Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2014 | |
Document and Entity Information | |
Entity Registrant Name | Xueda Education Group |
Entity Central Index Key | 1499619 |
Document Type | 20-F |
Document Period End Date | 31-Dec-14 |
Amendment Flag | FALSE |
Current Fiscal Year End Date | -19 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Accelerated Filer |
Entity Common Stock, Shares Outstanding | 124,655,742 |
Document Fiscal Year Focus | 2014 |
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $113,825 | $117,063 |
Short-term investments | 94,721 | 129,619 |
Prepaid expenses and other current assets | 14,813 | 16,642 |
Amounts due from related parties | 170 | 2,631 |
Deferred tax assets-current | 6,125 | 6,139 |
Total current assets | 229,654 | 272,094 |
Property and equipment, net | 30,433 | 34,826 |
Deferred tax assets-noncurrent | 1,083 | 1,460 |
Rental deposits | 4,893 | 4,807 |
Long-term investments | 9,010 | 15,197 |
Goodwill | 875 | 897 |
Other noncurrent assets | 3,001 | 2,337 |
Total assets | 278,949 | 331,618 |
Current liabilities: | ||
Deferred revenue-current (including deferred revenue of the consolidated variable interest entities ("VIE") without recourse to the Group of $103,871 and $102,461 as of December 31, 2013 and 2014, respectively) | 102,461 | 103,871 |
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIE without recourse to the Group of $29,993 and $30,605 as of December 31, 2013 and 2014, respectively) | 32,473 | 35,275 |
Income taxes payable (including income taxes payable of the consolidated VIE without recourse to the Group of $8,675 and $8,632 as of December 31, 2013 and 2014, respectively) | 9,064 | 9,383 |
Deferred income-current (including deferred income of the consolidated VIE without recourse to the Group of nil and nil as of December 31, 2013 and 2014, respectively) | 550 | 347 |
Total current liabilities | 144,548 | 148,876 |
Deferred revenue-noncurrent (including deferred revenue of the consolidated VIE without recourse to the Group of $29,983 and $23,687 as of December 31, 2013 and 2014, respectively) | 23,687 | 29,983 |
Deferred income-noncurrent (including deferred income of the consolidated VIE without recourse to the Group of nil and nil as of December 31, 2013 and 2014, respectively) | 260 | |
Total liabilities | 168,235 | 179,119 |
Commitments (Note 16) | ||
Equity | ||
Ordinary shares (par value $0.0001; 469,647,160 shares authorized; 144,243,870 and 135,520,084 shares issued; 133,610,982 and 124,655,742 shares outstanding as of December 31, 2013 and 2014, respectively) | 13 | 14 |
Treasury stock, at cost (9,366,032 shares as of December 31, 2013 and 2014) | -16,124 | -16,124 |
Additional paid-in capital | 125,205 | 157,149 |
Statutory reserves | 4,874 | 3,952 |
Retained earnings (accumulated deficits) | -3,763 | 7,181 |
Accumulated other comprehensive income | 588 | 215 |
Total Xueda Education Group shareholders' equity | 110,793 | 152,387 |
Noncontrolling interests | -79 | 112 |
Total equity | 110,714 | 152,499 |
Total liabilities and equity | $278,949 | $331,618 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Deferred revenue- current | $102,461 | $103,871 |
Accrued expenses and other current liabilities | 32,473 | 35,275 |
Income taxes payable | 9,064 | 9,383 |
Deferred income-current | 550 | 347 |
Deferred revenue-noncurrent | 23,687 | 29,983 |
Deferred income-noncurrent | 260 | |
Ordinary shares, par value (in dollars per share) | $0.00 | $0.00 |
Ordinary shares, shares authorized | 469,647,160 | 469,647,160 |
Ordinary shares, shares issued | 135,520,084 | 144,243,870 |
Ordinary shares, shares outstanding | 124,655,742 | 133,610,982 |
Treasury stock, at cost (in shares) | 9,366,032 | 9,366,032 |
Consolidated VIE | ||
Deferred revenue- current | 102,461 | 103,871 |
Accrued expenses and other current liabilities | 30,605 | 29,993 |
Income taxes payable | 8,632 | 8,675 |
Deferred income-current | 0 | 0 |
Deferred revenue-noncurrent | 23,687 | 29,983 |
Deferred income-noncurrent | $0 | $0 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Net revenues | $338,314 | $347,047 | $293,157 |
Cost of revenues (including share-based compensation expenses of $5, $10 and $37 for 2012, 2013 and 2014, respectively) | -254,612 | -239,948 | -219,655 |
Gross profit | 83,702 | 107,099 | 73,502 |
Operating expenses: | |||
General and administrative (including share-based compensation expenses of $3,156, $5,368 and $6,151 for 2012, 2013 and 2014, respectively) | -60,042 | -52,716 | -46,427 |
Selling and marketing (including share-based compensation expenses of $5, $4 and $10 for 2012, 2013 and 2014, respectively) | -36,216 | -36,308 | -31,336 |
Impairment loss on goodwill | 0 | -2,923 | 0 |
Impairment loss on acquired intangible assets | -494 | ||
Total operating expenses | -96,258 | -92,441 | -77,763 |
Government subsidies | 362 | 439 | 164 |
Loss from operations | -12,194 | 15,097 | -4,097 |
Interest income | 6,203 | 7,279 | 6,722 |
Income (loss) before income tax expenses and loss in equity method investment | -5,991 | 22,376 | 2,625 |
Income tax expenses | -4,132 | -7,482 | -876 |
Income (loss) after income tax expenses before loss in equity method investment | -10,123 | 14,894 | 1,749 |
Losses in equity method investments | -107 | ||
Net income (loss) | -10,230 | 14,894 | 1,749 |
Net loss attributable to the noncontrolling interests, net of taxes | 208 | 1,257 | 216 |
Net income (loss) attributable to Xueda Education Group ordinary shareholders | ($10,022) | $16,151 | $1,965 |
Net income (loss) per ordinary share: | |||
Net income (Loss) attributable to Xueda Education Group ordinary shareholders, Basic (in dollars per share) | ($0.08) | $0.12 | $0.01 |
Net income (loss) attributable to Xueda Education Group ordinary shareholders, Diluted (in dollars per share) | ($0.08) | $0.12 | $0.01 |
Weighted average ordinary shares used in calculating net income (loss) per share | |||
Basic (in shares) | 126,567,703 | 131,681,540 | 131,316,004 |
Diluted (in shares) | 126,567,703 | 134,466,868 | 131,776,207 |
CONSOLIDATED_STATEMENTS_OF_OPE1
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cost of revenues | |||
Share-based compensation expenses | $37 | $10 | $5 |
General and administrative | |||
Share-based compensation expenses | 6,151 | 5,368 | 3,156 |
Selling and marketing | |||
Share-based compensation expenses | $10 | $4 | $5 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income (loss) | ($10,230) | $14,894 | $1,749 |
Other comprehensive income (loss), net of tax of nil: | |||
Change in cumulative foreign currency translation adjustments | -264 | 439 | 250 |
Unrealized gain on available-for-sale securities, net of tax effects of nil, nil and nil for the years ended December 31, 2012, 2013 and 2014, respectively | 654 | 93 | 339 |
Total comprehensive income (loss) | -9,840 | 15,426 | 2,338 |
Comprehensive loss attributable to noncontrolling interests | 191 | 1,251 | 208 |
Total comprehensive income (loss) attributable to Xueda Education Group | ($9,649) | $16,677 | $2,546 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Unrealized gain on available-for-sale securities, tax effects | $0 | $0 | $0 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $) | Total Xueda Education Group shareholders' equity | Ordinary | Treasury stock | Additional paid-in capital | Statutory reserve | Retained earnings (accumulated deficits) | Accumulated other comprehensive (loss) income | Noncontrolling interests | Total |
In Thousands, except Share data, unless otherwise specified | |||||||||
Balance at Dec. 31, 2011 | $161,351 | $14 | ($8,846) | $178,058 | $1,544 | ($8,527) | ($892) | $161,351 | |
Balance (in shares) at Dec. 31, 2011 | 133,505,836 | ||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||
Repurchase of ordinary shares | -7,278 | -7,278 | -7,278 | ||||||
Repurchase of ordinary shares (in shares) | -4,155,864 | ||||||||
Provision for statutory reserve | 484 | -484 | |||||||
Share-based compensation | 3,166 | 3,166 | 3,166 | ||||||
Nonvested shares vested (in shares) | 348,062 | ||||||||
Options exercised | 673 | 673 | 673 | ||||||
Options exercised (in shares) | 679,402 | ||||||||
Foreign currency translation adjustments | 242 | 242 | 8 | 250 | |||||
Dividends distribution | -32,594 | -32,594 | -32,594 | ||||||
Acquisition of Weland International | 1,571 | 1,571 | |||||||
Net unrealized gain on available-for-sale securities, net of tax effects of nil | 339 | 339 | 339 | ||||||
Net income (loss) | 1,965 | 1,965 | -216 | 1,749 | |||||
Balance at Dec. 31, 2012 | 127,864 | 14 | -16,124 | 149,303 | 2,028 | -7,046 | -311 | 1,363 | 129,227 |
Balance (in shares) at Dec. 31, 2012 | 130,377,436 | ||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||
Provision for statutory reserve | 1,924 | -1,924 | |||||||
Share-based compensation | 5,382 | 5,382 | 5,382 | ||||||
Nonvested shares vested (in shares) | 788,064 | ||||||||
Options exercised | 2,464 | 2,464 | 2,464 | ||||||
Options exercised (in shares) | 2,445,482 | ||||||||
Foreign currency translation adjustments | 433 | 433 | 6 | 439 | |||||
Net unrealized gain on available-for-sale securities, net of tax effects of nil | 93 | 93 | 93 | ||||||
Net income (loss) | 16,151 | 16,151 | -1,257 | 14,894 | |||||
Balance at Dec. 31, 2013 | 152,387 | 14 | -16,124 | 157,149 | 3,952 | 7,181 | 215 | 112 | 152,499 |
Balance (in shares) at Dec. 31, 2013 | 133,610,982 | 133,610,982 | |||||||
Increase (Decrease) in Shareholders' Equity | |||||||||
Provision for statutory reserve | 922 | -922 | |||||||
Share-based compensation | 6,198 | 6,198 | 6,198 | ||||||
Nonvested shares vested (in shares) | 1,362,214 | ||||||||
Options exercised | 1,352 | 1,352 | 1,352 | ||||||
Options exercised (in shares) | 1,122,546 | ||||||||
Foreign currency translation adjustments | -281 | -281 | 17 | -264 | |||||
Dividends distribution | -9,865 | -9,865 | -9,865 | ||||||
Repurchase of common stock | -29,630 | -1 | -29,629 | -29,630 | |||||
Repurchase of common stock (in shares) | -11,440,000 | ||||||||
Net unrealized gain on available-for-sale securities, net of tax effects of nil | 654 | 654 | 654 | ||||||
Net income (loss) | -10,022 | -10,022 | -208 | -10,230 | |||||
Balance at Dec. 31, 2014 | $110,793 | $13 | ($16,124) | $125,205 | $4,874 | ($3,763) | $588 | ($79) | $110,714 |
Balance (in shares) at Dec. 31, 2014 | 124,655,742 | 124,655,742 |
CONSOLIDATED_STATEMENTS_OF_CHA1
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | |||
Dividends distribution, amount per ordinary share | $0.08 | $0.25 | |
Net unrealized gain on available-for-sale securities, tax effects | $0 | $0 | $0 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income (loss) | ($10,230) | $14,894 | $1,749 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization of property and equipment | 14,097 | 16,117 | 15,308 |
Amortization of acquired intangible assets | 81 | 47 | |
Impairment of goodwill | 0 | 2,923 | 0 |
Impairment of acquired intangible assets | 494 | ||
Loss on disposal of property and equipment | 552 | 639 | 690 |
Share-based compensation expense | 6,198 | 5,382 | 3,166 |
Deferred income taxes | 392 | -820 | -2,303 |
Loss from equity method investment | 107 | ||
Foreign exchange loss (gain) | 836 | -1,042 | |
Changes in assets and liabilities: | |||
Prepaid expenses and other current assets | -448 | -2,144 | 4,275 |
Amounts due from related parties | -181 | -3 | 56 |
Rental deposits | -204 | -180 | -660 |
Other non-current assets | 131 | -25 | -1,652 |
Deferred revenue | -3,923 | -3,869 | 30,486 |
Accrued expenses and other current liabilities | -2,346 | 9,829 | 3,591 |
Income taxes payable | -127 | 4,828 | 237 |
Deferred income | -58 | -348 | -346 |
Net cash provided by operating activities | 4,796 | 46,756 | 54,644 |
Cash flows from investing activities: | |||
Purchase of short-term investments | -188,715 | -291,384 | -128,307 |
Proceeds from maturity of short-term investments | 221,849 | 191,838 | 111,266 |
Acquisition of businesses (net of cash acquired of nil, $1,765 and nil for 2011, 2012, and 2013, respectively) | -1,196 | ||
Purchases of long-term investments | -1,613 | -9,839 | -4,786 |
Deposit for investment | -855 | ||
Proceeds from disposal of long-term investments | 8,169 | ||
Loan to a third party | -3,198 | ||
Proceeds from maturity of loan to a third party | 3,213 | ||
Loan to a related party | -2,636 | -4,777 | |
Proceeds from maturity of loan to a related party | 2,559 | 1,634 | 3,185 |
Purchase of property and equipment | -11,268 | -10,469 | -19,145 |
Proceeds from disposal of property and equipment | 95 | 42 | 17 |
Net cash (used in) provided by investing activities | 30,236 | -120,814 | -43,743 |
Cash flows from financing activities: | |||
Repurchase of ordinary shares | -29,630 | -7,278 | |
Proceeds from exercise of options | 3,393 | 246 | 123 |
Payment of dividend distribution | -9,865 | -22,665 | -9,929 |
Net cash used in financing activities | -36,102 | -22,419 | -17,084 |
Effect of exchange rate changes | -2,168 | 1,596 | 381 |
Net decrease in cash and cash equivalents | -3,238 | -94,881 | -5,802 |
Cash and cash equivalents, beginning of year | 117,063 | 211,944 | 217,746 |
Cash and cash equivalents, end of year | 113,825 | 117,063 | 211,944 |
Supplemental disclosure of cash flow information | |||
Income taxes paid | 4,059 | 3,248 | 2,897 |
Major non-cash investing activity: | |||
Payable for property and equipment | $2,097 | $1,888 | $2,393 |
CONSOLIDATED_STATEMENTS_OF_CAS1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
Acquisition of businesses, cash acquired | $0 | $0 | $1,765 |
ORGANIZATION_AND_PRINCIPAL_ACT
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||||||||
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1.ORGANIZATION AND PRINCIPAL ACTIVITIES | |||||||
Xueda Education Group (the “Company”) was incorporated under the laws of the Cayman Islands on April 24, 2009. The Company, its subsidiaries, its consolidated variable interest entity (“VIE”) and VIE’s subsidiaries and schools (collectively the “Group”) are primarily engaged in providing private personalized tutoring services for primary and secondary school students in the People’s Republic of China (“PRC”). | ||||||||
As of December 31, 2014, details of the Company’s subsidiaries and VIE, VIE’s significant subsidiaries and schools were as follows: | ||||||||
Place of | ||||||||
Incorporation | establishment/ | |||||||
Name | or acquisition date | incorporation | Legal ownership | |||||
Subsidiaries: | ||||||||
Xuecheng Century (Beijing) Information Technology Co., Ltd. (“Xuecheng Century”) | 17-Aug-09 | PRC | 100 | % | ||||
China Xueda Corporation Limited (“Xueda HK”) | May 13, 2009 | Hong Kong | 100 | % | ||||
Beijing Xueda Education & Training Consulting Co., Ltd. | 31-Oct-11 | PRC | 100 | % | ||||
Tianjin Xueda Education Technology Co., Ltd. | 25-Feb-14 | PRC | 100 | % | ||||
VIE: | ||||||||
Beijing Xueda Information Technology Co., Ltd. (“Xueda Information”) | 13-Jul-09 | PRC | Nil | * | ||||
VIE’s significant subsidiaries and schools: | ||||||||
Taiyuan Xueda Education & Training School(1) | 8-Dec-08 | PRC | Nil | * | ||||
Nanchang Xueda Education & Training School(1) | 20-Apr-09 | PRC | Nil | * | ||||
Qingdao Xueda Pre-exam Tutoring School(1) | 10-Jun-09 | PRC | Nil | * | ||||
Suzhou Xuecheng Information Technology Co., Ltd. | 28-Sep-09 | PRC | Nil | * | ||||
Wuhan Xueda Information Technology Co., Ltd. | 12-Oct-09 | PRC | Nil | * | ||||
Wuxi Xueda Information Technology Co., Ltd. | 15-Oct-09 | PRC | Nil | * | ||||
Hohhot Xueda Information Technology Co., Ltd. | 21-Oct-09 | PRC | Nil | * | ||||
Tianjin Xueda Educational Information Consulting Co., Ltd. | 26-Oct-09 | PRC | Nil | * | ||||
Beijing Xuecheng Shidai Information Technology Co., Ltd. | 28-Oct-09 | PRC | Nil | * | ||||
Changsha Xuezhi Information Technology Co., Ltd. | 3-Nov-09 | PRC | Nil | * | ||||
Kunming Xueda Information Technology Co., Ltd. | 6-Nov-09 | PRC | Nil | * | ||||
Guangzhou Xueda Educational Technology Co., Ltd. | 24-Nov-09 | PRC | Nil | * | ||||
Shenzhen Xueda Information Technology Co., Ltd. | 25-Nov-09 | PRC | Nil | * | ||||
Chengdu Xueda Information Technology Co., Ltd. | 30-Nov-09 | PRC | Nil | * | ||||
Jinan Xueda Education & Training School(1) | 17-Dec-09 | PRC | Nil | * | ||||
Beijing Xicheng Xueda Training School(1) | 1-Feb-10 | PRC | Nil | * | ||||
Dalian Shahekou Xueda Education & Training School(1) | 5-Mar-10 | PRC | Nil | * | ||||
Hangzhou Xueda Education Consulting Co., Ltd. | 9-Mar-10 | PRC | Nil | * | ||||
BeijingWeland International Education and Technology Corp. | 1-Jun-12 | PRC | Nil | * | ||||
Guiyang Xueda Information Technology Co., Ltd. | 9-Apr-10 | PRC | Nil | * | ||||
Fuzhou Gulou Xueda Education & Training School(1) | 26-Apr-10 | PRC | Nil | * | ||||
Shijiazhuang Yuhua District Xueda Education & Training School(1) | 26-Apr-10 | PRC | Nil | * | ||||
Beijing Dongcheng Xueda Training School(1) | May 27, 2010 | PRC | Nil | * | ||||
Changchun Xueda Education & Training School(1) | 11-Jun-10 | PRC | Nil | * | ||||
Xi’an Xueda Education & Training School(1) | 18-Jun-10 | PRC | Nil | * | ||||
Shenyang Xueda Education & Training School(1) | 10-Aug-10 | PRC | Nil | * | ||||
Nanjing Xueda Education & Training School(1) | 30-Sep-10 | PRC | Nil | * | ||||
Nantong Chongchuan District Xueda Education Training School(1) | 19-Nov-10 | PRC | Nil | * | ||||
Xi’an Lianhu Xueda Education Training School(1) | 7-Dec-10 | PRC | Nil | * | ||||
Xi’an Beilin District Xueda Education Training School(1) | 14-Dec-10 | PRC | Nil | * | ||||
Shanghai Jinshan District Xueda Education School of Continuing Studies(1) | 16-Dec-10 | PRC | Nil | * | ||||
Hefei Xueda Education Training Department(1) | 27-Dec-10 | PRC | Nil | * | ||||
Beijing Chaoyang Xueda Training School(1) | 25-Jan-11 | PRC | Nil | * | ||||
Xi’an Yanta Xueda Education & Training School(1) | 24-Feb-11 | PRC | Nil | * | ||||
Beijing Haidian Xueda Training School(1) | May 31, 2011 | PRC | Nil | * | ||||
Qindu Xueda Education & Training School(1) | 28-Oct-11 | PRC | Nil | * | ||||
Tangshan Lubei Xueda Education & Training School(1) | 26-Apr-12 | PRC | Nil | * | ||||
Shenzhen Xueda Education & Training School(1) | 30-Dec-13 | PRC | Nil | * | ||||
Tianjin Xuecheng Century Information Technology Co., Ltd. | 25-Feb-14 | PRC | Nil | * | ||||
*These entities are controlled by the Company pursuant to the contractual arrangements disclosed below. | ||||||||
-1 | These private schools are established and controlled by Xueda Information or its subsidiaries. Under PRC laws and regulations, entities who establish private schools are commonly referred to as “sponsors” instead of “owners” or “shareholders”. The economic substance of “sponsorship” in respect of private schools is substantially similar to that of ownership with respect to legal, regulatory and tax matters. | |||||||
The VIE arrangements | ||||||||
There are some uncertainties as to whether applicable PRC laws and regulations prohibit foreign investors from holding equity interest in PRC education companies. As a Cayman Islands corporation, the Company is deemed a foreign legal person under PRC laws. Accordingly, Xuecheng Century, the Company’s wholly owned subsidiary in the PRC, as a foreign invested company, may be deemed to be ineligible to engage in education business in the PRC. | ||||||||
The Company therefore conducts substantially all of its activities through the VIE, Xueda Information, and its subsidiaries and schools in the PRC. The VIE and its subsidiaries and schools hold leases and other assets necessary to operate the Company’s learning centers, provide tutoring services and generate all of the Group’s revenues. To provide the Company the power to control and the ability to receive substantially all of the expected residual returns of the VIE and its subsidiaries and schools, Xuecheng Century entered into a series of contractual arrangements with Xueda Information and its shareholders in August 2009. | ||||||||
Agreements that transfer economic benefits to Xuecheng Century | ||||||||
Exclusive technology consulting and management service agreement | ||||||||
Pursuant to the exclusive consulting and management service agreement between Xueda Information and Xuecheng Century, Xuecheng Century has the exclusive right to provide to Xueda Information consulting services, technical support and training services, including industry and customer research, employee training, IT system maintenance and support, website and network construction and maintenance, and other services. Xuecheng Century is entitled to charge Xueda Information an annual service fee and adjust the service fee rate from time to time according to the amount of services it has provided to Xueda Information. The annual service fee amounts are determined at Xuecheng Century’s sole discretion. The terms of the exclusive consulting and management service agreement are 10 years and can be automatically extended for an additional 10 years at Xuecheng Century’s discretion. Xuecheng Century has the right to terminate this agreement, at any time during the term of this agreement, by 30-day prior written notice to Xueda Information, whereas Xueda Information may only terminate this agreement on the ground of Xuecheng Century’s gross negligence, fraud or other illegal act, or bankruptcy, lawful dissolution or termination of Xueda Information. | ||||||||
Pledge agreement | ||||||||
Pursuant to the equity pledge agreement between Xuecheng Century and the nominee shareholders of Xueda Information, the nominee shareholders of Xueda Information pledged all of their equity interests in Xueda Information to Xuecheng Century to guarantee Xueda Information’s performance of its obligations under the exclusive technology consulting and management service agreement. If Xueda Information breaches its contractual obligations under that agreement, Xuecheng Century, as the pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. The nominee shareholders of Xueda Information agree that, without prior written consent of Xuecheng Century, they will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests that would prejudice Xuecheng Century’s interest. During the term of the equity pledge agreement, Xuecheng Century is entitled to receive all income in cash or otherwise generated from the pledged equity interests, such as all dividends paid on the pledged equity interests. The pledge agreement has an initial term of 10 years, and will remain effective for as long as the exclusive technology consulting and management service agreement is effective. | ||||||||
Agreements that provide Xuecheng Century effective control over Xueda Information | ||||||||
Power of attorney | ||||||||
Pursuant to the power of attorney, the nominee shareholders of Xueda Information each executed an irrevocable power of attorney assigning Xuecheng Century or any person designated by Xuecheng Century as their attorney-in-fact to vote on their behalf on all matters of Xueda Information requiring shareholder approval under PRC laws and regulations and the articles of association of Xueda Information. | ||||||||
The Articles of Incorporation of Xueda Information states that the major rights of the shareholders include the power to review and approve the annual budget, operating strategy and investment plan, elect the members of board of directors and approve their compensation plan. Therefore, through the irrevocable power of attorney arrangement, Xuecheng Century has the ability to exercise effective control over Xueda Information through shareholder votes and, through such votes, to also control the composition of the board of directors and thus appoint the senior management of Xueda Information. The power of attorneys will remain effective for as long as the nominee shareholders are shareholders of Xueda Information. | ||||||||
Exclusive purchase right contract | ||||||||
Pursuant to the exclusive purchase right contract, Xuecheng Century has the exclusive and irrevocable right to purchase or designate another party to purchase from the nominee shareholders the equity interest in Xueda Information at the lowest amount of consideration permitted by the PRC law when and to the extent that applicable PRC law permits Xuecheng Century to own all or part of such equity interest in Xueda Information. This agreement will terminate upon the lawful transfer of all equity interests in Xueda Information to Xuecheng Century. Through the exclusive purchase right contract, each of Xueda Information’s shareholders irrevocably granted Xuecheng Century an exclusive right to acquire, at any time, for its own account or through one or more PRC individuals or entities as nominee shareholders of its choice to replace the existing shareholders of Xueda Information, which constitutes a substantive kick-out right that is exercisable and enforceable under current PRC laws and regulations. This kickout right reinforces Xuecheng Century’s ability to direct the activities that most significantly impact Xueda Information’s economic performance. | ||||||||
As a result of these contractual arrangements, Xuecheng Century has (1) the power to direct the activities of Xueda Information that most significantly impact Xueda Information’s economic performance through its control over the board of directors and management of Xueda Information and (2) the right to receive economic benefits from Xueda Information, and accordingly, the Company has consolidated the financial results of Xueda Information and its subsidiaries and schools in the consolidated financial statements for all the periods presented. | ||||||||
