智通财经APP获悉，周五，中概教育股走高，截至发稿，好未来(TAL.US)涨超7%，新东方(EDU.US)涨超2.5%，高途(GOTU.US)微涨。中国银河证券发布研究报告称，当前中国教培行业的监管政策框架已较为完备，且行业规范化发展的界限与框架已经明晰，政策稳定性的能见度已较高。在此基础上，该行预计未来行业增量供给将主要以头部机构获颁的非学科类培训为主。而从需求端看，考虑未来十年高考人口增长+教育体系更加注重学生的综合素质发展是主要趋势，因此该行预计聚焦K9新素养+高中个性化教育服务的教培公司将充分受益于当前供需格局变化。 ...

BEIJING, Dec. 29, 2023 /PRNewswire/ -- TAL Education Group ("TAL" or the "Company") (NYSE: TAL), a smart learning solutions provider in China, today announced that it will release its unaudited financial results for the third quarter of fiscal year 2024 ended November 30, 2023, before the market opens on Thursday, January 25, 2024.The Company will host a corresponding conference call and live webcast at 7:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing Time) on Thursday, January 25, 2024.Please note that you w ...

TAL Education Group (NYSE:TAL) Q2 2024 Earnings Conference Call October 26, 2023 8:00 AM ET Company Participants Jackson Ding - Investor Relations Director Alex Peng - President & Chief Financial Officer Conference Call Participants Felix Liu - UBS Linda Huang - Macquarie Candis Chan - Daiwa Caini Wang - CICC Lucy Yu - Bank of America Operator Ladies and gentlemen, good day, and thank you for standing by. Welcome to TAL Education Group's Second Quarter of Fiscal Year 2024 Earnings Conference Call. At this t ...

Exhibit 99.1 TAL Education Group Announces Unaudited Financial Results for the Second Fiscal Quarter Ended August 31, 2023 (Beijing–October 26, 2023)—TAL Education Group (NYSE: TAL) ("TAL" or the "Company"), a smart learning solutions provider in China, today announced its unaudited financial results for the second quarter of fiscal year 2024 ended August 31, 2023. Highlights for the Second Quarter of Fiscal Year 2024 - Net revenues was US$411.9 million, compared to net revenues of US$294.1 million in the s ...

[Q1 FY2024 Financial Results Announcement](index=1&type=section&id=TAL%20Education%20Group%20Announces%20Unaudited%20Financial%20Results%20for%20the%20First%20Fiscal%20Quarter%20Ended%20May%2031%2C%202023) [Financial Highlights](index=1&type=section&id=Highlights%20for%20the%20First%20Quarter%20of%20Fiscal%20Year%202024) For the first quarter of fiscal year 2024, TAL Education Group reported a 22.9% year-over-year increase in net revenues to US$275.4 million, while loss from operations widened significantly to US$57.8 million from US$28.3 million in the prior-year period, maintaining a strong liquidity position with over US$3.0 billion in cash, cash equivalents, and short-term investments Q1 FY2024 Key Financial Metrics (Unaudited) | Metric | Q1 FY2024 (US$ Million) | Q1 FY2023 (US$ Million) | YoY Change | | :--- | :--- | :--- | :--- | | Net Revenues | $275.4 | $224.0 | +22.9% | | Loss from Operations | $(57.8) | $(28.3) | +104.0% | | Non-GAAP Loss from Operations | $(32.3) | $(1.8) | +1,649.5% | | Net Loss Attributable to TAL | $(45.0) | $(43.8) | +2.8% | | Cash, Cash Equivalents & Short-Term Investments | $3,044.7 | - | - | - Management highlighted ongoing efforts to refine core offerings and optimize operations, while also achieving progress in newer initiatives such as the smart device business[4](index=4&type=chunk) [Detailed Financial Results](index=2&type=section&id=Financial%20Results%20for%20the%20First%20Quarter%20of%20Fiscal%20Year%202024) In Q1 FY2024, the 22.9% revenue growth was offset by a 31.6% increase in operating costs and expenses, primarily driven by a 57.5% rise in cost of revenues and a 62.7% increase in selling and marketing expenses, resulting in a wider operating loss of US$57.8 million despite a slight 0.3% increase in gross profit [Net Revenues](index=2&type=section&id=Net%20Revenues) Net revenues increased by **22.9%** year-over-year to **US$275.4 million** in Q1 FY2024 Net Revenues (YoY) | Period | Net Revenues (US$ Million) | | :--- | :--- | | Q1 FY2024 | $275.4 | | Q1 FY2023 | $224.0 | | **YoY Increase** | **22.9%** | [Operating Costs and Expenses](index=2&type=section&id=Operating%20Costs%20and%20Expenses) Total operating costs and expenses rose **31.6%** to **US$342.1 million**, driven by significant increases in cost of revenues and selling and marketing expenses Operating Costs and Expenses Breakdown (YoY) | Expense Category | Q1 FY2024 (US$ Million) | Q1 FY2023 (US$ Million) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Operating Costs & Expenses** | **342.1** | **260.0** | **+31.6%** | | Cost of Revenues | 139.5 | 88.6 | +57.5% | | Selling and Marketing | 97.7 | 60.0 | +62.7% | | General and Administrative | 104.9 | 111.5 | -5.9% | - Total share-based compensation expenses, allocated across operating costs, decreased slightly by **3.6%** to **US$25.5 million**[10](index=10&type=chunk) [Profitability](index=3&type=section&id=Profitability) Gross profit remained stable at **US$135.9 million**, but operating loss widened to **US$57.8 million**, leading to a net loss of **US$45.0 million** Profitability Metrics (YoY) | Metric | Q1 FY2024 (US$ Million) | Q1 FY2023 (US$ Million) | | :--- | :--- | :--- | | Gross Profit | 135.9 | 135.5 | | Loss from Operations | (57.8) | (28.3) | | Net Loss Attributable to TAL | (45.0) | (43.8) | - Basic and diluted net loss per ADS were both **US$0.07** for the quarter[16](index=16&type=chunk) [Financial Position and Cash Flow](index=3&type=section&id=Financial%20Position%20and%20Cash%20Flow) As of May 31, 2023, TAL maintained a robust balance sheet with US$3.04 billion in cash, cash equivalents, and short-term investments, generated US$125.5 million in cash from operating activities, and saw deferred revenue increase to US$387.7 million, indicating future revenue potential Cash and Investments Position | Category | May 31, 2023 (US$ Million) | Feb 28, 2023 (US$ Million) | | :--- | :--- | :--- | | Cash and cash equivalents | 2,085.4 | 2,021.9 | | Short-term investments | 959.3 | 1,149.6 | | **Total** | **3,044.7** | **3,171.5** | - Net cash provided by operating activities for the first quarter of fiscal year 2024 was **US$125.5 million**[17](index=17&type=chunk) - Deferred revenue increased to **US$387.7 million** as of May 31, 2023, up from **US$237.4 million** as of February 28, 2023[19](index=19&type=chunk) [Corporate Actions](index=4&type=section&id=Corporate%20Actions) The company actively returned value to shareholders, repurchasing approximately 25.9 million ADSs for US$151.3 million during the quarter, and extended its share repurchase program by 12 months, with approximately US$737.4 million remaining available for repurchases through April 30, 2024 - In Q1 FY2024, the company spent approximately **US$151.3 million** to repurchase 8,645,334 common shares (equivalent to ~**25.9 million ADSs**)[5](index=5&type=chunk)[20](index=20&type=chunk) - The board of directors extended the existing share repurchase program by 12 months, authorizing up to approximately **US$737.4 million** in repurchases through April 30, 2024[20](index=20&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of May 31, 2023, total assets were US$4.71 billion, a slight decrease from US$4.72 billion as of February 28, 2023, while total liabilities increased to US$1.09 billion from US$0.90 billion, primarily due to a significant rise in deferred revenue from US$237.4 million to US$387.7 million, resulting in total equity decreasing to US$3.63 billion Key Balance Sheet Items (in US$ thousands) | Account | May 31, 2023 (US$ thousands) | Feb 28, 2023 (US$ thousands) | | :--- | :--- | :--- | | **Total Assets** | **$4,714,247** | **$4,724,354** | | Cash, cash equivalents & restricted cash | $2,425,591 | $2,294,907 | | Short-term investments | $959,310 | $1,149,607 | | **Total Liabilities** | **$1,088,103** | **$903,441** | | Deferred revenue (current & non-current) | $387,667 | $237,354 | | **Total Equity** | **$3,626,144** | **$3,820,913** | [Unaudited Condensed Consolidated Statements of Operations](index=7&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the three months ended May 31, 2023, the company reported net revenues of US$275.4 million, a 22.9% increase year-over-year, but a 57.5% surge in cost of revenues to US$139.5 million kept gross profit nearly flat at US$135.9 million, with higher operating expenses leading to a loss from operations of US$57.8 million, wider than the US$28.3 million loss in the prior-year period, and a net loss attributable to TAL of US$45.0 million Statement of Operations Summary (in US$ thousands) | Line Item | Q1 FY2024 (US$ thousands) | Q1 FY2023 (US$ thousands) | | :--- | :--- | :--- | | Net revenues | $275,440 | $224,045 | | Gross profit | $135,927 | $135,487 | | Loss from operations | $(57,773) | $(28,323) | | Net loss attributable to TAL | $(45,037) | $(43,829) | | Net loss per ADS - Basic & Diluted | $(0.07) | $(0.07) | [Unaudited Condensed Consolidated Statements of Comprehensive Loss](index=9&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20LOSS) For the quarter ended May 31, 2023, the company's comprehensive loss attributable to TAL was US$69.5 million, including a net loss of US$45.2 million and other comprehensive loss of US$23.8 million, net of tax Comprehensive Loss (in US$ thousands) | Item | Q1 FY2024 (US$ thousands) | Q1 FY2023 (US$ thousands) | | :--- | :--- | :--- | | Net loss | $(45,227) | $(42,912) | | Other