New Oriental Announces Results for the Fourth Quarter and Fiscal Year Ended May 31, 2014, and Adoption of Up to US$120 Million

 New Oriental Announces Results for the Fourth Quarter and Fiscal Year Ended
 May 31, 2014, and Adoption of Up to US$120 Million Share Repurchase Program

Quarterly Net Revenues Increased by 20.0% Year-Over-Year

Quarterly Operating Income Increased by 26.3% Year-Over-Year

Quarterly Net Income Attributable to New Oriental Increased by 52.2%
Year-Over-Year

Fiscal Year Net Revenues Increased by 18.7% Year-Over-Year

Fiscal Year Operating Income Increased by 61.2% Year-Over-Year

Fiscal Year Net Income Attributable to New Oriental Increased by 58.3%
Year-Over-Year

PR Newswire

BEIJING, July 22, 2014

BEIJING, July 22, 2014 /PRNewswire/ -- New Oriental Education and Technology
Group Inc. (the "Company" or "New Oriental") (NYSE: EDU), the largest provider
of private educational services in China, today announced its unaudited
financial results for the fourth quarter and fiscal year ended May 31, 2014.

Highlights for the Fourth Fiscal Quarter Ended May 31, 2014

  oTotal net revenues increased by 20.0% year-over-year to US$287.5 million
    from US$239.6 million in the same period of the prior fiscal year.
  oNet income attributable to New Oriental increased by 52.2% year-over-year
    to US$42.9 million from US$28.2 million in the same period of the prior
    fiscal year.
  oNon-GAAP net income attributable to New Oriental, which excludes
    share-based compensation expenses, increased by 33.2% year-over-year to
    US$46.8 million from US$35.2 million in the same period of the prior
    fiscal year.
  oOperating income increased by 26.3% year-over-year to US$30.8 million from
    US$24.4 million in the same period of the prior fiscal year.
  oNon-GAAP operating income, which excludes share-based compensation
    expenses, increased by 10.7% year-over-year to US$34.7 million from
    US$31.4 million in the same period of the prior fiscal year.
  oBasic and diluted net income attributable to New Oriental per American
    Depositary Shares ("ADS") were US$0.27 and US$0.27, respectively. Non-GAAP
    basic and diluted net income per ADS, which excludes share-based
    compensation expenses, were US$0.30 and US$0.30, respectively. Each ADS
    represents one common share of the Company.
  oTotal student enrollments in academic subjects tutoring and test
    preparation courses increased by 4.0% year-over-year to approximately
    581,400 from approximately 559,000 in the same period of the prior fiscal
    year.

Highlights for the Fiscal Year Ended May 31, 2014

  oTotal net revenues for the fiscal year increased by 18.7% year-over-year
    to US$1,138.9 million from US$959.9 million.
  oNet income attributable to New Oriental for the fiscal year increased by
    58.3% year-over-year to US$215.7 million from US$136.3 million.
  oNon-GAAP net income attributable to New Oriental for the fiscal year,
    which excludes share-based compensation expenses, increased by 44.2%
    year-over-year to US$235.8 million from US$163.5 million.
  oOperating income for the fiscal year increased by 61.2% year-over-year to
    US$197.6 million from US$122.6 million.
  oNon-GAAP operating income for the fiscal year, which excludes share-based
    compensation expenses, increased by 45.3% year-over-year to US$217.6
    million from US$149.8 million.
  oBasic and diluted net income attributable to New Oriental per ADS for the
    fiscal year were US$1.38 and US$1.37, respectively. Non-GAAP basic and
    diluted earnings per ADS, which excludes share-based compensation
    expenses, were US$1.51 and US$1.49, respectively. Each ADS represents one
    common share of the Company.
  oTotal student enrollments in academic subjects tutoring and test
    preparation courses for the fiscal year increased by 5.1% year-over-year
    to approximately 2,668,700 from approximately 2,540,300 in the prior
    fiscal year.
  oThe total number of schools and learning centers was 703 as of May 31,
    2014, down from 726 as of May 31, 2013, and an increase of three compared
    to 700 as of February 28, 2014. The total number of schools was 56 as of
    May 31, 2014.

