Part II OPERATIONAL AND FINANCIAL INFORMATION
Item 5. Market for Registrants Common Equity and Related Stockholders Matters DIVIDENDS DECLARED FOR THE FISCAL YEAR ENDED 31 MARCH 2015
III. Profitability
- 42 - FORMULA USED:
- 43 - FACTS (Based on Consolidated Balances):
( Amounts in Million Philippine Pesos )
March 31
2015 2014 2013 2012 FINANCIAL POSITION
Assets:
Quick assets* P 3,575.68 P 2,823.15 P 2,804.81 P 2,6383.93 Current assets 3,804.40 3,046.21 2,946,82 2,793.51 Non-current asset 5,286.48 5,007.24 4,080.45 2,434.38 Total assets 9,090.88 8,053.45 7,027.27 5,227.89 Liabilities:
Current liabilities P 1,516.57 P 634.27 P 497.30 P 473.73
Non-current liabilities 55.48 880.92 865.42 27.80
Total liabilities 1,572.05 1,515.19 1,362.72 501.53 Equity:
Total equity P 7,518.83 P 6,538.26 P 5,664.55 P 4,726.36 • Attributable to owners of the
Parent Company 5,889.36 5,158.54 4,811.87 4,245.05 • Non-controlling interest 1,629.47 1,379.72 852.68 481.30
RESULTS OF OPERATIONS Net Profit:
Operating profit P 1,005.59 P 829.30 P 905.19 P 663.66
Other income 222.65 201.62 158.67 191.67
Net profit before tax 1,228.24 1,031.93 1,063.86 855.33
Net profit after tax 1,078.16 902.82 890.86 741.47
• Attributable to owners of the
Parent Company 1,028.97 855.02 800.23 719.30
• Non-controlling interest 49.19 47.79 90.63 22.17 Other Comprehensive Income:
Other comprehensive income P 94.32 (P 137.61) P 96.14 P 62.90
Total comprehensive income 1,172.49 765.21 987.00 804.37
* Quick assets include Cash and Cash Equivalents, Trade and Other Receivables – net (under Current Assets), Financial Assets at Fair Value Through Profit or Loss, Available-for-Sale Financial Assets (under Current Assets) and Short-term Investment which is included as part of Other Current Assets – net (see Note 13 of the Consolidated Financial Statements).
- 44 - FACTS (Based on Consolidated Balances):
(Amounts in Philippine Peso and In Absolute Value Unless Otherwise Indicated )
March 31
2015 2014 2013 2012
OTHERS:
Weighted average number of
shares outstanding 16,468,304* 16,477,023* 16,477,023* 13,731,303 Earnings per share P 62.48 P 51.89 P 48.57 P 52.38
* As restated after giving retrospective effect on the stock dividend declared on July 15, 2014.
Retrospective adjustment is made to the earliest period presented on the Group’s consolidated financial statements as of and for the period ended March 31, 2015.
Other Items
1. The current economic condition remains stable for both the clientele and educational institutions; however, certain economic factors are still expected to affect the sales, revenues and income from the Group’s operations.
2. There are no known events that would result in any default or acceleration of an obligation.
3. There are no known events that will trigger direct or contingent financial obligation that may be material to the Group.
4. There are no material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Group with unconsolidated entities or other persons created during the reporting period.
5. The Group does not foresee any cash flow or liquidity problem in the next 12 months immediately following the report date. The Group and each of the component entities can easily meet all its commitments with its present reserves and expected earnings.
6. There are no significant elements of income or loss from continuing operations.
7. There are no sales of Unregistered or Exempt Securities including Recent Issuance of Securities Constituting an Exempt Transaction.
8. FEU Makati Campus, which was opened in June 2010 and strategically located at the heart of the Makati Central Business District, continuous to offer undergraduate business courses. Further, FEU Makati offers graduate programs for business and also houses FEU’s Institute of Law.