comprehensive loss, net of tax | $(23,813) | $(60,826) | | **Comprehensive loss attributable to TAL** | **$(69,501)** | **$(106,252)** | [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) In the first quarter of fiscal 2024, TAL generated US$125.5 million in net cash from operating activities, a significant improvement from a US$44.9 million use of cash in the same period last year, with net cash provided by investing activities of US$160.9 million and financing activities using US$151.2 million, primarily for share repurchases, resulting in a net increase in cash, cash equivalents, and restricted cash of US$130.7 million Cash Flow Summary (in US$ thousands) | Activity | Q1 FY2024 (US$ thousands) | Q1 FY2023 (US$ thousands) | | :--- | :--- | :--- | | Net cash from operating activities | $125,516 | $(44,880) | | Net cash from investing activities | $160,915 | $(51,335) | | Net cash used in financing activities | $(151,237) | $(49,768) | | **Net increase/(decrease) in cash** | **$130,684** | **$(164,720)** | [Reconciliation of Non-GAAP Measures](index=11&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures%20to%20the%20Most%20Comparable%20GAAP%20Measures) This section reconciles GAAP to non-GAAP financial measures by excluding share-based compensation expenses, which totaled US$25.5 million for Q1 FY2024, resulting in a non-GAAP loss from operations of US$32.3 million and a non-GAAP net loss attributable to TAL of US$19.5 million GAAP to Non-GAAP Reconciliation (in US$ thousands) | Metric | Q1 FY2024 GAAP (US$ thousands) | Share-based Compensation (US$ thousands) | Q1 FY2024 Non-GAAP (US$ thousands) | | :--- | :--- | :--- | :--- | | Loss from operations | $(57,773) | $25,513 | $(32,260) | | Net loss attributable to TAL | $(45,037) | $25,513 | $(19,524) |

TAL Education Group (NYSE:TAL) Q1 2024 Earnings Conference Call July 27, 2023 8:00 AM ET Company Participants Jackson Ding - IR Director Alex Peng - President and CFO Conference Call Participants Candis Chan - Daiwa Felix Liu - UBS Operator Ladies and gentlemen, good day and thank you for standing by. Welcome to TAL Education Group First Quarter of Fiscal Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-a ...

Introduction [Definitions and Currency Translation](index=3&type=section&id=INTRODUCTION_Definitions) This section defines key terms used throughout the annual report and specifies that financial statements are in U.S. dollars, providing the Renminbi to U.S. dollar exchange rate as of February 28, 2023 - Key definitions include 'ADSs' (three representing one Class A common share), 'China' (excluding Taiwan, Hong Kong, Macau for legal context), 'K-12' (kindergarten through high school), 'K-9 Academic AST Services' (after-school tutoring for K-9 academic subjects), 'RMB' (lawful currency of China), 'shares' (Class A and B common shares), 'student enrollments of normal priced long-term course' (paid enrollments excluding promotional/short-term courses), 'U.S. dollars' (lawful currency of the United States), 'U.S. GAAP' (generally accepted accounting principles in the United States), 'VIEs' (variable interest entities like Beijing Xueersi Network Technology Co., Ltd., Beijing Xueersi Education Technology Co., Ltd., and Xinxin Xiangrong Education Technology (Beijing) Co., Ltd. whose financial results are consolidated), 'VIE Subsidiaries' (VIEs' direct and indirect subsidiaries and schools), and 'VIE Contractual Arrangements' (agreements between PRC subsidiaries, VIEs, and their shareholders)[6](index=6&type=chunk) - Financial statements are expressed in U.S. dollars. Convenient translations from Renminbi to U.S. dollars in this report were made at a rate of **RMB6.9325 to $1.00**, as of February 28, 2023[7](index=7&type=chunk) Forward-Looking Statements [Overview of Forward-Looking Statements](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS_Overview) This section highlights that the annual report contains forward-looking statements subject to known and unknown risks and uncertainties, which may cause actual results to differ materially - The report contains forward-looking statements under the 'safe-harbor' provisions of the U.S. Private Securities Litigation Reform Act of 1995, which involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially[8](index=8&type=chunk) - Forward-looking statements relate to: PRC laws and policies in the learning solutions industry, anticipated growth strategies, market competition, future business development, financial condition, expected changes in revenues and expenses, ability to increase learner enrollments and expand offerings, and risks associated with geographic expansion and new product offerings[9](index=9&type=chunk) - The company bases these statements on current expectations and projections about future events and financial trends, but acknowledges that expectations may be incorrect and actual results could be materially different or worse[10](index=10&type=chunk) Part I [Item 3. Key Information](index=6&type=section&id=Item%203.%20Key%20Information) This item provides critical information about the company's corporate structure, including its reliance on Variable Interest Entities (VIEs) in China due to foreign investment restrictions, detailing contractual arrangements, the financial impact of K-9 Academic AST Services cessation, and a comprehensive summary of risk factors [Our Holding Company Structure and VIE Contractual Arrangements](index=6&type=section&id=Our%20Holding%20Company%20Structure%20and%20VIE%20Contractual%20Arrangements) TAL Education Group operates as a Cayman Islands holding company, conducting its primary operations in China through PRC subsidiaries and Variable Interest Entities (VIEs) due to foreign investment restrictions, with VIE contractual arrangements granting effective control and allowing consolidation of financial results, contributing 84.9% of total net revenues in fiscal year 2023 - TAL Education Group is a Cayman Islands holding company, operating primarily in China through PRC subsidiaries and VIEs due to foreign investment restrictions and license requirements on certain learning businesses and value-added telecommunication services[13](index=13&type=chunk) - Net revenues contributed by the VIEs and VIE Subsidiaries accounted for **94.4%**, **95.5%**, and **84.9%** of the company's net revenues in fiscal years ended February 28, 2021, 2022, and 2023, respectively[13](index=13&type=chunk) - The VIE Contractual Arrangements include: (i) exclusive business service agreements (allowing TAL Beijing to charge service fees amounting to substantially all net income of VIEs), (ii) call option agreements (granting TAL Beijing exclusive option to purchase VIE equity interests), (iii) equity pledge agreements (pledging VIE equity interests to TAL Beijing), (iv) letters of undertaking (remitting all income from VIEs to TAL Beijing), and (v) power of attorney agreements (appointing TAL Beijing as attorney-in-fact for shareholder voting)[14](index=14&type=chunk)[15](index=15&type=chunk) [The Holding Foreign Companies Accountable Act (HFCAA)](index=10&type=section&id=The%20Holding%20Foreign%20Companies%20Accountable%20Act) The company was identified as an SEC-Identified Issuer under the HFCAA in July 2022 due to its auditor being in a jurisdiction where the PCAOB was unable to inspect, but following the PCAOB's December 2022 report vacating its prior determination, the company does not expect to be identified as an SEC-Identified Issuer after filing this annual report, though future PCAOB determinations could still lead to trading prohibitions if full inspection access is lost for two consecutive years - The company was conclusively listed as an 'SEC-Identified Issuer' under the HFCAA in July 2022, following the filing of its annual report for fiscal year ended February 28, 2022, because its auditor (headquartered in mainland China) was not subject to PCAOB inspections[25](index=25&type=chunk) - On December 15, 2022, the PCAOB vacated its prior determination, removing mainland China and Hong Kong from the list of jurisdictions where it was unable to inspect. Consequently, the company does not expect to be identified as an SEC-Identified Issuer after filing this annual report[25](index=25&type=chunk) - If the PCAOB determines in the future that it no longer has full access to inspect auditors in mainland China and Hong Kong, and the company uses such an auditor, it could be identified as an SEC-Identified Issuer again. Two consecutive years of such identification would lead to a prohibition on trading its ADSs in the U.S[26](index=26&type=chunk) [Permissions Required from PRC Government Authorities](index=11&type=section&id=Permissions%20Required%20from%20the%20PRC%20Government%20Authorities%20for%20Our%20Operations) The company's operations in China are subject to evolving PRC laws and regulations, requiring various licenses, permits, and filings, with uncertainties remaining regarding future interpretations and new regulations, particularly concerning offshore offerings and data privacy, and new CSRC measures effective March 31, 2023, require filing for overseas securities offerings, which could impact future capital-raising activities - The company's PRC