses are recognized in the consolidated statements of operations. For the years ended February 28, 2018, 2019 and February 29, 2020, the Group recorded exchange gain of $3,324, exchange loss of $3,108 and exchange loss of $968, respectively, in other expense/income in the consolidated statements of operations. For translating the results of the PRC subsidiaries into the functional currency of the Company, assets and liabilities are translated from each subsidiary’s functional currency to the reporting currency at the exchange rate on the balance sheet date. Equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive income in the consolidated statements of changes in equity and comprehensive income / (loss). |
Foreign currency risk | Foreign currency risk RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into other currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. Cash and cash equivalents, and restricted cash of the Group included aggregate amounts of $538,364 and $1,435,739 as of February 28, 2019 and February 29, 2020, respectively, which were denominated in RMB. |
Income taxes | Income taxes Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net of operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities. The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. |
Comprehensive income / (loss) | Comprehensive income / (loss) Comprehensive income / (loss) includes net income / (loss), unrealized gain or loss on available-for-sale investments, and foreign currency translation adjustments. Comprehensive income / (loss) is reported in the consolidated statements of comprehensive income / (loss). |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially expose the Group to significant concentration of credit risk consist primarily of cash and cash equivalents, short-term investments and restricted cash. The Group places its cash and cash equivalents, short-term investments and restricted cash in financial institutions with high credit ratings. |
Financial instruments | Financial instruments The Group’s financial instruments consist primarily of cash and cash equivalents, restricted cash, short-term investments, long-term investments accounted for available-for-sale investments, fair value option investments, equity securities with readily determinable fair values, equity securities without readily determinable fair values, held-to-maturity investments, amounts due from related parties and amounts due to related parties, accounts payable, income tax payable, short-term debt, long-term debt and bond payable. The Group carries its available-for-sale investments, equity securities with readily determinable fair values and fair value option investments at fair value. The carrying amounts of short-term debt and long-term debt approximate fair value as their interest rates are at the same level of current market yield for comparable debts. The carrying amounts of other financial instruments, except for bond payable, equity securities without readily determinable fair values and long-term held-to-maturity investments, approximate their fair values because of their generally short maturities. The bond payable and long-term held-to-maturity investments are recorded at amortized cost. |
Net income / (loss) per share | Net income / (loss) per share Basic net income / (loss) per share is computed by dividing net income / (loss) attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. Diluted net income / (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised into common shares. Common share equivalents are excluded from the computation of the diluted net income / (loss) per share in years when their effect would be anti-dilutive. The Group has share options, non-vested shares and bond payable which could potentially dilute basic earnings per share in the future. To calculate the number of shares for diluted net income / (loss) per share, the effect of the share options and non-vested shares is computed using the treasury stock method. The dilutive effect of the bond payable is computed using as-if converted method. As the Group incurred net loss for the year ended February 29, 2020, the effect of potential issuances of the shares for the non-vested shares and share options would be anti-dilutive. Therefore, basic and diluted losses per share are the same in the period. |
Recent accounting pronouncements adopted | Recent accounting pronouncements adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance supersedes existing guidance on accounting for leases with the main difference being that operating leases are to be recorded in the statement of financial position as right-of-use assets and lease liabilities, initially measured at the present value of the lease payments. For operating leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. For public companies, the guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application of the guidance is permitted. In July 2018, ASU 2016-02 was updated with ASU 2018-11, Targeted Improvements to ASC 842, which provides entities with relief from the costs of implementing certain aspects of the new leasing standard. Specifically, under the amendments in ASU 2018-11, (1) entities may elect not to recast the comparative periods presented when transitioning to ASC 842 and (2) lessors may elect not to separate lease and nonlease components when certain conditions are met. Before ASU 2018-11 was issued, transition to the new lease standard required application of the new guidance at the beginning of the earliest comparative period presented in the financial statements. 2. SIGNIFICANT ACCOUNTING POLICIES – continued Recent accounting pronouncements adopted – continued The Group adopted this standard on March 1, 2019, and elected not to recast the comparative periods presented. In addition, the Group elected not to separate lease and nonlease components when certain conditions are met. The consolidated balance sheets and the consolidated statements of operations and cash flows for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under Topic 840. The adoption did not have a material impact on the Group's consolidated statements of operations or consolidated statements of cash flows, and the adoption of Topic 842 did not result in a cumulative-effect adjustment to retained earnings. Further information is disclosed in Note 16. In January 2017, the FASB issued ASU 2017-04: Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminated Step 2 from the goodwill impairment test. An entity should apply the amendments in this Update on a prospective basis. An entity is required to disclose the nature of and reason for the change in accounting principle upon transition. A public business entity should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Group early adopted ASU 2017-04 for the annual goodwill impairment test in fiscal year 2020. Recent accounting pronouncements not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. This ASU requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This ASU affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All entities may adopt the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). In April 25, 2019, ASU 2016-13 was updated with ASU 2019-04, which clarifies certain aspects of accounting for credit losses, hedging activities, and financial instruments. ASU 2019-04 provides certain alternatives for the measurement of the allowance for credit losses (ACL) on accrued interest receivable (AIR). These measurement alternatives include (1) measuring an ACL on AIR separately, (2) electing to provide separate disclosure of the AIR component of amortized cost as a practical expedient, and (3) making accounting policy elections to simplify certain aspects of the presentation and measurement of such AIR. For entities that have adopted ASU 2016-13, the amendments in ASU 2019-04 related to ASU 2016-13 are effective for fiscal years beginning after December 15, 2019, and interim periods therein. An entity may early adopt ASU 2019-04 in any interim period after its issuance if the entity has adopted ASU 2016-13. The Group does not expect this standard to have a material impact on its consolidated financial statements. 2. SIGNIFICANT ACCOUNTING POLICIES – continued Recent accounting pronouncements not yet adopted – continued In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value". ASU 2018-13 removes and modifies existing disclosure requirements on fair value measurement, namely regarding transfers between levels of the fair value hierarchy and the valuation processes for Level 3 fair value measurements. Additionally, ASU 2018-13 adds further disclosure requirements for Level 3 fair value measurements, specifically changes in unrealized gains and losses and other quantitative information. ASU 2018-13 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Group does not expect any material impact on its consolidated financial statements and related disclosures as a result of adopting the new standard. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) - Simplifying the accounting for Income Taxes”. The amendments in this Update simplify the accounting for income taxes by removing the following exceptions:1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items; 2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; 3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and 4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The amendments also simplify the accounting for income taxes by doing: 1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax; 2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction; 3) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements. However, an entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the taxing authority; 4) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date; and 5) making minor Codification improvements for income taxes related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Group is in the process of evaluating the impact of the Update on its consolidated financial statements. |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Schedule Of Major Subsidiaries And Consolidated Variable Interest Entities And Schools | Name Later of date of Place of incorporation Percentage of Principal activities Nature of TAL Holding Limited (“TAL Hong Kong”) March 11, 2008 Hong Kong 100% Intermediate holding company Subsidiary Beijing Century TAL Education Technology Co., Ltd. (“TAL Beijing”) May 8, 2008 Beijing 100% Software sales, and consulting service Subsidiary Beijing Huanqiu Zhikang Shidai Education Consulting Co., Ltd. (“Huanqiu Zhikang”) September 17, 2009 Beijing 100% Education and management consulting service Subsidiary Yidu Huida Education Technology (Beijing) Co., Ltd. (“Yidu Huida”) November 11, 2009 Beijing 100% Software sales and consulting service Subsidiary Beijing Xintang Sichuang Education Technology Co., Ltd. (“Beijing Xintang Sichuang”) August 27, 2012 Beijing 100% Software and Network development, sales, and consulting service Subsidiary Zhixuesi Education Consulting (Beijing) Co., Ltd. (“Zhixuesi Beijing”) October 23, 2012 Beijing 100% Software and Network development, sales, and consulting service Subsidiary Pengxin TAL Industrial investment (Shanghai) Co., Ltd. (“Pengxin TAL”) June 26, 2014 Shanghai 100% Investment management and consulting services Subsidiary Firstleap Education (“Firstleap”) January 22, 2016 Cayman Islands 100% Intermediate holding company Subsidiary Name Later of date of Place of incorporation Percentage of Principal activities Nature of Firstleap Education (HK) Limited (“Firstleap Hong Kong”) January 22, 2016 Hong Kong 100% Intermediate holding company Subsidiary Beijing Lebai Information Consulting Co., Ltd. (“Lebai Information”) January 22, 2016 Beijing 100% Education and management consulting service Subsidiary Beijing Yizhen Xuesi Education Technology Co., Ltd. (“Yizhen Xuesi”) November 3, 2016 Beijing 100% Software and Network development,sales and consulting service Subsidiary Beijing Xueersi Education Technology Co., Ltd. (“Xueersi Education”) December 31, 2005 Beijing N/A* Sales of educational materials and products VIE Beijing Xueersi Network Technology Co., Ltd. (“Xueersi Network”) August 23, 2007 Beijing N/A* Technology