In concluding that the Company is the primary beneficiary of Xueda Information, the Company believes that the powers of attorney are valid, binding and enforceable under existing PRC laws and regulations and enable the Company, through Xuecheng Century, to vote on all matters requiring shareholder approval for Xueda Information. In addition, the Company believes that the exclusive purchase right contract provides the Company, through Xuecheng Century, with a substantive kickout right. More specifically, the terms of the exclusive purchase right contract are exercisable and enforceable under current PRC laws and regulations, and the minimum amount of consideration permitted by the applicable PRC laws to exercise such purchase right does not represent a financial barrier or disincentive for the Company, through Xuecheng Century, to exercise such purchase right. The Company’s rights under the powers of attorney and the exclusive purchase right contract provide the Company with control over the shareholders of Xueda Information and thus provide the Company with the power to direct the activities that most significantly impact Xueda Information’s economic performance. | ||||||||
Risks in relation to the VIE structure | ||||||||
The Company believes that the contractual arrangements with Xueda Information and its shareholders are in compliance with existing PRC laws and regulations and are valid, binding and enforceable and will not result in any violation of PRC laws or regulations currently in effect. However, substantial uncertainties exist regarding the interpretation of current and future PRC laws, regulations and the PRC regulatory authorities may take a contrary view. If the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the regulatory authorities may exercise their discretion and: | ||||||||
· | revoke the business and operating licenses of the Company’s PRC subsidiaries or consolidated affiliated entities; | |||||||
· | restrict the rights to collect revenues from any of the Company’s PRC subsidiaries; | |||||||
· | discontinue or restrict the operations of any related-party transactions among the Company’s PRC subsidiaries or consolidated affiliated entities; | |||||||
· | require the Company’s PRC subsidiaries or consolidated affiliated entities to restructure the relevant ownership structure or operations; | |||||||
· | take other regulatory or enforcement actions, including levying fines that could be harmful to the Group’s business; or | |||||||
· | impose additional conditions or requirements with which the Company may not be able to comply. | |||||||
The imposition of any of these penalties may result in a material adverse effect on the Company’s ability to conduct its business. In addition, if the imposition of any of these penalties causes the Company to lose the rights to direct the activities of the VIE and its subsidiaries and schools or the right to receive their economic benefits, the Company would no longer be able to consolidate the financial results of the VIE, its subsidiaries or schools. | ||||||||
The Company’s ability to control Xueda Information depends on the powers of attorney that enable Xuecheng Century to vote on all matters requiring shareholder approval for Xueda Information. As noted above, the Company believes these powers of attorney are valid, binding and enforceable under existing PRC laws and regulations but may not be as effective as direct equity ownership. | ||||||||
Risks in relation to the VIE structure - continued | ||||||||
Certain shareholders of Xueda Information are also beneficial owners or directors of the Company. In addition, certain beneficial owners and directors of the Company are also directors or officers of Xueda Information. Their interests as beneficial owners of Xueda Information may differ from the interests of the Company as a whole. The Company cannot be certain that if conflicts of interest arise, these parties will act in the best interests of the Company or that conflicts of interests will be resolved in the Company’s favor. Currently, the Company does not have existing arrangements to address potential conflicts of interest these parties may encounter in their capacity as beneficial owners of Xueda Information, on the one hand, and as beneficial owners of the Company, on the other hand. The Company believes the shareholders of Xueda Information will not act contrary to any of the contractual arrangements and the exclusive purchase right contract provides the Company with a mechanism to remove them as shareholders of Xueda Information should they act to the detriment of the Company. If any conflict of interest or dispute between the Company and the shareholders of Xueda Information arises and the Company is unable to resolve it, the Company would have to rely on legal proceedings in the PRC. Such legal proceedings could result in disruption of its business; moreover, there is substantial uncertainty as to the ultimate outcome of any such legal proceedings. | ||||||||
The Group’s tutoring business has been directly operated by (and as a result all of the Group’s revenues have been generated from) the VIE and its subsidiaries and schools. The Company has consolidated the net revenues of Xueda Information and its subsidiaries and schools in its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). For the years ended December 31, 2012, 2013 and 2014, $293,157, $347,047 and $338,314, or 100%, 100% and 100%, respectively, of the Company’s total net revenues were attributable to Xueda Information and its subsidiaries and schools as they conducted all of the Group’s tutoring business. As of December 31, 2013 and 2014, Xueda Information and its subsidiaries and schools accounted for an aggregate of 53% and 61%, respectively, of the Group’s consolidated total assets, and 96% and 98%, respectively, of the Group’s consolidated total liabilities. The assets not associated with the Xueda Information and its subsidiaries and schools primarily consisted of cash held by the Company, Xueda HK and Xuecheng Century. The financial information of the VIE and VIE’s subsidiaries and schools (“variable interest entities”) after the elimination of inter-company transactions and balances as of December 31, 2013 and 2014 and for the years ended December 31, 2012, 2013 and 2014 were as follows: | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
Cash and cash equivalents | 56,947 | 54,730 | ||||||
Prepaid expense and other current assets | 12,902 | 12,738 | ||||||
Total current assets | 129,836 | 137,492 | ||||||
Total assets | 175,603 | 170,852 | ||||||
Deferred revenue | 133,854 | 126,148 | ||||||
Total current liabilities | 142,539 | 141,698 | ||||||
Total liabilities | 172,522 | 165,385 | ||||||
Total equity | 3,081 | 5,467 | ||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Net revenues | 293,157 | 347,047 | 338,314 | |||||
Net income | 6,282 | 10,089 | 4,069 | |||||
Net cash provided by (used in) operating activities | 48,370 | 43,003 | (11,256 | ) | ||||
Net cash (used in) provided by investing activities | (37,363 | ) | (48,532 | ) | 11,875 | |||
There are no consolidated VIE’s assets that are collateral for the VIE’s obligations and which can only be used to settle the VIE’s obligations. No creditors (or beneficial interest holders) of the VIE have recourse to the general credit of the Company or any of its consolidated subsidiaries. No terms in any arrangements, considering both explicit arrangements and implicit variable interests, require the Company or its subsidiaries to provide financial support to the VIE. However, if the VIE ever needs financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to the VIE through loans to the shareholders of the VIE or entrustment loans to the VIE. | ||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |||
Dec. 31, 2014 | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Basis of presentation | ||||
The consolidated financial statements of the Group have been prepared in accordance with U.S. GAAP. | ||||
Basis of consolidation | ||||
The consolidated financial statements include the financial statements of the Company, its subsidiaries, its VIE and the VIE’s subsidiaries and schools. All inter-company transactions and balances have been eliminated upon consolidation. | ||||
Noncontrolling interests | ||||
Noncontrolling interests are separately presented as a component of equity in the consolidated financial statements. | ||||
Cash and cash equivalents | ||||
Cash and cash equivalents consist of cash on hand, demand deposits, term deposits and debt securities with original maturities of three months or less. | ||||
Investments | ||||
Investments consist of trading securities, held-to-maturity securities, available-for-sale securities and equity method investment. | ||||
Trading securities are securities that are bought and held principally for the purpose of selling them in the near term and are reported at fair value, with unrealized gains and losses recognized in earnings. | ||||
The Group’s held-to-maturity securities consist of term deposits and debt securities placed with banks. Held-to maturity securities that will mature within one year are included in short-term investment and others are included in long-term investments. Investments are classified as held-to-maturity when the Group has the positive intent and ability to hold the security to maturity, and are recorded at amortized cost. | ||||
Investments classified as available-for-sale securities are carried at their fair values and the unrealized gains or losses from the changes in fair values are included in accumulated other comprehensive income. | ||||
Equity method investments relate to investee company over which the Group has the ability to exercise significant influence, but does not have control and are accounted for using the equity method. Significant influence is generally considered to exist when the Group has an ownership interest in the voting stock of the investee of between 20% and 50% and other factors, such as representation on the investee’s board of directors, voting rights and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. The Group’s share of earning (loss) of investee company is included in the accompanying consolidated statements of operations. | ||||
The Group reviews its investments for other-than-temporary impairment (“OTTI”) based on the specific identification method. The Group considers available quantitative and qualitative evidence in evaluating potential impairment of its investments. If the cost of an investment exceeds the investment’s fair value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than the cost, the Group’s intent and ability to hold the investment, and the financial condition and near term prospects of the issuers. | ||||
If there is OTTI on debt securities, the Group separates the amount of the OTTI into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings, which represents the difference between a security’s amortized cost basis and the discounted present value of expected future cash flows. The amount due to other factors is recognized in other comprehensive income if the entity neither intends to sell and will not more likely than not be required to sell the security before recovery. The difference between the amortized cost basis and the cash flows expected to be collected is accreted as interest income. | ||||
Fair value | ||||
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. | ||||
Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: | ||||
Level 1 | ||||
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. | ||||
Level 2 | ||||
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. | ||||
Level 3 | ||||
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. | ||||
Financial instruments | ||||
Financial instruments are primarily in the form of cash and cash equivalents, amounts due from related parties, short-term investments and long-term investments in held-to-maturity and available-for-sale securities. The carrying amounts of these financial instruments except for long-term investments, approximate their fair values because of their generally short maturities. The carrying amount of long-term held-to-maturity securities approximates their fair value due to the fact that the related interest rates approximate rates currently offered by financial institutions for similar debt instruments of comparable maturities. There is no quoted market value for the long-term available-for-sale securities; however, management estimates their fair value using discounted cash flow method. Fair value of such financial instruments is not necessarily representative of the amount that could be realized or settled. | ||||
Use of estimates | ||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues and expenses in the financial statements and the accompanying notes. Significant accounting estimates reflected in the Group’s financial statements include revenue recognition, valuation allowance for deferred tax assets, share-based compensation, fair value of available-for-sale securities and goodwill impairment. Actual results could differ from those estimates. | ||||
Property and equipment | ||||
Property and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization is calculated on a straight-line basis over the following estimated useful lives: | ||||
Buildings | 20~40 years | |||
Furniture, fixtures and equipment | 3 years | |||
Motor vehicles | 5 years | |||
Leasehold improvements | Shorter of useful life of the assets or the lease term | |||
Acquired intangible assets | ||||
Intangible assets with definite lives are carried at cost less accumulated amortization. Amortization of definite-lived intangible assets is computed using the straight-line method over the estimated average useful lives, which are as follows: | ||||
Trademark | 10 years | |||
Non-compete agreement | 5 years | |||
Impairment of long-lived assets with definite lives | ||||
Long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group compares the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss equal to the difference between the fair value and the carrying amount of the assets. | ||||
Business combinations | ||||
Business combinations are recorded using the acquisition method of accounting. The assets acquired, the liabilities assumed, and any noncontrolling interests of the acquiree at the acquisition date, if any, are measured at their fair values as of the acquisition date. Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any noncontrolling interest of the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Common forms of the consideration made in acquisitions include cash and common equity instruments. Consideration transferred in a business acquisition is measured at the fair value as at the date of acquisition. | ||||
Where the consideration in an acquisition includes contingent consideration and the payment of which depends on the achievement of certain specified conditions post-acquisition, the contingent consideration is recognized and measured at its fair value at the acquisition date and if recorded as a liability, it is subsequently carried at fair value with changes in fair value reflected in earnings. | ||||
Goodwill | ||||
Goodwill is not amortized but is evaluated for impairment annually or whenever events or changes in circumstances indicate that the goodwill might be impaired following a two-step process. The first step compares the fair value of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. | ||||
Revenue recognition | ||||
Revenues are recognized when earned and are reported net of business taxes and value added taxes. | ||||
The primary sources of the Group’s revenues are as follows: | ||||
(a) | Registration fees | |||
The Group charges each new student a non-refundable registration fee ranging from $48.35 (Renminbi300) to $161.17 (Renminbi1,000) for diagnosis and designing a personalized tutoring plan for the student. The nonrefundable registration fee is amortized over the estimated average customer relationship life. The average customer relationship life is estimated based on the Group’s historical data and the estimate is subject to annual assessment or when an event or other changes indicate the estimate is no longer reasonable. | ||||
(b) | Tuition fees for private personalized tutoring services | |||
Tuition revenues are collected in advance and are initially recorded as deferred revenue. Tuition revenues are recognized proportionately as the tutoring sessions are delivered. Deferred revenue relating to unused prepaid tutoring hours of expired contracts are recognized as revenues in the twenty-sixth month after the contract expiration date if no refund has been claimed by then. The refund period of twenty-six months was determined according to the applicable PRC laws and regulations. After such period, refund claims are not supported by the applicable PRC laws and regulations. | ||||
The Group’s PRC subsidiaries, VIE and VIE’s subsidiaries and schools are subject to business taxes and other related surcharges at a rate of 3.3% or 5.5% of gross revenues generated from their private personalized tutoring service. Business taxes are reported as a deduction to revenue when incurred and amounted to $13,834, $12,802 and $11,688 for the years ended December 31, 2012, 2013 and 2014, respectively. | ||||
In July 2012, the Ministry of Finance and the State Administration of Taxation jointly issued a circular regarding the pilot collection of value added taxes (“VAT”) in lieu of business tax in certain areas and industries in the PRC. Starting from September 1, 2012, the VIE’s certain subsidiaries and schools became subject to VAT at the rates of 3%, 6% or 17%, on certain service revenues which were previously subject to business tax. VAT is also reported as a deduction to revenue when incurred and amounted to $67, $999 and $1,207 for the years ended December 31, 2012, 2013 and 2014, respectively. | ||||
Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. However, entities that are VAT small scale taxpayers, cannot offset their input VAT against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in either other current liabilities or other current assets on the consolidated balance sheets. | ||||
Advertising costs | ||||
Advertising costs are expensed as incurred. The Group incurred advertising costs totaling $26,448, $29,015 and $28,785 for the years ended December 31, 2012, 2013 and 2014, respectively, which were recorded as a component of selling and marketing expenses in the accompanying consolidated statements of operations. | ||||
Lease accounting | ||||
The Group evaluates each lease for classification as either a capital lease or an operating lease. If substantially all of the benefits and risks of ownership have been transferred to the lessee, the Group records the lease as a capital lease at its inception. The Group performs this evaluation at the inception of the lease and when a modification is made to a lease. If the lease agreement provides rent holidays or calls for a scheduled rent increase during the lease term, the Group recognizes the lease expense on a straight-line basis over the lease term. The difference between rent expense and rent paid is recorded as deferred rent. The term of the Group’s leases typically ranges from one to five years and some of them are subject to renewal at fair market value. | ||||
Government subsidies | ||||
The Group receives government subsidies from the local government authorities for encouraging regional development and technology development. Government subsidies are recognized upon receipt as an item of operating income because the subsidies are not intended to compensate for specific expenditure and not subject to future return. For the years ended December 31, 2012, 2013 and 2014, $164, $439 and $362 were received and recognized, respectively. | ||||
Foreign currency translation | ||||
The functional and reporting currency of the Company and Xueda HK is US dollar. The functional currency of the Company’s other subsidiaries, VIE and VIE’s subsidiaries and schools in the PRC is Renminbi (“RMB”). | ||||
Assets and liabilities are translated from each entity’s functional currency to the reporting currency at the exchange rate on the balance sheet date. Equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative foreign currency translation adjustments and are shown as a separate component of other comprehensive income in the consolidated statements of comprehensive income. | ||||
Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currencies at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are remeasured into the applicable functional currencies at historical exchange rates. Transactions in currencies other than the applicable functional currencies during the year are converted into the functional currencies at the applicable rates of exchange prevailing at the transaction dates. Transaction gains and losses are recognized in the consolidated statements of operations. | ||||
Share-based compensation | ||||
Share-based compensation with employees is measured based on the grant date fair value of the equity instrument. The Group recognizes the compensation costs net of a forfeiture rate on a straight-line basis over the requisite service period of the award, which is generally the vesting period of the award, with the amount of compensation expenses recognized in any period not less than the portion of the grant date fair value of the options vested during that period. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment in the period of change. | ||||
For awards with performance condition vesting provision, when achievement of the performance condition is deemed probable, the Group recognized compensation cost on a straight-line basis over the awards vesting periods. | ||||
When terms of awards are modified, the Company are required to record the incremental fair value, if any, of the modified awards, as compensation cost on the date of modification (for vested awards) or over the remaining service (vesting) period (for unvested awards). The incremental compensation cost is the excess of the fair value of the modified award on the date of modification over fair value of the original award immediately before the modification. | ||||
Income taxes | ||||
Current income taxes are provided for in accordance with the laws of the relevant tax authorities. | ||||
Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. | ||||
The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. | ||||
Comprehensive income (loss) | ||||
Comprehensive income (loss) includes net income (loss), unrealized gain on available-for-sale securities and foreign currency translation adjustments. The Group presents the components of net income (loss), the components of other comprehensive income (loss) and total comprehensive income (loss) in two separate but consecutive statements. | ||||
Net income (loss) per share | ||||
Basic net income (loss) per share attributable to Xueda Education Group ordinary shareholders is computed by dividing net income (loss) attributable to Xueda Education Group ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net income (loss) per share attributable to Xueda Education Group ordinary shareholders reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares. The dilutive effect of stock options is computed using treasury stock method. | ||||
Significant risks and uncertainties | ||||
Foreign currency risk | ||||
RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The cash and cash equivalents of the Group included aggregate amounts of $109,895 and $103,235, which were denominated in RMB, at December 31, 2013 and 2014, respectively, representing 93.9% and 90.7% of the cash and cash equivalents balances as of December 31, 2013 and 2014, respectively. The Group’s short-term investments of $129,619 and $94,721 as of December 31, 2013 and 2014, respectively, were also denominated in RMB. | ||||
Concentration of credit risk | ||||
Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, amounts due from related parties and held-to-maturity securities classified as long-term investments. | ||||
Substantially all of the Group’s cash and cash equivalents, short-term investments and held-to maturity securities classified as long-term investments are held by financial institutions located within the PRC. Financial institutions in the PRC do not have insurance similar to that provided by the Federal Deposit Insurance Corporation in the United States of America. The Group’s investment policy limits its exposure to concentrations of credit risks in relation to its investments. | ||||
The Group’s amounts due from related parties include direct loans provided to a related party located within the PRC in the amount of $2,631 and nil as of December 31, 2013 and 2014, respectively. The Group does not foresee a credit risk associated with such loans based on evaluations of the financial conditions of the related party. | ||||
Recent accounting pronouncements | ||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued a new pronouncement which affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This Accounting Standards Update (“ASU”) will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles—Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. | ||||
The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: | ||||
· | Step 1: Identify the contract(s) with a customer. | |||
· | Step 2: Identify the performance obligations in the contract. | |||
· | Step 3: Determine the transaction price. | |||
· | Step 4: Allocate the transaction price to the performance obligations in the contract. | |||
· | Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | |||
For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. | ||||
An entity should apply the amendments in this ASU using one of the following two methods: | ||||
1.Retrospectively to each prior reporting period presented and the entity may elect any of the following practical expedients: | ||||
· | For completed contracts, an entity need not restate contracts that begin and end within the same annual reporting period. | |||
· | For completed contracts that have variable consideration, an entity may use the transaction price at the date the contract was completed rather than estimating variable consideration amounts in the comparative reporting periods. | |||
· | For all reporting periods presented before the date of initial application, an entity need not disclose the amount of the transaction price allocated to remaining performance obligations and an explanation of when the entity expects to recognize that amount as revenue. | |||
2.Retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. If an entity elects this transition method it also should provide the additional disclosures in reporting periods that include the date of initial application of: | ||||
· | The amount by which each financial statement line item is affected in the current reporting period by the application of this ASU as compared to the guidance that was in effect before the change. | |||
· | An explanation of the reasons for significant changes. | |||
The Group is in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements. | ||||
In June 2014, the FASB issued a new pronouncement which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation - Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. | ||||
The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. | ||||
In August, 2014, the FASB issued a new pronouncement which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements. Further, an entity must provide certain disclosures if there is “substantial doubt about the entity’s ability to continue as a going concern.” The new standard is effective for fiscal years ending after December 15, 2016. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. | ||||
ACQUISITION
ACQUISITION | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
ACQUISITION | |||||||
ACQUISITION | 3.ACQUISITION | ||||||
In an effort to diversify its service offerings to primary and secondary school students, in June 2012, Xueda Information acquired 60% of the equity interest of Beijing Weland International Education and Technology Corp., (“Weland”) for a total cash consideration of $2,961. Weland provides services to students in the PRC for short-term overseas studies, including hosting the Model United Nations Conference. This transaction was considered a business acquisition and therefore was recorded using the acquisition method of accounting. The acquired assets and liabilities were recorded at fair value at the date of acquisition, resulting in a goodwill balance of $2,795. The net revenue and net loss of Weland in the amount of $831 and $540, respectively, have been included in the consolidated statement of operations for the year ended December 31, 2012. | |||||||
With the assistance of a third party appraiser, the Group allocated the purchase price to assets acquired and liabilities assumed as follows: | |||||||
Purchase price allocation | Useful life | ||||||
Cash and cash equivalents | $ | 1,765 | |||||
Advance to suppliers | 62 | ||||||
Acquired intangible assets | |||||||
- Trademark | 408 | 10 years | |||||
- Non-Compete Agreement | 188 | 5 years | |||||
Fixed assets | 4 | ||||||
Total assets acquired | 2,427 | ||||||
Deferred tax liabilities | (150 | ) | |||||
Liabilities assumed | (540 | ) | |||||
Noncontrolling interest | (1,571 | ) | |||||
Total net assets | 166 | ||||||
Goodwill | 2,795 | ||||||
Total | $ | 2,961 | |||||
The following summary of unaudited pro forma result of operations for the year ended December 31, 2012 was presented with the assumption that the significant acquisition during the year ended December 31, 2012 occurred as of January 1, 2011. These pro forma results do not purport to be indicative of the results of operations which would have resulted had the significant acquisitions occurred as of January 1, 2011, nor are they indicative of future operating results. | |||||||
Year ended December 31, | |||||||
2012 | |||||||
Pro forma net revenue | 296,548 | ||||||
Pro forma net income attributable to Xueda Education Group | 2,414 | ||||||
Pro forma net income per ordinary share-basic | 0.02 | ||||||
Pro forma net income per ordinary share-diluted | 0.02 | ||||||
The Group recorded an impairment loss related to the goodwill of Weland for the year ended December 31, 2013, as set out in Note 7. | |||||||
PREPAID_EXPENSES_AND_OTHER_CUR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 4.PREPAID EXPENSES AND OTHER CURRENT ASSETS | |||||
Prepaid expenses and other current assets consisted of: | ||||||
December 31, | ||||||
2013 | 2014 | |||||
Other receivable (i) | 1,241 | 1,082 | ||||
Prepaid rental expenses | 7,288 | 8,846 | ||||
Advance to suppliers | 1,095 | 607 | ||||
Prepaid advertisement expenses | 565 | 454 | ||||
Short-term deposits | 451 | 157 | ||||
Interest receivable | 1,051 | 1,143 | ||||
Staff advances and others | 2,166 | 1,780 | ||||
Option exercising cost receivable (ii) | 2,785 | 744 | ||||
16,642 | 14,813 | |||||
(i) | Other receivable consists of cash that had been received from students but held by the third-party online payment processing agencies. The funds are transferred to the Group shortly after payments are received by the third-party online payment processing agencies. | |||||
(ii) | Option exercising cost receivable is the amount paid by employees to exercise options but held by a third party service provider. The funds are transferred to the Group shortly after payments are received by the third-party service provider. | |||||
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
PROPERTY AND EQUIPMENT | ||||||
PROPERTY AND EQUIPMENT | 5.PROPERTY AND EQUIPMENT | |||||
Property and equipment consist of the following: | ||||||
December 31, | ||||||
2013 | 2014 | |||||
Buildings | 5,969 | 5,824 | ||||
Furniture, fixtures and equipment | 25,296 | 27,193 | ||||
Motor vehicles | 2,334 | 2,499 | ||||
Leasehold improvements | 40,947 | 44,015 | ||||
Less: Accumulated depreciation and amortization | (39,720 | ) | (49,098 | ) | ||
34,826 | 30,433 | |||||
Depreciation and amortization expenses for the years ended December 31, 2012, 2013 and 2014 were $15,308, $16,117 and $14,097, respectively. | ||||||
ACQUIRED_INTANGIBLE_ASSETS
ACQUIRED INTANGIBLE ASSETS | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
ACQUIRED INTANGIBLE ASSETS | ||||||
ACQUIRED INTANGIBLE ASSETS | 6.ACQUIRED INTANGIBLE ASSETS | |||||
Acquired intangible assets arose from the acquisitions of Weland in 2012 and consisted of the following: | ||||||
December 31, | ||||||
2013 | 2014 | |||||
Trademark | 408 | 408 | ||||
Non-Compete Agreement | 188 | 188 | ||||
Exchange difference | 14 | 14 | ||||
610 | 610 | |||||
Less: Accumulated amortization | (128 | ) | (128 | ) | ||
Less: Accumulated impairment | (494 | ) | (494 | ) | ||
Exchange difference | 12 | 12 | ||||
Acquired intangible assets, net | — | — | ||||
Due to the lowered earnings forecast and increased competition in the industry, in December 2013, the Group performed, with the assistance of an independent valuation expert, an impairment test of the carrying value of the Weland trademarks and non-compete agreement to determine whether any impairment existed. This assessment resulted in an impairment write down of $494, which was included in “Impairment loss on acquired intangible assets” in the accompanying statement of operations for the year ended December 31, 2013. The fair value of acquired intangible assets is measured on a non-recurring basis, as set out in Note 9. | ||||||
GOODWILL
GOODWILL | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
GOODWILL | ||||||||||||||
GOODWILL | 7.GOODWILL | |||||||||||||
The Group has two reporting units, Taiyuan Xueda Education & Training School (“Taiyuan Xueda”) and Weland, that carries goodwill. The changes in the carrying amount of goodwill for the years ended December 31, 2013 and 2014 were as follows: | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2014 | |||||||||||||
Taiyuan | Taiyuan | |||||||||||||
Xueda | Weland | Total | Xueda | Weland | Total | |||||||||
Gross amount | ||||||||||||||
Beginning balance at January 1 | 872 | 2,857 | 3,729 | 897 | 2,940 | 3,837 | ||||||||
Exchange difference | 25 | 83 | 108 | (22 | ) | (71 | ) | (93 | ) | |||||
Ending balance at December 31 | 897 | 2,940 | 3,837 | 875 | 2,869 | 3,744 | ||||||||
Accumulated impairment loss | ||||||||||||||
Beginning balance at January 1 | — | — | — | — | (2,940 | ) | (2,940 | ) | ||||||
Charge for the year | — | (2,923 | ) | (2,923 | ) | — | — | — | ||||||
Exchange difference | — | (17 | ) | (17 | ) | — | 71 | 71 | ||||||
Ending balance at December 31 | — | (2,940 | ) | (2,940 | ) | — | (2,869 | ) | (2,869 | ) | ||||
Goodwill, net | 897 | — | 897 | 875 | — | 875 | ||||||||
The Group performs its annual goodwill impairment tests on December 31 of each year. Due to the lowered earnings forecast and increased competition in the industry, a goodwill impairment loss of $2,923 related to Weland was recognized in the year ended December 31, 2013. The fair value of the reporting unit of Weland was estimated based on the discounted cash flows as set out in Note 9. | ||||||||||||||
During the years ended December 31, 2012, 2013 and 2014, the Company recognized goodwill impairment losses of $nil, $2,923 and $nil, respectively. | ||||||||||||||
INVESTMENTS
INVESTMENTS | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
INVESTMENT | ||||||||||||
INVESTMENT | 8.INVESTMENTS | |||||||||||
Cash equivalents | ||||||||||||
The Group’s cash equivalents consist of term deposits and debt securities with original maturities of three months or less. | ||||||||||||
The Group measured the cash equivalents at amortized cost. Interest income of $4,177, $895 and $1,651 were recognized in the consolidated statements of operations for the years ended December 31, 2012, 2013 and 2014. | ||||||||||||
Short-term investments | ||||||||||||
As of December 31, 2012 and 2013, the Group’s short-term investments consist of trading securities and held-to-maturity securities with maturities of one year or less. | ||||||||||||
Trading securities | ||||||||||||
The Group measured the trading securities at fair value based on quoted market prices in an active market. Gains from the trading securities of $nil, $12 and $9 were recognized in the consolidated statements of operations for the years ended December 31, 2012, 2013 and 2014, respectively. | ||||||||||||
Held-to-maturity securities - short-term | ||||||||||||
The Group measured the held-to-maturity securities at amortized cost. Interest income of $2,074, $5,728 and $4,104 were recognized in the consolidated statements of operations for the years ended December 31, 2012, 2013 and 2014, respectively. | ||||||||||||
Long-term investments | ||||||||||||
The Group’s long-term investments consist of held-to-maturity securities with maturities of greater than 12 months, available-for-sale securities and equity method investments. | ||||||||||||
Held-to-maturity securities - long-term | ||||||||||||
The Group’s long-term held-to-maturity securities consist of debt securities placed with banks with maturities greater than one year, which are stated as amortized cost. Interest income of $nil, $86 and $353 were recognized in the consolidated statements of operations for the years ended December 31, 2012, 2013 and 2014. In October 2014, the Group disposed of its long-term held-to-maturity securities, and did not hold any long-term held-to-maturity securities thereafter. | ||||||||||||
Available-for-sale securities | ||||||||||||
In July 2012, the Company entered into a preferred share purchase agreement with the shareholders of Firstleap Education (“Firstleap”), a company incorporated in the Cayman Islands that provides English training program to children from 2 to 10 years of age in the PRC. The Company purchased, for a cash consideration of $4,786, 1,272,000 convertible redeemable preferred shares, which represented a 12.72% voting interest in Firstleap. In December 2012, Firstleap effected a 10 to 1 stock split. | ||||||||||||
On July 16, 2013, the Company contributed an additional capital of $1,632, for 4,039,610 convertible redeemable preferred shares, and its voting interest in Firstleap increased to 16.11%. In October 2014, a new investor was introduced and the voting interest in Firstleap was diluted to 14.33%. As of December 31, 2013 and 2014, the Company had two seats out of six in the board of directors of Firstleap. | ||||||||||||
At any time and from time to time on or after January 1, 2017 without consummation of a qualified initial public offering of Firstleap, the Company and other holders of the preferred shares may require Firstleap to redeem the preferred shares. Since the preferred shares are redeemable as the option of their holders, the Company determines that they are debt securities in nature and should be accounted for as available-for-sale securities. | ||||||||||||
The investment is classified as available-for-sale securities and is measured at fair value as of the balance sheet date. Unrealized holding gains and losses are excluded from earnings and are reported in other comprehensive income until realized. Unrealized holding gains of $339, $93 and $654 were reported in other comprehensive income for the years ended December 31, 2012, 2013 and 2014, respectively. | ||||||||||||
Fair value information about the investments as of December 31, 2013 and 2014 is as follows: | ||||||||||||
As of December 31, 2013 | ||||||||||||
Unrealized gain | ||||||||||||
Gross | Gross | in accumulated | ||||||||||
Amortized | unrecognized | unrecognized | other comprehensive | |||||||||
cost | holding gains | holding losses | income | Fair value | ||||||||
Cash and cash equivalents: | ||||||||||||
Cash equivalents | ||||||||||||
Term deposits | 11,827 | — | — | — | 11,827 | |||||||
Adjustable-rate debt securities | 4,326 | — | — | — | 4,326 | |||||||
16,153 | — | — | — | 16,153 | ||||||||
Short-term investments: | ||||||||||||
Trading securities | ||||||||||||
Adjustable-rate debt securities | 1,553 | — | — | — | 1,553 | |||||||
Held-to-maturity securities | ||||||||||||
Fixed-rate debt securities | 23,958 | 132 | (5 | ) | — | 24,085 | ||||||
Adjustable-rate debt securities | 33,479 | 11 | — | — | 33,490 | |||||||
Term deposits | 70,629 | — | — | — | 70,629 | |||||||
128,066 | 143 | (5 | ) | — | 128,204 | |||||||
129,619 | 143 | (5 | ) | — | 129,757 | |||||||
Long-term investments: | ||||||||||||
Held-to-maturity securities | ||||||||||||
Adjustable-rate debt securities | 8,347 | — | (85 | ) | — | 8,262 | ||||||
Available-for-sale securities | ||||||||||||
Convertible redeemable preferred shares | 6,418 | — | — | 432 | 6,850 | |||||||
14,765 | — | (85 | ) | 432 | 15,112 | |||||||
As of December 31, 2014 | ||||||||||||
Unrealized gain | ||||||||||||
Gross | Gross | in accumulated | ||||||||||
Amortized | unrecognized | unrecognized | other comprehensive | |||||||||
cost | holding gains | holding losses | income | Fair value | ||||||||
Cash and cash equivalents: | ||||||||||||
Cash equivalents | ||||||||||||
Term deposits | 33,040 | — | — | — | 33,040 | |||||||
33,040 | — | — | — | 33,040 | ||||||||
Short-term investments: | ||||||||||||
Held-to-maturity securities | ||||||||||||
Adjustable-rate debt securities | 56,410 | 437 | — | — | 56,847 | |||||||
Term deposits | 38,311 | — | — | — | 38,311 | |||||||
94,721 | 437 | — | — | 95,158 | ||||||||
Long-term investments: | ||||||||||||
Available-for-sale securities | ||||||||||||
Convertible redeemable preferred shares | 6,418 | — | — | 1,086 | 7,504 | |||||||
6,418 | 1,086 | 7,504 | ||||||||||
The fair values of trading securities and available-for-sale securities as measured, and cash equivalents and held-to-maturity securities as disclosed are further discussed in Note 9. | ||||||||||||
Equity method investment | ||||||||||||
In July 2014, the Group entered into an equity purchase agreement with the owner of Imagination Education (Beijing) Technology Co., Ltd (“Imagination”), a company established in the PRC that is principally engaged in offers of Scholastic Assessment Test. The Group purchased, for a cash consideration of $1,613, which represented a 25% equity ownership interest in Imagination. The Group has significant influence but does not have control over Imagination. Accordingly the Group recorded its interest in Imagination as an equity method investment. The Group recorded its shares of the loss of $107 for the year ended December 31, 2014. | ||||||||||||
FAIR_VALUE_MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
FAIR VALUE MEASUREMENT | ||||||||||
FAIR VALUE MEASUREMENT | 9.FAIR VALUE MEASUREMENT | |||||||||
Fair value disclosed or measured on a recurring basis | ||||||||||
The fair values of the Group’s trading securities and available-for-sale securities as measured, and cash equivalents and held-to-maturity securities as disclosed are determined based on the discounted cash flow method. The following table summarizes the Group’s financial assets measured or disclosed at fair value on a recurring basis. | ||||||||||
Fair value disclosure or measurement at | ||||||||||
December 31, 2013 using | ||||||||||
Quoted prices in | Significant | Significant | ||||||||
active markets for | other observable | unobservable | ||||||||
Fair value at | identical assets | inputs | inputs | |||||||
December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||
Fair value disclosure | ||||||||||
Cash and cash equivalents: | ||||||||||
Cash equivalents | ||||||||||
Term deposits | 11,827 | — | 11,827 | — | ||||||
Adjustable-rate debt securities | 4,326 | — | 4,326 | — | ||||||
Short-term investments: | ||||||||||
Held-to-maturity securities | ||||||||||
Fixed-rate debt securities | 24,085 | — | 24,085 | — | ||||||
Adjustable-rate debt securities | 33,490 | — | 33,490 | — | ||||||
Term deposits | 70,629 | — | 70,629 | — | ||||||
Long-term investments: | ||||||||||
Held-to-maturity securities | ||||||||||
Adjustable-rate debt securities | 8,262 | — | 8,262 | — | ||||||
Fair value measurement | ||||||||||
Short-term investments: | ||||||||||
Trading securities | ||||||||||
Adjustable-rate debt securities | 1,553 | 1,553 | — | — | ||||||
Long-term investments: | ||||||||||
Available-for-sale securities | ||||||||||
Convertible redeemable preferred shares | 6,850 | — | — | 6,850 | ||||||
Total assets measured at fair value | 8,403 | 1,553 | — | 6,850 | ||||||
Fair value disclosure or measurement at | ||||||||||
December 31, 2014 using | ||||||||||
Quoted prices in | Significant | Significant | ||||||||
active markets for | other observable | unobservable | ||||||||
Fair value at | identical assets | inputs | inputs | |||||||
December 31, 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||
Fair value disclosure | ||||||||||
Cash and cash equivalents: | ||||||||||
Cash equivalents | ||||||||||
Term deposits | 33,040 | — | 33,040 | — | ||||||
Short-term investments: | ||||||||||
Held-to-maturity securities | ||||||||||
Adjustable-rate debt securities | 56,847 | — | 56,847 | — | ||||||
Term deposits | 38,311 | — | 38,311 | — | ||||||
Fair value measurement | ||||||||||
Long-term investments: | ||||||||||
Available-for-sale securities | ||||||||||
Convertible redeemable preferred shares | 7,504 | — | — | 7,504 | ||||||
Total assets measured at fair value | 7,504 | — | — | 7,504 | ||||||
The available-for-sale securities do not have a quoted market rate. The Group adopted a discounted cash flow method under the income approach, which take into consideration a number of factors that include expected future cash flows, growth rates and discount rates from publicly traded companies in the industry and requires the Group to make certain assumptions and estimates regarding industry economic factors and future profitability. The assumptions are inherently uncertain and subjective. The expected future cash flows for Firstleap were based on discrete seven years financial forecasts developed by management for planning purposes. Cash flows beyond the forecasted period were estimated using a terminal value calculation, which incorporated historical and forecasted financial trends and considered long-term earnings growth rates for publicly traded comparable companies. Specifically, the income approach valuation as of December 31, 2014 included a cash flow discount rate of 20.45%, and a terminal value growth rate of 3% in the year 2014. | ||||||||||
The following is a reconciliation of the beginning and ending balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2013 and 2014, which only contain available-for-sale securities. | ||||||||||
Fair value measurement | ||||||||||
using significant | ||||||||||
unobservable inputs | ||||||||||
(Level 3) | ||||||||||
2014 | 2013 | |||||||||
Beginning balance | 5,125 | 6,850 | ||||||||
Total unrealized gains included in other comprehensive income | 93 | 654 | ||||||||
Purchase | 1,632 | — | ||||||||
Ending balance | 6,850 | 7,504 | ||||||||
Fair value measured on a non-recurring basis | ||||||||||
The Group measured the fair value of acquired intangible assets of Weland using “relief from royalty” or “with or without” valuation methods. These acquired intangible assets are considered Level 3 assets because the Group used unobservable inputs, such as royalty rate, forecast financial performance of the acquired business and discount rates, to determine the fair value of these acquired assets. The Group has recognized impairment loss of $359 and $135 related to trademark and non-compete agreement, respectively, for the year ended December 31, 2013, as set out in Note 6. | ||||||||||
The Group measured the fair value of goodwill using the income approach valuation methodology, based on which to recognize the impairment loss for the Weland reporting unit in 2013 as set out in Note 7. The goodwill is considered as Level 3 assets because the Group used unobservable inputs, such as five-year earnings forecast, weighted average cost of capital and lack of marketability discount, to determine the fair value of the goodwill. | ||||||||||
ACCRUED_EXPENSES_AND_OTHER_CUR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 10.ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||||
Accrued expenses and other current liabilities consisted of the following: | ||||||
December 31, | ||||||
2014 | 2013 | |||||
Accrued employee payroll and welfare benefits | 22,027 | 20,561 | ||||
Payable for purchase of property and equipment | 1,888 | 2,097 | ||||
Accrued rental expenses | 3,442 | 4,037 | ||||
Business taxes and other tax payable | 2,414 | 1,931 | ||||
Individual income taxes withheld | 579 | 634 | ||||
Payable to other service providers and suppliers | 3,531 | 491 | ||||
Others | 1,394 | 2,722 | ||||
35,275 | 32,473 | |||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
INCOME TAXES | ||||||||
INCOME TAXES | 11.INCOME TAXES | |||||||
The current and deferred components of income tax expenses were as follows: | ||||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Current | 3,179 | 8,302 | 3,740 | |||||
Deferred | (2,303 | ) | (820 | ) | 392 | |||
Total income tax expenses | 876 | 7,482 | 4,132 | |||||
The Company is a tax-exempt entity incorporated in the Cayman Islands. | ||||||||
Xueda HK located in Hong Kong and is subject to an income tax rate of 16.5%. Xueda HK did not record any income tax expense during the years ended December 31, 2012, 2013 and 2014 because Xueda HK is an investment holding company with no substantive business operations in Hong Kong. | ||||||||
Xueda Information and its subsidiaries and schools, which were entities incorporated in the PRC (“PRC entities”), are subject to PRC Enterprise Income Tax (“EIT”), on the taxable income in accordance with the relevant PRC income tax laws, which have adopted a unified income tax rate of 25% since January 1, 2008. Xuecheng Century was certified as a “software enterprise” and was exempt from income taxes in 2010 and 2011, followed by a 12.5% of income tax rate for 2012, 2013, and 2014. | ||||||||
The principal components of deferred income taxes were as follows: | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
Current deferred tax assets | ||||||||
Deferred income-current | 104 | 78 | ||||||
Accrued expenses (i) | 6,671 | 6,656 | ||||||
Less: Valuation allowance | (636 | ) | (609 | ) | ||||
Net current deferred tax assets | 6,139 | 6,125 | ||||||
Noncurrent deferred tax assets | ||||||||
Deferred income-noncurrent | 78 | — | ||||||
Net operating loss carry forwards | 4,025 | 5,939 | ||||||
Less: Valuation allowance | (2,643 | ) | (4,856 | ) | ||||
Net noncurrent deferred tax assets | 1,460 | 1,083 | ||||||
(i) | Accrued expenses deferred tax assets relate to accrued advertising, payroll and welfare expenses. According to the EIT law, accrued payments related to certain employee expenses, including employee payroll and certain welfare expenses, are not deductible for tax until the actual payments occur. The EIT law also limits the amount of advertising expenses deductible for any period to no more than 15% of gross revenue of such period and permits the amount of the advertising expense in excess of such 15% limit to be carried forward to future periods. | |||||||