Financial and Student Enrollments Summary – Fourth Fiscal Quarter and Fiscal
Year 2014

(in thousands US$, except per ADS data, student enrollments and percentages)

                              Q4of FY2014     Q4 of FY2013     Pct. Change
Net revenues                  287,487          239,645          20.0%
Net income attributable to    42,882           28,177           52.2%
New Oriental
Non-GAAP net income
attributable to New           46,836           35,172           33.2%
Oriental^(1)
Operating income              30,780           24,377           26.3%
Non-GAAP operating income^(1) 34,734           31,372           10.7%
Net income per ADS
attributable to New           0.27             0.18             51.1%
Oriental - basic
Net income per ADS
attributable to New           0.27             0.18             51.7%
Oriental - diluted
Non-GAAP net income per ADS
attributable                  0.30             0.23             32.2%
to New Oriental -
basic^(1)(2)
Non-GAAP net income per ADS
attributable                  0.30             0.22             32.7%
to New Oriental -
diluted^(1)(2)
Total student enrollments in
academic subjects tutoring    581,400          559,000          4.0%
and test preparation courses
                              FY 2014          FY 2013          Pct. Change
Net revenues                  1,138,887        959,854          18.7%
Net income attributable to    215,704          136,269          58.3%
New Oriental
Non-GAAP net income
attributable to New Oriental  235,783          163,511          44.2%
^(1)
Operating income              197,567          122,565          61.2%
Non-GAAP operating income     217,646          149,807          45.3%
^(1)
Net income per ADS
attributable to New           1.38             0.87             58.0%
Oriental - basic
Net income per ADS
attributable to New           1.37             0.86             58.2%
Oriental - diluted
Non-GAAP net income per ADS
attributable to               1.51             1.05             43.9%
New Oriental - basic ^(1)(2)
Non-GAAP net income per ADS
attributable to               1.49             1.04             44.1%
New Oriental - diluted
^(1)(2)
Total student enrollments in
academic subjects             2,668,700        2,540,300        5.1%
tutoring and test preparation
courses
(1) New Oriental provides net income attributable to New Oriental, operating
income, and net income per ADS attributable to New Oriental on a non-GAAP
basis that excludes share-based compensation expenses to provide supplemental
information regarding its operating performance. For more information on these
non-GAAP financial measures, please see the section captioned "About Non-GAAP
Financial Measures" and the tables captioned "Reconciliations of Non-GAAP
Measures to the Most Comparable GAAP Measures" set forth at the end of this
release.
(2) The Non-GAAP adjusted net income per share and per ADS are computed using
Non-GAAP adjusted net income and the same number of shares and ADSs used in
GAAP basic and diluted EPS calculation.

Michael Yu, New Oriental's Chairman and Chief Executive Officer, commented,
"We are pleased to report healthy top line growth of 20.0% and sustained
strong profit growth of 52.2% for the fourth fiscal quarter, as we ended our
fiscal year 2014 on a strong note. During this past fiscal year, we achieved
major milestones on both the top and bottom lines, with revenues exceeding
US$1 billion to US$1.139 billion and net profit exceeding US$200 million to
US$215.7 million for the first time. We are particularly encouraged that our
'Harvest the Market' strategy has driven a significant improvement in
profitability during the year. Gross margin for fiscal year 2014 increased by
30 basis points to 60.3% from 60.0% in fiscal year 2013, operating margin
increased by 450 basis points to 17.3% from 12.8%, and net margin increased by
a very impressive 470 basis points to 18.9% from 14.2%."

Mr. Yu continued, "Starting in the fourth quarter of fiscal year 2014, we once
again started to expand our network by adding a net of three learning centers,
giving us a total of 703 schools and learning centers as of the end of fiscal
year 2014. We also added more than 9,300 square meters of additional classroom
area by expanding 10 of our existing learning centers. Moving into fiscal year
2015, we plan to extend our penetration rate in existing markets by adding
capacity in cities where we are experiencing rapid growth and strong
profitability."

Mr. Yu concluded, "Looking ahead, while we expect that the reduction in the
size of our network over the last year, uncertainty about province-by-province
implementation of new policies relating to the English test for the Gaokao
college entrance exam, increased competition especially in second- and
third-tier cities, and O2O product transitions in our POP Kids program will
result in somewhat slower top-line growth in the first half of fiscal year
2015, we believe that the fundamentals of our business remain strong and that
we will extend our clear leadership position in China's education market."

Louis T. Hsieh, New Oriental's President and Chief Financial Officer,
commented, "Although we did not expand our school network over the last fiscal
year, we nevertheless continued to record strong growth momentum across our
key business lines as we improved utilization rates across the network. Our
overseas test preparation and overseas study consulting businesses together
recorded year-over-year gross revenue growth of about 22% to approximately
US$440.6 million, while our U-Can grade 7 to 12 all-subjects after-school
tutoring business recorded year-over-year gross revenue growth of about 23% to
approximately US$328.4 million."