development and Educational consulting service VIE Xinxin Xiangrong Education Technology (Beijing) Co., Ltd. (“Xinxin Xiangrong”) June 23, 2015 Beijing N/A* Technology development and Educational consulting service VIE Beijing Lebai Education Consulting Co., Ltd. (“Lebai Education”) January 22, 2016 Beijing N/A* Educational consulting service VIE Beijing Haidian District Xueersi Training School ("Beijing Haidian School" ) July 3, 2006 Beijing N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Beijing Xicheng District Xueersi Training School ("Beijing Xicheng School" ) April 2, 2009 Beijing N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Beijing Haidian District Lejiale Training School ("Beijing Haidian Lejiale" ) March 22, 2010 Beijing N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Beijing Chaoyang District Xueersi Training School ("Beijing Chaoyang School") January 17, 2011 Beijing N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Beijing Xueersi Nanjing Education Technology Co., Ltd. ("Beijing Xueersi Nanjing Education") January 24, 2011 Beijing N/A* Educational consulting service VIE’s subsidiaries and schools Name Later of date of Place of incorporation Percentage of Principal activities Nature of Shanghai Xueersi Education Training Co., Ltd. ("Shanghai Education") July 2, 2009 Shanghai N/A* Educational information consulting and educational software development VIE’s subsidiaries and schools Shenzhen Xueersi Education Technology Co., Ltd. ("Shenzhen Education") December 22, 2009 Shenzhen N/A* Teaching software research, and development VIE’s subsidiaries and schools Wuhan Jiang’an District Xueersi Education Training School ("Wuhan Jiang’an School") December 16, 2010 Wuhan N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Zhengzhou Jinshui District Xueersi Education Training School ("Zhengzhou Jinshui School") June 18, 2012 Zhengzhou N/A* After-school tutoring for primary and secondary school students VIE's subsidiaries and schools Guangzhou Tianhe District Xueersi Training Center ("Guangzhou Tianhe School") July 12, 2012 Guangzhou N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Guangzhou Yuexiu District Xueersi Training School ("Guangzhou Yuexiu School") March 20, 2013 Guangzhou N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Nanjing Xueersi Education Training School ("Nanjing School") April 19, 2013 Nanjing N/A* After-school tutoring for primary and secondary school students VIE's subsidiaries and schools Shenzhen Xueersi Training Center ("Shenzhen School") November 12, 2013 Shenzhen N/A* After-school tutoring for primary and secondary school students VIE’s subsidiaries and schools Hangzhou Xueersi Training School ("Hangzhou School") * |
Schedule of Variable Interest Entities | As of February 28, As of February 29, 2019 2020 Cash and cash equivalents $ 249,108 $ 350,035 Short-term investments 11,956 — Other current assets 154,977 159,706 Total current assets 416,041 509,741 Property and equipment, net 229,518 286,982 Other non-current assets 953,393 2,038,941 Total assets 1,598,952 2,835,664 Deferred revenue-current 401,027 733,253 Other current liabilities 445,338 898,959 Total current liabilities 846,365 1,632,212 Total non-current liabilities 20,019 891,633 Total liabilities $ 866,384 $ 2,523,845 For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Net revenues $ 1,614,512 $ 2,406,642 $ 3,058,285 Net income $ 378,975 $ 606,560 $ 534,070 For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Net cash provided by operating activities $ 325,799 $ 409,103 $ 215,892 Net cash used in investing activities $ (211,755) $ (346,183) $ (134,936) Net cash used in financing activities $ (26,965) $ (4,392) $ (5,173) |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Property, Plant and Equipment | Building 35 Computer, network equipment and software 3 years Vehicles 4 Office equipment and furniture 3 Leasehold improvement Shorter of the lease term or estimated useful lives |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | Trade name and domain names 3 Copyrights and teaching materials 3 User base and customer relationships 2 Technology 4 Partnership agreements and school cooperation agreements 3 Licenses 2 Others 2 |
Disaggregation of Revenue | For the year ended February 28, 2019 Disaggregation of net revenues -Small class tutoring services, personalized premium services and others $ 2,223,347 -Online education services through www.xueersi.com 339,637 Total $ 2,562,984 For the year ended February 29, 2020 Disaggregation of net revenues -Small class tutoring services, personalized premium services and others $ 2,655,323 -Online education services through www.xueersi.com 617,985 Total $ 3,273,308 |
BUSINESS ACQUISITION (Tables)
BUSINESS ACQUISITION (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
Acquisitions fiscal 2020 | |
Business Acquisition, Pro Forma Information | For the years ended February 28/29 2019 2020 (Unaudited) (Unaudited) Pro forma net revenues $ 2,563,413 $ 3,273,549 Pro forma net income / (loss) attributable to TAL Education Group $ 367,041 $ (110,263) Pro forma net income / (loss) per share - basic $ 1.93 $ (0.56) Pro forma net income / (loss) per share - diluted $ 1.83 $ (0.56) |
Xhanghai Xiaoxin | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | US$ Cash consideration $ 69,798 Fair value of the previously held 39.7% equity interest: Carrying amount 2,035 Gain on remeasurement of fair value as of acquisition date 26,291 Total $ 98,124 Amortization US$ period Cash and cash equivalents $ 11,310 Net assets acquired, excluding cash and cash equivalents, intangible assets and related deferred tax liabilities 19,860 Intangible assets User base 8,152 7 years Technology 1,283 5 years Goodwill 89,536 Deferred tax liabilities (2,359) Noncontrolling interests (29,658) Total purchase consideration $ 98,124 |
Other acquisitions fiscal 2019 | |
Business Acquisition, Pro Forma Information | For the years ended February 28, 2018 2019 (Unaudited) (Unaudited) Pro forma net revenues $ 1,725,115 $ 2,570,616 Pro forma net income attributable to TAL Education Group $ 187,607 $ 357,886 Pro forma net income per share - basic $ 1.07 $ 1.88 Pro forma net income per share - diluted $ 0.98 $ 1.79 |
Other acquisitions fiscal 2018 | |
Business Acquisition, Pro Forma Information | For the years ended February 28, 2017 2018 (Unaudited) (Unaudited) Pro forma net revenues $ 1,043,718 $ 1,715,774 Pro forma net income attributable to TAL Education Group $ 115,055 $ 198,105 Pro forma net income per share - basic $ 0.71 $ 1.13 Pro forma net income per share - diluted $ 0.65 $ 1.03 |
SHORT-TERM INVESTMENTS (Tables)
SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
SHORT-TERM INVESTMENTS | |
Schedule of short-term investments | As of As of February 28, February 29, 2019 2020 Held-to-maturity investments (1) $ 168,761 $ 345,457 Variable-rate financial instruments (2) 99,663 — $ 268,424 $ 345,457 (1) The Group purchased wealth management products from financial institutions in China and classified them as held-to-maturity investments as the Group has the positive intent and ability to hold the investments to maturity. The maturities of these financial products range from three months to twelve months . The Group estimated that their fair value approximate their amortized costs. (2) The Group purchased several investment products indexed to certain stock or stock markets with maturities less than one year. The Group accounted for them at fair value and recognized a loss of $337 and nil resulting from changes in fair value for the years ended February 28, 2019 and February 29, 2020, respectively. |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
PREPAID AND OTHER CURRENT ASSETS | |
Schedule of prepaid expenses and other current assets | As of As of February 28, February 29, 2019 2020 Accounts receivables $ 50,222 $ 42,654 Prepayments to suppliers (1) 45,525 55,342 Interest receivable 5,848 22,108 Staff advances (2) 4,636 3,206 Loan to employees, current portion (3) 5,467 4,413 Other deposits 3,179 7,550 Prepaid VAT 5,643 6,284 Prepaid rental (4) 45,107 7,335 Receivables from investees (5) — 13,304 Loans to third-parties (6) 24,410 5,883 Receivables of withholding tax from employees for option exercise (7) — 34,720 Receivable for exercise of capped call option (Note 13) 6,901 — Others 5,692 4,553 $ 202,630 $ 207,352 (1) Prepayments to suppliers are primarily for student recruitment services, advertising fees and server hosting fees. Student recruitment service fees are prepaid by the Group’s study abroad business to recruitment agencies. Such prepayments are generally short-term and refundable if performance condition is not met. (2) Staff advances are provided to employees primarily for traveling, office expenses and other expenditures which are subsequently expensed as incurred. (3) The Group offers housing benefit plan to employees who have been employed by the Group for three years or more and met certain performance criteria. Under this benefit plan, the eligible employees receive interest-free loans for purposes of property purchases. Each loan has a term of four years and must be repaid by equal annual installments. (4) The Group adopted ASC 842 on March 1, 2019, using the modified retrospective transition approach allowed under ASU 2018-11 as described in Note 2. After the adoption of ASC 842, the prepaid rental are included in the Group's operating lease right-of-use assets on its consolidated balance except for the prepaid rental related to the contract that has been entered into but not yet commenced. (5) In fiscal year 2020, two domestic investees of the Group initiated setting up their VIEs which is a process of re-organization under common control. The original investment amount would be returned from PRC investees and the same amount has already been reinvested to the overseas holding companies of the two investees. (6) Loans to third-parties are generally mature in less than one year, and certain loan was guaranteed by the borrower's equity interests in other investees. (7) The Group pays for withholding tax on behalf of employees who exercised their options and agreed to repay the tax by deduction from the proceeds of shares sold subsequent to the option exercise. As of February 29, 2020, such proceeds were in transit due to wire transfer processing and the withholding tax paid on behalf of employees was recorded as other receivables. |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment, net | As of As of February 28, February 29, 2019 2020 Building $ 62,151 $ 59,489 Leasehold improvement 247,898 316,528 Computer, network equipment and software 121,967 178,876 Vehicles 598 704 Office equipment and furniture 30,169 30,596 Construction in progress — 16,025 Total cost of property and equipment 462,783 602,218 Less: accumulated depreciation (174,906) (235,562) $ 287,877 $ 366,656 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
INTANGIBLE ASSETS, NET | |
Schedule of intangible assets, net | As of As of February 28, February 29, 2019 2020 Trade name and domain names $ 27,225 $ 27,982 Copyrights and teaching materials 5,974 5,974 User base and customer relationships 24,628 24,803 Technology 13,230 13,230 Partnership agreements and school cooperation agreements 4,858 4,858 Licenses 27,023 28,476 Others 2,542 2,687 Total cost of intangible assets 105,480 108,010 Less: accumulated amortization (30,253) (45,930) Less: accumulated impairment loss (358) (358) Add: foreign exchange difference (93) (2,737) $ 74,776 $ 58,985 |
LAND USE RIGHTS, NET (Tables)
LAND USE RIGHTS, NET (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
LAND USE RIGHTS, NET | |
Schedule Of Land Use Right, net | As of As of February 28, February 29, 2019 2020 Land use rights $ — $ 207,657 Less: accumulated amortization — (2,804) Add: foreign exchange difference — — Land use rights, net $ — $ 204,853 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
GOODWILL | |
Schedule of changes in the carrying amount of goodwill | As of As of February 28, February 29, 2019 2020 Beginning balance $ 292,906 $ 415,752 Addition (Note 3) 129,774 3,999 Accumulated impairment loss (1,524) (30,522) Exchange difference (6,928) (10,316) Goodwill, net $ 414,228 $ 378,913 |
LONG-TERM PREPAYMENTS AND OTH_2
LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS | |
Schedule of long-term prepayments and other non-current assets | As of As of February 28, February 29, 2019 2020 Long-term prepayments (1) $ 2,562 $ 36,989 Loan to employees (2) 6,512 3,940 Loan receivable (3) 32,069 32,661 Prepayment for land use rights (4) 209,865 — Other non-current assets (5) 16,396 11,685 $ 267,404 $ 85,275 (1) The balances at February 28, 2019 and February 29, 2020 represented the Group’s prepayments to acquire equity interests in several third-party companies. (2) Please see Note 5(3) for details of loan to employees. 11. LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS - continued (3) The balances represented long-term loans to several third parties with original maturity over one year. Interest income of $3,555 and $5,368 was accrued for the fiscal years ended February 28, 2019 and February 29, 2020, respectively. The loan principals and all interests will be received upon maturity. The third parties pledged their equity interests in other companies to the Group to guarantee the loan principals and interests. (4) The balances as of February 29, 2019 represented the Group's prepayment for purchase of land use rights in Beijing and deposit payment of land use rights in Jiangsu. As of February 29, 2020, the amount were fully transferred to land use rights, net. Please see Note 8 for details. (5) As of February 28, 2019 and February 29, 2020, other non-current assets were primarily made up of prepayment for property and equipment, the construction in process and long-term service fees. |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | As of As of February 28, February 29, 2019 2020 Accrued employee payroll and welfare benefits $ 208,897 $ 292,001 Refund liabilities 73,184 168,118 Other taxes payable 33,099 7,826 Accrued operating expenses 9,508 40,323 Payable for investments and acquisitions 17,530 404 Professional service fee payable 2,199 13,994 Payable for acquisitions of intangible assets 2,688 1,436 Interest payable 1,698 1,267 Others 16,392 27,281 Total $ 365,195 $ 552,650 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
FAIR VALUE | |
Schedule of inputs for fair value measurements of assets | Fair Value Measurement at Reporting Date Using Quoted Prices in Significant Other Significant February 28, Active Market for Observable Unobservable Description 2019 Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Short-term investments Variable-rate financial instruments $ 99,663 — $ 99,663 — Long-term investments Equity securities with readily determinable fair values $ 132,143 $ 132,143 — — Fair value option investments $ 7,484 — — $ 7,484 Available-for-sale investments $ 346,185 — — $ 346,185 Total $ 585,475 $ 132,143 $ 99,663 $ 353,669 Fair Value Measurement at Reporting Date Using Quoted Prices in Significant Other Significant February 29, Active Market for Observable Unobservable Description 2020 Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Long-term investments Equity securities with readily determinable fair values $ 26,696 $ 26,696 — — Fair value option investments $ 7,258 — — $ 7,258 Available-for-sale investments $ 303,584 — — $ 303,584 Total $ 337,538 $ 26,696 — $ 310,842 |
Schedule of roll forward of Level 3 instruments | US$ Balance as of February 28, 2018 $ 330,564 Purchase 186,628 Disposal (3,890) Transfer out due to reclassification (129,287) Changes in fair value 12,047 Impairment loss (34,883) Foreign exchange difference (7,510) Balance as of February 28, 2019 $ 353,669 Purchase 95,269 Disposal (1,512) Changes in fair value (45) Impairment loss (133,329) Foreign exchange difference (3,210) Balance as of February 29, 2020 $ 310,842 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
LEASES | |
Schedule of Supplemental information of the leases | For the year ended , February 29, 2020 Cash payments for operating leases $ 314,099 Right-of-use assets obtained in exchange for new operating lease liabilities $ 770,942 |
Schedule of Maturity analysis for operating lease liabilities | As of February 29, Fiscal year ending 2020 February 2021 $ 313,953 February 2022 329,556 February 2023 276,063 February 2024 210,742 February 2025 144,840 Thereafter 168,232 Total future lease payments $ 1,443,386 Less: Imputed interest (188,507) Present value of operating lease liabilities $ 1,254,879 |
Schedule of Future minimum lease payments under ASC 840 | As of February 28, Fiscal year ending 2019 February 2020 $ 270,093 February 2021 285,653 February 2022 258,355 February 2023 207,371 February 2024 143,145 Thereafter 178,642 Total future lease payments $ 1,343,259 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
INCOME TAXES | |
Schedule of provision (credit) for income tax | For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Current - PRC income tax expenses $ 48,958 $ 94,722 $ 127,731 Deferred - PRC income tax expenses (4,305) (18,218) (58,403) Total $ 44,653 $ 76,504 $ 69,328 |
Schedule of deferred tax assets and liabilities | As of As of February 29, February 29, 2019 2020 Deferred tax assets: Prepaid rental and advertising 9,763 50,187 Property and equipment 1,877 2,576 Impairment loss on long-term investments 6,563 4,559 Others 8,121 19,526 Tax losses carry-forward 44,376 84,007 Less: valuation allowance (41,521) (81,321) Deferred tax assets, net $ 29,179 $ 79,534 Deferred tax liabilities: Intangible assets 8,869 6,984 Property and equipment 249 805 Long-term investments 8,620 — Deferred tax liabilities $ 17,738 $ 7,789 |
Schedule of provision for income taxes | For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Income before provision for income tax $ 246,994 $ 457,204 $ (50,653) PRC statutory income tax rate 25 % 25 % 25 % Income tax at statutory income tax rate 61,748 114,301 (12,663) Effect of non-deductible and super deduction expenses (2,244) (6,252) (18,117) Effect of income tax exemptions and preferential tax rates (37,390) (45,625) (36,750) Effect of income tax rate difference in other jurisdictions 14,949 5,214 97,058 Change in valuation allowance 7,590 8,866 39,800 Provision for income tax $ 44,653 $ 76,504 $ 69,328 |
Schedule of tax holiday | For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Increase in income tax expenses $ 37,390 $ 45,625 $ 36,750 Net income / (loss) per common share-basic $ 0.90 $ 1.69 $ (0.74) Net income / (loss) per common share-diluted $ 0.82 $ 1.61 $ (0.74) |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
RELATED PARTY TRANSACTIONS | |
Schedule of related party transactions | As of As of February 28, February 29, 2019 2020 Amounts due from related parties-current (i) $ 3,341 $ 3,642 Amounts due from related parties-non-current (i) $ 1,747 $ — Amounts due to related parties-current (ii) $ 24,375 $ 4,361 Amounts due to related parties-non-current (ii) $ 196 $ — For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Services fees $ 880 $ 1,888 $ 6,350 Other revenue $ 1,016 $ 1,374 $ 4,113 Purchase of equipment $ 947 $ 1,068 $ 120 Disposal gain (iii) $ 3,044 $ 760 $ — (i) The amounts due from related parties represent loans and prepayments to certain investees for service fees received by an investee on behalf of the Group. In fiscal year 2020, the Group recorded $33,184 impairment loss on the amounts due from related parties, substantially all was provided during the year ended February 29, 2020. (ii) The amounts due to related parties include $20,635 and nil investment payable to related parties as of February 28, 2019 and February 29, 2020, respectively. The remaining amounts due to related parties primarily related to service fees payable to related parties. (iii) As disclosed in Note 10(1), in fiscal year 2018 and 2019, the Group disposed certain equity interests in BabyTree to a related party and recognized disposal gains of $3,044 and $ 760 , respectively. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of future minimum payments under non-cancellable operating leases | Future minimum payments under non-cancelable agreements for property management fees as of February 29, 2020 were as follows: Fiscal year ending February 2021 $ 22,729 February 2022 23,873 February 2023 19,451 February 2024 15,041 February 2025 10,514 Thereafter 16,015 Total $ 107,623 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Feb. 29, 2020 | |
SHARE-BASED COMPENSATION | |
Schedule of non-vested shares under 2010 Plan | Number of Weighted non-vested average grant date shares fair value Outstanding as of February 28, 2017 13,101,006 15.62 Granted 1,111,836 74.63 Forfeited 187,719 27.95 Vested 2,375,107 14.81 Outstanding as of February 28, 2018 11,650,016 21.21 Granted 2,801,437 86.95 Forfeited 370,028 44.33 Vested 2,095,211 19.82 Outstanding as of February 28, 2019 11,986,214 36.11 Granted 1,376,628 121.85 Forfeited 813,036 40.86 Vested 2,277,114 33.82 Outstanding as of February 29, 2020 10,272,692 47.73 |
Schedule of options fair value | For the year ended For the year ended For the year ended February 28, 2018 February 28, 2019 February 29, 2020 Risk-free interest rate (1) 1.99%‑2.55 % 2.89%‑2.92 % 1.63%‑2.35 % Expected life (years) (2) 6.17‑6.25 6.00‑6.25 6.00‑6.25 Expected dividend yield (3) 0 % 0 % 0 % Volatility (4) 32.8%‑33.8 % 34.0%‑34.5 % 34.2%‑35.1 % Fair value of options at grant date per share $28.69 to $38.71 $42.09 to $42.55 $43.53 to $72.09 (1) Risk-free interest rate Risk-free interest rate for periods within the contractual life of the option is based upon the U.S. treasury yield curve in effect at the time of grant. (2) Expected life (years) Assumption of the expected term were based on the vesting and contractual terms and employee demographics. (3) Expected dividend yield The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the options. (4) Volatility The volatility assumption was estimated based on historical volatility of the Company’s share price applying the guidance provided by ASC 718. The Company begins to estimate the volatility assumption solely based on its historical information since October 2010. |
Schedule of share options activity | Weighted Weighted Aggregate average average remaining intrinsic Number exercise price contractual value Share options of shares (US$) life (Years) (US$) Outstanding as of February 28, 2017 1,338,882 20.12 9.48 30,954 Granted 89,160 59.50 Exercised 76,491 18.46 Forfeited 23,850 19.44 Outstanding as of February 28, 2018 1,327,701 22.87 8.56 120,040 Granted 23,000 108.57 Exercised 232,024 16.85 Forfeited 69,740 31.55 Outstanding as of February 28, 2019 1,048,937 25.50 7.73 85,318 Granted 203,179 79.42 Exercised 114,793 21.79 Forfeited 90,198 41.11 Outstanding as of February 29, 2020 1,047,125 35.03 7.25 134,183 Vested and expected to vest as of February 29, 2020 1,047,125 35.03 7.25 134,183 Exercisable as of February 29, 2020 366,547 24.27 6.37 50,914 |
Schedule of share-based compensation expense | For the year ended For the year ended For the year ended February 28, February 28, February 29, 2018 2019 2020 Cost of revenues $ 366 $ 706 $ 1,074 Selling and marketing expenses 5,037 10,454 19,356 General and administrative expenses 41,747 66,117 97,513 Total $ 47,150 $ 77,277 $ 117,943 |
ORGANIZATION AND PRINCIPAL AC_3
ORGANIZATION AND PRINCIPAL ACTIVITIES - Subsidiaries (Details) | 12 Months Ended |
Feb. 29, 2020 | |
TAL Hong Kong | |
Subsidiaries, VIEs and VIEs subsidiaries | |
Subsidiaries direct or indirect ownership (as a percent) | 100.00% |
TAL Beijing | |
Subsidiaries, VIEs and VIEs subsidiaries | |
Subsidiaries direct or indirect ownership (as a percent) | 100.00% |
Huanqui Zhikang | |
Subsidiaries, VIEs and VIEs subsidiaries | |
Subsidiaries direct or indirect ownership (as a percent) | 100.00% |
Yidu Huida | |
Subsidiaries, VIEs and VIEs subsidiaries | |
Subsidiaries direct or indirect ownership (as a percent) | 100.00% |
Beijing Xintang Sichuang | |
Subsidiaries, VIEs and VIEs subsidiaries | |
Subsidiaries direct or indirect ownership (as a percent) | 100.00% |
Zhixuesi Beijing | |
Subsidiaries, VIEs and VIEs subsidiaries | |
Subsidiaries direct or indirect ownership (as a percent) | 100.00% |
Pengxin TAL | |
Subsidiaries, VIEs and VIEs subsidiaries | |
Subsidiaries direct or indirect ownership (as a percent) | 100.00% |
Firstleap | |
Subsidiaries, VIEs and VIEs subsidiaries | |
Subsidiaries direct or indirect ownership (as a percent) | 100.00% |