The net operating loss carry forwards for Xueda Information and its subsidiaries and schools was $23,756 as of December 31, 2014 and will expire on various dates through 2019. The valuation allowances as of December 31, 2013 and 2014 were primarily related to net operating losses generated by certain subsidiaries and schools of Xueda Information because the Group believes that it is more likely than not that the related deferred tax assets will not be utilized in the future. | ||||||||
The tax basis of the investment of Xuecheng Century in Xueda Information has been greater than the carrying value of this investment. Under U.S. GAAP, a deferred tax asset should be recognized for this temporary difference only if it is apparent that the temporary difference will reverse in the foreseeable future. Absent of evidence of a reversal in the foreseeable future, no deferred tax asset for such temporary difference was recorded. | ||||||||
Reconciliation between total income tax expenses and the amount computed by applying the PRC EIT statutory rate to income before income taxes is as follows: | ||||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Expected income tax expenses at PRC EIT statutory rate of 25% | 656 | 5,594 | (1,498 | ) | ||||
Effect of preferential tax rate and tax holiday | 745 | (601 | ) | 1,285 | ||||
Effect on tax rates in different tax jurisdictions (i) | (228 | ) | 6 | 1,595 | ||||
Tax effect of expenses that are not deductible in determining taxable profit (ii) | 226 | 806 | 564 | |||||
Changes in valuation allowance | (523 | ) | 1,677 | 2,186 | ||||
Total income tax expenses | 876 | 7,482 | 4,132 | |||||
(i) | Effect on tax rates in different tax jurisdictions relates to the interest income and exchange gains generated by the Company and Xueda HK from its RMB-denominated deposits, which are exempted in Cayman Islands, and not subject to Hong Kong income taxes in accordance with the Hong Kong Inland Revenue Ordinance as Xueda HK is an investment holding company with no substantive business operations in Hong Kong. | |||||||
(ii) | Expenses not deductible for tax purposes include impairment losses, entertainment expenses, employees’ training expenses that are not deductible in the computation of net income before income taxes. | |||||||
If the tax holidays granted to Xuecheng Century were not available, income tax provision and earnings per share amounts would be as follows: | ||||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Decrease (increase) in income tax expense | (745 | ) | 601 | (1,285 | ) | |||
Increase (reduction) in net income per share-basic | 0.01 | (0.00 | ) | 0.01 | ||||
Increase (reduction) in net income per share-diluted | 0.01 | (0.00 | ) | 0.01 | ||||
The Group did not identify significant unrecognized tax benefits for the years ended December 31, 2012, 2013 and 2014. The Group did not incur any interest and penalties related to potential underpaid income tax expenses and also does not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from December 31, 2014. | ||||||||
Uncertainties exist with respect to how the current income tax law in the PRC applies to the Group’s overall operations, and more specifically, with regard to tax residency status. The EIT law includes a provision specifying that legal entities organized outside of the PRC will be considered residents for Chinese Income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the new EIT law provide that non-resident legal entities will be considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting and properties occurs within the PRC. On April 22, 2009, the State Administration of Taxation (the “SAT”) issued the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies, or Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a Chinese-controlled offshore-incorporated enterprise is located in China. In addition, on August 3, 2011, the SAT issued a bulletin to made clarification in the areas of resident status determination, post-determination administration, as well as competent tax authorities. The Group does not believe that the legal entities organized outside of the PRC within the Group should be treated as residents for EIT law purposes. However, if the PRC tax authorities subsequently determine that the Company and its subsidiaries registered outside the PRC should be deemed resident enterprises, the Company and its subsidiaries registered outside the PRC will be subject to the PRC income taxes, at a rate of 25%. | ||||||||
If any entity within the Group that is outside the PRC were to be a non-resident for PRC tax purposes dividends paid to it out of profits earned by PRC entities after January 1, 2008 would be subject to a withholding tax at a rate of 10%, subject to reduction by an applicable tax treaty with the PRC. As of December 31, 2014, the Company's subsidiaries and variable interest entities located in the PRC recorded aggregate accumulated deficits. Accordingly, no deferred tax liability has been accrued for the Chinese dividend withholding taxes. In the future, aggregate undistributed earnings of the Company's subsidiaries and variable interest entities located in the PRC, if any, that are taxable upon distribution to the Company, will be considered to be indefinitely reinvested, because the Company does not have any plan to pay cash dividends by using any undistributed earnings of the Company's subsidiaries and variable interest entities in the PRC in the foreseeable future and intends to retain most of their available funds and any future earnings for use in the operation and expansion of their business. | ||||||||
ORDINARY_SHARES
ORDINARY SHARES | 12 Months Ended |
Dec. 31, 2014 | |
ORDINARY SHARES. | |
ORDINARY SHARES | 12.ORDINARY SHARES |
In 2011, 2013 and 2014, the Company issued 1,300,000, 3,427,854 and 3,354,000 ordinary shares, respectively, to its depositary bank for future exercise of share options and vesting of nonvested shares, which are not considered as outstanding shares until they are delivered to the employees upon exercise of vested stock options or vesting of nonvested shares. 79,480 and 948,720 shares as of December 31, 2013 and 2014, respectively, remain available for future option exercise or nonvested shares vesting, which were not considered as outstanding shares and therefore were excluded from the computation of earnings per share. | |
In September 2011, the board of directors approved a shares repurchase program to repurchase up to $30,000 of its outstanding ADSs (“ADSs” refers to the Company’s American depositary shares, each of which represents two ordinary shares). The Company engaged an independent investment bank to act as a broker-dealer in connection with such repurchases. 5,210,168 and 4,155,864 ordinary shares were repurchased from existing shareholders at an average price of $1.70 and $1.75 per share for the years ended December 31, 2011 and 2012, respectively. No ordinary share was repurchased during the years ended December 31, 2013 and 2014. The repurchased shares were accounted for as treasury stock and recorded at an aggregate cost of $16,124. | |
In March 2014, the board of directors approved a shares repurchase program to repurchase up to 6,000,000 of its outstanding ADSs. 11,440,000 ordinary shares were repurchased from a co-founder and certain pre-IPO investors at a price of $2.59 per share for the year ended December 31, 2014.The total consideration of the repurchased shares was $29,630. Such shares were immediately cancelled after the repurchase. | |
NET_INCOME_PER_SHARE
NET INCOME PER SHARE | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
NET INCOME PER SHARE | ||||||||
NET INCOME PER SHARE | 13.NET INCOME PER SHARE | |||||||
The following table sets forth the computation of basic and diluted net income per share for the periods indicated: | ||||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Net income (loss)-basic (numerator) | ||||||||
Net income (loss) attributable to Xueda Education Group ordinary shareholders | 1,965 | 16,151 | (10,022 | ) | ||||
Shares (denominator) | ||||||||
Weighted average ordinary shares used in calculating net income (loss) per share-basic | 131,316,004 | 131,681,540 | 126,567,703 | |||||
Effect of dilutive securities | ||||||||
Plus incremental weighted average ordinary shares from assumed conversions of stock options and nonvested shares using the treasury stock method | 460,203 | 2,785,328 | — | |||||
Weighted average ordinary shares used in calculating net income (loss) per share-diluted | 131,776,207 | 134,466,868 | 126,567,703 | |||||
Net income (loss) per ordinary share-basic | 0.01 | 0.12 | (0.08 | ) | ||||
Net income (loss) per ordinary share-diluted | 0.01 | 0.12 | (0.08 | ) | ||||
Stock options of 356,219 and 414,233, and nonvested shares of 1,248,944 and 105,533, as of December 31, 2012 and 2013, respectively, were excluded in computation of diluted net income per share, because their effects were anti-dilutive. The effect of options and nonvested shares was excluded from the computation of diluted loss per share for the year ended December 31, 2014 as the effect would be anti-dilutive. | ||||||||
SHAREBASED_COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
SHARE-BASED COMPENSATION. | |||||||||||||||
SHARE-BASED COMPENSATION | 14.SHARE-BASED COMPENSATION | ||||||||||||||
On November 13, 2009, the Company adopted a Stock Incentive Plan, which allows the Company to grant its employees, directors and consultants awards including option, stock appreciation right, dividend equivalent right, restricted stock and other right or benefit. The maximum aggregate number of shares which may be issued pursuant to all awards is 11,146,151 shares. The term of an incentive stock option shall be no more than ten years from the date of grant thereof. However, in the case of an incentive stock option granted to a grantee who, at the time the option is granted, owns stock representing more than ten percent of the voting power of all classes of stock of the Company or any parent or subsidiary of the Company, the term of the incentive stock option shall be five years from the date of grant thereof or such shorter term as may be provided in the award agreement. | |||||||||||||||
In December 2010 and May 2013, the Company revised the Stock Incentive plan. According to Amended and Restated 2009 Equity Incentive Plan, the share limit shall initially be 11,146,151 and shall automatically increase on January 1 of each calendar year during the term of this plan, commencing with January 1, 2011, by an amount equal to (i) 1% of the total number of shares issued and outstanding on December 31 of the immediately preceding calendar year and (ii) such number of shares as may be established by the board of directors or the Compensation Committee. Moreover, the option price per share shall be determined by the Compensation Committee, but shall not be less than, (i) with respect to options granted to individuals subject to taxation in the United States, 100% of the fair market value of a share, and (ii) with respect to all other options, 85% of the fair market value of a share, in each case, on the date an option is granted. The share limit was 19,504,380, and 738,791 shares were available for future grant as of December 31, 2014. | |||||||||||||||
Stock options | |||||||||||||||
In February 2012, concurrent with an officer’s resignation in February 2012, 417,979 of his share options, which would have been forfeited upon his resignation, were modified to vest on March 15, 2012 and became exercisable within six months of his resignation. The incremental share-based compensation expenses of $339 as of the modification date were recognized immediately. | |||||||||||||||
On August 22, 2012, the Company granted 2,089,904 share options to an employee with an exercise price of $1.65 per share, for which 50% of the share options vest on May 22, 2013 and 2014, respectively. | |||||||||||||||
On December 18, 2012, the Company granted 655,902 share options to another employee with an exercise price of $1.26 per Share. 1/8 of the share options vested on May 22, 2013, and 1/8 of the share options vest every six months thereafter over next 3.5 years. | |||||||||||||||
On June 23, 2014, the Company granted 1,080,000 share options to employees with an exercise price of $2.175 per share. 25% of the share options granted will be vest on each of the four anniversaries of the date of grant thereof. | |||||||||||||||
On December 4, 2014, the Company granted 65,000 share options to employees with an exercise price of $1.18 per share. 25% of the share options granted will be vest on each of the four anniversaries of the date of grant thereof. | |||||||||||||||
Outstanding options | |||||||||||||||
Weighted | Weighted average | Weighted average | Aggregate | ||||||||||||
Number of | average | grant-date | remaining contractual | intrinsic | |||||||||||
options | exercise price | fair value | Term (Years) | value | |||||||||||
Options outstanding at January 1, 2012 | 9,550,652 | $ | 1.31 | $ | 1.24 | ||||||||||
Granted | 2,745,806 | $ | 1.55 | $ | 0.66 | ||||||||||
Exercised | (679,402 | ) | $ | 0.99 | $ | 1.24 | |||||||||
Forfeited | (4,341,736 | ) | $ | 1.68 | $ | 1.24 | |||||||||
Options outstanding at December 31, 2012 | 7,275,320 | $ | 1.2 | $ | 1.02 | ||||||||||
Exercised | (2,445,482 | ) | $ | 1.01 | $ | 1.21 | |||||||||
Forfeited | (259,458 | ) | $ | 0.99 | $ | 1.24 | |||||||||
Options outstanding at December 31, 2013 | 4,570,380 | $ | 1.32 | $ | 0.91 | ||||||||||
Granted | 1,145,000 | $ | 2.12 | $ | 0.93 | ||||||||||
Exercised | (1,122,546 | ) | $ | 1.2 | $ | 1.04 | |||||||||
Forfeited | (13,440 | ) | $ | 0.99 | $ | 1.24 | |||||||||
Options outstanding at December 31, 2014 | 4,579,394 | $ | 1.55 | $ | 0.88 | 7.38 | $ | 255 | |||||||
Options vested and expected to vest as of December 31, 2014 | 4,443,294 | $ | 1.53 | $ | 0.88 | 7.32 | $ | 255 | |||||||
Option exercisable as of December 31, 2014 | 3,106,443 | $ | 1.37 | $ | 0.88 | 6.54 | $ | 254 | |||||||
The total intrinsic value of options exercised during the years ended December 31, 2012, 2013 and 2014 were $345, $2,763 and $2,502, respectively. | |||||||||||||||
The Company recorded share-based compensation expenses of $1,752, $1,900 and $892 for the years ended December 31, 2012, 2013 and 2014, respectively. As of December 31, 2014, there was $1,047 of share-based compensation related to stock options that is expected to be recognized over a weighted average period of 3.1 years. | |||||||||||||||
During the three years ended December 31, 2014, two batches of options were granted in 2012 and one batch of option was granted in 2014. The fair value of options granted was estimated on the date of grant using the binomial option pricing model with the following assumptions: | |||||||||||||||
Year ended | |||||||||||||||
December 31, 2012 | |||||||||||||||
Weighted average expected volatility | 57.90% | ||||||||||||||
Weighted average risk-free interest rate | 1.80% | ||||||||||||||
Weighted average expected dividend yield | 0% | ||||||||||||||
Weighted average fair value of the underlying ordinary shares | $1.21 per share | ||||||||||||||
Weighted average exercise multiple | 2.8 times | ||||||||||||||
Year ended | |||||||||||||||
December 31, 2014 | |||||||||||||||
Weighted average expected volatility | 58.20% | ||||||||||||||
Weighted average risk-free interest rate | 2.70% | ||||||||||||||
Weighted average expected dividend yield | 3.90% | ||||||||||||||
Weighted average fair value of the underlying ordinary shares | $2.12 per share | ||||||||||||||
Weighted average exercise multiple | 2.5 times | ||||||||||||||
-1 | Volatility | ||||||||||||||
The volatility of the underlying ordinary shares during the life of the options was estimated based on the historical stock price volatility of the Company and comparable listed companies over a period comparable to the contractual term of the options. | |||||||||||||||
-2 | Risk-free interest rate | ||||||||||||||
Risk-free interest rate was estimated based on the yield of treasury bonds of the United States with a maturity period similar to the contractual term of the options. | |||||||||||||||
-3 | Dividend yield | ||||||||||||||
The dividend yield was estimated by the Company based on its expected dividend policy over the contractual term of the options. | |||||||||||||||
-4 | Fair value of underlying ordinary shares | ||||||||||||||
The closing market price of the ordinary shares of the Company as of the grant date was used as the fair value of the ordinary shares on that date. | |||||||||||||||
-5 | Exercise multiple | ||||||||||||||
Exercise multiple represents the value of the underlying share or stock price as a multiple of exercise price of the option which, if achieved, results in exercise of the option. | |||||||||||||||
Nonvested shares | |||||||||||||||
In the years ended December 31, 2012, 2013 and 2014, the Company granted 1,888,313, 6,001,339 and 1,139,988 nonvested shares to employees and consultants, respectively. Nonvested shares generally vest over a period ranged from one to four years. Out of the nonvested shares granted, the vesting of 6,000,000 shares granted in July 2013 is subject to certain performance conditions such as target revenue and earnings before interest expenses and income taxes. In November 2014, the Company revised the performance conditions and extended the vesting period for one more year in relation to such 6,000,000 nonvested shares. There was no incremental compensation expense resulting from the modification. | |||||||||||||||
The grant-date fair value of nonvested shares was determined based on the closing price of the Company’s ADSs on New York Stock Exchange on such dates. | |||||||||||||||
A summary of the nonvested shares activity is as follows: | |||||||||||||||
Number of | Weighted average | Aggregate | |||||||||||||
Nonvested | grant-date | intrinsic | |||||||||||||
shares outstanding | fair value | value | |||||||||||||
Nonvested shares outstanding at January 1, 2012 | 1,487,418 | $ | 4.15 | ||||||||||||
Granted | 1,888,313 | $ | 1.32 | ||||||||||||
Forfeited | (275,303 | ) | $ | 4.3 | |||||||||||
Vested | (348,062 | ) | $ | 4.16 | |||||||||||
Nonvested shares outstanding at December 31, 2012 | 2,752,366 | $ | 2.19 | ||||||||||||
Granted | 6,001,339 | $ | 1.69 | ||||||||||||
Forfeited | (397,857 | ) | $ | 3.07 | |||||||||||
Vested | (788,064 | ) | $ | 2.15 | |||||||||||
Nonvested shares outstanding at December 31, 2013 | 7,567,784 | $ | 1.69 | ||||||||||||
Granted | 1,139,988 | $ | 2.71 | ||||||||||||
Forfeited | (292,496 | ) | $ | 2.08 | |||||||||||
Vested | (1,362,214 | ) | $ | 2.48 | |||||||||||
Nonvested shares outstanding at December 31, 2014 | 7,053,062 | $ | 1.68 | $ | 8,428 | ||||||||||
Nonvested shares vested and expected to vest at December 31, 2014 | 6,965,933 | $ | 1.67 | $ | 8,324 | ||||||||||
The total fair value of shares vested during the year ended December 31, 2012, 2013 and 2014 was $1,448, $1,315 and $3,353, respectively. The Company recorded share-based compensation expenses of $1,414, $3,482 and $5,306 for the years ended December 31, 2012, 2013 and 2014, respectively. As of December 31, 2014, there was $7,122 of share-based compensation related to nonvested shares that is expected to be recognized over a weighted average period of 3.3 years. | |||||||||||||||
MAINLAND_CHINA_CONTRIBUTION_PL
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | 12 Months Ended |
Dec. 31, 2014 | |
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | |
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | 15.MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION |
Full time employees of the Group in the PRC participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require the Group to accrue for these benefits based on certain percentages of the employees’ salaries. Total provisions for such employee benefits were $24,214, $26,609 and $27,567 for the years ended December 31, 2012, 2013 and 2014, respectively. | |
COMMITMENTS
COMMITMENTS | 12 Months Ended | |||
Dec. 31, 2014 | ||||
COMMITMENTS | ||||
COMMITMENTS | 16.COMMITMENTS | |||
The Group leases offices under non-cancelable operating leases agreements. Rent expenses under operating leases for the years ended December 31, 2012, 2013 and 2014 were $40,490, $42,429, and $43,898, respectively. | ||||
Future minimum lease payments under non-cancelable operating leases agreements are as follows: | ||||
Years ending December 31, | ||||
2015 | 36,239 | |||
2016 | 26,433 | |||
2017 | 16,086 | |||
2018 | 10,426 | |||
2019 and thereafter | 7,749 | |||
96,933 | ||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
RELATED PARTY TRANSACTIONS | ||||||||
RELATED PARTY TRANSACTIONS | 17.RELATED PARTY TRANSACTIONS | |||||||
The details of related party balances as of December 31, 2013 and 2014 and transactions for the years ended December 31, 2012, 2013 and 2014 are as follows: | ||||||||
-1 | Amount due from related party | |||||||
Amount due from | ||||||||
related party | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
Amounts due from Beijing Lebai Education Consulting Co., Ltd. (“Lebai”) (i) | 2,631 | 170 | ||||||
(i) | As of December 31, 2014, the Company had an aggregate 14.33% equity interest in Firstleap Education and Jin Xin, the Chief Executive Officer of the Company and Chirstine Lu-Wong, the Chief Financial Officer of the Company are appointed the board members of Firstleap. | |||||||
In November 2012, Xueda Information signed a three-party loan agreement with Lebai, an affiliate of Firstleap, and Bank of Beijing whereby the Company loaned RMB10 million (equivalent to $1,592) to Lebai through Bank of Beijing for a period from November 18, 2012 to May 28, 2013 at an annual interest rate of 10%. This loan was fully repaid in 2013. | ||||||||
In December 2013, Xuecheng Century provided two unsecured loans to Lebai, in a total amount of RMB16 million (equivalent to $2,631), to support Lebai’s business operations. Such loans are for a period from December 2013 to April 2014 and bear an interest rate of 4% per annum. The loan has been collected in May 2014 and there was no unsettled balance as of December 31, 2014. | ||||||||
As of December 31 2014, Xuecheng Century had account receivables of $170 related to rental income generated from Lebai. | ||||||||
-2 | Transactions with related parties | |||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Advertising services provided by Beijing 58 Information and Technology Co., Ltd. (“Beijing 58”) (ii) | 141 | 101 | — | |||||
Advertising services provided by Beijing Chengshi Wanglin Information and Technology Co., Ltd. (“ChengshiWanglin”) (ii) | 153 | 11 | 67 | |||||
Total | 294 | 112 | 67 | |||||
Rental income generated from Lebai | 99 | 159 | 177 | |||||
Tutoring related services income generated from Lebai | — | 117 | — | |||||
Total | 99 | 276 | 177 | |||||
(ii) | Yao Jinbo is director and a beneficial owner of the Company and also the chairman and shareholder of Beijing 58 and ChengshiWanglin. Beijing 58 and Chengshi Wanglin provided advertisement services to the Group. There was no unsettled balance as of December 31, 2013 and 2014. | |||||||
STATUTORY_RESERVES
STATUTORY RESERVES | 12 Months Ended |
Dec. 31, 2014 | |
STATUTORY RESERVES | |
STATUTORY RESERVES | 18.STATUTORY RESERVES |
Prior to payment of dividends, pursuant to the PRC laws and regulations, enterprises incorporated in the PRC must make appropriations from after-tax profit to non-distributable reserve funds as determined by the board of directors of each company. These reserves include (i) general reserve, and (ii) other reserves at the discretion of the board of directors. | |
Subject to certain cumulative limits, the general reserve requires annual appropriations of 10% of after-tax profits as determined under PRC laws and regulations at each year-end until the balance reaches 50% of the PRC entity registered capital; the other reserve appropriations are at the entity’s discretion. These reserves can only be used for specific purposes of enterprise expansion and are not distributable as cash dividends. The Company’s subsidiaries, the VIE and the VIE’s subsidiaries and schools contributed $370, $1,114 and $168 to the general reserve during the years ended December 31, 2012, 2013 and 2014, respectively. | |
PRC laws and regulations require private schools that require reasonable returns to make annual appropriations of 25% of after-tax income before payments of dividend to a fund to be used for the construction or maintenance of the school or procurement or upgrading of educational equipment. For private schools that do not require reasonable returns, this amount should be equivalent to no less than 25% of the annual increase of its net assets as determined in accordance with generally accepted accounting principles in the PRC (“PRC GAAP”). The Group’s private schools made appropriation to the reserve of $114, $810 and $754 for the years ended December 31, 2012, 2013 and 2014, respectively. | |
These reserves are included as statutory reserves in the consolidated statements of changes in equity. The statutory reserves cannot be transferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation. | |
RESTRICTED_NET_ASSETS
RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2014 | |
RESTRICTED NET ASSETS | |
RESTRICTED NET ASSETS | 19.RESTRICTED NET ASSETS |