subsidiaries and VIEs/VIE Subsidiaries are believed to have obtained requisite licenses (e.g., private school operating permit, ICP license, Radio and Television Program license, Publications Business Permit) for material business operations in China[27](index=27&type=chunk) - Under current PRC laws, the company, its PRC subsidiaries, and VIEs/VIE Subsidiaries have not been required to obtain permissions or complete filings with the CSRC or undergo cybersecurity review by the CAC for past securities issuances or maintaining NYSE listing status[27](index=27&type=chunk) - The Overseas Listing Trial Measures (effective March 31, 2023) require domestic companies seeking overseas offerings/listings to fulfill filing procedures with the CSRC. Companies already listed before this date are not required to file to maintain listing status but must file for subsequent securities offerings[27](index=27&type=chunk) [Cash and Asset Flows Through Our Organization](index=12&type=section&id=Cash%20and%20Asset%20Flows%20Through%20Our%20Organization) As a Cayman Islands holding company, TAL Education Group's ability to pay dividends and service debt relies on cash flows from its PRC subsidiaries and service fees from VIEs, with cash transfers subject to PRC regulations and tax implications, and in fiscal year 2023, PRC subsidiaries charged $96.2 million in service fees to VIEs, and VIEs paid $316.1 million in service fees, with hypothetical tax calculations illustrating potential tax burdens on earnings and distributions - TAL Education Group's ability to pay dividends and service debt depends on dividends from PRC subsidiaries and license/service fees from VIEs and VIE Subsidiaries[29](index=29&type=chunk) Service Fees Charged and Paid Between PRC Subsidiaries and VIEs (in millions USD) | Fiscal Year Ended Feb 28 | Service Fees Charged by PRC Subsidiaries to VIEs | Service Fees Paid by VIEs to PRC Subsidiaries | | :----------------------- | :--------------------------------------------- | :-------------------------------------------- | | 2021 | $1,123.5 | $784.4 | | 2022 | $1,174.6 | $839.9 | | 2023 | $96.2 | $316.1 | Hypothetical Tax Calculation for PRC Earnings Distribution | Metric | Tax Calculation | | :-------------------------------------- | :-------------- | | Hypothetical pre-tax earnings | 100% | | Tax on earnings at statutory rate of 25% | (25)% | | Net earnings available for distribution | 75% | | Withholding tax at standard rate of 10% | (7.5)% | | Net distribution to Parent/Shareholders | 67.5% | [Financial Information Related to the VIEs and VIE Subsidiaries](index=15&type=section&id=Financial%20Information%20Related%20to%20the%20VIEs%20and%20VIE%20Subsidiaries) This section provides condensed consolidated financial information for the VIEs and VIE Subsidiaries, highlighting their significant contribution to the company's net revenues, and includes selected statements of operations, balance sheets, and cash flows, demonstrating their financial position and performance within the consolidated group Selected Condensed Consolidated Statements of Operations Information (VIEs and VIE Subsidiaries, in thousands USD) | Metric (Year Ended Feb 28) | 2023 | 2022 | 2021 | | :------------------------- | :-------- | :---------- | :---------- | | Third-party net revenues | $865,846 | $4,193,212 | $4,244,907 | | Inter-company revenues | $30,204 | $11,449 | $12,272 | | Total costs and operating expenses | $(782,753) | $(4,812,029) | $(5,182,473) | | Net (loss)/income | $156,813 | $(945,686) | $(622,235) | Selected Condensed Consolidated Balance Sheets Information (VIEs and VIE Subsidiaries, in thousands USD) | Metric (As of Feb 28) | 2023 | 2022 | | :-------------------- | :---------- | :---------- | | Cash and cash equivalents | $331,081 | $359,208 | | Total current assets | $907,129 | $1,116,734 | | Total assets | $1,765,248 | $2,206,523 | | Total current liabilities | $3,217,861 | $3,931,088 | | Total liabilities | $3,330,668 | $4,095,257 | Selected Condensed Consolidated Cash Flows Information (VIEs and VIE Subsidiaries, in thousands USD) | Metric (Year Ended Feb 28) | 2023 | 2022 | 2021 | | :------------------------- | :---------- | :---------- | :---------- | | Net cash provided by / (used in) operating activities | $(56,397) | $(1,418,908) | $(1,034,695) | | Net cash used in investing activities | $(78,304) | $(194,349) | $(224,235) | | Net cash (used in) / provided by financing activities | $(108,511) | $1,536,258 | $1,758,838 | [Cessation of K-9 Academic AST Services in the Mainland of China](index=18&type=section&id=Cessation%20of%20K-9%20Academic%20AST%20Services%20in%20the%20Mainland%20of%20China) In compliance with 2021 regulatory policies, the company ceased K-9 Academic After-School Tutoring (AST) Services in mainland China by the end of 2021, which significantly impacted revenues and led to impairment losses on property, equipment, intangible assets, and goodwill, as well as early termination of leases - The company ceased offering K-9 Academic AST Services in mainland China by the end of December 2021, in compliance with regulatory policies like the 'Alleviating Burden Opinion Regarding Compulsory Education'[48](index=48&type=chunk) - Revenues from K-9 Academic AST Services constituted a substantial majority of total net revenues in fiscal years 2021 and 2022 prior to cessation[48](index=48&type=chunk) Impact of K-9 Academic AST Services Cessation on Financials (in millions USD) | Item | FY2021 (Pre-Cessation) | FY2022 (Post-Cessation Impact) | FY2023 (Post-Cessation Impact) | | :------------------------ | :--------------------- | :----------------------------- | :----------------------------- | | Total Net Revenues | $4,495.8 | $4,390.9 (2.3% decrease YoY) | $1,019.8 (76.8% decrease YoY) | | Property & Equipment Impairment | N/A | $256.0 | $0.7 | | Intangible Assets Impairment | N/A | $51.5 | Nil | | Goodwill Impairment | N/A | $453.6 (fully impaired) | Nil | | Right-of-Use Asset Derecognition | N/A | $1,100 | $57.7 | [D. Summary of Risk Factors](index=19&type=section&id=D.%20Summary%20of%20Risk%20Factors) This section summarizes significant risks categorized into those related to the company's business and industry, corporate structure, doing business in China, and its ADSs, including challenges in developing new products, intense competition, regulatory uncertainties, reliance on VIEs, potential conflicts of interest, evolving PRC legal and regulatory systems, cybersecurity and data privacy concerns, and market volatility of ADSs [Risks Related to Our Business and Industry](index=19&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) Risks include the inability to develop new learning products/services, failure to execute growth strategies, inability to maintain brand value, uncertainties in PRC after-school tutoring regulations (especially post-Alleviating Burden Opinion), failure to obtain/maintain operating licenses, intense competition, unindicative historical performance, challenges in recruiting/retaining teachers, global expansion risks, COVID-19 impact, reliance on senior management, adverse publicity, legal proceedings, and potential product cannibalization - Key business risks include: failure to develop new learning products/services or attract customers[74](index=74&type=chunk)[75](index=75&type=chunk), inability to successfully execute growth strategies[76](index=76&type=chunk)[77](index=77&type=chunk), failure to maintain and enhance brand value[80](index=80&type=chunk)[81](index=81&type=chunk), significant uncertainties in PRC after-school tutoring regulations[82](index=82&type=chunk)[83](index=83&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk), and failure to obtain/maintain required operating licenses and permits in China[87](index=87&type=chunk)[89](index=89&type=chunk) - Other business risks involve: significant competition leading to market share loss or reduced profitability[90](index=90&type=chunk), historical financial results not being indicative of future performance due to K-9 AST cessation and new businesses[92](index=92&type=chunk), inability to recruit, train, and retain qualified teachers[98](index=98&type=chunk), and risks related to global expansion into new countries/regions[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[114](index=114&type=chunk) - The business was materially and adversely affected by COVID-19, experiencing temporary closures, supply chain disruptions, and project delays[116](index=116&type=chunk)[117](index=117&type=chunk) The extent of future impact remains uncertain [Risks Related to Our Corporate Structure](index=20&type=section&id=Risks%20Related%20to%20Our%20Corporate%20Structure) Risks associated with the company's VIE structure include potential non-compliance with PRC foreign investment restrictions, which could lead to severe penalties or loss of control over operations, reliance on contractual arrangements that may not be as effective as direct ownership, and conflicts of interest with VIE legal owners that could adversely affect the business, with enforceability of these arrangements and security of non-tangible assets subject to uncertainties in the PRC legal system - The company's VIE structure, used to comply with PRC foreign