Firstleap Hong Kong | |
Subsidiaries, VIEs and VIEs subsidiaries | |
Subsidiaries direct or indirect ownership (as a percent) | 100.00% |
Lebai Information | |
Subsidiaries, VIEs and VIEs subsidiaries | |
Subsidiaries direct or indirect ownership (as a percent) | 100.00% |
Yizhen Xuesi | |
Subsidiaries, VIEs and VIEs subsidiaries | |
Subsidiaries direct or indirect ownership (as a percent) | 100.00% |
ORGANIZATION AND PRINCIPAL AC_4
ORGANIZATION AND PRINCIPAL ACTIVITIES - Financial information (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Feb. 29, 2020USD ($) | Feb. 28, 2019USD ($) | Feb. 28, 2018USD ($) | Feb. 29, 2020CNY (¥) | Feb. 28, 2019CNY (¥) | |
Balance Sheet | |||||
Cash and cash equivalents | $ 1,873,866 | $ 1,247,140 | ¥ 1,435,739 | ¥ 538,364 | |
Short-term investments | 345,457 | 268,424 | |||
Other current assets | 4,553 | 5,692 | |||
Total current assets | 2,495,781 | 1,745,716 | |||
Property and equipment, net | 366,656 | 287,877 | |||
Other non-current assets | 11,685 | 16,396 | |||
Total assets | 5,571,246 | 3,735,091 | |||
Deferred revenue-current | 780,167 | 433,610 | |||
Other current liabilities | 27,281 | 16,392 | |||
Total current liabilities | 1,806,558 | 1,183,718 | |||
Total liabilities | 3,027,049 | 1,204,614 | |||
Income And Cash Flow Statement | |||||
Net revenues | 3,273,308 | 2,562,984 | $ 1,715,016 | ||
Net income (loss) | (127,651) | 364,514 | 194,663 | ||
Net Cash Provided by (Used in) Operating Activities | 855,850 | 194,361 | 685,293 | ||
Net Cash Provided by (Used in) Investing Activities | (338,815) | (166,584) | (832,573) | ||
Net Cash Provided by (Used in) Financing Activities | 131,231 | 475,019 | 428,151 | ||
VIE's | |||||
Balance Sheet | |||||
Cash and cash equivalents | 350,035 | 249,108 | |||
Short-term investments | 11,956 | ||||
Other current assets | 159,706 | 154,977 | |||
Total current assets | 509,741 | 416,041 | |||
Property and equipment, net | 286,982 | 229,518 | |||
Other non-current assets | 2,038,941 | 953,393 | |||
Total assets | 2,835,664 | 1,598,952 | |||
Deferred revenue-current | 733,253 | 401,027 | |||
Other current liabilities | 898,959 | 445,338 | |||
Total current liabilities | 1,632,212 | 846,365 | |||
Total non-current liabilities | 891,633 | 20,019 | |||
Total liabilities | 2,523,845 | 866,384 | |||
Income And Cash Flow Statement | |||||
Net revenues | 3,058,285 | 2,406,642 | 1,614,512 | ||
Net income (loss) | 534,070 | 606,560 | 378,975 | ||
Net Cash Provided by (Used in) Operating Activities | 215,892 | 409,103 | 325,799 | ||
Net Cash Provided by (Used in) Investing Activities | (134,936) | (346,183) | (211,755) | ||
Net Cash Provided by (Used in) Financing Activities | $ (5,173) | $ (4,392) | $ (26,965) |
ORGANIZATION AND PRINCIPAL AC_5
ORGANIZATION AND PRINCIPAL ACTIVITIES - Additional information (Details) | Oct. 26, 2015 | Feb. 29, 2020USD ($)Owner | Feb. 28, 2019USD ($) | Feb. 28, 2018USD ($) |
Subsidiaries, VIEs and VIEs subsidiaries | ||||
VIE and subsidiaries, percentage of net revenue | 93.40% | |||
Service fees payable | $ | $ 78,357 | $ 128,088 | $ 60,336 | |
Majority shareholder | ||||
Subsidiaries, VIEs and VIEs subsidiaries | ||||
Deed of undertaking (in percent) | 50.00% | |||
Xueersi Education and Xueersi Network | ||||
Subsidiaries, VIEs and VIEs subsidiaries | ||||
Number of owners | 4 | |||
Xinxin Xiangrong | ||||
Subsidiaries, VIEs and VIEs subsidiaries | ||||
Number of owners | 3 | |||
Lebai Information | Lebai Education | ||||
Subsidiaries, VIEs and VIEs subsidiaries | ||||
Term of agreement entered on October 26, 2015 (in years) | 10 years | |||
Renewal term of agreement | 10 years |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Property and equipment, net (Details) | 12 Months Ended |
Feb. 29, 2020 | |
Building | Minimum | |
Property, plant and equipment | |
Useful life (in years) | 35 years |
Building | Maximum | |
Property, plant and equipment | |
Useful life (in years) | 64 years |
Computer, network equipment and software | |
Property, plant and equipment | |
Useful life (in years) | 3 years |
Vehicles | Minimum | |
Property, plant and equipment | |
Useful life (in years) | 4 years |
Vehicles | Maximum | |
Property, plant and equipment | |
Useful life (in years) | 5 years |
Office equipment and furniture | Minimum | |
Property, plant and equipment | |
Useful life (in years) | 3 years |
Office equipment and furniture | Maximum | |
Property, plant and equipment | |
Useful life (in years) | 5 years |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Acquired intangible assets (Details) | 12 Months Ended |
Feb. 29, 2020 | |
Trade name and domain names | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (in years) | 3 years |
Trade name and domain names | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (in years) | 10 years |
Copyrights and teaching materials | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (in years) | 3 years |
Copyrights and teaching materials | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (in years) | 10 years |
User base and customer relationships | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (in years) | 2 years |
User base and customer relationships | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (in years) | 7 years |
Technology | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (in years) | 4 years |
Technology | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (in years) | 6 years |
Partnership agreements and school cooperation agreements | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (in years) | 3 years |
Partnership agreements and school cooperation agreements | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (in years) | 6 years |
Licenses | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (in years) | 2 years |
Licenses | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (in years) | 7 years |
Others | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (in years) | 2 years |
Others | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (in years) | 6 years |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of net revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 3,273,308 | $ 2,562,984 | $ 1,715,016 |
Small class tutoring services, personalized premium services and others | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 2,655,323 | 2,223,347 | |
Online education services through www.xueersi.com | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 617,985 | $ 339,637 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details) ¥ in Thousands, $ in Thousands | Apr. 01, 2019 | May 31, 2018 | May 31, 2017 | Nov. 30, 2016 | May 31, 2016 | Jun. 30, 2015 | Feb. 29, 2020USD ($) | Feb. 28, 2019USD ($) | Feb. 28, 2018USD ($) | Feb. 29, 2020CNY (¥) | Mar. 01, 2019USD ($) | Feb. 28, 2019CNY (¥) | Mar. 01, 2018USD ($) |
Goodwill, Impairment Loss | $ 28,998 | $ 0 | |||||||||||
Contract liabilities of deferred revenue | 781,000 | 436,107 | |||||||||||
VAT (as a percent) | 13.00% | 16.00% | 16.00% | ||||||||||
Operating lease right-of-use assets | 1,243,692 | $ 1,024,863 | |||||||||||
Operating lease liabilities | 1,254,879 | $ 1,026,728 | |||||||||||
Operating lease liabilities, current portion (including operating lease liabilities current portion of the consolidated VIEs without recourse to TAL Education Group of nil and $276,712 as of February 28, 2019 and February 29, 2020, respectively) | 304,960 | ||||||||||||
Advertising costs | 248,807 | 114,697 | $ 22,474 | ||||||||||
Foreign currency translation, exchange gain (loss) | (968) | (3,108) | $ 3,324 | ||||||||||
Cash and cash equivalents | $ 1,873,866 | $ 1,247,140 | ¥ 1,435,739 | ¥ 538,364 | |||||||||
Xinxin Xiangrong | |||||||||||||
VAT (as a percent) | 6.00% | ||||||||||||
Beijing Xintang Sichuang, TAL Beijing, Yidu Huida | Xueersi Education | |||||||||||||
VAT (as a percent) | 6.00% | ||||||||||||
Zhixuesi Beijing | |||||||||||||
VAT (as a percent) | 6.00% | ||||||||||||
Pengxin TAL | |||||||||||||
VAT (as a percent) | 6.00% | ||||||||||||
Yizhen Xuesi | |||||||||||||
VAT (as a percent) | 6.00% | ||||||||||||
Online education services through www.xueersi.com | |||||||||||||
VAT (as a percent) | 6.00% | ||||||||||||
Minimum | |||||||||||||
Maturity period of investments | 3 months | 3 months | |||||||||||
VAT (as a percent) | 3.00% | ||||||||||||
Maximum | |||||||||||||
Maturity period of investments | 12 months | 12 months | |||||||||||
VAT (as a percent) | 16.00% | ||||||||||||
Equity Securities Without Readily Determinable Fair Value [Member] | |||||||||||||
Cumulative effect adjustment, equity securities without readily determinable fair value | $ 4,163 |
BUSINESS ACQUISITION - Shanghai
BUSINESS ACQUISITION - Shanghai Xiaoxin (Details) - Xhanghai Xiaoxin $ in Thousands | Jan. 24, 2019USD ($) |
Business Acquisition [Line Items] | |
Cash consideration | $ 69,798 |
Carrying amount | 2,035 |
Gain on remeasurement of fair value as of acquisition date | 26,291 |
Total | $ 98,124 |
BUSINESS ACQUISITION - Shangh_2
BUSINESS ACQUISITION - Shanghai Xiaoxin, allocation (Details) - USD ($) $ in Thousands | Jan. 24, 2019 | Feb. 29, 2020 | Feb. 28, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 378,913 | $ 414,228 | |
Xhanghai Xiaoxin | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 11,310 | ||
Net assets acquired, excluding cash and cash equivalents, intangible assets and the related deferred tax liabilities | 19,860 | ||
Goodwill | 89,536 | ||
Deferred tax liabilities | (2,359) | ||
Noncontrolling interests | (29,658) | ||
Total | 98,124 | ||
Xhanghai Xiaoxin | User base and customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 8,152 | ||
Amortization period | |||
Amortization period (in years) | 7 years | ||
Xhanghai Xiaoxin | Technology | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 1,283 | ||
Amortization period | |||
Amortization period (in years) | 5 years |
BUSINESS ACQUISITION - Pro form
BUSINESS ACQUISITION - Pro forma (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 | |
Acquisitions fiscal 2020 | ||||
Business Acquisition [Line Items] | ||||
Pro forma net revenues | $ 3,273,549 | $ 2,563,413 | ||
Pro forma net income / (loss) attributable to TAL Education Group | $ (110,263) | $ 367,041 | ||
Pro forma net income / (loss) per share - basic | $ (0.56) | $ 1.93 | ||
Pro forma net income / (loss) per share - diluted | $ (0.56) | $ 1.83 | ||
Other acquisitions fiscal 2019 | ||||
Business Acquisition [Line Items] | ||||
Pro forma net revenues | $ 2,570,616 | $ 1,725,115 | ||
Pro forma net income / (loss) attributable to TAL Education Group | $ 357,886 | $ 187,607 | ||
Pro forma net income / (loss) per share - basic | $ 1.88 | $ 1.07 | ||
Pro forma net income / (loss) per share - diluted | $ 1.79 | $ 0.98 | ||
Other acquisitions fiscal 2018 | ||||
Business Acquisition [Line Items] | ||||
Pro forma net revenues | $ 1,715,774 | $ 1,043,718 | ||
Pro forma net income / (loss) attributable to TAL Education Group | $ 198,105 | $ 115,055 | ||
Pro forma net income / (loss) per share - basic | $ 1.13 | $ 0.71 | ||
Pro forma net income / (loss) per share - diluted | $ 1.03 | $ 0.65 |
BUSINESS ACQUISITION - Addition
BUSINESS ACQUISITION - Additional information (Details) $ in Thousands | Feb. 28, 2019USD ($) | Jan. 24, 2019USD ($) | Feb. 29, 2020USD ($)itemshares | Feb. 28, 2019USD ($)shares | Feb. 28, 2018USD ($)shares |
Business Acquisition [Line Items] | |||||
Stock consideration | $ 764 | $ 33,361 | $ 3,643 | ||
Goodwill | $ 414,228 | $ 378,913 | $ 414,228 | ||
Common Class A | |||||
Business Acquisition [Line Items] | |||||
Stock consideration (in shares) | shares | 24,702 | 20,502 | 0 | ||
Xhanghai Xiaoxin | |||||
Business Acquisition [Line Items] | |||||
Ownership (as a percent) | 69.20% | 39.70% | |||
Total purchase consideration | $ 98,124 | ||||
Cash consideration | 69,798 | ||||
Goodwill | $ 89,536 | ||||
Acquisitions fiscal 2020 | |||||
Business Acquisition [Line Items] | |||||
Number of acquisitions | item | 2 | ||||
Total purchase consideration | $ 2,853 | ||||
Intangible assets | 321 | ||||
Goodwill | $ 3,999 | ||||
Other acquisitions fiscal 2019 | |||||
Business Acquisition [Line Items] | |||||
Total purchase consideration | 54,289 | $ 54,289 | |||
Cash consideration | 44,356 | ||||
Stock consideration | 3,703 | ||||