Adoption of Share Repurchase Program

On July 22, 2014, New Oriental's board of directors authorized the repurchase
of up to US$120 million of the Company's shares during the period from July
28, 2014, through March 31, 2015.

This share repurchase program authorizes the Company to purchase its ADSs or
common shares from time to time on the open market at prevailing market
prices, in negotiated transactions off the market, in block trades, pursuant
to a 10b5-1 plan or other legally permissible ways in accordance with
applicable rules and regulations. The timing and extent of any purchases will
depend upon market conditions, the trading price of ADSs and other factors.

New Oriental expects to implement this share repurchase program in a manner
consistent with market conditions and the interests of the shareholders. New
Oriental's board of directors will review the share repurchase program
periodically and may authorize adjustment of its terms and size accordingly.
New Oriental plans to fund any share repurchases made under this program from
the Company's available cash balance.

Updates on Online Education Strategy: Establishment of Online and Offline
Integrated Education Ecosystem

New Oriental is in the process of establishing an online and offline
integrated education ecosystem. This ecosystem strategy consists of three
levels.

1) The core element of the ecosystem is to develop an "O2O Two-way Interactive
Education System" by extending New Oriental's traditional offline
classroom-teaching offerings to online educational services.

New Oriental has developed a platform featuring a series of online education
modules to support classroom teaching, after-class self-learning, and
interaction between students, teachers, and parents via internet-enabled
devices, such as smartphones, tablets and PCs. The Company has been piloting
and upgrading the platform for all major product lines since the beginning of
fiscal year 2015. A newly revamped POP kids English program, called "Shuang
You" will be fully launched throughout the New Oriental network in the second
quarter of fiscal year 2015. A revamped U-Can all-subject after-school
tutoring program, named "U-Can Visible Progress Teaching system," has been
piloted in several large cities and will be rolled out to more cities in the
first half of fiscal year 2015. Similar systems will also be implemented for
overseas test preparation and domestic test preparation courses beginning from
the second quarter of fiscal year 2015.

2) The second level above the O2O Two-way Interactive Education System is to
invest in the development of supplementary online educational products and
services.

New Oriental's own online education website koolearn.com now offers over 2,000
online courses in language training, overseas and domestic test preparation
and vocational education with over 9.2 million cumulative registered users by
the end of fiscal year 2014 and about 177,700 paying users in fiscal year
2014. Recent developments relating to koolearn.com include:

  oKoolearn.com recently launched an online test preparation program, which
    features live broadcasts of a series of New Oriental's most popular
    offline test preparation classes. This program had achieved over 264,400
    registrations in the second half of fiscal year 2014.
  oIn July 2014, Koolearn.com and ATA Inc. (NASDAQ: ATAI), a leading provider
    of advanced testing technologies and testing-related services in China,
    established a joint venture to provide online and mobile education and
    training to working professionals in China. The partnership aims to
    leverage New Oriental's expertise in online education website and its
    distribution channels, and ATA Inc.'s experience in assessment deliveries,
    student resources, learning tools, software and other technical resources.
  oKoolearn.com's "DONUT" game-based mobile learning applications for
    children aged 2 to 8 recorded over 8 million downloads by the end of
    fiscal year 2014 and Koolearn.com has reached agreements for DONUT
    applications to be used in about 20 kindergartens by September 2014.

In addition, during the fourth fiscal quarter of 2014 New Oriental made
important progress in its strategy to develop other supplementary online
education products and services under the New Oriental brand, either
independently or in majority-held partnerships with other companies. Recent
developments in this regard include:

  oIn May 2014, the Company launched an English language vocabulary training
    application, "Le Ci", for mobile phones and tablets. Le Ci aids vocabulary
    memorization and language development using techniques developed by New
    Oriental's Chairman and CEO, Michael Yu. Over time, social networking and
    incentive-based learning features will be added to the application. In the
    two months since it was launched, the application has already recorded
    over 310,000 users.
  oIn July 2014, the Company also launched anonline education platform for
    primary and secondary schools. The "OKAY" platform was developed in
    cooperation with more than 30,000 teachers from 49 public schools in China
    and was specifically designed to support learning activities in primary
    and secondary classrooms. It features an extensive database of educational
    content and resources, which can support intelligent, customized,
    interactive in-class teaching and learning on New Oriental customized
    tablets and digital whiteboards. The platform can also track and analyze
    students' after-class self-learning progress, and automatically push
    customized content that can improve students' learning efficiency.
  oNew Oriental has developed a strategic partnership with Tencent Holdings
    Limited ("Tencent", SEHK: 00700), a leading provider of comprehensive
    Internet services in China, to research and develop unique mobile-based
    English language learning offerings that will build on the Company's deep
    resources in terms of content and educational research and Tencent's
    technological expertise and online penetration. The first product is
    expected to be launched by the end of 2014, and will be promoted through
    Tencent's online channels and New Oriental's offline network.