investment restrictions in education and value-added telecommunication services, faces risks. If deemed non-compliant, the company could face severe penalties, including revocation of licenses, operational restrictions, fines, or forced relinquishment of interests, potentially rendering ADSs worthless[61](index=61&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk)[180](index=180&type=chunk) - Reliance on VIE contractual arrangements may not provide as effective operational control as direct ownership. Failures by VIEs or their shareholders to perform obligations could lead to substantial costs and reliance on potentially ineffective legal remedies in the PRC[62](index=62&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) - Potential conflicts of interest exist with the legal owners of VIEs (who are also company shareholders/directors/officers), as their interests may diverge from the company's. While a deed of undertaking with Mr. Bangxin Zhang addresses some voting power, other conflicts may require legal proceedings with uncertain outcomes[63](index=63&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk)[191](index=191&type=chunk) [Risks Related to Doing Business in China](index=20&type=section&id=Risks%20Related%20to%20Doing%20Business%20in%20China) Operating primarily in China exposes the company to significant risks from the evolving PRC legal system, government oversight, and regulatory changes, including those related to cybersecurity, data privacy, and overseas listings, with uncertainties in law interpretation, potential penalties for non-compliance, and restrictions on cash/asset transfers from China potentially materially impacting operations and ADS value, while tax implications, foreign exchange fluctuations, and labor cost increases pose further challenges - Uncertainties in the PRC legal system, including quickly evolving laws, inconsistent interpretations, and significant discretion of authorities, could materially and adversely affect the company's operations and ADS value[64](index=64&type=chunk)[202](index=202&type=chunk) - The PRC government's significant oversight and discretion over business operations, including new regulations on overseas offerings (CSRC Overseas Listing Trial Measures) and cybersecurity/data privacy (Cybersecurity Review Measures, Draft Data Security Regulations), could result in material adverse changes or limit the ability to offer securities[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk) - The company relies on dividends from PRC subsidiaries for cash needs, but these are subject to limitations, including statutory reserve requirements and PRC government control over currency conversions, which could restrict cash availability outside China[71](index=71&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk)[280](index=280&type=chunk) [Risks Related to Our ADSs](index=22&type=section&id=Risks%20Related%20to%20Our%20ADSs) The market price of the company's ADSs may be volatile due to various factors, including operating results, analyst estimates, competition, and general economic conditions, with the dual-class voting structure limiting shareholder influence and substantial future sales potentially causing price declines, and as the company does not expect to pay dividends, returns depend on price appreciation, while enforceability of judgments against the company or its officers in the Cayman Islands or China may be limited, and ADS holders have fewer rights than common shareholders - The market price for the company's ADSs has been volatile, ranging from **$1.75 to $10.08 per ADS** in fiscal year ended February 28, 2023, and is subject to fluctuations from operating results, analyst estimates, competition, and economic/political conditions[285](index=285&type=chunk)[287](index=287&type=chunk) - The dual-class voting structure (Class A: one vote, Class B: ten votes) gives holders of Class B common shares (including officers and directors) considerable influence (**75.0% of voting power** as of April 30, 2023), limiting other shareholders' ability to influence corporate matters and potentially discouraging change-of-control transactions[290](index=290&type=chunk)[292](index=292&type=chunk)[294](index=294&type=chunk) - Holders of ADSs have fewer rights than common shareholders and must act through the depositary to exercise voting rights, potentially receiving insufficient notice for meetings or facing limitations on distributions if deemed illegal or impractical. The company does not expect to pay dividends in the foreseeable future, meaning returns rely on price appreciation[299](index=299&type=chunk)[300](index=300&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk)[313](index=313&type=chunk) [Item 4. Information on the Company](index=68&type=section&id=Item%204.%20Information%20on%20the%20Company) This item provides an overview of TAL Education Group's history, business operations, organizational structure, and property, plants, and equipment, detailing the company's evolution from K-12 tutoring to smart learning solutions, its current offerings, technology capabilities, competitive landscape, and the regulatory environment in China, particularly concerning private education and foreign investment [A. History and Development of the Company](index=68&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) TAL Education Group was founded in 2005 as Xueersi Education in China, later incorporating as a Cayman Islands holding company in 2008, and after ceasing K-9 Academic AST Services in mainland China by the end of 2021 due to regulatory changes, it has since realigned its focus to smart learning solutions, including enrichment learning and learning content, and has engaged in significant capital raising activities, including an IPO in 2010 and various private placements - TAL Education Group was incorporated in the Cayman Islands on January 10, 2008, to facilitate foreign investment, building on operations started in 2005 with Xueersi Education in China[331](index=331&type=chunk) - The company ceased offering K-9 Academic AST Services in mainland China by December 31, 2021, in response to regulatory developments, and has since realigned its business focus[332](index=332&type=chunk) - Significant capital raising activities include an IPO in October 2010 (listing ADSs on NYSE under 'TAL'), and private placements in January 2018 (**$500 million**), February 2019 (**$500 million**), November 2020 (**$1.5 billion**), and January 2021 (**$1.0 billion** equity, **$2.3 billion** convertible notes)[333](index=333&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk) [B. Business Overview](index=68&type=section&id=B.%20Business%20Overview) TAL Education Group, a smart learning solutions provider, has shifted its business focus from K-9 Academic AST Services (ceased end of 2021) to learning services and learning content solutions, with its offerings powered by technology and strong R&D capabilities, operating in a competitive market, relying on branding and marketing, adhering to data privacy and intellectual property protection, and heavily influenced by complex and evolving PRC regulations, particularly in private education, telecommunications, and data security [Our Offerings](index=69&type=section&id=Our%20Offerings) The company's offerings have shifted from K-9 Academic AST Services (ceased end of 2021) to a broad range of enrichment learning programs (Science and Creativity, Coding and Programming, Humanities and Aesthetics) and learning content solutions (print books, smart books, mobile apps, AI-driven devices), also providing SaaS technology solutions to institutional customers - The company ceased K-9 Academic AST Services in mainland China by the end of 2021 due to regulatory policies[342](index=342&type=chunk) - Current learning services include enrichment learning programs (Science and Creativity, Coding and Programming, Humanities and Aesthetics) delivered via small classes, personalized premium services, and online courses[343](index=343&type=chunk)[344](index=344&type=chunk) - Learning content solutions comprise diverse materials in paper and digital formats, including print books, smart books, mobile apps, and AI-driven learning devices, developed in-house or licensed from partners[349](index=349&type=chunk) Average Student Enrollments of Normal Priced Long-Term Course (per quarter) | Fiscal Year Ended Feb 28 | Enrollments (millions) | Change YoY | | :----------------------- | :--------------------- | :--------- | | 2022 | ~3.9 | N/A | | 2023 | ~0.6 | -83.9% | [Technology, Research and Development](index=70&type=section&id=Technology,%20Research%20and%20Development) Technology is central to the company's business, enabling engaging and effective learning experiences through intelligent classroom capabilities, AI-driven teaching methodologies (computer vision, speech recognition, natural language processing), and content development, supported by a robust, scalable, and secure technology infrastructure for online live instruction, and a dedicated in-house R&D team focused on foundational technologies and new learning solutions - Technology capabilities are core to the business, delivering engaging and effective learning experiences through