Equity interests | 6,230 | ||||
Intangible assets | 11,943 | 11,943 | |||
Goodwill | 40,238 | 40,238 | |||
Other acquisitions fiscal 2019 | Common Class A | |||||
Business Acquisition [Line Items] | |||||
Stock consideration | $ 1,977 | $ 1,726 | |||
Other acquisitions fiscal 2018 | |||||
Business Acquisition [Line Items] | |||||
Total purchase consideration | $ 16,165 | ||||
Cash consideration | 15,866 | ||||
Equity interests | 3,643 | ||||
Intangible assets | 5,782 | ||||
Goodwill | $ 12,622 |
SHORT-TERM INVESTMENTS (Details
SHORT-TERM INVESTMENTS (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | Feb. 28, 2019 |
SHORT-TERM INVESTMENTS | ||
Held-to-maturity investments | $ 345,457 | $ 168,761 |
Variable-rate financial instruments | 99,663 | |
Short-term investments | $ 345,457 | $ 268,424 |
SHORT-TERM INVESTMENTS - Additi
SHORT-TERM INVESTMENTS - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | |
Gain (Loss) on investment | $ 0 | $ 337 |
Minimum | ||
Maturity period of investments | 3 months | 3 months |
Maximum | ||
Maturity period of investments | 12 months | 12 months |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | Feb. 28, 2019 |
PREPAID AND OTHER CURRENT ASSETS | ||
Accounts receivables | $ 42,654 | $ 50,222 |
Prepayments to suppliers | 55,342 | 45,525 |
Interest receivable | 22,108 | 5,848 |
Staff advances | 3,206 | 4,636 |
Loan to employees, current portion | 4,413 | 5,467 |
Other deposits | 7,550 | 3,179 |
Prepaid VAT | 6,284 | 5,643 |
Prepaid rental | 7,335 | 45,107 |
Receivables from investees | 13,304 | |
Loans to third-parties | 5,883 | 24,410 |
Receivables of withholding tax from employees for option exercise | 34,720 | |
Receivable for exercise of capped call option (Note 13) | 6,901 | |
Others | 4,553 | 5,692 |
Prepaid expenses and other current assets | $ 207,352 | $ 202,630 |
PREPAID EXPENSES AND OTHER CU_4
PREPAID EXPENSES AND OTHER CURRENT ASSETS - Additional information (Details) - item | 12 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | |
Number of domestic investees | 2 | |
Loans to employees | ||
Service requirement to qualify for (in years) | 3 years | 3 years |
Debt instrument term (in years) | 4 years | 4 years |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | Feb. 28, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 602,218 | $ 462,783 |
Less: accumulated depreciation | (235,562) | (174,906) |
Property and equipment, net | 366,656 | 287,877 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 59,489 | 62,151 |
Leasehold improvement | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 316,528 | 247,898 |
Computer, network equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 178,876 | 121,967 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 704 | 598 |
Office equipment and furniture | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 30,596 | $ 30,169 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 16,025 |
PROPERTY AND EQUIPMENT, NET - D
PROPERTY AND EQUIPMENT, NET - Depreciation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
PROPERTY AND EQUIPMENT, NET | |||
Depreciation | $ 99,511 | $ 76,669 | $ 50,907 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Intangible assets | |||
Intangible assets, gross | $ 108,010 | $ 105,480 | |
Less: accumulated amortization | (45,930) | (30,253) | |
Less: accumulated impairment loss | (358) | (358) | $ (358) |
Add: foreign exchange difference | (2,737) | (93) | |
Intangible assets, net | 58,985 | 74,776 | |
Trade name and domain names | |||
Intangible assets | |||
Intangible assets, gross | 27,982 | 27,225 | |
Copyrights and teaching materials | |||
Intangible assets | |||
Intangible assets, gross | 5,974 | 5,974 | |
User base and customer relationships | |||
Intangible assets | |||
Intangible assets, gross | 24,803 | 24,628 | |
Technology | |||
Intangible assets | |||
Intangible assets, gross | 13,230 | 13,230 | |
Partnership agreements and school cooperation agreements | |||
Intangible assets | |||
Intangible assets, gross | 4,858 | 4,858 | |
Licenses | |||
Intangible assets | |||
Intangible assets, gross | 28,476 | 27,023 | |
Others | |||
Intangible assets | |||
Intangible assets, gross | $ 2,687 | $ 2,542 |
INTANGIBLE ASSETS, NET - Additi
INTANGIBLE ASSETS, NET - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
INTANGIBLE ASSETS, NET | |||
Amortization of Intangible Assets | $ 15,677 | $ 12,166 | $ 8,307 |
Estimated amortization expense year one | 15,108 | ||
Estimated amortization expense year two | 12,052 | ||
Estimated amortization expense year three | 9,907 | ||
Estimated amortization expense year four | 7,338 | ||
Estimated amortization expense year five | 5,829 | ||
Impairment loss on acquired intangible assets | $ 358 | $ 358 | $ 358 |
LAND USE RIGHTS, NET (Details)
LAND USE RIGHTS, NET (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | Feb. 28, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Land use rights | $ 108,010 | $ 105,480 |
Less: accumulated amortization | (45,930) | $ (30,253) |
LAND USE RIGHTS | ||
Finite-Lived Intangible Assets [Line Items] | ||
Land use rights | 207,657 | |
Less: accumulated amortization | (2,804) | |
Land use rights, net | $ 204,853 |
LAND USE RIGHTS, NET - Amortiza
LAND USE RIGHTS, NET - Amortization Expense (Details) ¥ in Millions | Jul. 08, 2019CNY (¥)m² | Mar. 19, 2019CNY (¥)m²USD ($) | Feb. 29, 2020USD ($) | Feb. 28, 2019USD ($) |
Finite-Lived Intangible Assets [Line Items] | ||||
Cost of land use rights | $ 6,780,000 | $ 209,865,000 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
2021 | 15,108,000 | |||
2022 | 12,052,000 | |||
2023 | 9,907,000 | |||
2024 | 7,338,000 | |||
2025 | $ 5,829,000 | |||
LAND USE RIGHTS | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Number of land use rights acquired | 2 | |||
Useful life | 50 years | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
2021 | $ 4,195,000 | |||
2022 | 4,195,000 | |||
2023 | 4,195,000 | |||
2024 | 4,195,000 | |||
2025 | 4,195,000 | |||
Thereafter | $ 183,878,000 | |||
LAND USE RIGHTS | Zhenjiang, Jiangsu | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cost of land use rights | ¥ | ¥ 92 | |||
Number of square meters of land use rights acquired | m² | 83,025 | |||
LAND USE RIGHTS | Beijing | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cost of land use rights | ¥ | ¥ 1,360 | |||
Number of square meters of land use rights acquired | m² | 28,600 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | |
GOODWILL | ||
Beginning balance | $ 415,752 | $ 292,906 |
Addition (Note 3) | 3,999 | 129,774 |
Accumulated impairment loss | (30,522) | (1,524) |
Exchange difference | (10,316) | (6,928) |
Goodwill, net | 378,913 | 414,228 |
Impairment | $ 28,998 | $ 0 |
LONG-TERM INVESTMENTS (Details)
LONG-TERM INVESTMENTS (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | Feb. 28, 2019 |
Schedule of Investments [Line Items] | ||
Held-to-maturity investments | $ 52,965 | |
Long-term Investments, Total | $ 571,601 | 850,695 |
BabyTree | ||
Schedule of Investments [Line Items] | ||
Equity securities with readily determinable fair values | 26,696 | 132,143 |
Jiangsu Qusu | ||
Schedule of Investments [Line Items] | ||
Equity securities without readily determinable fair values | 48,704 | |
Xiamen Meiyou Information and Technology Co., Ltd. ("Xiamen Meiyou") | ||
Schedule of Investments [Line Items] | ||
Equity securities without readily determinable fair values | 47,068 | |
Equity method investments | 48,639 | |
Other investments | ||
Schedule of Investments [Line Items] | ||
Equity securities without readily determinable fair values | 84,681 | 81,968 |
Equity method investments | 102,314 | 132,607 |
Available-for-sale investments | 108,567 | 92,664 |
Long term Investment In Third party technology Company | ||
Schedule of Investments [Line Items] | ||
Fair value option investment | 7,258 | 7,484 |
Changing | ||
Schedule of Investments [Line Items] | ||
Available-for-sale investments | 148,405 | 102,581 |
Hypen | ||
Schedule of Investments [Line Items] | ||
Available-for-sale investments | 50,808 | |
DaDa | ||
Schedule of Investments [Line Items] | ||
Available-for-sale investments | 80,115 | |
Ximalaya Inc | ||
Schedule of Investments [Line Items] | ||
Available-for-sale investments | $ 46,612 | $ 20,017 |
LONG-TERM INVESTMENTS - Additio
LONG-TERM INVESTMENTS - Additional information (Details) | 1 Months Ended | 12 Months Ended | ||||||
Jan. 31, 2014USD ($) | Feb. 29, 2020USD ($)Transaction | Feb. 28, 2019USD ($)Transaction | Feb. 28, 2018USD ($) | Feb. 29, 2020$ / shares | Feb. 28, 2019$ / shares | Dec. 31, 2018 | Jul. 31, 2018 | |
Schedule of Investments [Line Items] | ||||||||
Payments to acquire Long-term Investment | $ 117,508,000 | $ 243,542,000 | $ 196,559,000 | |||||
Gain (Loss) on disposal | 25,002,000 | 3,363,000 | 9,026,000 | |||||
Gain recognized for the conversion of debt securities to equity securities | 95,491,000 | |||||||
Equity method investments, impairment gain (loss) | 17,198,000 | 8,719,000 | 409,000 | |||||
BabyTree | ||||||||
Schedule of Investments [Line Items] | ||||||||
Payments to acquire Long-term Investment | $ 23,475,000 | |||||||
Gain (Loss) on disposal | 760,000 | 3,044,000 | ||||||
Gain recognized for the conversion of debt securities to equity securities | 95,491,000 | |||||||
Share Price | $ / shares | $ 1.44 | $ 7.18 | ||||||
Loss on change in fair value | 105,447,000 | |||||||
Jiangsu Qusu | ||||||||
Schedule of Investments [Line Items] | ||||||||
Ownership percentage (as a percent) | 33.99% | |||||||
Gain recognized | 16,670 | |||||||
Other investments | ||||||||
Schedule of Investments [Line Items] | ||||||||
Impairment loss | 3,444,000 | 14,489,000 | 0 | |||||
Xiamen Meiyou Information and Technology Co., Ltd. ("Xiamen Meiyou") | ||||||||
Schedule of Investments [Line Items] | ||||||||
Ownership percentage (as a percent) | 15.32% | |||||||
Impairment loss | 0 | |||||||
Long term Investment In Third party technology Company | ||||||||
Schedule of Investments [Line Items] | ||||||||
Impairment gain (loss) | $ (2,137,000) | $ (34,883,000) | $ (1,804,000) | |||||
Changing | ||||||||
Schedule of Investments [Line Items] | ||||||||
Ownership percentage (as a percent) | 34.55% | |||||||
Hypen | ||||||||
Schedule of Investments [Line Items] | ||||||||
Number of transactions | Transaction | 3 | |||||||
DaDa | ||||||||
Schedule of Investments [Line Items] | ||||||||
Number of transactions | Transaction | 2 | |||||||
Ximalaya Inc | ||||||||
Schedule of Investments [Line Items] | ||||||||
Number of transactions | Transaction | 2 | |||||||
Ownership percentage (as a percent) | 1.73% |
LONG-TERM PREPAYMENTS AND OTH_3
LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | Feb. 28, 2019 |
LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS | ||
Long-term prepayments | $ 36,989 | $ 2,562 |
Loan to employees | 3,940 | 6,512 |
Loan receivable | 32,661 | 32,069 |
Prepayment for land use right | 209,865 | |
Other non-current assets | 11,685 | 16,396 |
Long-term prepayments and other non-current assets | $ 85,275 | $ 267,404 |
LONG-TERM PREPAYMENTS AND OTH_4
LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS | |||
Interest Income Accrued | $ 5,368 | $ 3,555 | |
Impairment loss | $ 0 | $ 0 | $ 260 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | Feb. 28, 2019 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Accrued employee payroll and welfare benefits | $ 292,001 | $ 208,897 |
Refund liabilities | 168,118 | 73,184 |
Other taxes payable | 7,826 | 33,099 |
Accrued operating expenses | 40,323 | 9,508 |
Payable for investments and acquisitions | 404 | 17,530 |
Professional service fee payable | 13,994 | 2,199 |
Payable for acquisitions of intangible assets | 1,436 | 2,688 |
Interest payable | 1,267 | 1,698 |
Others | 27,281 | 16,392 |
Accrued expenses and other current liabilities | $ 552,650 | $ 365,195 |
BOND PAYABLE (Details)
BOND PAYABLE (Details) $ / shares in Units, $ in Thousands | May 21, 2014USD ($)$ / sharesshares | Feb. 29, 2020USD ($)shares | Feb. 28, 2019USD ($)shares | Feb. 28, 2018USD ($) |
Debt Instrument [Line Items] | ||||
Interest Expense | $ 11,820 | $ 17,628 | $ 16,640 | |
Debt issuance costs | $ 5,277 | |||
Debt conversion carrying amount | 5,250 | 5,800 | $ 214,422 | |
Index shares, proceeds from exercise | (66,346) | (13,270) | ||
