bank of america merrill lynch - s1.q4cdn.coms1.q4cdn.com/718184649/files/doc_presentations/2013/2013...

BANK of AMERICA MERRILL LYNCH 2013 Services Conference

May 21, 2013

FORWARD-LOOKING STATEMENTS

This presentation may contain forward-looking statements including, without limitation, statements with respect

management’s expectations regarding student persistence, institutional accreditation, the results of the Company's

initiatives, 2013 outlook, financial results and and related commentary. These statements involve risks and

uncertainties, and the Company's actual performance may differ materially from those expressed in or suggested

by such statements. Risks and uncertainties include, without limitation:

• failure to comply with the extensive regulatory framework applicable to the Company and its

institutions, including Title IV of the Higher Education Act and its regulations, state laws and

regulatory requirements, and accrediting agency requirements;

• adverse regulatory or legislative changes affecting the Company's institutions;

• the imposition of fines or other corrective measures against the Company's institutions;

• competition in the postsecondary education market and its potential impact on the Company's market

share and recruiting costs; and

• reputational and other risks related to potential compliance audits, regulatory actions, negative

publicity or service disruptions.

More information on potential factors that could affect the Company's performance is included from time to time in

the “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations”

sections of the Company's periodic reports filed with the SEC, including the Company's Annual Report on Form

10-K for the year ended December 31, 2012, filed with the SEC on March 12, 2013 and amended on May 17,

2013, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, filed with the SEC on May 15,

2013. Forward-looking statements are made on the basis of management's views and assumptions regarding

future events and business performance as of the time the statements are made, and the Company assumes no

obligation to update any forward-looking statements or information, which speak as of their respective dates,

except as required by law.

DIFFERENTIATION…

Quality

Value

Affordable

…Creates Value For Students47%

BA Salaries Increased

10.5%

• MA, PsyD, PhD

• Social & Behavioral Sciences

• Colorado Springs Campus

• HLC Accredited

99% Online

71% Female

48% Minority

37 Years Old

University of The RockiesAshford University

• AA, BA, MA, MBA

• 17 NAIA Sports Teams

• Clinton, IA Campus

• HLC Accredited, placed on notice

• WASC application process

RECOGNIZED BRANDS

Bus 39%

Lib Arts;

16%

Edu 21%

Hcare

23%

Non-D

1%

AU Programs

AA, 12%

BA, 74%

MA, 12%

Doc, 1%

AU and UOR Students

Ashford and Rockies: Robust data disclosure

– On student characteristics, satisfaction and performance,

and alumni data

– Committed to transparency:

• Informed prospective student decision-making

• Institutional continuous improvement

• Accountability for public and private funds

– Exceeds federal requirements

TRANSPARENCY & ACCOUNTABILITY

2012 2011 2010 2009

Bachelor’s Degree salary %

increase from salary at

enrollment

10.5% 11.6% 14.0% 16.7%

Master’s Degree salary %

increase from salary at

enrollment

15.5% 11.0% 11.5% 23.0%

ASHFORD Students and Alumni: Salary Increases

Our Approach

to

Quality Education

LEADERSHIP

Dr. Greg Geoffroy

Chairman, AU Trustees

38 Yrs Academic Leadership

President Emeritus, Iowa St.