personalized in-class interactions, automated feedback, and tailored recommendations[350](index=350&type=chunk) - The company utilizes AI-driven teaching methodologies such as computer vision, speech recognition, and natural language processing[350](index=350&type=chunk) - A proprietary learning management system facilitates online live instruction, supported by a reliable, scalable, and secure technology infrastructure with servers hosted in multiple cities in China and daily database backups[351](index=351&type=chunk) - A dedicated in-house team conducts R&D for foundational technologies, their application, and the design of learning services and content solutions[352](index=352&type=chunk) [Competition](index=70&type=section&id=Competition) The learning solutions market in China is highly fragmented and competitive, with competition from existing major players and new entrants across various product and service types, and key entry barriers include brand awareness, learning resources, technology capabilities, and access to superior talent - The learning solutions market in China is rapidly evolving, highly fragmented, and competitive, with competition from existing major players and new entrants[353](index=353&type=chunk) - Entry barriers include brand awareness, learning resources, technology capabilities, and the supply of superior talents[354](index=354&type=chunk) [Branding and Marketing](index=71&type=section&id=Branding%20and%20Marketing) The company's reputation and brand awareness are crucial for learner and institutional customer acquisition, employing diverse marketing activities, including organic traffic (apps, social media, e-commerce direct sales) and paid channels, and distributing learning content solutions through online and offline partners, with selling and marketing expenses significantly decreasing in fiscal year 2023 - Reputation and brand awareness are significant for learner recruitment and institutional customer acquisition, supported by various marketing activities[356](index=356&type=chunk) - Marketing channels include organic traffic (apps, social media, e-commerce) and paid channels for learning services, and online/offline platforms for learning content solutions[357](index=357&type=chunk) Selling and Marketing Expenses (in millions USD) | Fiscal Year Ended Feb 28 | Amount (USD) | % of Total Net Revenues | | :----------------------- | :----------- | :---------------------- | | 2021 | $1,680.1 | 37.4% | | 2022 | $1,118.1 | 25.5% | | 2023 | $283.0 | 27.8% | [Data Privacy and Security](index=71&type=section&id=Data%20Privacy%20and%20Security) The company is committed to protecting data privacy and security through internal rules, policies, protocols, systems, and technologies, with users consenting to data collection and usage, and privacy policies regularly updated to comply with evolving and uncertain PRC government regulations - The company is committed to data privacy and security, implementing internal rules, policies, protocols, systems, and technologies for data collection, processing, and usage[359](index=359&type=chunk) - Users must consent to data collection, use, and disclosure, and privacy policies are updated to meet the latest PRC regulatory requirements[359](index=359&type=chunk) - The company is subject to PRC laws and regulations governing personal information and data protection, with associated risks and uncertainties due to evolving interpretations and enforcement[360](index=360&type=chunk) [Intellectual Property](index=71&type=section&id=Intellectual%20Property) The company's intellectual property, including brands, trademarks, copyrights, patents, and domain names, is vital for its competitive advantage, protected through legal registrations and confidentiality agreements, but faces challenges in preventing infringement, particularly in China's evolving legal landscape - Intellectual property rights, including brands, trademarks, service marks, copyrights, patents, and domain names, are crucial for distinguishing offerings and maintaining competitive advantages[361](index=361&type=chunk) - As of February 28, 2023, IP assets include trademark registrations ('Xueersi', 'Haoweilai'), key domain names (www.100tal.com, www.xueersi.com, www.speiyou.com), copyrights for learning content and software, and technology-driven teaching patents in China[361](index=361&type=chunk) - Protection efforts involve trademarks, copyrights, patents, domain names, know-how, trade secret laws, and confidentiality agreements, but preventing infringement in China remains challenging due to evolving laws[362](index=362&type=chunk) [Insurance](index=72&type=section&id=Insurance) The company maintains limited liability insurance coverage for its learning and service centers, which is considered comparable to other learning solutions providers of similar size in China - The company has limited liability insurance coverage for its learning centers and service centers[364](index=364&type=chunk) - The insurance coverage is considered in line with that of other learning solutions providers of a similar size in China[364](index=364&type=chunk) [PRC Regulations](index=72&type=section&id=PRC%20Regulations) This section outlines the complex and evolving PRC legal and regulatory framework governing the company's operations, including laws on private education, after-school tutoring, online education, publishing, telecommunications, advertising, data privacy, foreign investment, and anti-monopoly, with key regulations like the Alleviating Burden Opinion and the Foreign Investment Law significantly impacting the business, particularly the cessation of K-9 Academic AST Services and restrictions on foreign ownership - The company's operations in China are governed by a legal regime including the NPC, State Council, and various ministries (MoE, SAPPRFT, MIIT, SAMR, Ministry of Civil Affairs)[366](index=366&type=chunk) - Key regulations include the PRC Education Law, Private Education Law (amended to classify schools as non-profit or for-profit, prohibiting for-profit compulsory education), and specific rules for after-school tutoring (e.g., Alleviating Burden Opinion, Online After-School Tutoring Opinions)[367](index=367&type=chunk)[368](index=368&type=chunk)[369](index=369&type=chunk)[372](index=372&type=chunk)[374](index=374&type=chunk)[384](index=384&type=chunk)[388](index=388&type=chunk) - Regulations on foreign investment (Negative List, FITE Regulations) restrict foreign ownership in education and value-added telecommunications, while data security and privacy laws (PRC Data Security Law, Personal Information Protection Law, Cybersecurity Review Measures) impose strict requirements on data processing and cross-border transfers[423](index=423&type=chunk)[424](index=424&type=chunk)[425](index=425&type=chunk)[463](index=463&type=chunk)[464](index=464&type=chunk)[465](index=465&type=chunk)[467](index=467&type=chunk)[468](index=468&type=chunk)[469](index=469&type=chunk)[472](index=472&type=chunk)[473](index=473&type=chunk)[474](index=474&type=chunk)[475](index=475&type=chunk)[477](index=477&type=chunk) [C. Organizational Structure](index=94&type=section&id=C.%20Organizational%20Structure) The company's organizational structure involves a Cayman Islands holding company, Hong Kong and PRC subsidiaries, and Variable Interest Entities (VIEs) in China, with VIEs like Xueersi Education, Xueersi Network, and Xinxin Xiangrong controlled through contractual arrangements due to PRC foreign investment restrictions, granting TAL Beijing effective control and economic benefits, allowing for consolidation of VIE financial results - The company's structure includes TAL Education Group (Cayman Islands holding company), TAL Holding Limited (Hong Kong subsidiary), PRC subsidiaries (e.g., Pengxin TAL Industrial Investment (Shanghai) Co., Ltd., Beijing Century TAL Education Technology Co., Ltd., Beijing Xintang Sichuang Education Technology Co., Ltd.), and VIEs (Beijing Xueersi Education Technology Co., Ltd., Beijing Xueersi Network Technology Co., Ltd., Xinxin Xiangrong Education Technology (Beijing) Co., Ltd.) with their subsidiaries and schools[17](index=17&type=chunk) - The VIE Contractual Arrangements, including exclusive business service agreements, call option agreements, equity pledge agreements, letters of undertaking, and powers of attorney, enable TAL Beijing to direct VIE activities and receive substantially all economic benefits, leading to consolidation under U.S. GAAP[490](index=490&type=chunk)[491](index=491&type=chunk)[492](index=492&type=chunk)[494](index=494&type=chunk)[496](index=496&type=chunk)[497](index=497&type=chunk)[498](index=498&type=chunk) - PRC counsel believes the VIE ownership structures and contractual arrangements comply with existing PRC laws, but acknowledges substantial uncertainties in interpretation and application of future regulations, which could lead to severe penalties or loss of control[500](index=500&type=chunk)[501](index=501&type=chunk) [D. Property, Plants and Equipment](index=98&type=section&id=D.