Call Option [Member] | Long [Member] | ||||
Debt Instrument [Line Items] | ||||
Index shares purchased (in shares) | shares | 52,712,642 | |||
Index shares, payment received | $ 22,885 | |||
ADS | ||||
Debt Instrument [Line Items] | ||||
Debt conversion carrying amount | $ 5,250 | $ 5,800 | ||
Debt conversion, converted instrument (in shares) | shares | 1,203,222 | 1,329,273 | ||
ADS | Call Option [Member] | Long [Member] | ||||
Debt Instrument [Line Items] | ||||
Index shares, cap price (per share) | $ / shares | $ 5.87 | |||
Convertible bond | ||||
Debt Instrument [Line Items] | ||||
Interest Expense | $ 27 | $ 162 | ||
Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 230,000 | |||
Interest rate (as a percent) | 2.50% | |||
Net proceeds from issuance of debt | $ 224,723 | |||
Debt Instrument Repurchase Price As Percentage To The Principal Amount | 100.00% | |||
Notes | ADS | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument conversion ratio (per $1K principal amount) | 229.1856 | |||
Conversion price (per share) | $ / shares | $ 4.36 |
LONG-TERM DEBT AND SHORT-TERM_2
LONG-TERM DEBT AND SHORT-TERM DEBT (Details) $ in Thousands | Jun. 30, 2019USD ($) | Feb. 01, 2019USD ($) | Dec. 31, 2019CNY (¥) | Jun. 30, 2018USD ($) | Jun. 30, 2016USD ($) | Feb. 29, 2020USD ($) | Feb. 28, 2019USD ($) |
Long-term Debt | $ 261,950 | ||||||
Short-term debt and current portion of long-term debt (including short-term debt and current portion of long-term debt of the consolidated VIEs without recourse to TAL Education Group of nil and nil as of February 28, 2019 and February 29, 2020, respectively) | $ 210,027 | ||||||
Facilities agreement of 2016 | |||||||
Repayment of debt | $ 195,000 | ||||||
Swap one | Facilities agreement of 2016 | |||||||
Notional amount | $ 30,000 | ||||||
Interest rate (as a percent) | 3.46% | ||||||
Swap two | Facilities agreement of 2016 | |||||||
Notional amount | $ 30,000 | ||||||
Interest rate (as a percent) | 4.10% | ||||||
Swap three | Facilities agreement of 2016 | |||||||
Notional amount | $ 50,000 | ||||||
Interest rate (as a percent) | 4.14% | ||||||
Short-term Loan Agreement | |||||||
Debt instrument term (in years) | 1 year | ||||||
Short-term debt and current portion of long-term debt (including short-term debt and current portion of long-term debt of the consolidated VIEs without recourse to TAL Education Group of nil and nil as of February 28, 2019 and February 29, 2020, respectively) | $ 14,945 | ||||||
Facilities agreement of 2016 | |||||||
Debt instrument term (in years) | 3 years | ||||||
Maximum borrowing capacity | $ 400,000 | ||||||
Commiment Fee, Percentage | 0.75% | ||||||
Debt instrument, issue costs | $ 12,000 | ||||||
Facilities agreement of 2016 | Bullet maturity loan | |||||||
Debt instrument term (in years) | 3 years | ||||||
Maximum borrowing capacity | $ 225,000 | ||||||
Facilities agreement of 2016 | Revolving facility | |||||||
Debt instrument term (in years) | 3 years | ||||||
Maximum borrowing capacity | $ 175,000 | ||||||
Facilities agreement of 2016 | Revolving facility | LIBOR | |||||||
Basis points | .250 | ||||||
Facilities agreement of 2019 | |||||||
Debt instrument term (in years) | 3 years | ||||||
Maximum borrowing capacity | $ 600,000 | ||||||
Commiment Fee, Percentage | 0.35% | ||||||
Debt instrument, issue costs | $ 12,600 | ||||||
Facilities agreement of 2019 | LIBOR | |||||||
Basis points | 175 | ||||||
Facilities agreement of 2019 | Bullet maturity loan | |||||||
Debt instrument term (in years) | 3 years | 3 years | |||||
Maximum borrowing capacity | $ 270,000 | $ 270,000 | |||||
Facilities agreement of 2019 | Revolving facility | |||||||
Debt instrument term (in years) | 3 years | ||||||
Maximum borrowing capacity | $ 330,000 | ||||||
Facilities Agreement of Zhenjiang | |||||||
Debt instrument term (in years) | 8 years | ||||||
Maximum borrowing capacity | ¥ | ¥ 1,800 | ||||||
Basis points | 39 |
FAIR VALUE (Details)
FAIR VALUE (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Feb. 29, 2020 | Feb. 28, 2019 |
Short-term investments | ||
Variable-rate financial instruments | $ 99,663 | |
Long-term investments | ||
Equity Securities, FV-NI | $ 26,696 | 132,143 |
Fair value option investments | 7,258 | 7,484 |
Available-for-sale investments | 303,584 | 346,185 |
Total | 337,538 | 585,475 |
Fair Value, Inputs, Level 1 | ||
Long-term investments | ||
Equity Securities, FV-NI | 26,696 | 132,143 |
Total | 26,696 | 132,143 |
Fair Value, Inputs, Level 2 | ||
Short-term investments | ||
Variable-rate financial instruments | 99,663 | |
Long-term investments | ||
Total | 99,663 | |
Fair Value, Inputs, Level 3 | ||
Long-term investments | ||
Fair value option investments | 7,258 | 7,484 |
Available-for-sale investments | 303,584 | 346,185 |
Total | $ 310,842 | $ 353,669 |
FAIR VALUE- Rollforward (Detail
FAIR VALUE- Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | |
FAIR VALUE | ||
Balance at the beginning of the period | $ 353,669 | $ 330,564 |
Purchase | 95,269 | 186,628 |
Disposal | (1,512) | (3,890) |
Transfer out due to reclassification | (129,287) | |
Changes in fair value | (45) | 12,047 |
Impairment loss | (133,329) | (34,883) |
Foreign exchange difference | (3,210) | (7,510) |
Balance at the end of the period | $ 310,842 | $ 353,669 |
FAIR VALUE - Additional informa
FAIR VALUE - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
FAIR VALUE | |||
Goodwill and Intangible Asset Impairment | $ 28,998 | $ 0 | $ 358 |
LEASES - Supplemental in format
LEASES - Supplemental in formation of leases (Details) $ in Thousands | 12 Months Ended |
Feb. 29, 2020USD ($) | |
LEASES | |
Operating lease cost | $ 338,593 |
Short-term lease cost | $ 1,184 |
Weighted-average remaining lease term - operating leases | 4 years 10 months 24 days |
Weighted-average discount rate - operating leases | 4.80% |
Other information | |
Cash paid for amounts included in the measurement of lease liabilities | $ 314,099 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 770,942 |
LEASES - Maturity analysis of l
LEASES - Maturity analysis of leases liabilities (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | Mar. 01, 2019 |
Lessee, Operating Lease, Liability, Payment, Due | ||
February 2021 | $ 313,953 | |
February 2022 | 329,556 | |
February 2023 | 276,063 | |
February 2024 | 210,742 | |
February 2025 | 144,840 | |
Thereafter | 168,232 | |
Total | 1,443,386 | |
Less: Imputed interest | (188,507) | |
Present value of operating lease liabilities | $ 1,254,879 | $ 1,026,728 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:OperatingLeaseLiabilityCurrent us-gaap:OperatingLeaseLiabilityNoncurrent | |
Lease not yet commenced , contract value | $ 39,944 |
LEASES - Future minimum lease p
LEASES - Future minimum lease payments under ASC 840 (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | Feb. 28, 2019 |
LEASES | ||
February 2020 | $ 270,093 | |
February 2021 | 285,653 | |
February 2022 | 258,355 | |
February 2023 | 207,371 | |
February 2024 | 143,145 | |
Thereafter | 178,642 | |
Total | $ 107,623 | $ 1,343,259 |
INCOME TAXES - Expense (Details
INCOME TAXES - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Deferred | |||
Total | $ 69,328 | $ 76,504 | $ 44,653 |
PRC | |||
Current | |||
- PRC income tax expenses | 127,731 | 94,722 | 48,958 |
Deferred | |||
- PRC income tax expenses | (58,403) | (18,218) | (4,305) |
Total | $ 69,328 | $ 76,504 | $ 44,653 |
INCOME TAXES - Deferred tax ass
INCOME TAXES - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | Feb. 28, 2019 |
Deferred tax assets: | ||
Prepaid rental and advertising | $ 50,187 | $ 9,763 |
Property and equipment | 2,576 | 1,877 |
Impairment loss on long-term investments | 4,559 | 6,563 |
Others | 19,526 | 8,121 |
Tax losses carry-forward | 84,007 | 44,376 |
Less: valuation allowance | (81,321) | (41,521) |
Deferred tax assets, net | 79,534 | 29,179 |
Deferred tax liabilities: | ||
Intangible assets | 6,984 | 8,869 |
Property and equipment | 805 | 249 |
Long-term investments | 8,620 | |
Deferred tax liabilities | $ 7,789 | $ 17,738 |
INCOME TAXES - Provision (Detai
INCOME TAXES - Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Reconciliation of the PRC statutory tax rate to the effective tax rate | |||
Income before provision for income tax | $ (50,653) | $ 457,204 | $ 246,994 |
PRC statutory income tax rate | 25.00% | 25.00% | 25.00% |
Income tax at statutory income tax rate | $ (12,663) | $ 114,301 | $ 61,748 |
Effect of non-deductible and super deduction expenses | (18,117) | (6,252) | (2,244) |
Effect of income tax exemptions and preferential tax rates | (36,750) | (45,625) | (37,390) |
Effect of income tax rate difference in other jurisdictions | 97,058 | 5,214 | 14,949 |
Change in valuation allowance | 39,800 | 8,866 | 7,590 |
Provision for income tax | $ 69,328 | $ 76,504 | $ 44,653 |
INCOME TAXES - Tax Holiday (Det
INCOME TAXES - Tax Holiday (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
INCOME TAXES | |||
Increase in income tax expenses | $ 36,750 | $ 45,625 | $ 37,390 |
Net income / (loss) per common share-basic (in dollars per share) | $ (0.74) | $ 1.69 | $ 0.90 |
Net income / (loss) per common share-diluted (in dollars per share) | $ (0.74) | $ 1.61 | $ 0.82 |
INCOME TAXES - Additional infor
INCOME TAXES - Additional information (Details) ¥ in Millions, $ in Millions | 12 Months Ended | 36 Months Ended | 72 Months Ended | |||||||||||
Dec. 31, 2020 | Feb. 29, 2020HKD ($) | Feb. 29, 2020USD ($) | Feb. 29, 2020CNY (¥) | Dec. 31, 2019 | Feb. 28, 2019USD ($) | Dec. 31, 2018 | Feb. 28, 2018USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2008 | Dec. 31, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income taxes | ||||||||||||||
Deferred Tax Assets, Valuation Allowance | $ 81,321,000 | $ 41,521,000 | ||||||||||||
Uncertain tax positions | 0 | $ 0 | $ 0 | |||||||||||
Unrecognized Tax Benefits | $ 0 | |||||||||||||
Income Tax Statute Of Limitations Special Circumstance Minimum Underpayment Of Tax Liability | ¥ | ¥ 0.1 | |||||||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | |||||||||
Withholding Tax Rate On Dividend Distributed By Foreign Investment Entities | 10.00% | 10.00% | 10.00% | |||||||||||
Hong Kong | ||||||||||||||
Income taxes | ||||||||||||||
Statutory rate - tier one | 8.25% | 8.25% | 8.25% | |||||||||||
Taxable Income Under Tier One Tax Rate | $ 2 | |||||||||||||
Statutory rate - tier two | 16.50% | 16.50% | 16.50% | |||||||||||
Income tax accrual | $ 0 | $ 0 | $ 0 | |||||||||||
Assessable income | 0 | 0 | $ 0 | |||||||||||
PRC | ||||||||||||||
Income taxes | ||||||||||||||
Income tax rate (as a percent) | 25.00% | |||||||||||||
Operating Loss Carryforwards | 84,007,000 | |||||||||||||
Undistributed earnings | $ 1,807,724 | $ 1,337,157 | ||||||||||||
PRC | TAL Beijing | ||||||||||||||
Income taxes | ||||||||||||||
Income tax rate (as a percent) | 15.00% | 15.00% | 15.00% | |||||||||||
HNTE tax rate (as a percent) | 15.00% | |||||||||||||
PRC | Yidu Huida | ||||||||||||||
Income taxes | ||||||||||||||
HNTE tax rate (as a percent) | 10.00% | 10.00% | 15.00% | |||||||||||
PRC | Beijing Xintang Sichuang | ||||||||||||||
Income taxes | ||||||||||||||
Income tax rate (as a percent) | 15.00% | 15.00% | 15.00% | |||||||||||
HNTE tax rate (as a percent) | 12.50% | |||||||||||||
PRC | Yizhen Xuesi | ||||||||||||||
Income taxes | ||||||||||||||
Income tax rate (as a percent) | 12.50% | 12.50% | ||||||||||||
PRC | Lebai Information | ||||||||||||||
Income taxes | ||||||||||||||
Income tax rate (as a percent) | 12.50% | 12.50% | 12.50% | |||||||||||
PRC | Key Software Enterprise | TAL Beijing | ||||||||||||||
Income taxes | ||||||||||||||
HNTE tax rate (as a percent) | 10.00% | 10.00% | ||||||||||||
PRC | Key Software Enterprise | Yidu Huida | ||||||||||||||
Income taxes | ||||||||||||||
HNTE tax rate (as a percent) | 10.00% | 10.00% | 10.00% | 10.00% | ||||||||||
PRC | Key Software Enterprise | Beijing Xintang Sichuang | ||||||||||||||
Income taxes | ||||||||||||||
Income tax rate (as a percent) | 10.00% | |||||||||||||
HNTE tax rate (as a percent) | 10.00% | 10.00% | ||||||||||||
PRC | High And New Technology Enterprise | TAL Beijing | ||||||||||||||
Income taxes | ||||||||||||||
HNTE tax rate (as a percent) | 15.00% | |||||||||||||