Under the PRC laws and regulations, distributions by the PRC entities can only be paid out of distributable profits computed in accordance with the PRC GAAP, and the PRC entities are restricted from transferring a portion of their net assets to the Company. Amounts restricted include paid-in capital and the statutory reserves of the PRC entities. The balance of restricted net assets was $54,844 as of December 31, 2014. | |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2014 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 20.SEGMENT INFORMATION |
The Group is mainly engaged in private personalized tutoring services in the PRC. The Group’s chief operating decision maker has been identified as the Chief Executive Officer who reviews results of operations by geographic location (i.e. city rather than learning centers), each location constituting a subsidiary of Xueda Information, when making decisions about allocating resources and assessing performance of the Group. Consequently, the Group has determined that each location represents an operating segment. However, under the aggregation criteria set forth in the U.S. GAAP with respect to segment reporting, the Group operates in only one reportable segment as all of its operating segments have similar economic characteristics and provide the same tutoring services. | |
The Group’s net revenues for the years ended December 31, 2012, 2013 and 2014 were all generated from the services provided in the PRC. The Group’s long-lived assets as of December 31, 2013 and 2014 were all located in the PRC. | |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended | |||
Dec. 31, 2014 | ||||
SUBSEQUENT EVENTS | ||||
SUBSEQUENT EVENTS | 21.SUBSEQUENT EVENTS | |||
-1 | On March 4, 2015, the Company declared a cash dividend of $0.16 per ADS or $0.08 per ordinary share. The cash dividend will be paid out of additional paid-in capital on or about April 16, 2015 to holders of ordinary shares on record as of the close of business on March 16, 2015. The aggregate amount of cash dividends to be paid is $9,983. | |||
-2 | In February 2015, the Group and Qihoo 360 Technology Co. Ltd., a leading Internet company in China, established a new company with registered capital of less than $5 million for the principal business purpose of pursuing online education opportunities. | |||
SCHEDULE_I_CONDENSED_FINANCIAL
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | ||||||||
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | XUEDA EDUCATION GROUP | |||||||
ADDITIONAL INFORMATION - FINANCIAL STATEMENT SCHEDULE I | ||||||||
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | ||||||||
BALANCE SHEETS | ||||||||
(In thousands of U.S. dollars, except for shares and per share data) | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 12,626 | 12,395 | ||||||
Short-term investments | 68,553 | 35,742 | ||||||
Prepaid expenses and other current assets | 4,181 | 1,344 | ||||||
Amounts due from subsidiaries | 41,453 | 36,884 | ||||||
Total current assets | 126,813 | 86,365 | ||||||
Investment in subsidiary | 19,387 | 17,526 | ||||||
Other long-term investments | 6,850 | 7,504 | ||||||
Total assets | 153,050 | 111,395 | ||||||
Liabilities | ||||||||
Current liabilities: | ||||||||
Accrued expenses and other current liabilities | 56 | 52 | ||||||
Deferred income-current | 347 | 550 | ||||||
Total current liabilities | 403 | 602 | ||||||
Deferred income-noncurrent | 260 | — | ||||||
Total liabilities | 663 | 602 | ||||||
Equity | ||||||||
Ordinary shares | 14 | 13 | ||||||
Treasury stock, at cost | (16,124 | ) | (16,124 | ) | ||||
Additional paid-in capital | 157,149 | 125,205 | ||||||
Retained earnings | 11,133 | 1,111 | ||||||
Accumulated other comprehensive income | 215 | 588 | ||||||
Total equity | 152,387 | 110,793 | ||||||
Total liabilities and equity | 153,050 | 111,395 | ||||||
ADDITIONAL INFORMATION - FINANCIAL STATEMENT SCHEDULE I | ||||||||
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | ||||||||
STATEMENTS OF OPERATIONS | ||||||||
(In thousands of U.S. dollars) | ||||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Total operating expenses | (3,129 | ) | (4,158 | ) | (9,722 | ) | ||
Loss from operations | (3,129 | ) | (4,158 | ) | (9,722 | ) | ||
Equity in earnings of subsidiary | 1,409 | 17,882 | (1,580 | ) | ||||
Interest income | 3,685 | 2,427 | 1,280 | |||||
Net income (loss) | 1,965 | 16,151 | (10,022 | ) | ||||
ADDITIONAL INFORMATION - FINANCIAL STATEMENT SCHEDULE I | ||||||||
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | ||||||||
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||||
(In thousands of U.S. dollars) | ||||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Net income (loss) | 1,965 | 16,151 | (10,022 | ) | ||||
Other comprehensive income, net of tax: | ||||||||
Change in cumulative foreign currency translation adjustments | 242 | 433 | (281 | ) | ||||
Unrealized gain on available-for-sale securities, net of tax effects of nil, nil and nil for the years ended December 31, 2012, 2013 and 2014, respectively | 339 | 93 | 654 | |||||
Total comprehensive income (loss) | 2,546 | 16,677 | (9,649 | ) | ||||
ADDITIONAL INFORMATION - FINANCIAL STATEMENT SCHEDULE I | ||||||||
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | ||||||||
STATEMENTS OF CASH FLOWS | ||||||||
(In thousands of U.S. dollars) | ||||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | 1,965 | 16,151 | (10,022 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Equity in earnings from subsidiary | (1,409 | ) | (17,882 | ) | 1,580 | |||
Share-based compensation expense | 3,166 | 5,382 | 6,198 | |||||
Foreign exchange gain (loss) | 919 | 1,848 | (1,622 | ) | ||||
Changes in assets and liabilities: | ||||||||
Prepaid expenses and other current assets | 784 | (3,091 | ) | 2,837 | ||||
Amounts due from subsidiaries | 3,464 | (38,548 | ) | 4,006 | ||||
Accrued expenses and other current liabilities | 237 | (181 | ) | (3 | ) | |||
Deferred income | (346 | ) | (348 | ) | (58 | ) | ||
Net cash provided by (used in) operating activities | 8,780 | (36,669 | ) | 2,916 | ||||
Cash flows from investing activities: | ||||||||
Purchase of short-term investments | — | (67,619 | ) | (71,847 | ) | |||
Proceeds from maturity of short-term investments | — | — | 104,802 | |||||
Purchases of long-term investments | (4,786 | ) | (1,632 | ) | — | |||
Net cash (used in) provided by investing activities | (4,786 | ) | (69,251 | ) | 32,955 | |||
Cash flows from financing activities: | ||||||||
Repurchase of ordinary shares | (7,278 | ) | — | (29,630 | ) | |||
Proceeds from exercise of options | 123 | 246 | 3,393 | |||||
Payment of dividend distribution | (9,929 | ) | (22,665 | ) | (9,865 | ) | ||
Net cash used in financing activities | (17,084 | ) | (22,419 | ) | (36,102 | ) | ||
Net decrease in cash and cash equivalents | (13,090 | ) | (128,339 | ) | (231 | ) | ||
Cash and cash equivalents, beginning of year | 154,055 | 140,965 | 12,626 | |||||
Cash and cash equivalents, end of year | 140,965 | 12,626 | 12,395 | |||||
ADDITIONAL INFORMATION - FINANCIAL STATEMENT SCHEDULE I | ||||||||
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | ||||||||
NOTE TO THE FINANCIAL STATEMENTS | ||||||||
1.BASIS FOR PREPARATION | ||||||||
The condensed financial information of the Parent Company has been prepared using the same accounting policies as set out in the Group’s consolidated financial statements except that the Parent Company used the equity method to account for investment in its subsidiary. | ||||||||
2.INVESTMENTS IN SUBSIDIARIES AND VARIABLE INTEREST ENTITIES | ||||||||
In its consolidated financial statements, the Parent Company consolidates the results of operations and assets and liabilities of its subsidiaries and schools, VIE and VIE’s subsidiaries, and inter-company balances and transactions are eliminated upon consolidation. For the purpose of the Parent Company’s standalone financial statements, its investment in subsidiary, Xeuda HK, though which the Company indirectly holds and consolidates other subsidiaries, VIE and VIE subsidiaries and schools, is reported using the equity method of accounting as a single line item and the Parent Company’s share of earnings from its subsidiary is reported as the single line item of equity in earnings of subsidiary. | ||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Basis of presentation | Basis of presentation | |||
The consolidated financial statements of the Group have been prepared in accordance with U.S. GAAP. | ||||
Basis of consolidation | Basis of consolidation | |||
The consolidated financial statements include the financial statements of the Company, its subsidiaries, its VIE and the VIE’s subsidiaries and schools. All inter-company transactions and balances have been eliminated upon consolidation. | ||||
Noncontrolling interests | Noncontrolling interests | |||
Noncontrolling interests are separately presented as a component of equity in the consolidated financial statements. | ||||
Cash and cash equivalents | Cash and cash equivalents | |||
Cash and cash equivalents consist of cash on hand, demand deposits, term deposits and debt securities with original maturities of three months or less. | ||||
Investments | Investments | |||
Investments consist of trading securities, held-to-maturity securities, available-for-sale securities and equity method investment. | ||||
Trading securities are securities that are bought and held principally for the purpose of selling them in the near term and are reported at fair value, with unrealized gains and losses recognized in earnings. | ||||
The Group’s held-to-maturity securities consist of term deposits and debt securities placed with banks. Held-to maturity securities that will mature within one year are included in short-term investment and others are included in long-term investments. Investments are classified as held-to-maturity when the Group has the positive intent and ability to hold the security to maturity, and are recorded at amortized cost. | ||||
Investments classified as available-for-sale securities are carried at their fair values and the unrealized gains or losses from the changes in fair values are included in accumulated other comprehensive income. | ||||
Equity method investments relate to investee company over which the Group has the ability to exercise significant influence, but does not have control and are accounted for using the equity method. Significant influence is generally considered to exist when the Group has an ownership interest in the voting stock of the investee of between 20% and 50% and other factors, such as representation on the investee’s board of directors, voting rights and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. The Group’s share of earning (loss) of investee company is included in the accompanying consolidated statements of operations. | ||||
The Group reviews its investments for other-than-temporary impairment (“OTTI”) based on the specific identification method. The Group considers available quantitative and qualitative evidence in evaluating potential impairment of its investments. If the cost of an investment exceeds the investment’s fair value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than the cost, the Group’s intent and ability to hold the investment, and the financial condition and near term prospects of the issuers. | ||||
If there is OTTI on debt securities, the Group separates the amount of the OTTI into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings, which represents the difference between a security’s amortized cost basis and the discounted present value of expected future cash flows. The amount due to other factors is recognized in other comprehensive income if the entity neither intends to sell and will not more likely than not be required to sell the security before recovery. The difference between the amortized cost basis and the cash flows expected to be collected is accreted as interest income. | ||||
Fair value | Fair value | |||
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. | ||||
Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: | ||||
Level 1 | ||||
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. | ||||
Level 2 | ||||
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. | ||||
Level 3 | ||||
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. | ||||
Financial instruments | Financial instruments | |||
Financial instruments are primarily in the form of cash and cash equivalents, amounts due from related parties, short-term investments and long-term investments in held-to-maturity and available-for-sale securities. The carrying amounts of these financial instruments except for long-term investments, approximate their fair values because of their generally short maturities. The carrying amount of long-term held-to-maturity securities approximates their fair value due to the fact that the related interest rates approximate rates currently offered by financial institutions for similar debt instruments of comparable maturities. There is no quoted market value for the long-term available-for-sale securities; however, management estimates their fair value using discounted cash flow method. Fair value of such financial instruments is not necessarily representative of the amount that could be realized or settled. | ||||
Use of estimates | Use of estimates | |||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues and expenses in the financial statements and the accompanying notes. Significant accounting estimates reflected in the Group’s financial statements include revenue recognition, valuation allowance for deferred tax assets, share-based compensation, fair value of available-for-sale securities and goodwill impairment. Actual results could differ from those estimates. | ||||
Property and equipment | Property and equipment | |||
Property and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization is calculated on a straight-line basis over the following estimated useful lives: | ||||
Buildings | 20~40 years | |||
Furniture, fixtures and equipment | 3 years | |||
Motor vehicles | 5 years | |||
Leasehold improvements | Shorter of useful life of the assets or the lease term | |||
Acquired intangible assets | Acquired intangible assets | |||
Intangible assets with definite lives are carried at cost less accumulated amortization. Amortization of definite-lived intangible assets is computed using the straight-line method over the estimated average useful lives, which are as follows: | ||||
Trademark | 10 years | |||
Non-compete agreement | 5 years | |||
Impairment of long-lived assets with definite lives | Impairment of long-lived assets with definite lives | |||
Long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group compares the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss equal to the difference between the fair value and the carrying amount of the assets. | ||||
Business combinations | Business combinations | |||
Business combinations are recorded using the acquisition method of accounting. The assets acquired, the liabilities assumed, and any noncontrolling interests of the acquiree at the acquisition date, if any, are measured at their fair values as of the acquisition date. Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any noncontrolling interest of the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Common forms of the consideration made in acquisitions include cash and common equity instruments. Consideration transferred in a business acquisition is measured at the fair value as at the date of acquisition. | ||||
Where the consideration in an acquisition includes contingent consideration and the payment of which depends on the achievement of certain specified conditions post-acquisition, the contingent consideration is recognized and measured at its fair value at the acquisition date and if recorded as a liability, it is subsequently carried at fair value with changes in fair value reflected in earnings. | ||||
Goodwill | Goodwill | |||
Goodwill is not amortized but is evaluated for impairment annually or whenever events or changes in circumstances indicate that the goodwill might be impaired following a two-step process. The first step compares the fair value of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. | ||||
Revenue recognition | Revenue recognition | |||
Revenues are recognized when earned and are reported net of business taxes and value added taxes. | ||||
The primary sources of the Group’s revenues are as follows: | ||||
(a) | Registration fees | |||
The Group charges each new student a non-refundable registration fee ranging from $48.35 (Renminbi300) to $161.17 (Renminbi1,000) for diagnosis and designing a personalized tutoring plan for the student. The nonrefundable registration fee is amortized over the estimated average customer relationship life. The average customer relationship life is estimated based on the Group’s historical data and the estimate is subject to annual assessment or when an event or other changes indicate the estimate is no longer reasonable. | ||||
(b) | Tuition fees for private personalized tutoring services | |||
Tuition revenues are collected in advance and are initially recorded as deferred revenue. Tuition revenues are recognized proportionately as the tutoring sessions are delivered. Deferred revenue relating to unused prepaid tutoring hours of expired contracts are recognized as revenues in the twenty-sixth month after the contract expiration date if no refund has been claimed by then. The refund period of twenty-six months was determined according to the applicable PRC laws and regulations. After such period, refund claims are not supported by the applicable PRC laws and regulations. | ||||
The Group’s PRC subsidiaries, VIE and VIE’s subsidiaries and schools are subject to business taxes and other related surcharges at a rate of 3.3% or 5.5% of gross revenues generated from their private personalized tutoring service. Business taxes are reported as a deduction to revenue when incurred and amounted to $13,834, $12,802 and $11,688 for the years ended December 31, 2012, 2013 and 2014, respectively. | ||||
In July 2012, the Ministry of Finance and the State Administration of Taxation jointly issued a circular regarding the pilot collection of value added taxes (“VAT”) in lieu of business tax in certain areas and industries in the PRC. Starting from September 1, 2012, the VIE’s certain subsidiaries and schools became subject to VAT at the rates of 3%, 6% or 17%, on certain service revenues which were previously subject to business tax. VAT is also reported as a deduction to revenue when incurred and amounted to $67, $999 and $1,207 for the years ended December 31, 2012, 2013 and 2014, respectively. | ||||
Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. However, entities that are VAT small scale taxpayers, cannot offset their input VAT against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in either other current liabilities or other current assets on the consolidated balance sheets. | ||||
Advertising costs | Advertising costs | |||
Advertising costs are expensed as incurred. The Group incurred advertising costs totaling $26,448, $29,015 and $28,785 for the years ended December 31, 2012, 2013 and 2014, respectively, which were recorded as a component of selling and marketing expenses in the accompanying consolidated statements of operations. | ||||
Lease accounting | Lease accounting | |||
The Group evaluates each lease for classification as either a capital lease or an operating lease. If substantially all of the benefits and risks of ownership have been transferred to the lessee, the Group records the lease as a capital lease at its inception. The Group performs this evaluation at the inception of the lease and when a modification is made to a lease. If the lease agreement provides rent holidays or calls for a scheduled rent increase during the lease term, the Group recognizes the lease expense on a straight-line basis over the lease term. The difference between rent expense and rent paid is recorded as deferred rent. The term of the Group’s leases typically ranges from one to five years and some of them are subject to renewal at fair market value. | ||||
Government subsidies | Government subsidies | |||
The Group receives government subsidies from the local government authorities for encouraging regional development and technology development. Government subsidies are recognized upon receipt as an item of operating income because the subsidies are not intended to compensate for specific expenditure and not subject to future return. For the years ended December 31, 2012, 2013 and 2014, $164, $439 and $362 were received and recognized, respectively. | ||||
Foreign currency translation | Foreign currency translation | |||
The functional and reporting currency of the Company and Xueda HK is US dollar. The functional currency of the Company’s other subsidiaries, VIE and VIE’s subsidiaries and schools in the PRC is Renminbi (“RMB”). | ||||
Assets and liabilities are translated from each entity’s functional currency to the reporting currency at the exchange rate on the balance sheet date. Equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative foreign currency translation adjustments and are shown as a separate component of other comprehensive income in the consolidated statements of comprehensive income. | ||||
Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currencies at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are remeasured into the applicable functional currencies at historical exchange rates. Transactions in currencies other than the applicable functional currencies during the year are converted into the functional currencies at the applicable rates of exchange prevailing at the transaction dates. Transaction gains and losses are recognized in the consolidated statements of operations. | ||||
Share-based compensation | Share-based compensation | |||
Share-based compensation with employees is measured based on the grant date fair value of the equity instrument. The Group recognizes the compensation costs net of a forfeiture rate on a straight-line basis over the requisite service period of the award, which is generally the vesting period of the award, with the amount of compensation expenses recognized in any period not less than the portion of the grant date fair value of the options vested during that period. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment in the period of change. | ||||
For awards with performance condition vesting provision, when achievement of the performance condition is deemed probable, the Group recognized compensation cost on a straight-line basis over the awards vesting periods. | ||||
When terms of awards are modified, the Company are required to record the incremental fair value, if any, of the modified awards, as compensation cost on the date of modification (for vested awards) or over the remaining service (vesting) period (for unvested awards). The incremental compensation cost is the excess of the fair value of the modified award on the date of modification over fair value of the original award immediately before the modification. | ||||
Income taxes | Income taxes | |||
Current income taxes are provided for in accordance with the laws of the relevant tax authorities. | ||||
Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. | ||||
The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. | ||||
Comprehensive income (loss) | Comprehensive income (loss) | |||
Comprehensive income (loss) includes net income (loss), unrealized gain on available-for-sale securities and foreign currency translation adjustments. The Group presents the components of net income (loss), the components of other comprehensive income (loss) and total comprehensive income (loss) in two separate but consecutive statements. | ||||
Net income (loss) per share | Net income (loss) per share | |||
Basic net income (loss) per share attributable to Xueda Education Group ordinary shareholders is computed by dividing net income (loss) attributable to Xueda Education Group ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net income (loss) per share attributable to Xueda Education Group ordinary shareholders reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares. The dilutive effect of stock options is computed using treasury stock method. | ||||
Significant risks and uncertainties | Significant risks and uncertainties | |||
Foreign currency risk | ||||
RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The cash and cash equivalents of the Group included aggregate amounts of $109,895 and $103,235, which were denominated in RMB, at December 31, 2013 and 2014, respectively, representing 93.9% and 90.7% of the cash and cash equivalents balances as of December 31, 2013 and 2014, respectively. The Group’s short-term investments of $129,619 and $94,721 as of December 31, 2013 and 2014, respectively, were also denominated in RMB. | ||||
Recent accounting pronouncements | Recent accounting pronouncements | |||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued a new pronouncement which affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This Accounting Standards Update (“ASU”) will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles—Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. | ||||
The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: | ||||
· | Step 1: Identify the contract(s) with a customer. | |||
· | Step 2: Identify the performance obligations in the contract. | |||
· | Step 3: Determine the transaction price. | |||
· | Step 4: Allocate the transaction price to the performance obligations in the contract. | |||
· | Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | |||