10 Years as President: Expanded Diversity

Built Infrastructure

Bioeconomy Institute

SVP & Provost, U. Maryland

Ph.D. Chemistry, Caltech

Dr. Richard Pattenaude

Ashford U. President

23 Yrs. Academic Leadership

Chancellor, U. Maine System 7 years

President, U. Southern Maine 16 Years

Former Chair, Commission on

Institutions of Higher Education, New

England Association of Schools and

Colleges

Ph.D. Political Science,

U. of Colorado

ASHFORD UNIVERSITY & UNIVERSITY of the ROCKIES

AFFORDABILITY ACCESS SUCCESSQUALITY

Delivering value to students through FOUR PILLARS

AFFORDABILITY ACCESS QUALITY SUCCESSAFFORDABILITY

42%33%

12%

0%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

$-

$100

$200

$300

$400

$500

$600

DeVry - DV UoP -APOL

Strayer -STRA

GrandCanyon -

LOPE

Ashford -BPI

AshfordMilitary

AMU -APEI

% D

iffe

ren

ce

$ p

er

Cre

dit

47%Affordable

AFFORDABILITY ACCESS QUALITY SUCCESSACCESS

• Better Student Benchmarking Data

• Rich Data on Outcomes

• Used By 40 Institutions

• Assessment of Learning Data

Apple™/ Android™

MOBILE ACCESS

• Constellation

• Students

• Grade Book

• Admin

• Classroom

• Faculty

} • More Affordable

• Proprietary Learning Platform

• Rapid uptake

• Patent Pending&

ACCESS through TECHNOLOGY

AFFORDABILITY ACCESS QUALITY SUCCESSQUALITY

Quality Initiatives

Learning

• Additional Full-Time Faculty

• Smaller Class Sizes

• Continued Technology Investment

• InsideTrack

University Advisors

• Extend relationship to 26 wks

• Problem-solving Focus

Student Support

• 2 Advisors thru 4th Course

• Predictive Modeling

• Better Persistence

AFFORDABILITY ACCESS QUALITY SUCCESSSUCCESS

Student Inquiry

• First Contact with Students

• 200 Staff

• Data Analytics

• Goal: Student Readiness

Orientation

• 2 Weeks

• 100% Free

• All AAs & BAs w/ zero credits

The Ashford Promise

• 3-Week Refund Policy

• Drop Underperforms

• All Tuition, Fees Refunded

• No Debt Incurred

Career Support

• Career Support Services– Resume building

– Job Search

– Interview Prep

• Alumni Networking

• Employer Awareness

Student Success Initiatives

BRAND STRATEGY

• Marketing Mix Optimization

Business intel, analytics: develop optimal marketing

media

• Awareness

Attracting learners most committed to, & persisting

with their education goals

• Reputation

Developing positive perception and sentiment

around online higher ed

BRAND STRATEGY

“Technology Changes Everything”

90% of Potential Students Think the Future of Education is Virtual

BRAND CAMPAIGN “Technology Changes Everything”

2012 Q4 Campaign Launch Results

• 80% increase in Organic traffic on Ashford’s website

• 100% increase in Brand Awareness

• 114% increase in Awareness among fully employed

• Positive Sentiment Up 40% from August

2013 Q1 Campaign Launch Results (Digital)

• Aided brand awareness nearly tripled since 2012 study

Control/Exposed: 2013 21/27.8 (32.4% increase)

• Online Ad awareness doubled since last campaign

Control/Exposed: 2013 6/10.5 (75% increase)

2013FINANCIAL REVIEW

AFFORDABILITY ACCESS QUALITY SUCCESS

FINANCIAL MODEL HIGHLIGHTS

• Highly Competitive Tuition Pricing

One of the lowest in the sector

Below Title IV Loan Limits

• Branding: Recalibrate Marketing Mix

• Capital Efficient Business

• Strong Cash Position, No Debt


CONSISTENT REGULARTORY METRICS

2012 2011 2010 2009

Ashford 2-Yr. CDR --- 10.1%* 10.2% 15.3%

Rockies 2-Yr. CDR --- 4.9%* 4.0% 3.3%

Ashford 3-Yr. CDR --- --- 16.3%* 19.8%

Rockies 3-Yr. CDR --- --- 8.0%* 3.3%

Ashford 90 /10 Ratio 86.4% 86.8% 85.0% 85.5%

Rockies 90 /10 Ratio 87.3% 85.0% 85.9% 84.6%

*draft data


HISTORY of CONSISTENT PERFORMANCE

31,558

53,688

77,892

86,64281,810

78,782

5,000

25,000

45,000

65,000

85,000

105,000

2008 2009 2010 2011 2012 Q12013

Enrollments

$218.3

$454.3

$713.2

$933.3$968.2

$222.0

$50.0

$250.0

$450.0

$650.0

$850.0

$1,050.0

2008 2009 2010 2011 2012 Q12013

Revenue


OPERATING MARGIN

15.3%18.0%

30.3% 29.3%

20.2% 19.6%

0.0%

10.0%

20.0%

30.0%

40.0%

2008 2009 2010 2011 2012 Q1 2013


CASH FLOW and EPS

$70.7

$131.7

$189.9

$220.8

$143.2

$15.6

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

2008 2009 2010 2011 2012 Q12013

Net Cash Provided By Operating Activities

$0.16

$0.74

$2.14

$3.02

$2.21

$0.49

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

2008 2009 2010 2011 2012 Q12013

Fully-Diluted Earnings Per Common Share


20132012

Data Submissions Site Visit

Substantial

Presence PlanHLC Board

Meeting

Site VisitRe-Application

Submittal

WASC Board

Meeting

June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul

REGULATORY TIMELINE

bank of america merrill lynch - s1.q4cdn.coms1.q4cdn.com/718184649/files/doc_presentations/2013/2013...

Documents