PRC | High And New Technology Enterprise | Yidu Huida | ||||||||||||||
Income taxes | ||||||||||||||
Income tax rate (as a percent) | 15.00% | |||||||||||||
HNTE tax rate (as a percent) | 15.00% | |||||||||||||
PRC | High And New Technology Enterprise | Beijing Xintang Sichuang | ||||||||||||||
Income taxes | ||||||||||||||
Income tax rate (as a percent) | 15.00% | |||||||||||||
PRC | Yinghe Youshi | ||||||||||||||
Income taxes | ||||||||||||||
Income tax rate (as a percent) | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% |
COMMON SHARES (Details)
COMMON SHARES (Details) $ in Thousands | Feb. 25, 2019USD ($) | Feb. 18, 2019shares | Jan. 12, 2018USD ($) | Jan. 05, 2018shares | Feb. 29, 2020classshares | Feb. 28, 2019USD ($)shares | Feb. 28, 2018USD ($)shares |
Classes of common shares | class | 2 | ||||||
Proceeds from Issuance of Private Placement | $ | $ 500,000 | $ 500,000 | |||||
Common Class A | |||||||
Common Stock, Voting Rights | one | ||||||
Shares converted (in shares) | 3,614,796 | 0 | 900,000 | ||||
Shares issued | 5,329,922 | 5,464,481 | 2,239,239 | 2,073,711 | 2,314,190 | ||
Stock consideration (in shares) | 24,702 | 20,502 | 0 | ||||
Exercise of share options (in shares) | 114,793 | 232,024 | 76,491 | ||||
Conversion of Stock, Shares Issued | 401,074 | 443,091 | 16,380,780 | ||||
Proceeds from Issuance of Private Placement | $ | $ 500,000 | $ 500,000 | |||||
Minority Interest Decrease From Redemptions Shares | 135,264 | ||||||
Common Class A | Share options | |||||||
Exercise of share options (in shares) | 114,793 | 232,024 | 76,491 | ||||
Common Class B | |||||||
Common Stock, Voting Rights | ten | ||||||
Conversion ratio of Class B into Class A | 1 | ||||||
Shares converted (in shares) | 3,614,796 | 0 | 900,000 | ||||
ADS | |||||||
Shares issued | 6,717,717 | 6,221,133 | 6,942,570 | ||||
Conversion of Stock, Shares Issued | 1,203,222 | 1,329,273 | 49,142,340 | ||||
ADS | Share options | |||||||
Exercise of share options (in shares) | 344,379 | 696,072 | 229,473 |
NET INCOME _ (LOSS) PER SHARE (
NET INCOME / (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Numerator: | |||
Net income/(loss) attributable to TAL Education Group's shareholders | $ (110,195) | $ 367,236 | $ 198,440 |
Eliminate the dilutive effect of interest expense of the bond payable | 27 | 162 | 2,465 |
Numerator for diluted net income/(loss) per share | $ (110,168) | $ 367,398 | $ 200,905 |
Denominator: | |||
Weighted average shares outstanding: Basic | 198,184,370 | 189,951,643 | 174,979,574 |
Effect of dilutive securities: | |||
Dilutive effect of non-vested shares and options | 9,689,955 | 11,084,069 | |
Dilutive effect of the bond payable | 583,336 | 8,267,662 | |
Denominator for diluted net income/(loss) per share | 198,184,370 | 200,224,934 | 194,331,305 |
Net income/(loss) per common share attributable to TAL Education Group's shareholders-basic | $ (0.56) | $ 1.93 | $ 1.13 |
Net income/(loss) per common share attributable to TAL Education Group's shareholders-diluted | $ (0.56) | $ 1.83 | $ 1.03 |
NET INCOME _ (LOSS) PER SHARE -
NET INCOME / (LOSS) PER SHARE - Additional information (Details) - shares | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
NET INCOME / (LOSS) PER SHARE | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 11,319,817 | 2,559,254 | 381,426 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | Feb. 28, 2019 |
RELATED PARTY TRANSACTIONS | ||
Amounts due from related parties-current | $ 3,642 | $ 3,341 |
Amounts due from related parties-non-current | 1,747 | |
Amounts due to related parties-current | $ 4,361 | 24,375 |
Amounts due to related parties-non-current | $ 196 |
RELATED PARTY TRANSACTIONS - Tr
RELATED PARTY TRANSACTIONS - Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
RELATED PARTY TRANSACTIONS | |||
Services fees | $ 6,350 | $ 1,888 | $ 880 |
Other revenue | 4,113 | 1,374 | 1,016 |
Purchase of equipment | $ 120 | 1,068 | 947 |
Disposal gain | $ 760 | $ 3,044 |
RELATED PARTY TRANSACTIONS - Du
RELATED PARTY TRANSACTIONS - Due to related parties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Amounts due to related parties-current | $ 4,361 | $ 24,375 | |
Disposal gain | 760 | $ 3,044 | |
Related party investment payable | |||
Impairment loss | 33,184 | ||
Amounts due to related parties-current | $ 0 | 20,635 | |
BabyTree | |||
Disposal gain | $ 760 | $ 3,044 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | Feb. 28, 2019 |
COMMITMENTS AND CONTINGENCIES | ||
February 2021 | $ 22,729 | |
February 2022 | 23,873 | |
February 2023 | 19,451 | |
February 2024 | 15,041 | |
February 2025 | 10,514 | |
Thereafter | 16,015 | |
Total | $ 107,623 | $ 1,343,259 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional information (Details) $ in Thousands | Feb. 29, 2020USD ($) |
Capital commitment | Beijing | |
Commiments and Contingencies | $ 150,556 |
Capital commitment | Jiangsu | |
Commiments and Contingencies | 253,510 |
Investment commitment | |
Commiments and Contingencies | $ 28,646 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) | 12 Months Ended |
Feb. 29, 2020segment | |
SEGMENT INFORMATION | |
Operating segments | 1 |
Reporting segments | 1 |
MAINLAND CHINA CONTRIBUTION P_2
MAINLAND CHINA CONTRIBUTION PLAN (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
MAINLAND CHINA CONTRIBUTION PLAN | |||
Defined Contribution Plan, Cost | $ 220,366 | $ 173,050 | $ 108,463 |
STATUTORY RESERVES AND RESTRI_2
STATUTORY RESERVES AND RESTRICTED NET ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | ||
Appropriation of after tax income to statutory surplus reserve per annum | 10.00% | |
Reserve level threshold for mandatory transfer percentage | 50.00% | |
Minimum appropriation of after tax income to development fund for private schools requiring reasonable return | 25.00% | |
Minimum appropriation of annual increase of net assets to development fund for private schools that do not require reasonable return | 25.00% | |
Appropriations to statutory surplus reserve | $ 2,709 | $ 1,519 |
Appropriations to development fund | 21,313 | 18,856 |
Paid-in capital of Company's PRC subsidiaries, VIEs and VIEs' subsidiaries | 580,551 | 390,762 |
Statutory reserve of Company's PRC subsidiaries, VIEs and VIEs' subsidiaries | 82,712 | 58,690 |
Total of restricted net assets of Company's PRC subsidiaries, VIEs and VIEs' subsidiaries | $ 663,263 | $ 449,452 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - $ / shares | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Number of non-vested shares | |||
Outstanding at the beginning of the period (in shares) | 11,986,214 | 11,650,016 | 13,101,006 |
Granted (in shares) | 1,376,628 | 2,801,437 | 1,111,836 |
Forfeited (in shares) | 813,036 | 370,028 | 187,719 |
Vested (in shares) | 2,277,114 | 2,095,211 | 2,375,107 |
Outstanding at the end of the period (in shares) | 10,272,692 | 11,986,214 | 11,650,016 |
Weighted average grant date fair value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 36.11 | $ 21.21 | $ 15.62 |
Granted (in dollars per share) | 121.85 | 86.95 | 74.63 |
Forfeited (in dollars per share) | 40.86 | 44.33 | 27.95 |
Vested (in dollars per share) | 33.82 | 19.82 | 14.81 |
Outstanding at the end of the period (in dollars per share) | $ 47.73 | $ 36.11 | $ 21.21 |
SHARE-BASED COMPENSATION - Fair
SHARE-BASED COMPENSATION - Fair value (Details) - $ / shares | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Risk-free interest rate | 1.63% | 2.89% | 1.99% |
Expected life (years) | 6 years | 6 years | 6 years 2 months 1 day |
Volatility | 34.20% | 34.00% | 32.80% |
Fair value of options at grant date per share | $ 43.53 | $ 42.09 | $ 28.69 |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Risk-free interest rate | 2.35% | 2.92% | 2.55% |
Expected life (years) | 6 years 3 months | 6 years 3 months | 6 years 3 months |
Volatility | 35.10% | 34.50% | 33.80% |
Fair value of options at grant date per share | $ 72.09 | $ 42.55 | $ 38.71 |
SHARE-BASED COMPENSATION - Opti
SHARE-BASED COMPENSATION - Options (Details) - Share options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average number of shares, Outstanding | 1,048,937 | 1,327,701 | 1,338,882 | |
Weighted average number of shares granted | 203,179 | 23,000 | 89,160 | |
Weighted average number of shares exercised | 114,793 | 232,024 | 76,491 | |
Weighted average number of shares forfeited | 90,198 | 69,740 | 23,850 | |
Weighted average number of shares, Outstanding | 1,047,125 | 1,048,937 | 1,327,701 | 1,338,882 |
Weighted average number of shares vested and expected to vest | 1,047,125 | |||
Weighted average number of shares exercisable | 366,547 | |||
Weighted average remaining exercise price, Outstanding | $ 25.50 | $ 22.87 | $ 20.12 | |
Weighted average remaining exercise price, Granted | 79.42 | 108.57 | 59.50 | |
Weighted average remaining exercise price, Exercised | 21.79 | 16.85 | 18.46 | |
Weighted average remaining exercise price, Forfeited | 41.11 | 31.55 | 19.44 | |
Weighted average remaining exercise price, Outstanding | 35.03 | $ 25.50 | $ 22.87 | $ 20.12 |
Weighted average remaining exercise price, Vested and expected to vest | 35.03 | |||
Weighted average remaining exercise price, Exercisable | $ 24.27 | |||
Aggregate intrinsic contractual life (Years), Outstanding | 7 years 8 months 23 days | 8 years 6 months 22 days | 9 years 5 months 23 days | 9 years 9 months 7 days |
Aggregate intrinsic contractual life (Years), Vested and expected to vest | 7 years 8 months 23 days | |||
Aggregate intrinsic contractual life (Years), Exercisable | 7 years 4 months 13 days | |||
Value, Outstanding | $ 134,183 | $ 85,318 | $ 120,040 | $ 30,954 |
Value, Vested and expected to vest | 134,183 | |||
Value, Exercisable | $ 50,914 |
SHARE-BASED COMPENSATION - Expe
SHARE-BASED COMPENSATION - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 117,943 | $ 77,277 | $ 47,150 |
Cost of revenues | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 1,074 | 706 | 366 |
Selling and marketing expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 19,356 | 10,454 | 5,037 |
General and administrative expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 97,513 | $ 66,117 | $ 41,747 |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2010 | Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares authorized (as percent of total issued and outstanding) | 5.00% | |||
Shares authorized threshold (as percent of outstanding) | 1.00% | |||
Granted (in shares) | 1,376,628 | 2,801,437 | 1,111,836 | |
Share-based compensation expense | $ 117,943 | $ 77,277 | $ 47,150 | |
Unrecognized compensation expense recognition period (in years) | 4 years 9 months 18 days | |||
Share options, exercised intrinsic value | $ 12,139 | 19,863 | 5,811 | |
Share options, vested fair value | 3,225 | 2,764 | $ 2,256 | |
Share options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting (in years) | 4 years | |||
Share-based compensation expense | 3,916 | $ 3,046 | $ 2,820 | |
Unrecognized compensation expense | $ 15,643 | |||
Unrecognized compensation expense recognition period (in years) | 3 years 9 months 18 days | |||
Share options granted (in shares) | 203,179 | 23,000 | 89,160 | |
Share options low limit (per share) | $ 63 | $ 107.67 | $ 40.05 | |
Share options high limit (per share) | $ 115.80 | $ 109.98 | $ 102 | |
Non-vested | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 1,376,628 | 2,801,437 | 1,111,836 | |
Share-based compensation expense | $ 114,027 | $ 74,231 | $ 44,330 | |
Non-vested shares fair value | 77,012 | $ 41,527 | $ 35,175 | |
Non vested unrecognized compensation expense | $ 406,824 | |||
Minimum | Share options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting (in years) | 3 years | 3 years | ||
Share options expiration (in years) | 10 years | |||
Minimum | Non-vested | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting (in years) | 3 years | 1 year | 1 year | |
Maximum | Share options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting (in years) | 4 years | 4 years | ||
Share options expiration (in years) | 12 years | |||
Maximum | Non-vested | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting (in years) | 8 years | 13 years | 10 years |
DISTRIBUTION TO SHAREHOLDERS (D
DISTRIBUTION TO SHAREHOLDERS (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 27, 2017 | May 31, 2017 | Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 |