For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. | ||||
An entity should apply the amendments in this ASU using one of the following two methods: | ||||
1.Retrospectively to each prior reporting period presented and the entity may elect any of the following practical expedients: | ||||
· | For completed contracts, an entity need not restate contracts that begin and end within the same annual reporting period. | |||
· | For completed contracts that have variable consideration, an entity may use the transaction price at the date the contract was completed rather than estimating variable consideration amounts in the comparative reporting periods. | |||
· | For all reporting periods presented before the date of initial application, an entity need not disclose the amount of the transaction price allocated to remaining performance obligations and an explanation of when the entity expects to recognize that amount as revenue. | |||
2.Retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. If an entity elects this transition method it also should provide the additional disclosures in reporting periods that include the date of initial application of: | ||||
· | The amount by which each financial statement line item is affected in the current reporting period by the application of this ASU as compared to the guidance that was in effect before the change. | |||
· | An explanation of the reasons for significant changes. | |||
The Group is in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements. | ||||
In June 2014, the FASB issued a new pronouncement which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation - Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. | ||||
The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. | ||||
In August, 2014, the FASB issued a new pronouncement which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements. Further, an entity must provide certain disclosures if there is “substantial doubt about the entity’s ability to continue as a going concern.” The new standard is effective for fiscal years ending after December 15, 2016. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. | ||||
ORGANIZATION_AND_PRINCIPAL_ACT1
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||||||||
Schedule of the entity's subsidiaries and VIE and VIE's significant subsidiaries | As of December 31, 2014, details of the Company’s subsidiaries and VIE, VIE’s significant subsidiaries and schools were as follows: | |||||||
Place of | ||||||||
Incorporation | establishment/ | |||||||
Name | or acquisition date | incorporation | Legal ownership | |||||
Subsidiaries: | ||||||||
Xuecheng Century (Beijing) Information Technology Co., Ltd. (“Xuecheng Century”) | 17-Aug-09 | PRC | 100 | % | ||||
China Xueda Corporation Limited (“Xueda HK”) | May 13, 2009 | Hong Kong | 100 | % | ||||
Beijing Xueda Education & Training Consulting Co., Ltd. | 31-Oct-11 | PRC | 100 | % | ||||
Tianjin Xueda Education Technology Co., Ltd. | 25-Feb-14 | PRC | 100 | % | ||||
VIE: | ||||||||
Beijing Xueda Information Technology Co., Ltd. (“Xueda Information”) | 13-Jul-09 | PRC | Nil | * | ||||
VIE’s significant subsidiaries and schools: | ||||||||
Taiyuan Xueda Education & Training School(1) | 8-Dec-08 | PRC | Nil | * | ||||
Nanchang Xueda Education & Training School(1) | 20-Apr-09 | PRC | Nil | * | ||||
Qingdao Xueda Pre-exam Tutoring School(1) | 10-Jun-09 | PRC | Nil | * | ||||
Suzhou Xuecheng Information Technology Co., Ltd. | 28-Sep-09 | PRC | Nil | * | ||||
Wuhan Xueda Information Technology Co., Ltd. | 12-Oct-09 | PRC | Nil | * | ||||
Wuxi Xueda Information Technology Co., Ltd. | 15-Oct-09 | PRC | Nil | * | ||||
Hohhot Xueda Information Technology Co., Ltd. | 21-Oct-09 | PRC | Nil | * | ||||
Tianjin Xueda Educational Information Consulting Co., Ltd. | 26-Oct-09 | PRC | Nil | * | ||||
Beijing Xuecheng Shidai Information Technology Co., Ltd. | 28-Oct-09 | PRC | Nil | * | ||||
Changsha Xuezhi Information Technology Co., Ltd. | 3-Nov-09 | PRC | Nil | * | ||||
Kunming Xueda Information Technology Co., Ltd. | 6-Nov-09 | PRC | Nil | * | ||||
Guangzhou Xueda Educational Technology Co., Ltd. | 24-Nov-09 | PRC | Nil | * | ||||
Shenzhen Xueda Information Technology Co., Ltd. | 25-Nov-09 | PRC | Nil | * | ||||
Chengdu Xueda Information Technology Co., Ltd. | 30-Nov-09 | PRC | Nil | * | ||||
Jinan Xueda Education & Training School(1) | 17-Dec-09 | PRC | Nil | * | ||||
Beijing Xicheng Xueda Training School(1) | 1-Feb-10 | PRC | Nil | * | ||||
Dalian Shahekou Xueda Education & Training School(1) | 5-Mar-10 | PRC | Nil | * | ||||
Hangzhou Xueda Education Consulting Co., Ltd. | 9-Mar-10 | PRC | Nil | * | ||||
BeijingWeland International Education and Technology Corp. | 1-Jun-12 | PRC | Nil | * | ||||
Guiyang Xueda Information Technology Co., Ltd. | 9-Apr-10 | PRC | Nil | * | ||||
Fuzhou Gulou Xueda Education & Training School(1) | 26-Apr-10 | PRC | Nil | * | ||||
Shijiazhuang Yuhua District Xueda Education & Training School(1) | 26-Apr-10 | PRC | Nil | * | ||||
Beijing Dongcheng Xueda Training School(1) | May 27, 2010 | PRC | Nil | * | ||||
Changchun Xueda Education & Training School(1) | 11-Jun-10 | PRC | Nil | * | ||||
Xi’an Xueda Education & Training School(1) | 18-Jun-10 | PRC | Nil | * | ||||
Shenyang Xueda Education & Training School(1) | 10-Aug-10 | PRC | Nil | * | ||||
Nanjing Xueda Education & Training School(1) | 30-Sep-10 | PRC | Nil | * | ||||
Nantong Chongchuan District Xueda Education Training School(1) | 19-Nov-10 | PRC | Nil | * | ||||
Xi’an Lianhu Xueda Education Training School(1) | 7-Dec-10 | PRC | Nil | * | ||||
Xi’an Beilin District Xueda Education Training School(1) | 14-Dec-10 | PRC | Nil | * | ||||
Shanghai Jinshan District Xueda Education School of Continuing Studies(1) | 16-Dec-10 | PRC | Nil | * | ||||
Hefei Xueda Education Training Department(1) | 27-Dec-10 | PRC | Nil | * | ||||
Beijing Chaoyang Xueda Training School(1) | 25-Jan-11 | PRC | Nil | * | ||||
Xi’an Yanta Xueda Education & Training School(1) | 24-Feb-11 | PRC | Nil | * | ||||
Beijing Haidian Xueda Training School(1) | May 31, 2011 | PRC | Nil | * | ||||
Qindu Xueda Education & Training School(1) | 28-Oct-11 | PRC | Nil | * | ||||
Tangshan Lubei Xueda Education & Training School(1) | 26-Apr-12 | PRC | Nil | * | ||||
Shenzhen Xueda Education & Training School(1) | 30-Dec-13 | PRC | Nil | * | ||||
Tianjin Xuecheng Century Information Technology Co., Ltd. | 25-Feb-14 | PRC | Nil | * | ||||
*These entities are controlled by the Company pursuant to the contractual arrangements disclosed below. | ||||||||
-1 | These private schools are established and controlled by Xueda Information or its subsidiaries. Under PRC laws and regulations, entities who establish private schools are commonly referred to as “sponsors” instead of “owners” or “shareholders”. The economic substance of “sponsorship” in respect of private schools is substantially similar to that of ownership with respect to legal, regulatory and tax matters. | |||||||
Schedule of financial information of the entity's VIE and VIE's subsidiaries | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
Cash and cash equivalents | 56,947 | 54,730 | ||||||
Prepaid expense and other current assets | 12,902 | 12,738 | ||||||
Total current assets | 129,836 | 137,492 | ||||||
Total assets | 175,603 | 170,852 | ||||||
Deferred revenue | 133,854 | 126,148 | ||||||
Total current liabilities | 142,539 | 141,698 | ||||||
Total liabilities | 172,522 | 165,385 | ||||||
Total equity | 3,081 | 5,467 | ||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Net revenues | 293,157 | 347,047 | 338,314 | |||||
Net income | 6,282 | 10,089 | 4,069 | |||||
Net cash provided by (used in) operating activities | 48,370 | 43,003 | (11,256 | ) | ||||
Net cash (used in) provided by investing activities | (37,363 | ) | (48,532 | ) | 11,875 | |||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||
Dec. 31, 2014 | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Schedule of estimated useful lives of property and equipment | |||
Buildings | 20~40 years | ||
Furniture, fixtures and equipment | 3 years | ||
Motor vehicles | 5 years | ||
Leasehold improvements | Shorter of useful life of the assets or the lease term | ||
Schedule of estimated useful lives of acquired intangible assets | |||
Trademark | 10 years | ||
Non-compete agreement | 5 years | ||
ACQUISITION_Tables
ACQUISITION (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
ACQUISITION | |||||||
Schedule of the purchase price to assets acquired and liabilities assumed | |||||||
Purchase price allocation | Useful life | ||||||
Cash and cash equivalents | $ | 1,765 | |||||
Advance to suppliers | 62 | ||||||
Acquired intangible assets | |||||||
- Trademark | 408 | 10 years | |||||
- Non-Compete Agreement | 188 | 5 years | |||||
Fixed assets | 4 | ||||||
Total assets acquired | 2,427 | ||||||
Deferred tax liabilities | (150 | ) | |||||
Liabilities assumed | (540 | ) | |||||
Noncontrolling interest | (1,571 | ) | |||||
Total net assets | 166 | ||||||
Goodwill | 2,795 | ||||||
Total | $ | 2,961 | |||||
Schedule of unaudited pro forma results of operations | |||||||
Year ended December 31, | |||||||
2012 | |||||||
Pro forma net revenue | 296,548 | ||||||
Pro forma net income attributable to Xueda Education Group | 2,414 | ||||||
Pro forma net income per ordinary share-basic | 0.02 | ||||||
Pro forma net income per ordinary share-diluted | 0.02 | ||||||
PREPAID_EXPENSES_AND_OTHER_CUR1
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||||
Schedule of prepaid expenses and other current assets | ||||||
December 31, | ||||||
2013 | 2014 | |||||
Other receivable (i) | 1,241 | 1,082 | ||||
Prepaid rental expenses | 7,288 | 8,846 | ||||
Advance to suppliers | 1,095 | 607 | ||||
Prepaid advertisement expenses | 565 | 454 | ||||
Short-term deposits | 451 | 157 | ||||
Interest receivable | 1,051 | 1,143 | ||||
Staff advances and others | 2,166 | 1,780 | ||||
Option exercising cost receivable (ii) | 2,785 | 744 | ||||
16,642 | 14,813 | |||||
(i) | Other receivable consists of cash that had been received from students but held by the third-party online payment processing agencies. The funds are transferred to the Group shortly after payments are received by the third-party online payment processing agencies. | |||||
(ii) | Option exercising cost receivable is the amount paid by employees to exercise options but held by a third party service provider. The funds are transferred to the Group shortly after payments are received by the third-party service provider. | |||||
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
PROPERTY AND EQUIPMENT | ||||||
Schedule of property and equipment | ||||||
December 31, | ||||||
2013 | 2014 | |||||
Buildings | 5,969 | 5,824 | ||||
Furniture, fixtures and equipment | 25,296 | 27,193 | ||||
Motor vehicles | 2,334 | 2,499 | ||||
Leasehold improvements | 40,947 | 44,015 | ||||
Less: Accumulated depreciation and amortization | (39,720 | ) | (49,098 | ) | ||
34,826 | 30,433 | |||||
ACQUIRED_INTANGIBLE_ASSETS_Tab
ACQUIRED INTANGIBLE ASSETS (Table) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
ACQUIRED INTANGIBLE ASSETS | ||||||
Schedule of acquired intangible assets arose from the acquisitions of Weland | ||||||
December 31, | ||||||
2013 | 2014 | |||||
Trademark | 408 | 408 | ||||
Non-Compete Agreement | 188 | 188 | ||||
Exchange difference | 14 | 14 | ||||
610 | 610 | |||||
Less: Accumulated amortization | (128 | ) | (128 | ) | ||
Less: Accumulated impairment | (494 | ) | (494 | ) | ||
Exchange difference | 12 | 12 | ||||
Acquired intangible assets, net | — | — | ||||
GOODWILL_Tables
GOODWILL (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
GOODWILL | ||||||||||||||
Schedule of the changes in the carrying amount of goodwill | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2014 | |||||||||||||
Taiyuan | Taiyuan | |||||||||||||
Xueda | Weland | Total | Xueda | Weland | Total | |||||||||
Gross amount | ||||||||||||||
Beginning balance at January 1 | 872 | 2,857 | 3,729 | 897 | 2,940 | 3,837 | ||||||||
Exchange difference | 25 | 83 | 108 | (22 | ) | (71 | ) | (93 | ) | |||||
Ending balance at December 31 | 897 | 2,940 | 3,837 | 875 | 2,869 | 3,744 | ||||||||
Accumulated impairment loss | ||||||||||||||
Beginning balance at January 1 | — | — | — | — | (2,940 | ) | (2,940 | ) | ||||||
Charge for the year | — | (2,923 | ) | (2,923 | ) | — | — | — | ||||||
Exchange difference | — | (17 | ) | (17 | ) | — | 71 | 71 | ||||||
Ending balance at December 31 | — | (2,940 | ) | (2,940 | ) | — | (2,869 | ) | (2,869 | ) | ||||
Goodwill, net | 897 | — | 897 | 875 | — | 875 | ||||||||
INVESTMENTS_Tables
INVESTMENTS (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
INVESTMENT | ||||||||||||
Schedule of investments | ||||||||||||
As of December 31, 2013 | ||||||||||||
Unrealized gain | ||||||||||||
Gross | Gross | in accumulated | ||||||||||
Amortized | unrecognized | unrecognized | other comprehensive | |||||||||
cost | holding gains | holding losses | income | Fair value | ||||||||
Cash and cash equivalents: | ||||||||||||
Cash equivalents | ||||||||||||
Term deposits | 11,827 | — | — | — | 11,827 | |||||||
Adjustable-rate debt securities | 4,326 | — | — | — | 4,326 | |||||||
16,153 | — | — | — | 16,153 | ||||||||
Short-term investments: | ||||||||||||
Trading securities | ||||||||||||
Adjustable-rate debt securities | 1,553 | — | — | — | 1,553 | |||||||
Held-to-maturity securities | ||||||||||||
Fixed-rate debt securities | 23,958 | 132 | (5 | ) | — | 24,085 | ||||||
Adjustable-rate debt securities | 33,479 | 11 | — | — | 33,490 | |||||||
Term deposits | 70,629 | — | — | — | 70,629 | |||||||
128,066 | 143 | (5 | ) | — | 128,204 | |||||||
129,619 | 143 | (5 | ) | — | 129,757 | |||||||
Long-term investments: | ||||||||||||
Held-to-maturity securities | ||||||||||||
Adjustable-rate debt securities | 8,347 | — | (85 | ) | — | 8,262 | ||||||
Available-for-sale securities | ||||||||||||
Convertible redeemable preferred shares | 6,418 | — | — | 432 | 6,850 | |||||||
14,765 | — | (85 | ) | 432 | 15,112 | |||||||
As of December 31, 2014 | ||||||||||||
Unrealized gain | ||||||||||||
Gross | Gross | in accumulated | ||||||||||
Amortized | unrecognized | unrecognized | other comprehensive | |||||||||
cost | holding gains | holding losses | income | Fair value | ||||||||
Cash and cash equivalents: | ||||||||||||
Cash equivalents | ||||||||||||
Term deposits | 33,040 | — | — | — | 33,040 | |||||||
33,040 | — | — | — | 33,040 | ||||||||
Short-term investments: | ||||||||||||
Held-to-maturity securities | ||||||||||||
Adjustable-rate debt securities | 56,410 | 437 | — | — | 56,847 | |||||||
Term deposits | 38,311 | — | — | — | 38,311 | |||||||
94,721 | 437 | — | — | 95,158 | ||||||||
Long-term investments: | ||||||||||||
Available-for-sale securities | ||||||||||||
Convertible redeemable preferred shares | 6,418 | — | — | 1,086 | 7,504 | |||||||
6,418 | 1,086 | 7,504 | ||||||||||
FAIR_VALUE_MEASUREMENT_Table
FAIR VALUE MEASUREMENT (Table) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
FAIR VALUE MEASUREMENT | ||||||||||
Summary of financial assets measured at fair value on a recurring basis | ||||||||||
Fair value disclosure or measurement at | ||||||||||
December 31, 2013 using | ||||||||||
Quoted prices in | Significant | Significant | ||||||||
active markets for | other observable | unobservable | ||||||||
Fair value at | identical assets | inputs | inputs | |||||||
December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||
Fair value disclosure | ||||||||||
Cash and cash equivalents: | ||||||||||
Cash equivalents | ||||||||||
Term deposits | 11,827 | — | 11,827 | — | ||||||
Adjustable-rate debt securities | 4,326 | — | 4,326 | — | ||||||
Short-term investments: | ||||||||||
Held-to-maturity securities | ||||||||||
Fixed-rate debt securities | 24,085 | — | 24,085 | — | ||||||
Adjustable-rate debt securities | 33,490 | — | 33,490 | — | ||||||
Term deposits | 70,629 | — | 70,629 | — | ||||||
Long-term investments: | ||||||||||
Held-to-maturity securities | ||||||||||
Adjustable-rate debt securities | 8,262 | — | 8,262 | — | ||||||
Fair value measurement | ||||||||||
Short-term investments: | ||||||||||
Trading securities | ||||||||||
Adjustable-rate debt securities | 1,553 | 1,553 | — | — | ||||||
Long-term investments: | ||||||||||
Available-for-sale securities | ||||||||||
Convertible redeemable preferred shares | 6,850 | — | — | 6,850 | ||||||
Total assets measured at fair value | 8,403 | 1,553 | — | 6,850 | ||||||
Fair value disclosure or measurement at | ||||||||||
December 31, 2014 using | ||||||||||
Quoted prices in | Significant | Significant | ||||||||
active markets for | other observable | unobservable | ||||||||
Fair value at | identical assets | inputs | inputs | |||||||
December 31, 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||
Fair value disclosure | ||||||||||
Cash and cash equivalents: | ||||||||||
Cash equivalents | ||||||||||
Term deposits | 33,040 | — | 33,040 | — | ||||||
Short-term investments: | ||||||||||
Held-to-maturity securities | ||||||||||
Adjustable-rate debt securities | 56,847 | — | 56,847 | — | ||||||
Term deposits | 38,311 | — | 38,311 | — | ||||||
Fair value measurement | ||||||||||
Long-term investments: | ||||||||||
Available-for-sale securities | ||||||||||
Convertible redeemable preferred shares | 7,504 | — | — | 7,504 | ||||||
Total assets measured at fair value | 7,504 | — | — | 7,504 | ||||||
Schedule of reconciliation of the beginning and ending balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | ||||||||||
Fair value measurement | ||||||||||
using significant | ||||||||||
unobservable inputs | ||||||||||
(Level 3) | ||||||||||
2014 | 2013 | |||||||||
Beginning balance | 5,125 | 6,850 | ||||||||
Total unrealized gains included in other comprehensive income | 93 | 654 | ||||||||
Purchase | 1,632 | — | ||||||||
Ending balance | 6,850 | 7,504 | ||||||||
ACCRUED_EXPENSES_AND_OTHER_CUR1
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||||||
Schedule of accrued expenses and other current liabilities | ||||||
December 31, | ||||||
2014 | 2013 | |||||
Accrued employee payroll and welfare benefits | 22,027 | 20,561 | ||||
Payable for purchase of property and equipment | 1,888 | 2,097 | ||||
Accrued rental expenses | 3,442 | 4,037 | ||||
Business taxes and other tax payable | 2,414 | 1,931 | ||||
Individual income taxes withheld | 579 | 634 | ||||
Payable to other service providers and suppliers | 3,531 | 491 | ||||
Others | 1,394 | 2,722 | ||||
35,275 | 32,473 | |||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
INCOME TAXES | ||||||||
Schedule of current and deferred components of income tax expenses (benefits) | ||||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Current | 3,179 | 8,302 | 3,740 | |||||
Deferred | (2,303 | ) | (820 | ) | 392 | |||
Total income tax expenses | 876 | 7,482 | 4,132 | |||||
Schedule of principal components of deferred income taxes | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
Current deferred tax assets | ||||||||
Deferred income-current | 104 | 78 | ||||||
Accrued expenses (i) | 6,671 | 6,656 | ||||||
Less: Valuation allowance | (636 | ) | (609 | ) | ||||
Net current deferred tax assets | 6,139 | 6,125 | ||||||
Noncurrent deferred tax assets | ||||||||
Deferred income-noncurrent | 78 | — | ||||||
Net operating loss carry forwards | 4,025 | 5,939 | ||||||
Less: Valuation allowance | (2,643 | ) | (4,856 | ) | ||||
Net noncurrent deferred tax assets | 1,460 | 1,083 | ||||||
(i) | Accrued expenses deferred tax assets relate to accrued advertising, payroll and welfare expenses. According to the EIT law, accrued payments related to certain employee expenses, including employee payroll and certain welfare expenses, are not deductible for tax until the actual payments occur. The EIT law also limits the amount of advertising expenses deductible for any period to no more than 15% of gross revenue of such period and permits the amount of the advertising expense in excess of such 15% limit to be carried forward to future periods. | |||||||
Schedule of reconciliation between total income tax expenses and the amount computed by applying the PRC EIT statutory rate to income before income taxes | ||||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Expected income tax expenses at PRC EIT statutory rate of 25% | 656 | 5,594 | (1,498 | ) | ||||
Effect of preferential tax rate and tax holiday | 745 | (601 | ) | 1,285 | ||||
Effect on tax rates in different tax jurisdictions (i) | (228 | ) | 6 | 1,595 | ||||
Tax effect of expenses that are not deductible in determining taxable profit (ii) | 226 | 806 | 564 | |||||
Changes in valuation allowance | (523 | ) | 1,677 | 2,186 | ||||
Total income tax expenses | 876 | 7,482 | 4,132 | |||||
(i) | Effect on tax rates in different tax jurisdictions relates to the interest income and exchange gains generated by the Company and Xueda HK from its RMB-denominated deposits, which are exempted in Cayman Islands, and not subject to Hong Kong income taxes in accordance with the Hong Kong Inland Revenue Ordinance as Xueda HK is an investment holding company with no substantive business operations in Hong Kong. | |||||||
(ii) | Expenses not deductible for tax purposes include impairment losses, entertainment expenses, employees’ training expenses that are not deductible in the computation of net income before income taxes. | |||||||
Schedule of impact on tax provision and earnings per share from tax holidays granted | ||||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Decrease (increase) in income tax expense | (745 | ) | 601 | (1,285 | ) | |||
Increase (reduction) in net income per share-basic | 0.01 | (0.00 | ) | 0.01 | ||||
Increase (reduction) in net income per share-diluted | 0.01 | (0.00 | ) | 0.01 | ||||
NET_INCOME_PER_SHARE_Tables
NET INCOME PER SHARE (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
NET INCOME PER SHARE | ||||||||
Schedule of computation of basic and diluted net income per share | ||||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Net income (loss)-basic (numerator) | ||||||||
Net income (loss) attributable to Xueda Education Group ordinary shareholders | 1,965 | 16,151 | (10,022 | ) | ||||
Shares (denominator) | ||||||||
Weighted average ordinary shares used in calculating net income (loss) per share-basic | 131,316,004 | 131,681,540 | 126,567,703 | |||||
Effect of dilutive securities | ||||||||
Plus incremental weighted average ordinary shares from assumed conversions of stock options and nonvested shares using the treasury stock method | 460,203 | 2,785,328 | — | |||||
Weighted average ordinary shares used in calculating net income (loss) per share-diluted | 131,776,207 | 134,466,868 | 126,567,703 | |||||
Net income (loss) per ordinary share-basic | 0.01 | 0.12 | (0.08 | ) | ||||
Net income (loss) per ordinary share-diluted | 0.01 | 0.12 | (0.08 | ) | ||||
SHAREBASED_COMPENSATION_Tables
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
SHARE-BASED COMPENSATION. | |||||||||||||||
Summary of the share option activities | |||||||||||||||
Outstanding options | |||||||||||||||
Weighted | Weighted average | Weighted average | Aggregate | ||||||||||||
Number of | average | grant-date | remaining contractual | intrinsic | |||||||||||
options | exercise price | fair value | Term (Years) | value | |||||||||||
Options outstanding at January 1, 2012 | 9,550,652 | $ | 1.31 | $ | 1.24 | ||||||||||
Granted | 2,745,806 | $ | 1.55 | $ | 0.66 | ||||||||||
Exercised | (679,402 | ) | $ | 0.99 | $ | 1.24 | |||||||||
Forfeited | (4,341,736 | ) | $ | 1.68 | $ | 1.24 | |||||||||
Options outstanding at December 31, 2012 | 7,275,320 | $ | 1.2 | $ | 1.02 | ||||||||||
Exercised | (2,445,482 | ) | $ | 1.01 | $ | 1.21 | |||||||||
Forfeited | (259,458 | ) | $ | 0.99 | $ | 1.24 | |||||||||
Options outstanding at December 31, 2013 | 4,570,380 | $ | 1.32 | $ | 0.91 | ||||||||||
Granted | 1,145,000 | $ | 2.12 | $ | 0.93 | ||||||||||
Exercised | (1,122,546 | ) | $ | 1.2 | $ | 1.04 | |||||||||
Forfeited | (13,440 | ) | $ | 0.99 | $ | 1.24 | |||||||||
Options outstanding at December 31, 2014 | 4,579,394 | $ | 1.55 | $ | 0.88 | 7.38 | $ | 255 | |||||||
Options vested and expected to vest as of December 31, 2014 | 4,443,294 | $ | 1.53 | $ | 0.88 | 7.32 | $ | 255 | |||||||
Option exercisable as of December 31, 2014 | 3,106,443 | $ | 1.37 | $ | 0.88 | 6.54 | $ | 254 | |||||||
Schedule of estimated fair value of each option granted on the date of grant using the binomial option pricing model with certain assumptions | |||||||||||||||
Year ended | |||||||||||||||
December 31, 2012 | |||||||||||||||
Weighted average expected volatility | 57.90% | ||||||||||||||
Weighted average risk-free interest rate | 1.80% | ||||||||||||||
Weighted average expected dividend yield | 0% | ||||||||||||||
Weighted average fair value of the underlying ordinary shares | $1.21 per share | ||||||||||||||
Weighted average exercise multiple | 2.8 times | ||||||||||||||
Year ended | |||||||||||||||
December 31, 2014 | |||||||||||||||
Weighted average expected volatility | 58.20% | ||||||||||||||
Weighted average risk-free interest rate | 2.70% | ||||||||||||||
Weighted average expected dividend yield | 3.90% | ||||||||||||||
Weighted average fair value of the underlying ordinary shares | $2.12 per share | ||||||||||||||
Weighted average exercise multiple | 2.5 times | ||||||||||||||
Summary of the nonvested shares activity | |||||||||||||||
Number of | Weighted average | Aggregate | |||||||||||||
Nonvested | grant-date | intrinsic | |||||||||||||
shares outstanding | fair value | value | |||||||||||||