3) New Oriental is also exploring opportunities to invest in selected online
education companies with minority stake to further support its efforts to
develop a comprehensive online and offline integrated education ecosystem.

New Oriental intends to focus on investing in online education companies that
have business models or technologies that are complementary to its online
education strategy.

Financial Results for the Fourth Fiscal Quarter Ended May 31, 2014

For the fourth fiscal quarter of 2014, New Oriental reported net revenues of
US$287.5 million, representing a 20.0% increase year-over-year.

Net revenues from educational programs and services for the fourth fiscal
quarter were US$236.2 million, representing a 16.6% increase year-over-year.
The growth was mainly driven by an increase in student enrollments in academic
subjects tutoring and test preparation courses, as well as an increase in
average selling prices. Total student enrollments in academic subjects
tutoring and test preparation courses in the fourth quarter of fiscal year
2014 increased by 4.0% year-over-year to approximately 581,400 from
approximately 559,000 in the same period of the prior fiscal year.

Operating costs and expenses for the quarter were US$260.3 million, a 20.9%
increase year-over-year. Non-GAAP operating costs and expenses, which exclude
share-based compensation expenses, for the quarter were US$256.4 million, a
23.1% increase year-over-year.

Cost of revenues increased by 21.0% year-over-year to US$113.8 million,
primarily due to increases in teachers' compensation which is in line with the
revenue growth.

Selling and marketing expenses increased by 40.9% year-over-year to US$51.7
million, primarily due to brand promotion expenses.

General and administrative expenses for the quarter increased by 12.2%
year-over-year to US$94.8 million. Non-GAAP general and administrative
expenses, which exclude share-based compensation expenses, were US$90.9
million, a 17.2% increase year-over-year.

Total share-based compensation expenses, which were allocated to related
operating costs and expenses, decreased by 43.5% to US$4.0 million in the
fourth quarter of fiscal year 2014 from US$7.0 million in the same period of
the prior fiscal year.

Operating income for the quarter was US$30.8 million, a 26.3% increase from
US$24.4 million in the same period of the prior fiscal year. Non-GAAP
operating income, which excludes share-based compensation expenses, for the
quarter was US$34.7 million, a 10.7% increase from US$31.4 million in the same
period of the prior fiscal year.

Operating margin for the quarter was 10.7%, compared to 10.2% in the same
period of the prior fiscal year. Non-GAAP operating margin, which excludes
share-based compensation expenses, for the quarter was 12.1%, compared to
13.1% in the same period of the prior fiscal year.

Net income attributable to New Oriental for the quarter was US$42.9 million,
representing a 52.2% increase from the same period of the prior fiscal year.
Basic and diluted earnings per ADS attributable to New Oriental were US$0.27
and US$0.27, respectively.

Non-GAAP net income attributable to New Oriental for the quarter was US$46.8
million, representing a 33.2% increase from the same period of the prior
fiscal year. Non-GAAP basic and diluted earnings per ADS attributable to New
Oriental were US$0.30 and US$0.30, respectively.

Capital expenditures for the quarter were US$8.9 million, which were primarily
attributable to the opening of 24 new learning centers and renovations at
older, existing learning centers.

As of May 31, 2014, New Oriental had cash and cash equivalents of US$371.6
million, as compared to US$355.8 million as of February 28, 2014. In addition,
the Company had US$98.5 million in term deposits and US$643.4 million in
short-term investment at the end of the quarter. Net operating cash flow for
the fourth quarter of fiscal year 2014 was approximately US$93.6 million.

New Oriental's deferred revenue balance, which is cash collected from
registered students for courses and recognized proportionally as revenue as
the instructions are delivered, at the end of the fourth quarter of fiscal
year 2014 was US$380.8 million, an increase of 14.6% as compared to US$332.2
million at the end of the fourth quarter of fiscal year 2013.

Financial Results for the Fiscal Year Ended May 31, 2014

For the fiscal year ended May 31, 2014, New Oriental reported net revenues of
US$1,138.9 million, an 18.7% increase year-over-year.

Total student enrollments in academic subjects tutoring and test preparation
courses for the fiscal year ended May 31, 2014, increased by 5.1%
year-over-year to approximately 2,668,700 from approximately 2,540,300 for the
fiscal year ended May 31, 2013.