DISTRIBUTION TO SHAREHOLDERS | |||||
Dividend (per share) | $ 0.25 | ||||
Dividends, Common Stock, Cash | $ 41,166 | $ 0 | $ 0 | $ 41,166 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | |||
Jun. 30, 2020 | May 31, 2020 | Mar. 31, 2020 | Apr. 28, 2020 | |
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Definitive agreement to further invest | $ 10,400 | |||
Common Stock | ||||
Subsequent Event [Line Items] | ||||
Stock Repurchase Program, Authorized Amount | $ 500,000 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 100,000 | |||
Share Incentive Plan 2020 [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Term of period issued | 10 years | |||
ADS | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock Repurchased During Period, Shares | 185,001 | |||
Common Shares | 61,667 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Per Share Weighted Average Price of Shares Purchased | $ 53.23 | |||
Stock Repurchased During Period, Value | $ 9,850 |
Schedule I Condensed Financia_2
Schedule I Condensed Financial Information of Parent Company - Balance sheet (Details) ¥ in Thousands, $ in Thousands | Feb. 29, 2020USD ($) | Feb. 29, 2020CNY (¥) | Feb. 28, 2019USD ($) | Feb. 28, 2019CNY (¥) |
Current assets | ||||
Cash and cash equivalents | $ 1,873,866 | ¥ 1,435,739 | $ 1,247,140 | ¥ 538,364 |
Restricted cash-current | 28,084 | 9,227 | ||
Short-term investments | 345,457 | 268,424 | ||
Prepaid expenses and other current assets | 207,352 | 202,630 | ||
Total current assets | 2,495,781 | 1,745,716 | ||
Restricted cash-non-current | 13,235 | 7,334 | ||
Intangible assets, net | 58,985 | 74,776 | ||
Goodwill | 378,913 | 414,228 | ||
Long-term investments | 571,601 | 850,695 | ||
Long-term prepayments and other non-current assets | 85,275 | 267,404 | ||
Total assets | 5,571,246 | 3,735,091 | ||
Current liabilities | ||||
Accrued expenses and other current liabilities | 552,650 | 365,195 | ||
Short-term debt and current portion of long-term debt | 210,027 | |||
Bond payable, current portion | 5,275 | |||
Total current liabilities | 1,806,558 | 1,183,718 | ||
Long-term debt | 261,950 | |||
Total liabilities | 3,027,049 | 1,204,614 | ||
Equity | ||||
Class A common shares issuable | 1,977 | |||
Additional paid-in capital | 1,675,640 | 1,485,521 | ||
Statutory reserve | 82,712 | 58,690 | ||
Retained earnings | 786,097 | 920,314 | ||
Accumulated other comprehensive income / (loss) | (28,913) | 17,047 | ||
Total TAL Education Group shareholder's equity | 2,515,736 | 2,483,747 | ||
Total liabilities and equity | 5,571,246 | 3,735,091 | ||
Common Class A | ||||
Equity | ||||
Common shares | 133 | 127 | ||
Common Class B | ||||
Equity | ||||
Common shares | 67 | 71 | ||
Parent Company | ||||
Current assets | ||||
Cash and cash equivalents | 442,001 | 697,962 | ||
Restricted cash-current | 5,105 | |||
Short-term investments | 312,000 | 173,943 | ||
Amounts due from subsidiaries and related parties-current | 308,831 | 77,396 | ||
Prepaid expenses and other current assets | 21,410 | 38,261 | ||
Total current assets | 1,084,242 | 992,667 | ||
Restricted cash-non-current | 2,589 | |||
Amounts due from subsidiaries and related parties-non-current | 1,000 | |||
Intangible assets, net | 612 | 720 | ||
Goodwill | 57,206 | 57,206 | ||
Long-term investments | 454,746 | 645,328 | ||
Long-term prepayments and other non-current assets | 24,675 | 8,060 | ||
Investments in its subsidiaries, and VIEs and the VIEs' subsidiaries and schools | 1,336,905 | 1,137,833 | ||
Total assets | 2,960,975 | 2,842,814 | ||
Current liabilities | ||||
Amounts due to subsidiaries and related parties-current | 179,977 | 154,885 | ||
Accrued expenses and other current liabilities | 3,312 | 3,907 | ||
Short-term debt and current portion of long-term debt | 195,000 | |||
Bond payable, current portion | 5,275 | |||
Total current liabilities | 183,289 | 359,067 | ||
Long-term debt | 261,950 | |||
Total liabilities | 445,239 | 359,067 | ||
Equity | ||||
Class A common shares issuable | 1,977 | |||
Additional paid-in capital | 1,675,640 | 1,485,521 | ||
Statutory reserve | 82,712 | 58,690 | ||
Retained earnings | 786,097 | 920,314 | ||
Accumulated other comprehensive income / (loss) | (28,913) | 17,047 | ||
Total TAL Education Group shareholder's equity | 2,515,736 | 2,483,747 | ||
Total liabilities and equity | 2,960,975 | 2,842,814 | ||
Parent Company | Common Class A | ||||
Equity | ||||
Common shares | 133 | 127 | ||
Parent Company | Common Class B | ||||
Equity | ||||
Common shares | $ 67 | $ 71 |
Schedule I Condensed Financia_3
Schedule I Condensed Financial Information of Parent Company - Balance sheet (Parenthetical) (Details) - $ / shares | Feb. 29, 2020 | Feb. 28, 2019 |
Common Class A | ||
Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common shares, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common shares, shares issued (in shares) | 132,895,675 | 126,501,071 |
Common shares, shares outstanding (in shares) | 126,501,071 | 118,401,821 |
Common Class B | ||
Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common shares, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common shares, shares issued (in shares) | 66,941,204 | 70,556,000 |
Common shares, shares outstanding (in shares) | 66,941,204 | 70,556,000 |
Parent Company | Common Class A | ||
Common shares, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common shares, shares issued (in shares) | 132,895,675 | 126,501,071 |
Common shares, shares outstanding (in shares) | 132,895,675 | 126,501,071 |
Parent Company | Common Class B | ||
Common shares, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common shares, shares issued (in shares) | 66,941,204 | 70,556,000 |
Common shares, shares outstanding (in shares) | 66,941,204 | 70,556,000 |
Schedule I Condensed Financia_4
Schedule I Condensed Financial Information of Parent Company - Statements of operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Cost of revenues | $ (1,468,569) | $ (1,164,454) | $ (882,316) |
Operating expenses | |||
Selling and marketing | (852,808) | (484,000) | (242,102) |
General and administrative | (794,957) | (579,672) | (386,287) |
Income from operations | 137,443 | 341,582 | 208,604 |
Interest income | 72,991 | 59,614 | 39,837 |
Interest expense | (11,820) | (17,628) | (16,640) |
Other income / (loss) | (95,297) | 131,727 | 17,406 |
Impairment loss on long-term investments | (153,970) | (58,091) | (2,213) |
Income tax expense | (69,328) | (76,504) | (44,653) |
Gain from equity method investments | (7,670) | (16,186) | (7,678) |
Net income / (loss) | (127,651) | 364,514 | 194,663 |
Parent Company | |||
Cost of revenues | (1,034) | (605) | (149) |
Operating expenses | |||
Selling and marketing | (19,423) | (10,447) | (4,904) |
General and administrative | (94,608) | (62,084) | (36,849) |
Income from operations | (115,065) | (73,136) | (41,902) |
Interest income | 27,813 | 13,114 | 5,240 |
Interest expense | (11,730) | (17,194) | (16,640) |
Other income / (loss) | (131,283) | 106,179 | 8,495 |
Impairment loss on long-term investments | (132,120) | (29,382) | |
Income tax expense | (2,689) | (2,202) | (2,268) |
Gain from equity method investments | 995 | 1,409 | 1,295 |
Equity in earnings of its subsidiaries, the VIEs and the VIEs' subsidiaries and schools | 253,884 | 368,448 | 244,220 |
Net income / (loss) | $ (110,195) | $ 367,236 | $ 198,440 |
Schedule I Condensed Financia_5
Schedule I Condensed Financial Information of Parent Company - Statements of comprehensive income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Net income / (loss) | $ (127,651) | $ 364,514 | $ 194,663 |
Other comprehensive income / (loss) , net of tax | |||
Foreign currency translation adjustment | (48,947) | (35,823) | 47,469 |
Unrealized gains on available-for-sale investments, net of tax | 1,122 | 15,837 | 34,556 |
Less: Transfer to statements of operations of realized gains on available-for-sale investments, net of tax | (96,251) | (4,245) | |
Other comprehensive income / (loss) | (47,825) | (116,237) | 77,780 |
Comprehensive income / (loss) attributable to TAL Education Group's shareholders | (156,155) | 251,958 | 274,896 |
Parent Company | |||
Net income / (loss) | (110,195) | 367,236 | 198,440 |
Other comprehensive income / (loss) , net of tax | |||
Foreign currency translation adjustment | (47,082) | (34,864) | 46,145 |
Unrealized gains on available-for-sale investments, net of tax | 1,122 | 15,837 | 34,556 |
Less: Transfer to statements of operations of realized gains on available-for-sale investments, net of tax | (96,251) | (4,245) | |
Other comprehensive income / (loss) | (45,960) | (115,278) | 76,456 |
Comprehensive income / (loss) attributable to TAL Education Group's shareholders | $ (156,155) | $ 251,958 | $ 274,896 |
Schedule I Condensed Financia_6
Schedule I Condensed Financial Information of Parent Company - Statements of cash flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | |
Net cash provided by operating activities | $ 855,850 | $ 194,361 | $ 685,293 |
Cash flows from investing activities | |||
Loan to third parties | (13,590) | (33,700) | (5,531) |
Repayment of loan to third parties | 5,231 | 74,902 | |
Loan to related parties | (31,681) | (3,989) | (2,641) |
Prepayment for investments | (18,489) | (2,562) | (43,572) |
Purchase of intangible assets | (3,213) | (6,738) | (2,079) |
Purchase of short-term investments | (546,747) | (581,204) | (1,197,155) |
Proceeds from maturity of short-term investments | 517,001 | 1,103,252 | 657,532 |
Payments for long-term investments | (117,508) | (243,542) | (196,559) |
Proceeds from disposal of long-term investments | 61,487 | 4,220 | 19,352 |
Net cash used in investing activities | (338,815) | (166,584) | (832,573) |
Cash flows from financing activities | |||
Net proceeds from long-term debt and short-term debt | 270,000 | 189,932 | |
Payment for upfront fee in related to long term debt | (12,600) | ||
Cash dividend to shareholders | (41,166) | ||
Cash received from exercise of capped call option | 73,247 | 6,369 | |
Proceeds from private placement | 500,000 | 500,000 | |
Proceeds from exercise of share options | 2,490 | 710 | 2,127 |
Repayment of convertible bond | (25) | ||
Net cash provided by financing activities | 131,231 | 475,019 | 428,151 |
Net increase in cash, cash equivalents and restricted cash | 651,484 | 536,004 | 249,086 |
Cash, cash equivalents and restricted cash at the beginning of year | 1,263,701 | 727,697 | 478,611 |
Cash, cash equivalents and restricted cash at the end of year | 1,915,185 | 1,263,701 | 727,697 |
Parent Company | |||
Net cash provided by operating activities | (200,408) | 64,362 | 14,141 |
Cash flows from investing activities | |||
Loan to third parties | (13,304) | (22,940) | |
Repayment of loan to third parties | 74,902 | ||
Loan to related parties | (23,527) | (1,000) | |
Prepayment for investments | (6,175) | (11,068) | |
Purchase of intangible assets | (56) | ||
Purchase of short-term investments | (312,000) | (148,918) | (370,000) |
Proceeds from maturity of short-term investments | 224,943 | 371,001 | 60,776 |
Payments for long-term investments | (84,929) | (246,261) | (117,868) |
Proceeds from disposal of long-term investments | 7,504 | 578 | 6,376 |
Investment in subsidiaries | (1,238) | (36,754) | (18,381) |
Net cash used in investing activities | (208,782) | (84,294) | (375,263) |
Cash flows from financing activities | |||
Net proceeds from long-term debt and short-term debt | 270,000 | 175,000 | |
Repayment of long-term debt | (195,000) | (205,000) | |
Payment for upfront fee in related to long term debt | (12,600) | ||
Cash dividend to shareholders | (41,166) | ||
Cash received from exercise of capped call option | 73,248 | 6,369 | |
Proceeds from private placement | 500,000 | 500,000 | |
Proceeds from exercise of share options | 2,490 | 710 | 2,127 |
Repayment of convertible bond | (25) | ||
Net cash provided by financing activities | 150,713 | 464,479 | 460,961 |
Net increase in cash, cash equivalents and restricted cash | (258,477) | 444,547 | 99,839 |
Cash, cash equivalents and restricted cash at the beginning of year | 703,067 | 258,520 | 158,681 |
Cash, cash equivalents and restricted cash at the end of year | $ 444,590 | $ 703,067 | $ 258,520 |