For the fiscal year ending March 31, 2015, FEU Makati generates Educational Income and Other Income amounting to P152.4 million and P0.1 million, respectively. Efficient operations keep operating expenses at a manageable level of P23.6 million, which eventually yielded a net income of P128.9 million.
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9. In January 2013, FEU established its new subsidiary FEU Alabang, Inc. The new subsidiary will operate as an educational institution and will serve its market within its vicinity and nearby communities. As of March 31, 2015, FEU Alabang, Inc. has not yet commenced its normal operations and still in its pre-operating stage.
10. During the current fiscal year, EACCI, under the trade name FEU Institute of
Technology (FEU Tech), started its operations with 3,017 students for the first term of S.Y. 2014-2015. FEU Tech offers various engineering and computer courses.
11. Seasonal aspects that has material effect on financial statements:
For FEU-Manila and FEU-Cavite, there are three school terms within a fiscal year:
Summer Term (April to May), First Semester (June to October) and Second Semester (November to March). The first semester has the highest number of students enrolled.
The second semester enrollment is approximately at 90% of the first semester’s enrollment, while the summer term is the lowest at an approximate of 33%. The maximum load, in terms of subject units, of a student during the summer term is only nine units compared to 21 to 24 units during the first and second semesters.
For the FEU Institute of Technology, there are three regular terms in a fiscal year:
First Term (July to October), Second Term (October to February) and Third Term (February to June).
The tuition fee increase, if any, usually takes effect during the first semester of a particular school year. Thus, old rates are followed during the summer term while new rates are applied during the first and second semesters. Since the first quarter is from April to June, the resulting income for the first quarter is expected to be lowest among the four quarters of the fiscal year. Revenue from tuition and other school fees starts to stabilize during the second to fourth quarter as the first and second semester of the school year commences.
12. The K-12 program of the government is anticipated to have an adverse effect on enrollment, particularly on S.Y. 2016-2017. With the enhancement of the current 10-year basic education program, high school graduates need to undergo the senior high school program for two years starting S.Y. 2016-2017 before being able to move on to the college level. With this, college enrollment is expected to drastically
decrease for next five years especially from S.Y. 2017-2018 to S.Y. 2019-2020.
Enrollment levels are expected to normalize only on S.Y. 2021-2022.
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To cushion the expected impact of K-12, FEU had organized a new subsidiary to offer and conduct enhanced basic education programs, including junior and senior high school, starting on S.Y. 2016-2017. On June 2014, FEU High School, Inc. was incorporated and registered with the Philippine Securities and Exchange Commission with the primary purpose of offering pre-school, grade school and high school
education programs and various technical and vocational education and training programs.
With EACCI, now in full operations as an educational institution, the Group is confident of not only maintaining the quality and high standards of its service offerings, but continuing its development for further academic excellence.
13. The Group identifies its operating segments as its three major lines of business namely education, real estate and investment activities.
Also, the Group reports geographical segments in which FEU campuses are located.
(Amounts in Thousand Philippine Peso)
Operating Segments by Line of Business:
Real Estate
Education Rental
Sale of
Properties Investment Total
Revenues
P
2,611,998 P 205,965
P
- P 221,597 P 3,039,560 Costs and
operating
expenses 1,696,965 82,370 - 421 1,779,756
Operating income
P
915,033 P 123,595 P - P 221,176 P 1,259,804
Assets
P
3,597,320 P 2,523,488 P - P 3,101,145 P 9,416,287
Liabilities 1,536,648 55,035 - 857 1,592,540
Operating Segments by Geographical Location:
Manila Makati Cavite Total
Revenues P 2,801,940 P 160,838 P 76,782 P 3,039,560 Costs and
operating
expenses 1,694,873 23,684 61,199 1,779,756
Operating income P 1,107,067 P 137,154 P 15,583 P 1,259,804
Assets P 9,274,542 P 72,719 P 69,026 P 9,416,287
Liabilities 1,575,597 9,782 7,161 1,592,540
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