Nonvested shares outstanding at January 1, 2012 | 1,487,418 | $ | 4.15 | ||||||||||||
Granted | 1,888,313 | $ | 1.32 | ||||||||||||
Forfeited | (275,303 | ) | $ | 4.3 | |||||||||||
Vested | (348,062 | ) | $ | 4.16 | |||||||||||
Nonvested shares outstanding at December 31, 2012 | 2,752,366 | $ | 2.19 | ||||||||||||
Granted | 6,001,339 | $ | 1.69 | ||||||||||||
Forfeited | (397,857 | ) | $ | 3.07 | |||||||||||
Vested | (788,064 | ) | $ | 2.15 | |||||||||||
Nonvested shares outstanding at December 31, 2013 | 7,567,784 | $ | 1.69 | ||||||||||||
Granted | 1,139,988 | $ | 2.71 | ||||||||||||
Forfeited | (292,496 | ) | $ | 2.08 | |||||||||||
Vested | (1,362,214 | ) | $ | 2.48 | |||||||||||
Nonvested shares outstanding at December 31, 2014 | 7,053,062 | $ | 1.68 | $ | 8,428 | ||||||||||
Nonvested shares vested and expected to vest at December 31, 2014 | 6,965,933 | $ | 1.67 | $ | 8,324 | ||||||||||
COMMITMENTS_Tables
COMMITMENTS (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
COMMITMENTS | ||||
Schedule of future minimum lease payments under non-cancelable operating leases agreements | ||||
Years ending December 31, | ||||
2015 | 36,239 | |||
2016 | 26,433 | |||
2017 | 16,086 | |||
2018 | 10,426 | |||
2019 and thereafter | 7,749 | |||
96,933 | ||||
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
RELATED PARTY TRANSACTIONS | ||||||||
Schedule of amounts due from related party | ||||||||
Amount due from | ||||||||
related party | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
Amounts due from Beijing Lebai Education Consulting Co., Ltd. (“Lebai”) (i) | 2,631 | 170 | ||||||
(i) | As of December 31, 2014, the Company had an aggregate 14.33% equity interest in Firstleap Education and Jin Xin, the Chief Executive of the Company and Chirstine Lu-Wong, the Chief Financial Officer of the Company are appointed the board members of Firstleap. | |||||||
Schedule of transactions with related party | ||||||||
Years ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
Advertising services provided by Beijing 58 Information and Technology Co., Ltd. (“Beijing 58”) (ii) | 141 | 101 | — | |||||
Advertising services provided by Beijing Chengshi Wanglin Information and Technology Co., Ltd. (“ChengshiWanglin”) (ii) | 153 | 11 | 67 | |||||
Total | 294 | 112 | 67 | |||||
Rental income generated from Lebai | 99 | 159 | 177 | |||||
Tutoring related services income generated from Lebai | — | 117 | — | |||||
Total | 99 | 276 | 177 | |||||
(ii) | Yao Jinbo is director and a beneficial owner of the Company and also the chairman and shareholder of Beijing 58 and ChengshiWanglin. Beijing 58 and Chengshi Wanglin provided advertisement services to the Group. There was no unsettled balance as of December 31, 2013 and 2014. | |||||||
ORGANIZATION_AND_PRINCIPAL_ACT2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Beijing Xueda Information Technology Co., Ltd. ("Xueda Information") | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Taiyuan Xueda Education & Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Nanchang Xueda Education & Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Qingdao Xueda Pre-exam Tutoring School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Suzhou Xuecheng Information Technology Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Wuhan Xueda Information Technology Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Wuxi Xueda Information Technology Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Hohhot Xueda Information Technology Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Tianjin Xueda Educational Information Consulting Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Beijing Xuecheng Shidai Information Technology Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Changsha Xuezhi Information Technology Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Kunming Xueda Information Technology Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Guangzhou Xueda Educational Technology Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Shenzhen Xueda Information Technology Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Chengdu Xueda Information Technology Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Jinan Xueda Education & Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Beijing Xicheng Xueda Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Dalian Shahekou Xueda Education & Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Hangzhou Xueda Education Consulting Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Beijing Weland International Education and Technology Corp., | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Guiyang Xueda Information Technology Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Fuzhou Gulou Xueda Education & Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Shijiazhuang Yuhua District Xueda Education & Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Beijing Dongcheng Xueda Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Changchun Xueda Education & Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Xi'an Xueda Education & Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Shenyang Xueda Education & Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Nanjing Xueda Education & Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Nantong Chongchuan District Xueda Education Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Xi'an Lianhu Xueda Education Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Xi'an Beilin District Xueda Education Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Shanghai Jinshan District Xueda Education School of Continuing Studies | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Hefei Xueda Education Training Department | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Beijing Chaoyang Xueda Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Xi'an Yanta Xueda Education & Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Beijing Haidian Xueda Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Qindu Xueda Education & Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Tangshan Lubei Xueda Education & Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Shenzhen Xueda Education & Training School | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Tianjin Xuecheng Century Information Technology Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership of VIE and its subsidiaries (as a percent) | 0.00% |
Xuecheng Century (Beijing) Information Technology Co., Ltd. ("Xuecheng Century") | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership (as a percent) | 100.00% |
China Xueda Corporation Limited ("Xueda HK") | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership (as a percent) | 100.00% |
Beijing Xueda Education & Training Consulting Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership (as a percent) | 100.00% |
Tianjin Xueda Education Technology Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Legal ownership (as a percent) | 100.00% |
ORGANIZATION_AND_PRINCIPAL_ACT3
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details 2) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Financial information of the entity's VIE and VIE's subsidiaries | ||||
VIE service revenue percentage | 100.00% | 100.00% | 100.00% | |
VIE service assets percentage | 61.00% | 53.00% | ||
VIE service liabilities percentage | 98.00% | 96.00% | ||
Balance sheet | ||||
Cash and cash equivalents | $113,825 | $117,063 | $211,944 | $217,746 |
Prepaid expense and other current assets | 14,813 | 16,642 | ||
Total current assets | 229,654 | 272,094 | ||
Total assets | 278,949 | 331,618 | ||
Total current liabilities | 144,548 | 148,876 | ||
Total liabilities | 168,235 | 179,119 | ||
Total equity | 110,714 | 152,499 | 129,227 | 161,351 |
Income statement and cash flow statement | ||||
Net revenues | 338,314 | 347,047 | 293,157 | |
Net (loss) income | -10,022 | 16,151 | 1,965 | |
Net cash provided by operating activities | 4,796 | 46,756 | 54,644 | |
Net cash used in investing activities | 30,236 | -120,814 | -43,743 | |
VIE and its subsidiaries | ||||
Balance sheet | ||||
Cash and cash equivalents | 54,730 | 56,947 | ||
Prepaid expense and other current assets | 12,738 | 12,902 | ||
Total current assets | 137,492 | 129,836 | ||
Total assets | 170,852 | 175,603 | ||
Deferred revenue | 126,148 | 133,854 | ||
Total current liabilities | 141,698 | 142,539 | ||
Total liabilities | 165,385 | 172,522 | ||
Total equity | 5,467 | 3,081 | ||
Income statement and cash flow statement | ||||
Net revenues | 338,314 | 347,047 | 293,157 | |
Net (loss) income | 4,069 | 10,089 | 6,282 | |
Net cash provided by operating activities | -11,256 | 43,003 | 48,370 | |
Net cash used in investing activities | 11,875 | -48,532 | -37,363 | |
Consolidated assets that are collateral for the VIE's obligations | $0 | |||
Beijing Xueda Information Technology Co., Ltd. ("Xueda Information") | Xuecheng Century (Beijing) Information Technology Co., Ltd. ("Xuecheng Century") | ||||
Financial information of the entity's VIE and VIE's subsidiaries | ||||
Term of the exclusive technology consulting and service agreement between Xueda Information and Xuecheng Century | 10 years | |||
Automatic extendable term of the exclusive technology consulting and service agreement between Xueda Information and Xuecheng Century | 10 years | |||
Period of written notice by Xuecheng Century required to terminate agreement | 30 days | |||
Term of the pledge agreement between Xuecheng Century and the shareholders of Xueda Information | 10 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (Maximum) | 12 Months Ended |
Dec. 31, 2014 | |
Maximum | |
Investments | |
Remaining maturities terms | 1 year |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) | 12 Months Ended |
Dec. 31, 2014 | |
Buildings | Minimum | |
Property and equipment | |
Estimated useful lives | 20 years |
Buildings | Maximum | |
Property and equipment | |
Estimated useful lives | 40 years |
Furniture, fixtures and equipment | Minimum | |
Property and equipment | |
Estimated useful lives | 3 years |
Motor vehicles | Minimum | |
Property and equipment | |
Estimated useful lives | 5 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) | 12 Months Ended |
Dec. 31, 2014 | |
Trademark | |
Acquired intangible assets | |
Estimated average useful lives | 10 years |
Non-Compete Agreement | |
Acquired intangible assets | |
Estimated average useful lives | 5 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) | 12 Months Ended | ||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | |
USD ($) | USD ($) | USD ($) | Minimum | Minimum | Maximum | Maximum | |
USD ($) | CNY | USD ($) | CNY | ||||
Revenue recognition | |||||||
Non-refundable registration fees charged to each new student | $48.35 | 300 | $161.17 | 1,000 | |||
Period for recognition of revenues relating to unused prepaid tutoring hours of expired contracts | 26 months | ||||||
Business taxes and surcharges rate one (as a percent) | 3.30% | ||||||
Business taxes and surcharges rate two (as a percent) | 5.50% | ||||||
Business taxes | 11,688,000 | 12,802,000 | 13,834,000 | ||||
VAT rate one (as a percent) | 3.00% | ||||||
VAT rate two (as a percent) | 6.00% | ||||||
VAT rate three (as a percent) | 17.00% | ||||||
VAT deductible to revenue | 1,207,000 | 999,000 | 67,000 | ||||
Advertising costs | |||||||
Advertising expense | $28,785,000 | $29,015,000 | $26,448,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Government subsidies | |||
Government subsidies | $362 | $439 | $164 |
Minimum | |||
Lease accounting | |||
Term of the Group's leases | 1 year | ||
Maximum | |||
Lease accounting | |||
Term of the Group's leases | 5 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 6) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Foreign currency risk | ||||
Cash and cash equivalents denominated in RMB | $113,825 | $117,063 | $211,944 | $217,746 |
Short-term investments denominated in RMB | 94,721 | 129,619 | ||
Direct loans provided to a related party | 0 | 2,631 | ||
Cash and cash equivalents | Foreign currency risk | Denominated in RMB | ||||
Foreign currency risk | ||||
Cash and cash equivalents denominated in RMB | 103,235 | 109,895 | ||
Percentage of cash and cash equivalents which are denominated in RMB | 90.70% | 93.90% | ||
Short term investments | Foreign currency risk | Denominated in RMB | ||||
Foreign currency risk | ||||
Short-term investments denominated in RMB | $94,721 | $129,619 |
ACQUISITION_Details
ACQUISITION (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2013 |
Acquisition consideration allocated as of the acquisition date | ||||
Goodwill | 875 | $897 | ||
Trademark | ||||
Acquisition consideration allocated as of the acquisition date | ||||
Useful life | 10 years | |||
Non-Compete Agreement | ||||
Acquisition consideration allocated as of the acquisition date | ||||
Useful life | 5 years | |||
Beijing Weland International Education and Technology Corp., | Beijing Xueda Information Technology Co., Ltd. ("Xueda Information") | ||||
ACQUISITION | ||||
Equity interest acquired (as a percent) | 60.00% | |||
Cash consideration | 2,961 | |||
Net revenues | 831 | |||
Net loss | 540 | |||
Acquisition consideration allocated as of the acquisition date | ||||
Cash and cash equivalents | 1,765 | |||
Advance to suppliers | 62 | |||
Fixed assets | 4 | |||
Total assets acquired | 2,427 | |||
Deferred tax liabilities | -150 | |||
Liabilities assumed | -540 | |||
Noncontrolling interest | -1,571 | |||
Total net assets | 166 | |||
Goodwill | 2,795 | |||
Total | 2,961 | |||
Pro forma results | ||||
Pro forma net revenue | 296,548 | |||
Pro forma net income attributable to Xueda Education Group | 2,414 | |||
Pro forma net income per ordinary share-basic | $0.02 | |||
Pro forma net income per ordinary share-diluted | $0.02 | |||
Beijing Weland International Education and Technology Corp., | Beijing Xueda Information Technology Co., Ltd. ("Xueda Information") | Trademark | ||||
Acquisition consideration allocated as of the acquisition date | ||||
Acquired intangible assets | 408 | |||
Useful life | 10 years | |||
Beijing Weland International Education and Technology Corp., | Beijing Xueda Information Technology Co., Ltd. ("Xueda Information") | Non-Compete Agreement | ||||
Acquisition consideration allocated as of the acquisition date | ||||
Acquired intangible assets | $188 | |||
Useful life | 5 years |
PREPAID_EXPENSES_AND_OTHER_CUR2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||
Other receivable | $1,082 | $1,241 |
Prepaid rental expenses | 8,846 | 7,288 |
Advance to suppliers | 607 | 1,095 |
Prepaid advertisement expenses | 454 | 565 |
Short-term deposits | 157 | 451 |
Interest receivable | 1,143 | 1,051 |
Staff advances and others | 1,780 | 2,166 |
Option exercising cost receivable | 744 | 2,785 |
Prepaid expenses and other current assets | $14,813 | $16,642 |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property and equipment | |||
Less: accumulated depreciation and amortization | ($49,098) | ($39,720) | |
Property and equipment, net | 30,433 | 34,826 | |
Depreciation and amortization expenses | 14,097 | 16,117 | 15,308 |
Buildings | |||
Property and equipment | |||
Property and equipment, gross | 5,824 | 5,969 | |
Furniture, fixtures and equipment | |||
Property and equipment | |||
Property and equipment, gross | 27,193 | 25,296 | |
Motor vehicles | |||
Property and equipment | |||
Property and equipment, gross | 2,499 | 2,334 | |
Leasehold improvements | |||
Property and equipment | |||
Property and equipment, gross | $44,015 | $40,947 |
ACQUIRED_INTANGIBLE_ASSETS_Det
ACQUIRED INTANGIBLE ASSETS (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 |
Acquired intangible assets | ||
Impairment of acquired intangible assets | $494 | |
Beijing Weland International Education and Technology Corp., | ||
Acquired intangible assets | ||
Exchange difference | 14 | 14 |
Acquired intangible assets, gross, after exchange difference | 610 | 610 |
Less: Accumulated amortization | -128 | -128 |
Less: Accumulated impairment | -494 | -494 |
Exchange difference | 12 | 12 |
Impairment of acquired intangible assets | 494 | |
Beijing Weland International Education and Technology Corp., | Trademark | ||
Acquired intangible assets | ||
Acquired intangible assets, gross | 408 | 408 |
Impairment of acquired intangible assets | 359 | |
Beijing Weland International Education and Technology Corp., | Non-Compete Agreement | ||
Acquired intangible assets | ||
Acquired intangible assets, gross | 188 | 188 |
Impairment of acquired intangible assets | $135 |
GOODWILL_Details
GOODWILL (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
item | |||
GOODWILL | |||
Number of reporting units that carry goodwill | 2 | ||
Gross amount: | |||
Beginning balance | $3,837 | $3,729 | |
Exchange difference | -93 | 108 | |
Ending balance | 3,744 | 3,837 | 3,729 |
Accumulated impairment loss | |||
Beginning balance | -2,940 | ||
Charge for the year | 0 | -2,923 | 0 |
Exchange difference | 71 | -17 | |
Ending balance | -2,869 | -2,940 | |
Goodwill, net | 875 | 897 | |
Taiyuan Xueda | |||
Gross amount: | |||
Beginning balance | 897 | 872 | |
Exchange difference | -22 | 25 | |
Ending balance | 875 | 897 | |
Accumulated impairment loss | |||
Goodwill, net | 875 | 897 | |
Weland | |||
Gross amount: | |||
Beginning balance | 2,940 | 2,857 | |
Exchange difference | -71 | 83 | |
Ending balance | 2,869 | 2,940 | |
Accumulated impairment loss | |||
Beginning balance | -2,940 | ||
Charge for the year | -2,923 | ||
Exchange difference | 71 | -17 | |
Ending balance | ($2,869) | ($2,940) |
INVESTMENTS_Details
INVESTMENTS (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 16, 2013 | Oct. 31, 2014 | Dec. 31, 2012 | Jul. 31, 2012 |
Investment | |||||||
Interest income | $6,203 | $7,279 | $6,722 | ||||
Net unrealized gain on available-for-sale securities, net of tax effects of nil | 654 | 93 | 339 | ||||
Firstleap Education | |||||||
Investment | |||||||
Number of board seats held | 2 | 2 | |||||
Number of board seats of investee | 6 | 6 | |||||
Convertible Preferred Stock | |||||||
Investment | |||||||
Net unrealized gain on available-for-sale securities, net of tax effects of nil | 654 | 93 | 339 | ||||
Convertible Preferred Stock | Firstleap Education | |||||||
Investment | |||||||
Cash consideration for purchase of shares | 1,632 | 4,786 | |||||
Number of shares acquired | 4,039,610 | 1,272,000 | |||||
Equity ownership interest (as a percent) | 16.11% | 14.33% | 12.72% | ||||
Stock split ratio | 10 | ||||||
Trading Securities. | |||||||
Investment | |||||||
Gains from the securities | 9 | 12 | 0 | ||||
Held-to-maturity securities | Short Term investments | |||||||
Investment | |||||||
Interest income | 4,104 | 5,728 | 2,074 | ||||
Held-to-maturity securities | Long term investments | |||||||
Investment | |||||||
Interest income | 353 | 86 | 0 | ||||
Cash equivalents | |||||||
Investment | |||||||
Interest income | $1,651 | $895 | $4,177 |
INVESTMENTS_Details_2
INVESTMENTS (Details 2) (USD $) | 12 Months Ended | 1 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Jul. 31, 2014 | Dec. 31, 2013 |
Short-term investment | |||
Amortized cost | $94,721 | $129,619 | |
Long-term investment | |||
Loss from equity method investment | 107 | ||
Imagination | |||
Long-term investment | |||
Cash consideration for equity method investment | 1,613 | ||
Percentage of equity ownership interest purchased | 25.00% | ||
Loss from equity method investment | 107 | ||
Short Term investments | |||
Held-to-maturity securities | |||
Amortized Cost | 94,721 | ||
Gross unrecognized holding gains | 437 | 143 | |
Gross unrecognized holding losses | -5 | ||
Fair value | 95,158 | ||
Short-term investment | |||
Amortized cost | 129,619 | ||
Fair value | 129,757 | ||
Short Term investments | Held-to-maturity securities | |||
Held-to-maturity securities | |||
Amortized Cost | 128,066 | ||
Gross unrecognized holding gains | 143 | ||
Gross unrecognized holding losses | -5 | ||
Fair value | 128,204 | ||
Short Term investments | Term deposits | Held-to-maturity securities | |||
Held-to-maturity securities | |||
Amortized Cost | 38,311 | 70,629 | |
Fair value | 38,311 | 70,629 | |
Short Term investments | Adjustable-rate debt securities | Trading Securities. | |||
Trading securities | |||
Amortized cost | 1,553 | ||
Fair value | 1,553 | ||
Short Term investments | Adjustable-rate debt securities | Held-to-maturity securities | |||
Held-to-maturity securities | |||
Amortized Cost | 56,410 | 33,479 | |
Gross unrecognized holding gains | 437 | 11 | |
Fair value | 56,847 | 33,490 | |
Short Term investments | Fixed-rate debt securities | Held-to-maturity securities | |||
Held-to-maturity securities | |||
Amortized Cost | 23,958 | ||
Gross unrecognized holding gains | 132 | ||
Gross unrecognized holding losses | -5 | ||
Fair value | 24,085 | ||
Long term investments | |||
Available-for-sale securities. | |||
Unrealized gains in accumulated other comprehensive income | 1,086 | ||
Long-term investment | |||
Amortized cost | 6,418 | 14,765 | |
Fair value | 7,504 | 15,112 | |
Long term investments | Available for sale securities | |||
Held-to-maturity securities | |||
Gross unrecognized holding losses | -85 | ||
Available-for-sale securities. | |||
Unrealized gains in accumulated other comprehensive income | 432 | ||
Long term investments | Adjustable-rate debt securities | Held-to-maturity securities | |||
Held-to-maturity securities | |||
Amortized Cost | 8,347 | ||
Gross unrecognized holding losses | -85 | ||
Fair value | 8,262 | ||
Long term investments | Convertible Preferred Stock | Available for sale securities | |||
Available-for-sale securities. | |||
Amortized cost | 6,418 | 6,418 | |
Unrealized gains in accumulated other comprehensive income | 1,086 | 432 | |
Fair value | 7,504 | 6,850 | |
Cash equivalents | |||
Cash and cash equivalents: | |||
Amortized cost | 33,040 | 16,153 | |
Fair value | 33,040 | 16,153 | |
Cash equivalents | Term deposits | |||
Cash and cash equivalents: | |||
Amortized cost | 33,040 | 11,827 | |
Fair value | 33,040 | 11,827 | |
Cash equivalents | Adjustable-rate debt securities | |||
Cash and cash equivalents: | |||
Amortized cost | 4,326 | ||
Fair value | $4,326 |
FAIR_VALUE_MEASUREMENT_Details
FAIR VALUE MEASUREMENT (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Short Term investments | ||
Fair value measurement | ||
Held-to-maturity securities | 95,158 | |
Recurring | Quoted price in active markets for identical investments Level 1 | ||
Fair value measurement | ||
Total assets measured at fair value | 1,553 | |
Recurring | Quoted price in active markets for identical investments Level 1 | Short Term investments | ||
Fair value measurement | ||
Trading securities | 1,553 | |
Recurring | Significant other observable inputs Level 2 | ||
Fair value measurement | ||
Held-to-maturity securities | 8,262 | |
Recurring | Significant other observable inputs Level 2 | Term deposits | ||
Fair value measurement | ||
Cash and cash equivalents | 33,040 | 11,827 |
Recurring | Significant other observable inputs Level 2 | Term deposits | Short Term investments | ||
Fair value measurement | ||
Held-to-maturity securities | 38,311 | 70,629 |
Recurring | Significant other observable inputs Level 2 | Fixed-rate debt securities | Short Term investments | ||
Fair value measurement | ||
Held-to-maturity securities | 24,085 | |
Recurring | Significant other observable inputs Level 2 | Adjustable-rate debt securities | ||
Fair value measurement | ||
Cash and cash equivalents | 4,326 | |
Recurring | Significant other observable inputs Level 2 | Adjustable-rate debt securities | Short Term investments | ||
Fair value measurement | ||
Held-to-maturity securities | 56,847 | 33,490 |
Recurring | Significant unobservable inputs Level 3 | ||
Fair value measurement | ||
Total assets measured at fair value | 7,504 | 6,850 |
Recurring | Significant unobservable inputs Level 3 | Convertible Preferred Stock | Long term investments | ||
Fair value measurement | ||
Available-for-sale securities | 7,504 | 6,850 |
Recurring | Fair value | ||
Fair value measurement | ||
Total assets measured at fair value | 7,504 | 8,403 |
Recurring | Fair value | Short Term investments | ||
Fair value measurement | ||
Trading securities | 1,553 | |
Recurring | Fair value | Long term investments | ||
Fair value measurement | ||
Held-to-maturity securities | 8,262 | |
Recurring | Fair value | Term deposits | ||
Fair value measurement | ||
Cash and cash equivalents | 33,040 | 11,827 |
Recurring | Fair value | Term deposits | Short Term investments | ||
Fair value measurement | ||
Held-to-maturity securities | 38,311 | 70,629 |
Recurring | Fair value | Fixed-rate debt securities | Short Term investments | ||
Fair value measurement | ||
Held-to-maturity securities | 24,085 | |
Recurring | Fair value | Convertible Preferred Stock | Long term investments | ||
Fair value measurement | ||
Available-for-sale securities | 7,504 | 6,850 |
Recurring | Fair value | Adjustable-rate debt securities | ||
Fair value measurement | ||
Cash and cash equivalents | 4,326 | |
Recurring | Fair value | Adjustable-rate debt securities | Short Term investments | ||
Fair value measurement | ||
Held-to-maturity securities | 56,847 | $33,490 |
Income approach valuations | Recurring | ||
Fair value measurement | ||
Discount rate (as a percent ) | 20.45% | |
Terminal value growth rate (as a percent) | 3.00% |
FAIR_VALUE_MEASUREMENT_Details1
FAIR VALUE MEASUREMENT (Details 2) (Recurring, Available for sale securities, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Recurring | Available for sale securities | ||