%20Property,%20Plants%20and%20Equipment) The company's headquarters are in Beijing, China, where it owns and leases office and learning center space, and also leases significant space in 38 other Chinese cities and four international cities, undertaking major construction projects for office buildings in Zhenjiang, Jiangsu, and Changping District, Beijing, with expected completion in late 2023, funded by cash on hand - The company's headquarters are in Beijing, China, with approximately **7,582 square meters** of owned office space as of February 28, 2023[502](index=502&type=chunk) - As of February 28, 2023, the company leased approximately **81,900 square meters** in Beijing (**9,100 sqm** learning/service centers, **72,800 sqm** office) and **238,500 square meters** in 38 other Chinese cities and four international cities (**157,500 sqm** learning/service centers, **81,000 sqm** office)[503](index=503&type=chunk) - Major construction projects for office buildings are underway in Zhenjiang, Jiangsu (**222,730 sqm** construction area, **RMB1.421 billion** total cost, **RMB590 million** paid by Feb 28, 2023, expected completion Oct 2023) and Changping District, Beijing (**127,670 sqm** construction area, **RMB1.111 billion** total cost, **RMB686 million** paid by Feb 28, 2023, expected completion Dec 2023)[504](index=504&type=chunk)[505](index=505&type=chunk) [Item 5. Operating and Financial Review and Prospects](index=98&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) This item provides a detailed analysis of the company's financial condition and results of operations, including an overview of its business realignment post-K-9 Academic AST Services cessation, key factors affecting performance, impact of COVID-19, and critical accounting estimates, also covering liquidity and capital resources, cash flow analysis, material cash requirements, and the implications of its holding company structure on dividend distributions [A. Operating Results](index=98&type=section&id=A.%20Operating%20Results) The company's operating results reflect a significant impact from the cessation of K-9 Academic AST Services, leading to a substantial decrease in net revenues, with the business realigned towards learning services and content solutions, and performance influenced by factors like product quality, market expansion, talent retention, technology competitiveness, and cost management, detailing revenue disaggregation, cost of revenues, operating expenses, government subsidies, interest income/expense, and impairment losses, showing a net loss across recent fiscal years - The company's business focus has realigned towards (i) learning services and others, and (ii) learning content solutions, following the cessation of K-9 Academic AST Services in mainland China by the end of 2021[511](index=511&type=chunk) Net Revenues Disaggregated by Revenue Sources (in millions USD) | Revenue Source (Year Ended Feb 28) | 2023 | 2022 | 2021 | | :--------------------------------- | :-------- | :---------- | :---------- | | Learning services and others | $853.6 | $4,275.3 | $4,433.9 | | Learning content solutions | $166.1 | $115.6 | $61.8 | | Total Net Revenues | $1,019.8 | $4,390.9 | $4,495.8 | Consolidated Results of Operations Summary (in millions USD) | Metric (Year Ended Feb 28) | 2023 | 2022 | 2021 | | :------------------------- | :---------- | :------------ | :------------ | | Net Revenues | $1,019.8 | $4,390.9 | $4,495.8 | | Cost of Revenues | $(436.4) | $(2,203.3) | $(2,048.6) | | Gross Profit | $583.4 | $2,187.6 | $2,447.2 | | Selling and marketing expenses | $(283.0) | $(1,118.1) | $(1,680.1) | | General and administrative expenses | $(413.8) | $(1,199.7) | $(1,117.3) | | Impairment loss on intangible assets and goodwill | — | $(505.1) | $(107.5) | | Loss from operations | $(90.7) | $(614.5) | $(438.2) | | Net loss | $(132.0) | $(1,164.3) | $(143.1) | | Net loss attributable to TAL Education Group's shareholders | $(135.6) | $(1,136.1) | $(116.0) | [B. Liquidity and Capital Resources](index=111&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily supported by cash flows from operations, existing cash, and short-term investments, holding significant cash and equivalents, restricted cash, and short-term investments as of February 28, 2023, with cash flows from operating activities turning positive in fiscal year 2023, while investing activities consistently used cash, and financing activities were negative due to share repurchases, and material cash requirements include capital expenditures for construction projects and long-term investment obligations, with dividend payments relying on PRC subsidiaries' distributions, which are subject to local regulations and currency controls Cash, Cash Equivalents, Restricted Cash, and Short-Term Investments (in millions USD) | Category (As of Feb 28) | 2023 | 2022 | | :---------------------- | :---------- | :---------- | | Cash and cash equivalents | $2,021.9 | $1,638.2 | | Restricted cash | $273.0 | $1,043.6 | | Short-term investments | $1,149.6 | $1,070.5 | | Total | $3,444.5 | $3,752.3 | Summary of Cash Flows (in millions USD) | Cash Flow Activity (Year Ended Feb 28) | 2023 | 2022 | 2021 | | :------------------------------------- | :-------- | :---------- | :---------- | | Net cash provided by / (used in) operating activities | $7.4 | $(939.2) | $954.7 | | Net cash (used in) / provided by investing activities | $(301.6) | $1,368.7 | $(2,641.5) | | Net cash provided by / (used in) financing activities | $(66.2) | $(2,766.7) | $4,794.8 | - Material cash requirements as of February 28, 2023, include **$193.7 million** for property and equipment obligations (mainly construction projects in Beijing and Jiangsu) and **$20.4 million** for lease property management fees[610](index=610&type=chunk)[612](index=612&type=chunk)[613](index=613&type=chunk) [C. Research and Development, Patents and Licenses, etc.](index=115&type=section&id=C.%20Research%20and%20Development,%20Patents%20and%20Licenses,%20etc.) This section refers to the detailed information on the company's technology, research and development, and intellectual property as described in Item 4. Information on the Company—B. Business Overview [D. Trend Information](index=115&type=section&id=D.%20Trend%20Information) The company is not aware of any material adverse trends, uncertainties, demands, commitments, or events for the fiscal year ended February 28, 2023, that would significantly impact its net revenues, income, profitability, liquidity, or capital resources, beyond what is already disclosed in the report - The company is not aware of any trends, uncertainties, demands, commitments, or events for the fiscal year ended February 28, 2023, that are reasonably likely to have a material adverse effect on its net revenues, income, profitability, liquidity, or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions, other than those already disclosed[627](index=627&type=chunk) [E. Critical Accounting Estimates](index=115&type=section&id=E.%20Critical%20Accounting%20Estimates) This section refers to the critical accounting estimates, including impairment assessments for goodwill, long-term investments, and other long-lived assets, as well as fair value measurements for Level 3 available-for-sale investments and income taxes/valuation allowances for deferred tax assets, as detailed in Item 5. Operating and Financial Review and Prospects—A. Operating Results - Critical accounting estimates include impairment assessment of goodwill, long-term investments, and other long-lived assets, fair value of Level 3 available-for-sale investments, and income taxes and valuation allowance for deferred tax assets[563](index=563&type=chunk)[566](index=566&type=chunk)[568](index=568&type=chunk)[570](index=570&type=chunk)[572](index=572&type=chunk) - These estimates require significant management judgment and assumptions, such as discount rates, future cash flows, market prices, and projected future taxable income, which could materially impact consolidated financial statements[564](index=564&type=chunk)[567](index=567&type=chunk)[569](index=569&type=chunk)[571](index=571&type=chunk)[572](index=572&type=chunk) [Item 6. Directors, Senior Management and Employees](index=116&type=section&id=Item%206.%20Directors,%20Senior%20Management%20and%20Employees) This item details the company's leadership, compensation practices, board structure, and employee information, listing directors and executive officers, outlining their employment agreements, describing share incentive plans designed to attract and retain talent, and providing an overview of employee numbers and share ownership by key personnel [A. Directors and Senior Management](index=116&type=section&id=A.