Operating income for the fiscal year ended May 31, 2014, was US$197.6 million,
a 61.2% increase year-over-year. Non-GAAP operating income, which excludes
share-based compensation expenses, for the fiscal year ended May 31, 2014, was
US$217.6 million, a 45.3% increase year-over-year.

Operating margin for the fiscal year ended May 31, 2014, was 17.3%, compared
to 12.8% for the fiscal year ended May 31, 2013. Non-GAAP operating margin,
which excludes share-based compensation expenses, for the fiscal year ended
May 31, 2014, was 19.1%, compared to 15.6% for the fiscal year ended May 31,
2013.

Net income attributable to New Oriental for the fiscal year ended May 31,
2014, was US$215.7 million, representing a 58.3% increase year-over-year.
Basic and diluted earnings per ADS attributable to New Oriental for the fiscal
year ended May 31, 2014, were US$1.38 and US$1.37, respectively.

Non-GAAP net income attributable to New Oriental, which excludes share-based
compensation expenses, for the fiscal year ended May 31, 2014, was US$235.8
million, a 44.2% increase year-over-year. Non-GAAP basic and diluted earnings
per ADS attributable to New Oriental for the fiscal year ended May 31, 2014,
were US$1.51 and US$1.49, respectively.

Outlook for First Quarter of Fiscal Year 2015

New Oriental expects total net revenues in the first quarter of fiscal year
2015 (June 1, 2014, to August 31, 2014) to be in the range of US$412.0 million
to US$427.5 million, representing year-over-year growth in the range of 6% to
10%. This lower-than-normal projected revenue growth rate reflects the
anticipated impact on the Company's top-line performance of margin expansion
initiatives in fiscal year 2014, the transition to a new POP Kids program,
changes in product mix and business seasonality, as well as certain
macroeconomic factors. We are in the process of reducing our previous learning
center opening plan of 10 to 12 per quarter in light of the slower than
expected revenue growth outlook for our first quarter of 2015.

The specific factors impacting the Company's guidance are:

  oThe fact that the Company has reduced the total number of schools and
    learning centers in its network, which decreased by a net of 23 during
    fiscal year 2014 to 703 at the end of fiscal year 2014 from 726 at the end
    of fiscal year 2013;
  oThe ongoing rollout of a revamped POP Kids program, which has impacted
    enrollments in this business line and is expected to be fully completed in
    the second quarter of fiscal year 2015;
  oAn expected continued decline in enrollments for the Company's legacy
    business lines of adult English and domestic college English test
    preparation;
  oUncertainty about the implementation of new policies related to the
    English test for the Gaokao, or college entrance exam, which is being
    determined on a province-by-province basis;
  oChanging trends in the seasonality of the Company's business as its
    fastest-growing business line, K-12 after-school tutoring, experiences a
    slack season in the first fiscal quarter when primary and secondary
    schools are closed for the summer break;
  oGrowing local competition in second and third tier cities in the K-12
    after-school tutoring segment;
  oThe slowing Chinese economy which has adversely affected discretionary
    consumer spending, notwithstanding the fact that educational services
    remain more resilient than most other discretionary consumer categories;
    and
  oThe recent depreciation of Renminbi against U.S. dollar.

This forecast reflects New Oriental's current and preliminary view, which is
subject to change.

Conference Call Information

New Oriental's management will host an earnings conference call at 8 AM on
July 22, 2014, U.S. Eastern Time (8 PM on July 22, 2014, Beijing/Hong Kong
Time).

Dial-in details for the earnings conference call are as follows:

US:  +1-845-675-0437
Hong Kong:       +852-2475-0994
UK:   +44-20-3059-8139

Please dial in 10 minutes before the call is scheduled to begin and provide
the passcode to join the call. The passcode is "New Oriental Earnings Call."

A replay of the conference call may be accessed by phone at the following
number until July 29, 2014:

International: +61-2-8199-0299
Passcode:   67230146

Additionally, a live and archived webcast of the conference call will be
available at http://investor.neworiental.org.

About New Oriental

New Oriental is the largest provider of private educational services in China
based on the number of program offerings, total student enrollments and
geographic presence. New Oriental offers a wide range of educational programs,
services and products consisting primarily of English and other foreign
language training, test preparation courses for major admissions and
assessment tests in the United States, the PRC and Commonwealth countries,
primary and secondary school education, development and distribution of
educational content, software and other technology, and online education. New
Oriental's ADSs, each of which represents one common share, currently trade on
the New York Stock Exchange under the symbol ''EDU.''