Reconciliation of the beginning and ending balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | ||
Beginning balance | $6,850 | $5,125 |
Total unrealized gains included in other comprehensive income | 654 | 93 |
Purchase | 1,632 | |
Ending balance | $7,504 | $6,850 |
FAIR_VALUE_MEASUREMENT_Details2
FAIR VALUE MEASUREMENT (Details 3) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Fair value measurement | |
Impairment loss of Intangible assets | $494 |
Goodwill. | Weland | |
Fair value measurement | |
Period used to forecast earnings | 5 years |
Beijing Weland International Education and Technology Corp., | |
Fair value measurement | |
Impairment loss of Intangible assets | 494 |
Beijing Weland International Education and Technology Corp., | Trademark | |
Fair value measurement | |
Impairment loss of Intangible assets | 359 |
Beijing Weland International Education and Technology Corp., | Non-Compete Agreement | |
Fair value measurement | |
Impairment loss of Intangible assets | $135 |
ACCRUED_EXPENSES_AND_OTHER_CUR2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Accrued employee payroll and welfare benefits | $20,561 | $22,027 |
Payable for purchase of property and equipment | 2,097 | 1,888 |
Accrued rental expenses | 4,037 | 3,442 |
Business taxes and other tax payable | 1,931 | 2,414 |
Individual income taxes withheld | 634 | 579 |
Payable to other service providers and suppliers | 491 | 3,531 |
Others | 2,722 | 1,394 |
Accrued expenses and other current liabilities | $32,473 | $35,275 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | ||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2008 |
Current and deferred components of income tax expense (benefit) | |||||||
Current | 3,740 | 8,302 | 3,179 | ||||
Deferred | 392 | -820 | -2,303 | ||||
INCOME TAXES | |||||||
Total income tax expenses | 4,132 | 7,482 | 876 | ||||
Income tax rate (as a percent) | 25.00% | 25.00% | 25.00% | ||||
Current deferred tax assets | |||||||
Deferred income-current | 78 | 104 | |||||
Accrued expenses | 6,656 | 6,671 | |||||
Less: Valuation allowance | -609 | -636 | |||||
Net current deferred tax assets | 6,125 | 6,139 | |||||
Noncurrent deferred tax assets | |||||||
Deferred income-noncurrent | 78 | ||||||
Net operating loss carry forwards | 5,939 | 4,025 | |||||
Less: Valuation allowance | -4,856 | -2,643 | |||||
Net noncurrent deferred tax assets | 1,083 | 1,460 | |||||
Limit on advertising expenses deductible for period, as a percentage of gross revenues. Amounts in excess of limit may be carried forward | 15.00% | ||||||
Deferred tax asset for investment of Xuecheng Century in Xueda information | 0 | ||||||
PRC | |||||||
INCOME TAXES | |||||||
Income tax rate (as a percent) | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% |
Xueda HK | Hong Kong | |||||||
INCOME TAXES | |||||||
Income tax rate (as a percent) | 16.50% | ||||||
Xuecheng Century (Beijing) Information Technology Co., Ltd. ("Xuecheng Century") | PRC | |||||||
INCOME TAXES | |||||||
Preferential income tax rate for certified software enterprise (as a percent) | 12.50% | 12.50% | 12.50% | ||||
Xueda Information and its subsidiaries | |||||||
INCOME TAXES | |||||||
Net operating loss carry forwards | 23,756 |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation between total income tax expense and the amount computed by applying the PRC EIT statutory rate to income before income taxes | |||
PRC EIT statutory rate (as a percent) | 25.00% | 25.00% | 25.00% |
Expected income tax expenses at PRC EIT statutory rate of 25% | ($1,498) | $5,594 | $656 |
Effect of preferential tax rate and tax holiday | 1,285 | -601 | 745 |
Effect on tax rates in different tax jurisdictions | 1,595 | 6 | -228 |
Tax effect of expenses that are not deductible in determining taxable profit | 564 | 806 | 226 |
Changes in valuation allowance | 2,186 | 1,677 | -523 |
Total income tax expenses | 4,132 | 7,482 | 876 |
Tax holidays | |||
Decrease (increase) in income tax expense | ($1,285) | $601 | ($745) |
Increase (reduction) in net income per share-basic (in dollars per share) | $0.01 | $0 | $0.01 |
Increase( reduction) in net income per share-diluted (in dollars per share) | $0.01 | $0 | $0.01 |
INCOME_TAXES_Details_3
INCOME TAXES (Details 3) | 12 Months Ended |
Dec. 31, 2014 | |
INCOME TAXES | |
Income tax rate applicable to the entity and its subsidiaries registered outside the PRC that are deemed resident enterprises (as a percent) | 25.00% |
Withholding tax rate in case of dividends paid by PRC subsidiaries (as a percent) | 10.00% |
ORDINARY_SHARES_Details
ORDINARY SHARES (Details) (USD $) | 12 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Mar. 31, 2014 |
ORDINARY SHARES | ||||||
Pruchase price for share repurchased | $29,630 | |||||
Ordinary shares | ||||||
ORDINARY SHARES | ||||||
Number of shares transferred to depositary bank for future exercise of share options and vesting of nonvested shares | 3,354,000 | 3,427,854 | 1,300,000 | |||
Number of shares remaining available for future option exercise or nonvested shares vesting | 948,720 | 79,480 | ||||
Equivalent number of shares for each American Depositary Share | 2 | |||||
Number of shares repurchased and held as treasury stock | 0 | 0 | 4,155,864 | 5,210,168 | ||
Average repurchase price (in dollars per share) | $1.75 | $1.70 | ||||
Aggregate cost | 16,124 | |||||
ADSs | ||||||
ORDINARY SHARES | ||||||
Maximum repurchase amount under the repurchase program | 30,000 | |||||
Privately repurchase of unregistered ordinary shares | Ordinary shares | ||||||
ORDINARY SHARES | ||||||
Average repurchase price (in dollars per share) | $2.59 | |||||
Share repurchased (in shares) | 11,440,000 | |||||
Pruchase price for share repurchased | $29,630 | |||||
Privately repurchase of unregistered ordinary shares | ADSs | ||||||
ORDINARY SHARES | ||||||
Number of shares approved to be repurchased | 6,000,000 |
NET_INCOME_PER_SHARE_Details
NET INCOME PER SHARE (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net income (loss)-basic (numerator) | |||
Net income (loss) attributable to Xueda Education Group ordinary shareholders | ($10,022) | $16,151 | $1,965 |
Shares (denominator): | |||
Weighted average ordinary shares used in calculating net income (loss) per share-basic | 126,567,703 | 131,681,540 | 131,316,004 |
Effect of dilutive securities: | |||
Plus incremental weighted average ordinary shares from assumed conversions of stock options and nonvested shares using the treasury stock method | 2,785,328 | 460,203 | |
Weighted average ordinary shares used in calculating net income (loss) per share-diluted | 126,567,703 | 134,466,868 | 131,776,207 |
Net income (loss) per ordinary share-basic (in dollars per share) | ($0.08) | $0.12 | $0.01 |
Net income (loss) per ordinary share-diluted (in dollars per share) | ($0.08) | $0.12 | $0.01 |
NET_INCOME_PER_SHARE_Details_2
NET INCOME PER SHARE (Details 2) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Stock options | ||
Anti-dilutive securities | ||
Number of shares excluded from the computation of diluted net loss per share | 414,233 | 356,219 |
Nonvested shares | ||
Anti-dilutive securities | ||
Number of shares excluded from the computation of diluted net loss per share | 105,533 | 1,248,944 |
SHAREBASED_COMPENSATION_Detail
SHARE-BASED COMPENSATION (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Nov. 13, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 04, 2014 | Jun. 23, 2014 | Dec. 18, 2012 | Aug. 22, 2012 | Feb. 29, 2012 |
SHARE-BASED COMPENSATION | |||||||||
Maximum aggregate number of shares which may be issued pursuant to all awards | 19,504,380 | 11,146,151 | |||||||
Annual increase in share limit authorized as a percentage of the total number of shares issued and outstanding | 1.00% | ||||||||
Number of shares available for future grant | 738,791 | ||||||||
Stock options | |||||||||
SHARE-BASED COMPENSATION | |||||||||
Term of the incentive stock option where grantee holds a minimum percentage of voting power | 5 years | ||||||||
Outstanding options, Number of options | |||||||||
Options outstanding at the beginning of the period (in shares) | 4,570,380 | 7,275,320 | 9,550,652 | ||||||
Granted (in shares) | 1,145,000 | 2,745,806 | |||||||
Exercised (in shares) | -1,122,546 | -2,445,482 | -679,402 | ||||||
Forfeited (in shares) | -13,440 | -259,458 | -4,341,736 | ||||||
Options outstanding at the end of the period (in shares) | 4,579,394 | 4,570,380 | 7,275,320 | ||||||
Options vested and expected to vest at the end of the period (in shares) | 4,443,294 | ||||||||
Options exercisable at the end of the period (in shares) | 3,106,443 | ||||||||
Outstanding options, Weighted average exercise price | |||||||||
Options outstanding at the beginning of the period (in dollars per share) | 1.32 | $1.20 | $1.31 | ||||||
Granted (in dollars per share) | 2.12 | $1.55 | |||||||
Exercised (in dollars per share) | 1.2 | $1.01 | $0.99 | ||||||
Forfeited (in dollars per share) | 0.99 | $0.99 | $1.68 | ||||||
Options outstanding at the end of the period (in dollars per share) | 1.55 | $1.32 | $1.20 | ||||||
Options vested and expected to vest at the end of the period (in dollars per share) | 1.53 | ||||||||
Options exercisable at the end of the period (in dollars per share) | 1.37 | ||||||||
Outstanding options, Weighted average grant-date fair value | |||||||||
Options outstanding at the beginning of the period (in dollars per share) | 0.91 | $1.02 | $1.24 | ||||||
Granted (in dollars per share) | 0.93 | $0.66 | |||||||
Exercised (in dollars per share) | 1.04 | $1.21 | $1.24 | ||||||
Forfeited (in dollars per share) | 1.24 | $1.24 | $1.24 | ||||||
Options outstanding at the end of the period (in dollars per share) | 0.88 | $0.91 | $1.02 | ||||||
Options vested and expected to vest at the end of the period (in dollars per share) | 0.88 | ||||||||
Options exercisable at the end of the period (in dollars per share) | 0.88 | ||||||||
Outstanding options, Weighted average remaining contractual Term | |||||||||
Options outstanding at the end of the period | 7 years 4 months 17 days | ||||||||
Options vested and expected to vest at the end of the period | 7 years 3 months 26 days | ||||||||
Options exercisable at the end of the period | 6 years 6 months 15 days | ||||||||
Aggregate intrinsic value | |||||||||
Options outstanding at the end of the period | 255 | ||||||||
Options vested and expected to vest at the end of the period | 255 | ||||||||
Options exercisable at the end of the period | 254 | ||||||||
Additional disclosures | |||||||||
Total intrinsic value of options exercised during the period (in dollars) | 2,502 | 2,763 | 345 | ||||||
Share-based compensation expenses, additional disclosure | |||||||||
Share-based compensation expenses | 892 | 1,900 | 1,752 | ||||||
Unrecognized share-based compensation related to stock options | 1,047 | ||||||||
Weighted average period to recognize share-based compensation expenses related to nonvested options | 3 years 1 month 6 days | ||||||||
Assumptions used to estimate the fair value of options | |||||||||
Weighted average expected volatility (as a percent) | 58.20% | 57.90% | |||||||
Weighted average risk-free interest rate (as a percent) | 2.70% | 1.80% | |||||||
Weighted average expected dividend yield (as a percent) | 3.90% | 0.00% | |||||||
Weighted average fair value of the underlying ordinary shares (in dollars per share) | 2.12 | $1.21 | |||||||
Weighted average exercise multiple | 2.5 | 2.8 | |||||||
Stock options | Minimum | |||||||||
SHARE-BASED COMPENSATION | |||||||||
Stock option term limited to 5 years for grantees who own stock representing more than specified percentage | 10.00% | ||||||||
Option exercise price as a percentage of fair market value, with respect to options granted to individuals subject to taxation in the United States | 100.00% | ||||||||
Option exercise price as a percentage of fair market value, with respect to other options granted to individuals not subject to taxation in the United States | 85.00% | ||||||||
Stock options | Maximum | |||||||||
SHARE-BASED COMPENSATION | |||||||||
Term of an incentive stock option | 10 years | ||||||||
Stock options | Employees | |||||||||
SHARE-BASED COMPENSATION | |||||||||
Percentage of shares that will vest on first vesting date | 12.50% | 50.00% | |||||||
Percentage of shares that will vest on subsequent vesting date | 25.00% | 25.00% | 12.50% | 50.00% | |||||
Subsequent period of vesting | 6 months | ||||||||
Remaining vesting period | 4 years | 4 years | 3 years 6 months | ||||||
Outstanding options, Number of options | |||||||||
Granted (in shares) | 65,000 | 1,080,000 | 655,902 | 2,089,904 | |||||
Outstanding options, Weighted average exercise price | |||||||||
Granted (in dollars per share) | $1.18 | $2.17 | $1.26 | $1.65 | |||||
Stock options | Officer | |||||||||
SHARE-BASED COMPENSATION | |||||||||
Options which would have been forfeited upon resignation (in shares) | 417,979 | ||||||||
Exercisable period of vested options | 6 months | ||||||||
Incremental share-based compensation expense | $339 |
SHAREBASED_COMPENSATION_Detail1
SHARE-BASED COMPENSATION (Details 2) (Nonvested shares, USD $) | 12 Months Ended | 1 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 30, 2014 | Jul. 31, 2013 |
Number of Nonvested shares outstanding | |||||
Nonvested shares outstanding at the beginning of the period | 7,567,784 | 2,752,366 | 1,487,418 | ||
Granted (in shares) | 1,139,988 | 6,001,339 | 1,888,313 | ||
Forfeited (in shares) | -292,496 | -397,857 | -275,303 | ||
Vested (in shares) | -1,362,214 | -788,064 | -348,062 | ||
Nonvested shares outstanding at the end of the period | 7,053,062 | 7,567,784 | 2,752,366 | ||
Nonvested shares vested and expected to vest at the end of the period (in shares) | 6,965,933 | ||||
Weighted average grant-date fair value | |||||
Nonvested shares outstanding at the beginning of the period (in dollars per share) | $1.69 | $2.19 | $4.15 | ||
Granted (in dollars per share) | $2.71 | $1.69 | $1.32 | ||
Forfeited (in dollars per share) | $2.08 | $3.07 | $4.30 | ||
Vested (in dollars per share) | $2.48 | $2.15 | $4.16 | ||
Nonvested shares outstanding at the end of the period (in dollars per share) | $1.68 | $1.69 | $2.19 | ||
Nonvested shares vested and expected to vest at the end of the period (in dollars per share) | $1.67 | ||||
Aggregate intrinsic value | |||||
Nonvested shares outstanding at the end of the period | $8,428 | ||||
Nonvested shares vested and expected to vest at the end of the period | 8,324 | ||||
Additional disclosures | |||||
Total fair value of shares vested during the period | 3,353 | 1,315 | 1,448 | ||
Share-based compensation expenses | 5,306 | 3,482 | 1,414 | ||
Unrecognized compensation related to nonvested shares | 7,122 | ||||
Weighted average period to recognize share-based compensation expenses related to nonvested shares | 3 years 3 months 18 days | ||||
Minimum | |||||
SHARE-BASED COMPENSATION | |||||
Vesting period | 1 year | ||||
Maximum | |||||
SHARE-BASED COMPENSATION | |||||
Vesting period | 4 years | ||||
Performance condition | |||||
Number of Nonvested shares outstanding | |||||
Granted (in shares) | 6,000,000 | ||||
Additional disclosures | |||||
Extension to vesting period | 1 year | ||||
Incremental share-based compensation expense | $0 |
MAINLAND_CHINA_CONTRIBUTION_PL1
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | |||
Total provision for employee benefits under defined contribution plan | $27,567 | $26,609 | $24,214 |
COMMITMENTS_Details
COMMITMENTS (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
COMMITMENTS | |||
Rent expenses under operating leases | $43,898 | $42,429 | $40,490 |
Future minimum lease payments under non-cancelable operating leases agreements | |||
2015 | 36,239 | ||
2016 | 26,433 | ||
2017 | 16,086 | ||
2018 | 10,426 | ||
2019 and thereafter | 7,749 | ||
Total | $96,933 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Nov. 30, 2012 | Nov. 30, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | USD ($) | USD ($) | Firstleap Education | Lebai | Lebai | Lebai | Lebai | Lebai | Lebai | Lebai | Lebai | Lebai | Lebai | Lebai | Beijing 58 | Beijing 58 | Beijing 58 | Chengshi Wanglin | Chengshi Wanglin | Chengshi Wanglin | |
USD ($) | CNY | USD ($) | CNY | USD ($) | USD ($) | USD ($) | Rental income | Rental income | Rental income | Tutoring services income | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||||
loan | USD ($) | USD ($) | USD ($) | USD ($) | |||||||||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||||||||||||
Amounts due from related parties | $170 | $2,631 | $2,631 | $170 | $2,631 | ||||||||||||||||
Equity ownership interest (as a percent) | 14.33% | ||||||||||||||||||||
Number of unsecured loans | 2 | 2 | |||||||||||||||||||
Amount loaned to related party | 2,631 | 16,000 | 1,592 | 10,000 | |||||||||||||||||
Interest rate (as a percent) | 4.00% | 4.00% | 10.00% | 10.00% | |||||||||||||||||
Total advertising expense | 67 | 112 | 294 | 101 | 141 | 67 | 11 | 153 | |||||||||||||
Unsettled balance | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
Amount of transactions with related party revenue | $177 | $276 | $99 | $177 | $159 | $99 | $117 |
STATUTORY_RESERVES_Details
STATUTORY RESERVES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
STATUTORY RESERVES | |||
Percentage of after-tax profits required to be transferred to general reserve | 10.00% | ||
Maximum percentage of the entity registered capital required for general reserve fund | 50.00% | ||
Appropriation to general reserve fund | $168 | $1,114 | $370 |
Annual appropriations to development as a percentage of after-tax income, for private school which requires reasonable return | 25.00% | ||
Minimum annual appropriation to development fund as a percentage of the increase in net assets for private schools which do not require a reasonable return | 25.00% | ||
Appropriation to development fund | $754 | $810 | $114 |
RESTRICTED_NET_ASSETS_Details
RESTRICTED NET ASSETS (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
RESTRICTED NET ASSETS | |
Balance restricted net assets | $54,844 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) | 12 Months Ended |
Dec. 31, 2014 | |
segment | |
SEGMENT INFORMATION | |
Number of reportable segments | 1 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2012 | Feb. 28, 2015 | Mar. 04, 2015 |
SUBSEQUENT EVENTS | ||||
Cash dividend declared (in dollars per share) | $0.08 | $0.25 | ||
Subsequent event | Qihoo 360 Technology Co Ltd. | Maximum | ||||
SUBSEQUENT EVENTS | ||||
Registered capital of the newly established company | $5,000,000 | |||
Subsequent event | ADSs | ||||
SUBSEQUENT EVENTS | ||||
Cash dividend declared (in dollars per share) | $0.16 | |||
Cash dividends to be paid | $9,983,000 | |||
Subsequent event | Ordinary shares | ||||
SUBSEQUENT EVENTS | ||||
Cash dividend declared (in dollars per share) | $0.08 |
SCHEDULE_I_CONDENSED_FINANCIAL1
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Current assets: | ||||
Cash and cash equivalents | $113,825 | $117,063 | $211,944 | $217,746 |
Short-term investments | 94,721 | 129,619 | ||
Prepaid expenses and other current assets | 14,813 | 16,642 | ||
Total current assets | 229,654 | 272,094 | ||
Total assets | 278,949 | 331,618 | ||
Current liabilities: | ||||
Accrued expenses and other current liabilities | 32,473 | 35,275 | ||
Deferred income-current | 550 | 347 | ||
Total current liabilities | 144,548 | 148,876 | ||
Deferred income-noncurrent | 260 | |||
Total liabilities | 168,235 | 179,119 | ||
Equity | ||||
Ordinary shares | 13 | 14 | ||
Treasury stock, at cost | -16,124 | -16,124 | ||
Additional paid-in capital | 125,205 | 157,149 | ||
Accumulated other comprehensive income | 588 | 215 | ||
Total Xueda Education Group shareholders' equity | 110,793 | 152,387 | ||
Total liabilities and equity | 278,949 | 331,618 | ||
Parent Company | ||||
Current assets: | ||||
Cash and cash equivalents | 12,395 | 12,626 | 140,965 | 154,055 |
Short-term investments | 35,742 | 68,553 | ||
Prepaid expenses and other current assets | 1,344 | 4,181 | ||
Amounts due from subsidiaries | 36,884 | 41,453 | ||
Total current assets | 86,365 | 126,813 | ||
Investment in subsidiary | 17,526 | 19,387 | ||
Other Long-term Investments | 7,504 | 6,850 | ||
Total assets | 111,395 | 153,050 | ||
Current liabilities: | ||||
Accrued expenses and other current liabilities | 52 | 56 | ||
Deferred income-current | 550 | 347 | ||
Total current liabilities | 602 | 403 | ||
Deferred income-noncurrent | 260 | |||
Total liabilities | 602 | 663 | ||
Equity | ||||
Ordinary shares | 13 | 14 | ||
Treasury stock, at cost | -16,124 | -16,124 | ||
Additional paid-in capital | 125,205 | 157,149 | ||
Retained earnings | 1,111 | 11,133 | ||
Accumulated other comprehensive income | 588 | 215 | ||
Total Xueda Education Group shareholders' equity | 110,793 | 152,387 | ||
Total liabilities and equity | $111,395 | $153,050 |
SCHEDULE_I_CONDENSED_FINANCIAL2
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | |||
Total operating expenses | ($96,258) | ($92,441) | ($77,763) |
Loss from operations | -12,194 | 15,097 | -4,097 |
Interest income | 6,203 | 7,279 | 6,722 |
Net income (loss) | -10,230 | 14,894 | 1,749 |
Parent Company | |||
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | |||
Total operating expenses | -9,722 | -4,158 | -3,129 |
Loss from operations | -9,722 | -4,158 | -3,129 |
Equity in earnings of subsidiary | -1,580 | 17,882 | 1,409 |
Interest income | 1,280 | 2,427 | 3,685 |
Net income (loss) | ($10,022) | $16,151 | $1,965 |
SCHEDULE_I_CONDENSED_FINANCIAL3
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | |||
Net income (loss) | ($10,230) | $14,894 | $1,749 |
Other comprehensive income (loss), net of tax: | |||
Change in cumulative foreign currency translation adjustments | -264 | 439 | 250 |
Unrealized gain on available-for-sale securities, net of tax effects of nil, nil and nil for the years ended December 31, 2012, 2013 and 2014, respectively | 654 | 93 | 339 |
Total comprehensive income (loss) | -9,840 | 15,426 | 2,338 |
Unrealized gain on available-for-sale securities, tax effects | 0 | 0 | 0 |
Parent Company | |||
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | |||
Net income (loss) | -10,022 | 16,151 | 1,965 |
Other comprehensive income (loss), net of tax: | |||
Change in cumulative foreign currency translation adjustments | -281 | 433 | 242 |
Unrealized gain on available-for-sale securities, net of tax effects of nil, nil and nil for the years ended December 31, 2012, 2013 and 2014, respectively | 654 | 93 | 339 |
Total comprehensive income (loss) | -9,649 | 16,677 | 2,546 |
Unrealized gain on available-for-sale securities, tax effects | $0 | $0 | $0 |
SCHEDULE_I_CONDENSED_FINANCIAL4
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income | ($10,230) | $14,894 | $1,749 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Share-based compensation expense | 6,198 | 5,382 | 3,166 |
Deferred tax assets | 392 | -820 | -2,303 |
Foreign exchange loss (gain) | 836 | -1,042 | |
Changes in assets and liabilities: | |||
Prepaid expenses and other current assets | -448 | -2,144 | 4,275 |
Amounts due from related parties | -181 | -3 | 56 |
Deferred revenue | -3,923 | -3,869 | 30,486 |
Accrued expenses and other current liabilities | -2,346 | 9,829 | 3,591 |
Deferred income | -58 | -348 | -346 |
Net cash provided by operating activities | 4,796 | 46,756 | 54,644 |
Cash flows from investing activities: | |||
Purchase of short-term investments | -188,715 | -291,384 | -128,307 |
Proceeds from maturity of short-term investments | 221,849 | 191,838 | 111,266 |
Purchases of long-term investments | -1,613 | -9,839 | -4,786 |
Net cash (used in) provided by investing activities | 30,236 | -120,814 | -43,743 |
Cash flows from financing activities: | |||
Repurchase of ordinary shares | -29,630 | -7,278 | |
Proceeds from exercise of options | 3,393 | 246 | 123 |
Payment of dividend distribution | -9,865 | -22,665 | -9,929 |
Net cash used in financing activities | -36,102 | -22,419 | -17,084 |
Cash and cash equivalents, beginning of year | 117,063 | 211,944 | 217,746 |
Cash and cash equivalents, end of year | 113,825 | 117,063 | 211,944 |
Parent Company | |||
Cash flows from operating activities: | |||
Net income | -10,022 | 16,151 | 1,965 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Equity in earnings from subsidiary | 1,580 | -17,882 | -1,409 |
Share-based compensation expense | 6,198 | 5,382 | 3,166 |
Foreign exchange loss (gain) | -1,622 | 1,848 | 919 |
Changes in assets and liabilities: | |||
Prepaid expenses and other current assets | 2,837 | -3,091 | 784 |
Amounts due from related parties | 4,006 | -38,548 | 3,464 |
Accrued expenses and other current liabilities | -3 | -181 | 237 |
Deferred income | -58 | -348 | -346 |
Net cash provided by operating activities | 2,916 | -36,669 | 8,780 |
Cash flows from investing activities: | |||
Purchase of short-term investments | -71,847 | -67,619 | |
Proceeds from maturity of short-term investments | 104,802 | ||
Purchases of long-term investments | -1,632 | -4,786 | |
Net cash (used in) provided by investing activities | 32,955 | -69,251 | -4,786 |
Cash flows from financing activities: | |||
Repurchase of ordinary shares | -29,630 | -7,278 | |
Proceeds from exercise of options | 3,393 | 246 | 123 |
Payment of dividend distribution | -9,865 | -22,665 | -9,929 |
Net cash used in financing activities | -36,102 | -22,419 | -17,084 |
Net decrease in cash and cash equivalents | -231 | -128,339 | -13,090 |
Cash and cash equivalents, beginning of year | 12,626 | 140,965 | 154,055 |
Cash and cash equivalents, end of year | $12,395 | $12,626 | $140,965 |