%20Directors%20and%20Senior%20Management) The company's leadership team includes Bangxin Zhang (Chairman & CEO), Yunfeng Bai (Director), Kaifu Zhang (Independent Director), Weiru Chen (Independent Director), Janet Yan Feng (Independent Director), Yachao Liu (COO), and Alex Zhuangzhuang Peng (President & CFO), with employment agreements for executive officers including specified terms, termination clauses, confidentiality, intellectual property assignment, and non-competition/non-solicitation restrictions Directors and Executive Officers | Name | Age | Position/Title | | :------------------- | :-- | :----------------------------------------------- | | Bangxin Zhang | 42 | Chairman of the Board of Directors and Chief Executive Officer | | Yunfeng Bai | 41 | Director | | Kaifu Zhang | 38 | Independent Director | | Weiru Chen | 52 | Independent Director | | Janet Yan Feng | 46 | Independent Director | | Yachao Liu | 41 | Chief Operating Officer | | Alex Zhuangzhuang Peng | 49 | President and Chief Financial Officer | | Mi Tian | N/A | Chief Technology Officer | - Employment agreements with executive officers include specified terms, termination for cause or without cause (with one-month notice), confidentiality, intellectual property assignment, and non-competition/non-solicitation restrictions for half a year post-employment[639](index=639&type=chunk)[640](index=640&type=chunk)[641](index=641&type=chunk) [B. Compensation](index=118&type=section&id=B.%20Compensation) For fiscal year 2023, the aggregate cash compensation for executive officers and directors was approximately $2.2 million, with the company granting 30,000 non-vested restricted Class A common shares and 443,370 share options to these individuals, resulting in $10.6 million in share-based compensation expense, governed by the 2010 and 2020 Share Incentive Plans, with the 2020 Plan allowing for automatic increases in the award pool - Aggregate cash compensation for executive officers and directors was approximately **$2.2 million** for fiscal year ended February 28, 2023[644](index=644&type=chunk) - For fiscal year 2023, **30,000** non-vested restricted Class A common shares and **443,370** share options were granted to executive officers and non-executive directors, leading to **$10.6 million** in share-based compensation expense[644](index=644&type=chunk) - The 2010 Share Incentive Plan (amended 2013) and the 2020 Share Incentive Plan (adopted June 2020) govern share-based awards. The 2020 Plan's Award Pool is initially **5%** of total issued shares and increases automatically if ungranted awards fall below **1%** to restore it to **5%**[644](index=644&type=chunk)[653](index=653&type=chunk) [C. Board Practices](index=121&type=section&id=C.%20Board%20Practices) The board of directors consists of five members, including independent directors who meet NYSE and Exchange Act requirements, with directors serving without fixed terms and removable by shareholder resolution, and the board has three committees: Audit, Compensation, and Nominating and Corporate Governance, each with specific oversight responsibilities and independent members - The board of directors has **five** directors, including independent directors (Ms. Janet Yan Feng, Dr. Weiru Chen, Dr. Kaifu Zhang) who satisfy NYSE and Exchange Act independence requirements[663](index=663&type=chunk)[668](index=668&type=chunk) - Directors serve without a term of office and can be removed by an ordinary resolution of shareholders. They owe fiduciary duties, including loyalty and acting in the company's best interests, under Cayman Islands law[665](index=665&type=chunk)[666](index=666&type=chunk) - The board has an Audit Committee (chaired by Ms. Feng, an audit committee financial expert), a Compensation Committee (chaired by Dr. Chen), and a Nominating and Corporate Governance Committee (chaired by Dr. Zhang), each with defined responsibilities[667](index=667&type=chunk)[668](index=668&type=chunk)[671](index=671&type=chunk)[672](index=672&type=chunk) [D. Employees](index=123&type=section&id=D.%20Employees) The company's full-time employee count significantly decreased from approximately 70,900 in fiscal year 2021 to 11,700 in fiscal year 2023, with additional contract teachers, and employees receive basic salaries and performance-based bonuses, with the company contributing to government-mandated social security plans in China, reporting good working relationships with employees and no significant labor disputes Full-Time Employee Count | Fiscal Year Ended Feb 28 | Full-Time Employees | | :----------------------- | :------------------ | | 2021 | ~70,900 | | 2022 | ~16,200 | | 2023 | ~11,700 | - As of February 28, 2023, approximately **5,400** full-time employees were in Beijing, and **6,300** in other parts of China and internationally. The company also employed about **1,400** contract teachers[674](index=674&type=chunk) - Employees receive basic salaries and performance-based bonuses. The company contributes to government-mandated social security plans (pensions, medical, unemployment, injury, maternity, housing funds) in the PRC[674](index=674&type=chunk) [E. Share Ownership](index=123&type=section&id=E.%20Share%20Ownership) As of April 30, 2023, the company's executive officers, directors, and their affiliated entities beneficially owned approximately 31.9% of total outstanding shares, representing 77.9% of total voting power due to a dual-class voting structure (Class A: one vote, Class B: ten votes), with Mr. Bangxin Zhang, through affiliated entities, holding 26.7% of common shares and 72.1% of voting power Share Ownership by Directors, Executive Officers, and Principal Shareholders (as of April 30, 2023) | Shareholder Category | Shares Beneficially Owned (%) | % of Voting Power | | :------------------------------------ | :---------------------------- | :---------------- | | Bangxin Zhang | 26.7% | 72.1% | | Yachao Liu | 4.2% | 5.4% | | All directors and executive officers as a group | 31.9% | 77.9% | | Bright Unison Limited | 22.5% | 58.7% | - The company has a dual-class voting structure: Class A common shares (one vote per share) and Class B common shares (ten votes per share). Class B shares are convertible to Class A shares, but not vice-versa[291](index=291&type=chunk)[680](index=680&type=chunk) - This concentrated ownership by officers, directors, and affiliated entities (**77.9% of total voting power**) limits other shareholders' influence and could deter change-of-control transactions[292](index=292&type=chunk)[294](index=294&type=chunk) [Item 7. Major Shareholders and Related Party Transactions](index=124&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) This item refers to the share ownership details provided in Item 6.E and outlines the company's related party transactions, including amounts due from and to related investees for loans, prepayments, and service fees, as well as service fees incurred and other revenue generated from related parties, with the company's VIE contractual arrangements and employment agreements with executive officers also noted as related party transactions [B. Related Party Transactions](index=124&type=section&id=B.%20Related%20Party%20Transactions) The company has various related party transactions, including loans and prepayments to investees (amounts due from related parties) and service fees payable to related parties (amounts due to related parties), with amounts due from related parties at $0.4 million and an impairment loss of $0.3 million in fiscal year 2023, and service fees incurred from related parties at $0.3 million and other revenue generated at $0.3 million, while the VIE Contractual Arrangements and executive employment agreements are also considered related party transactions Amounts Due From/To Related Parties (in millions USD) | Category (As of Feb 28) | 2023 | 2022 | | :---------------------- | :---- | :---- | | Amounts due from related parties-current | $0.4 | $0.9 | | Amounts due from related parties-non-current | — | $0.1 | | Amounts due to related parties-current | $0.1 | $0.2 | Transactions with Related Parties (in millions USD) | Transaction (Year Ended Feb 28) | 2023 | 2022 | 2021 | | :------------------------------ | :---- | :---- | :---- | | Services fees | $0.3 | $2.9 | $3.7 | | Other revenue | $0.3 | $1.3 | $1.7 | | Purchase of equipment | — | $0.6 | $0.8 | - Impairment loss on amounts due from related parties was **$0.3 million** in fiscal year 2023, compared to **$2.1 million** in 2022 and **$16.1 million** in 2021[683](index=683&type=chunk)[1043](index=1043&type=chunk) [Item 8. Financial Information](index=125&type=section&id=Item%208.%20Financial%20Information) This item covers the company's consolidated financial statements, legal and administrative proceedings, and dividend policy, detailing ongoing shareholder class action lawsuits and an SEC investigation related to past allegations and employee misconduct, and indicating no expected cash dividends in the foreseeable future, with past dividends paid from offshore cash balances [A. Consolidated Statements and Other Financial Information](index=125&type=section&id=A.