For more information about New Oriental, please visit
http://english.neworiental.org.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are
made under the "safe harbor" provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be
identified by terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates" and similar statements. Among
other things, the outlook for the first quarter of fiscal year 2015,
quotations from management in this announcement, as well as New Oriental's
strategic and operational plans, contain forward-looking statements. New
Oriental may also make written or oral forward-looking statements in its
reports filed or furnished to the U.S. Securities and Exchange Commission, in
its annual reports to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or employees
to third parties. Statements that are not historical facts, including
statements about New Oriental's beliefs and expectations, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties. A number of factors could cause actual results to differ
materially from those contained in any forward-looking statement, including
but not limited to the following: our ability to attract students without a
significant decrease in course fees; our ability to continue to hire, train
and retain qualified teachers; our ability to maintain and enhance our "New
Oriental" brand; our ability to effectively and efficiently manage the
expansion of our school network and successfully execute our growth strategy;
the outcome of ongoing, or any future, litigation or arbitration, including
those relating to copyright and other intellectual property rights;
competition in the private education sector in China; changes in our revenues
and certain cost or expense items as a percentage of our revenues; the
expected growth of the Chinese private education market; Chinese governmental
policies relating to private educational services and providers of such
services; health epidemics and other outbreaks in China; and general economic
conditions in China. Further information regarding these and other risks is
included in our annual report on Form 20-F and other documents filed with the
Securities and Exchange Commission. New Oriental does not undertake any
obligation to update any forward-looking statement, except as required under
applicable law. All information provided in this press release and in the
attachments is as of the date of this press release, and New Oriental
undertakes no duty to update such information, except as required under
applicable law.

About Non-GAAP Financial Measures

To supplement New Oriental's consolidated financial results presented in
accordance with GAAP, New Oriental uses the following measures defined as
non-GAAP financial measures by the SEC: net income excluding share-based
compensation expenses, operating income excluding share-based compensation
expenses, operating costs and expenses excluding share-based compensation
expenses, general and administrative expenses excluding share-based
compensation expenses, operating margin excluding share-based compensation
expenses, and basic and diluted net income per ADS and per share excluding
share-based compensation expenses. The presentation of these non-GAAP
financial measures is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in accordance
with GAAP. For more information on these non-GAAP financial measures, please
see the tables captioned "Reconciliations of non-GAAP measures to the most
comparable GAAP measures" set forth at the end of this release.

New Oriental believes that these non-GAAP financial measures provide
meaningful supplemental information regarding its performance and liquidity by
excluding share-based compensation expenses that may not be indicative of its
operating performance from a cash perspective. New Oriental believes that both
management and investors benefit from referring to these non-GAAP financial
measures in assessing its performance and when planning and forecasting future
periods. These non-GAAP financial measures also facilitate management's
internal comparisons to New Oriental's historical performance and liquidity.
New Oriental computes its non-GAAP financial measures using the same
consistent method from quarter to quarter. New Oriental believes these
non-GAAP financial measures are useful to investors in allowing for greater
transparency with respect to supplemental information used by management in
its financial and operational decision making. A limitation of using these
non-GAAP measures is that they exclude share-based compensation charge that
has been and will continue to be for the foreseeable future a significant
recurring expense in our business. Management compensates for these
limitations by providing specific information regarding the GAAP amounts
excluded from each non-GAAP measure. The accompanying tables have more details
on the reconciliations between GAAP financial measures that are most directly
comparable to non-GAAP financial measures.

Contacts

For investor and media inquiries, please contact:

In China:

Mr. Martin Reidy
FTI Consulting
Tel:+86-10-8591-1060
Email:martin.reidy@fticonsulting.com

Ms. Sisi Zhao
New Oriental Education and Technology Group Inc.
Tel:+86-10-6260-5568
Email:zhaosisi@xdf.cn



NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
                                               AsofMay31  AsofFebruary28
                                               2014          2014
                                               (Unaudited)   (Unaudited)
                                               USD           USD
ASSETS:
Current assets:
Cash and cash equivalents                      371,593       355,782
Restricted cash, current                       488           1,635
Term deposits                                  98,489        99,612
Short term investments                         643,410       696,225
Accounts receivable, net                       2,782         3,700
Inventory                                      22,366        23,388
Deferred tax assets, current                   12,033        8,380
Prepaid expenses and other current assets      78,398        61,351
Amounts due from related parties, current      4,116         2,427
Total current assets                           1,233,675     1,252,500
Property, plant and equipment, net             225,335       231,681
Land use rights, net                           4,344         4,446
Amounts due from related party, non-current    930           -
Deferred tax assets, non-current               2,224         1,763
Long term deposit                              12,574        13,633
Long term prepaid rent                         1,082         1,025
Restricted cash, non-current                   1,840         1,789
Intangible assets                              736           772
Goodwill                                       3,692         3,753
Long term investments                          117,113       7,340
Total assets                                   1,603,545     1,518,702
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable (including accounts payable
of the consolidated VIEs without recourse to
New Oriental of US$10,601 and US$8,501 as of   8,586         10,796
February 28, 2014 and May 31, 2014,
respectively)
Accrued expenses and other current liabilities
(including accrued expenses and other current
liabilities of the consolidated VIEs without   168,918       117,054
recourse to New Oriental of US$105,636 and
US$144,304 as of February 28, 2014 and May 31,
2014, respectively)
Income taxes payable (including income tax
payable of the consolidated VIEs without
recourse to New Oriental of US$11,693 and      17,720        13,688
US$15,920 as of February 28, 2014 and May 31,
2014, respectively)
Amounts due to related parties (including
amounts due to related parties of the
consolidated VIEs without recourse to New      4             2,444
Oriental ofnil and nil as of February 28,
2014 and May 31, 2014, respectively)
Deferred revenue (including deferred revenue
of the consolidated VIEs without recourse to
New Oriental of US$375,752 and US$380,062 as   380,837       381,358
of February 28, 2014 and May 31, 2014,
respectively)
Total current liabilities                      576,065       525,340
Deferred tax liabilities (including deferred
tax liablities of the consolidated VIEs
without recourse to New Oriental of US$1,767   1,722         1,767
and US$1,722 as of February 28, 2014 and May
31, 2014, respectively)
Total long-term liabilities                    1,722         1,767
Total liabilities                              577,787       527,107
Total shareholder's equity                     1,025,758     991,595
Total liabilities and shareholder's equity     1,603,545     1,518,702





NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except for per share and per ADS amounts)
                                             FortheThreeMonthsEndedMay31
                                             2014               2013
                                             (Unaudited)        (Unaudited)
                                             USD                USD
Net Revenues:
Educational programs and services            236,239            202,589
Books and others                             51,248             37,056
Total net revenues                           287,487            239,645
Operating costs and expenses (note 1):
Cost of revenues                            113,819            94,088
Selling and marketing                        51,666             36,666
General and administrative                  94,843             84,514
Total operating costs and expenses           260,328            215,268
Gain on disposal of subsidiaries             3,621              -
Operating income                             30,780             24,377
Other income, net                            14,014             6,715
Provision for income taxes                   (1,912)            (2,354)
Loss from equity method investment          -                  (561)
Net income attributable to New Oriental      42,882             28,177
Education & Technology Group Inc.
Net income per share attributable to New     0.27               0.18
Oriental-Basic
Net income per share attributable to New     0.27               0.18
Oriental-Diluted
Net income per ADS attributable to New       0.27               0.18
Oriental-Basic (note 2)
Net income per ADS attributable to New       0.27               0.18
Oriental-Diluted (note 2)
Other comprehensive (loss) income, net of    (19,708)           10,600
tax
Comprehensive income                         23,174             38,777
Comprehensive income attributable to New     23,174             38,777
Oriental Education & Technology Group Inc.
Notes:
Note 1: Share-based compensation expenses (in thousands) are included in the
operating costs and expenses as follows:
                                             For the Three Months Ended May 31
                                             2014               2013
                                             (Unaudited)        (Unaudited)
                                             USD                USD
General and administrative                   3,954              6,995
Total                                        3,954              6,995
Note 2: Each ADS represents one common
share.



NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.
RECONCILIATION OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES
(In thousands except for per share and per ADS amounts)
                                           FortheThreeMonthsEndedMay31
                                           2014               2013
                                           (Unaudited)        (Unaudited)
                                           USD                USD
General and administrative expenses        94,843             84,514
Share-based compensation expense in        3,954              6,995
general and administrative expenses
Non-GAAP general and administrative        90,889             77,519
expenses
Total operating costs and expenses         260,328            215,268
Share-based compensation expenses          3,954              6,995
Non-GAAP operating costs and expenses      256,374            208,273
Operating income                           30,780             24,377
Share-based compensation expenses          3,954              6,995
Non-GAAP operating income                  34,734             31,372
Operating margin                          10.7%              10.2%
Non-GAAP operating margin                  12.1%              13.1%
Net income attributable to New Oriental    42,882             28,177
Share-based compensation expense           3,954              6,995
Non-GAAP net income                        46,836             35,172
Net income per ADS attributable to New     0.27               0.18
Oriental- Basic (note 1)
Net income per ADS attributable to New     0.27               0.18
Oriental- Diluted (note1)
Non-GAAP net income per ADS attributable
to                                         0.30               0.23
New Oriental - Basic (note 1)
Non-GAAP net income per ADS attributable
to                                         0.30               0.22
New Oriental - Diluted (note 1)
Weighted average shares used in
calculating                                156,868,796        155,714,549
basic net income per ADS (note 1)
Weighted average shares used in
calculating                                158,284,927        157,774,804
diluted net income per ADS (note 1)
Non-GAAP income per share - basic          0.30               0.23
Non-GAAP income per share - diluted        0.30               0.22
Note 1: Each ADS represents one common share.



NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except for per share and per ADS amounts)
                                       For the Year Ended May 31
                                       2014                    2013
                                       (Unaudited)             (Unaudited)
                                       USD                     USD
Net Revenues:
Educational programs and services      1,006,198               857,685
Books and others                       132,689                 102,169
Total net revenues                     1,138,887               959,854
Operating costs and expenses (note 1):
Cost of revenues                      451,669                 384,177
Selling and marketing                  169,062                 142,098
General and administrative            324,210                 311,014
Total operating costs and expenses     944,941                 837,289
Gain on disposal of subsidiaries       3,621                   -
Operating income                      197,567                 122,565
Other income, net                      45,632                  30,893
Provision for income taxes             (26,042)                (15,355)
Loss from equity method investment    (1,453)                 (1,427)
Income from continuing operations      215,704                 136,676
Loss on discontinued operations, net   -                       (407)
of tax
Net income attributable to New
Oriental Education &                   215,704                 136,269
Technology Group Inc.
Net income (loss) per share
attributable to
New Oriental-Basic
Income from continuing operations      1.38                    0.88
Loss on discontinued operations        -                       (0.00)
Net income (loss) per share
attributable to
New Oriental-Diluted
Income from continuing operations      1.37                    0.87
Loss on discontinued operations        -                       (0.00)
Net income (loss) per ADS attributable
to
New Oriental-Basic (note 2)
Income from continuing operations      1.38                    0.88
Loss on discontinued operations        -                       (0.00)
Net income (loss) per ADS attributable
to
New Oriental-Diluted (note 2)
Income from continuing operations      1.37                    0.87
Loss on discontinued operations        -                       (0.00)
Other comprehensive (loss) income, net (17,308)                27,729
of tax
Comprehensive income                   198,396                 163,998
Comprehensive income attributable to
New Oriental Education & Technology    198,396                 163,998
Group Inc.
Notes:
Note 1: Share-based compensation expenses (in thousands) are included in the
operating costs and expenses as follows:
                                       For the Year Ended May 31
                                       2014                    2013
                                       (Unaudited)             (Unaudited)
                                       USD                     USD
General and administrative             20,079                  27,242
Total                                  20,079                  27,242
Note 2: Each ADS represents one common
share.



NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.
RECONCILIATION OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES
(In thousands except for per share and per ADS amounts)
                                                   For the Year Ended May 31
                                                   2014          2013
                                                   (Unaudited)   (Unaudited)
                                                   USD           USD
General and administrative expenses                324,210       311,014
Share-based compensation expense in                20,079        27,242
general and administrative expenses
Non-GAAP general and administrative expenses       304,131       283,772
Total operating costs and expenses                 944,941       837,289
Share-based compensation expenses                  20,079        27,242
Non-GAAP operating costs and expenses              924,862       810,047
Operating income                                   197,567       122,565
Share-based compensation expenses                  20,079        27,242
Non-GAAP operating income                          217,646       149,807
Operating margin                                  17.3%         12.8%
Non-GAAP operating margin                          19.1%         15.6%
Net income attributable to New Oriental            215,704       136,269
Share-based compensation expense                   20,079        27,242
Non-GAAP net income                                235,783       163,511
Net income per ADS attributable to New             1.38          0.87
Oriental- Basic (note 1)
Net income per ADS attributable to New             1.37          0.86
Oriental- Diluted (note 1)
Non-GAAP net income per ADS attributable to        1.51          1.05
New Oriental - Basic (note 1)
Non-GAAP net income per ADS attributable to        1.49          1.04
New Oriental - Diluted (note 1)
Weighted average shares used in calculating basic  156,033,992   155,762,959
net income per ADS (note 1)
Weighted average shares used in calculating
diluted                                            157,903,464   157,823,792
net income per ADS (note 1)
Non-GAAP income per share - basic                  1.51          1.05
Non-GAAP income per share - diluted                1.49          1.04
Note 1: Each ADS represents one common share.

SOURCE New Oriental Education and Technology Group Inc.

Website: http://investor.neworiental.org
Website: http://english.neworiental.org
 
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