%20Consolidated%20Statements%20and%20Other%20Financial%20Information) This section refers to the audited consolidated financial statements in Item 18 and details legal and administrative proceedings, including ongoing shareholder class action lawsuits and an SEC investigation, also outlining the company's dividend policy, which does not anticipate cash dividends in the foreseeable future, with past dividends paid from offshore cash balances [Legal and Administrative Proceedings](index=125&type=section&id=Legal%20and%20Administrative%20Proceedings) The company is currently defending against two putative shareholder class action lawsuits filed in U.S. District Courts (Southern District of New York and District of New Jersey) alleging misrepresentations regarding compliance with Chinese laws, which are in preliminary stages with potential losses currently not estimable, and the SEC's Division of Enforcement is investigating transactions identified in Muddy Waters reports and issues related to the 'Light Class' business, with which the company is cooperating - The company is defending against two putative shareholder class action lawsuits (Ruoshui Sun v. TAL Education Group, et al. and a new complaint in District of New Jersey) alleging misrepresentations about compliance with Chinese laws[690](index=690&type=chunk)[691](index=691&type=chunk) - These lawsuits are in preliminary stages, and the company is currently unable to estimate the possible loss or range of loss, if any, associated with their resolution[131](index=131&type=chunk)[1052](index=1052&type=chunk) - The SEC's Division of Enforcement is seeking documents and information related to transactions identified in Muddy Waters reports and issues concerning the 'Light Class' business, with which the company is cooperating[695](index=695&type=chunk) [Dividend Policy](index=126&type=section&id=Dividend%20Policy) The company does not expect to pay cash dividends in the foreseeable future, with past dividends paid from offshore cash balances, and future dividend declarations are at the discretion of the board and shareholders, subject to Cayman Islands law and PRC regulations on subsidiary profit distribution and currency conversion controls - The company does not expect to pay any cash dividends in the foreseeable future, and past dividends were sourced from offshore cash balances[299](index=299&type=chunk)[696](index=696&type=chunk) - Dividend declarations are at the complete discretion of the board of directors and shareholders, subject to Cayman Islands law (requiring payment from profit or share premium, and ability to pay debts) and PRC regulations on subsidiary distributions[300](index=300&type=chunk)[697](index=697&type=chunk) - The ability to pay dividends relies on distributions from PRC subsidiaries, which are subject to PRC laws requiring statutory reserves and government control of currency conversion, potentially limiting foreign currency remittances[699](index=699&type=chunk) [Item 9. The Offer and Listing](index=127&type=section&id=Item%209.%20The%20Offer%20and%20Listing) This item confirms that the company's ADSs are listed on the New York Stock Exchange under the symbol 'TAL' since October 20, 2010, with the ADS to Class A common share ratio adjusted in August 2017 to three ADSs representing one Class A common share - The company's ADSs have been listed on the New York Stock Exchange (NYSE) since October 20, 2010, initially under the symbol 'XRS' and changed to 'TAL' effective December 1, 2016[333](index=333&type=chunk)[701](index=701&type=chunk) - Effective August 16, 2017, the ratio of ADSs to Class A common shares was adjusted from one ADS representing two Class A common shares to **three ADSs representing one Class A common share**[1](index=1&type=chunk)[701](index=701&type=chunk) [Item 10. Additional Information](index=127&type=section&id=Item%2010.%20Additional%20Information) This item provides additional corporate and legal information, including summaries of the company's memorandum and articles of association, details on exchange controls, and a comprehensive discussion of taxation in the Cayman Islands, PRC, and U.S. federal income tax considerations, particularly regarding PFIC status, and lists documents available for public display [B. Memorandum and Articles of Association](index=127&type=section&id=B.%20Memorandum%20and%20Articles%20of%20Association) The company's corporate affairs are governed by its Fourth Amended and Restated Memorandum and Articles of Association and the Companies Act of the Cayman Islands, with key provisions including an unrestricted object clause, a five-member board of directors, and a dual-class common share structure (Class A: one vote, Class B: ten votes) with conversion rights, and dividends declared by the board, subject to Cayman Islands law, with shareholder meetings requiring at least ten days' notice - The company's affairs are governed by its Fourth Amended and Restated Memorandum and Articles of Association and the Companies Act (As Revised) of the Cayman Islands[702](index=702&type=chunk) - The common shares are divided into Class A (one vote per share) and Class B (ten votes per share). Class B shares are convertible to Class A shares, but Class A shares are not convertible to Class B shares[705](index=705&type=chunk)[707](index=707&type=chunk)[708](index=708&type=chunk) - Dividends are declared by the board of directors, subject to the Companies Act and articles of association, and can be paid from profits or share premium account, provided the company can pay its debts[706](index=706&type=chunk) [D. Exchange Controls](index=130&type=section&id=D.%20Exchange%20Controls) The Cayman Islands currently have no exchange control restrictions, however, the company's PRC operations are subject to PRC government controls on currency convertibility and remittance of foreign currencies, as detailed in Item 4.B. Business Overview—PRC Regulation—Regulations on Foreign Currency Exchange - The Cayman Islands currently have no exchange control restrictions[723](index=723&type=chunk) - PRC government imposes controls on the convertibility between Renminbi and foreign currencies, and the remittance of currencies out of China, affecting the company's PRC operations[280](index=280&type=chunk)[459](index=459&type=chunk) [E. Taxation](index=131&type=section&id=E.%20Taxation) This section details the tax implications for the company in the Cayman Islands, PRC, and for U.S. federal income tax purposes, with the company exempt from income and capital gains tax in the Cayman Islands, and PRC subsidiaries subject to enterprise income tax (EIT) at 25%, with some qualifying for preferential rates, and uncertainties regarding 'resident enterprise' classification for offshore holding companies and withholding tax on dividends, and for U.S. Holders, the company believes it was a Passive Foreign Investment Company (PFIC) for fiscal year 2023, which could lead to adverse tax consequences unless a mark-to-market election is made - The company, as a Cayman Islands exempted company, is not subject to income, corporate, or capital gains tax in the Cayman Islands[725](index=725&type=chunk) - PRC subsidiaries are generally subject to a **25% EIT rate**, with some entities (e.g., HNTE, Key Software Enterprise, Newly Established Software Enterprise) qualifying for preferential rates (e.g., **15%**, **10%**, **12.5%** or exemptions)[542](index=542&type=chunk)[543](index=543&type=chunk)[544](index=544&type=chunk)[545](index=545&type=chunk)[546](index=546&type=chunk)[547](index=547&type=chunk)[548](index=548&type=chunk)[1008](index=1008&type=chunk)[1009](index=1009&type=chunk)[1010](index=1010&type=chunk)[1011](index=1011&type=chunk)[1012](index=1012&type=chunk)[1013](index=1013&type=chunk)[1014](index=1014&type=chunk) - The company believes it was a Passive Foreign Investment Company (PFIC) for the taxable year ended February 28, 2023, and may be classified as such in future years. This could result in significantly increased U.S. federal income tax for U.S. Holders on gains and distributions, unless a mark-to-market election is made[328](index=328&type=chunk)[329](index=329&type=chunk)[736](index=736&type=chunk)[740](index=740&type=chunk)[741](index=741&type=chunk)[742](index=742&type=chunk) [Item 11. Quantitative and Qualitative Disclosures About Market Risk](index=138&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item discusses the company's exposure to market risks, primarily interest rate risk and foreign exchange risk, with interest rate risk being minimal due to no floating-rate borrowings, and foreign exchange risk arising from Renminbi fluctuations against the U.S. dollar, which can impact reported financial results and the value of U.S. dollar-denominated investments or dividends, despite some hedging efforts [Interest Rate Risk](index=138&type=section&id=Interest%20Rate%20Risk) The company's exposure to interest rate risk is primarily related to interest income from liqui

TAL Education Group (NYSE:TAL) Q4 2023 Results Conference Call April 27, 2023 8:00 AM ET Company Participants Jackson Ding - IR Director Alex Peng - President and CFO Conference Call Participants Felix Liu - UBS Tommy Wong - CMS Lucy Yu - Bank of America Securities Liping Zhao - CICC Operator Ladies and gentlemen, good day, and thank you for standing by. Welcome to TAL Education Group Fourth Quarter and Fiscal Year 2023 Earnings Conference Call. [Operator Instructions] I’d now like to hand the conference ov ...

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TAL Education Group (NYSE:TAL) Q2 2023 Earnings Conference Call October 28, 2022 8:00 AM ET Company Participants Jackson Ding - Investor Relations Director Alex Peng - President and Chief Financial Officer Conference Call Participants Mark Li - Citi Candis Chan - Daiwa Crystal Li - China Merchants Felix Liu - UBS Operator Good day and thank you for standing by. Welcome to TAL Education Group Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the spe ...