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J.P. MORGAN ULTIMATE SERVICES CONFERENCE November 14, 2012
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements including, without limitation, statements regarding the Company’s initiatives, their anticipated impact, institutional accreditation, the Company’s financial model highlights, 2012 outlook and related commentary. These statements involve risks and uncertainties, and the Company’s actual performance may differ materially from those expressed in or suggested by such statements. Risks and uncertainties include, without limitation:
• Failure to comply with the extensive regulatory framework applicable to the Company and its institutions, including Title IV of the Higher Education Act and its regulations, state laws and regulatory requirements, and accrediting agency requirements;
• Adverse regulatory or legislative changes affecting the Company's institutions, including, but not limited to decisions by regional accrediting bodies WASC and HLC;
• The imposition of fines or other corrective measures against the Company's institutions; • Competition in the postsecondary education market and its potential impact on the Company's market share
and recruiting costs; and • Reputational and other risks related to potential compliance audits, regulatory actions, negative publicity or
service disruptions.
More information on potential factors that could affect the Company’s performance is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s periodic reports filed with the SEC, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, which have been filed with the SEC. Forward-looking statements are made on the basis of management’s views and assumptions regarding future events and business performance as of the time the statements are made, and the Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates, except as required by law.
• MA, PsyD, PhD • Social & Behavioral Sciences • Colorado Springs Campus • HLC Accredited
99% Online 72% Female 49% Minority 36 Years Old
University of The Rockies Ashford University • AA, BA, MA, MBA • 17 NAIA Sports Teams • Clinton, IA Campus • HLC Accredited; WASC in process
RECOGNIZED BRANDS
Bus 40%
Lib Arts; 17%
Edu 19%
Hcare 21%
Non-D 2%
AU Programs
AA, 13%
BA, 74%
MA, 12%
Doc, <1% AU and UOR Students
2011 2010 2009
Fall-to-Fall Persistence Rates 61% 60% 62%
Bachelors Graduation Rates 51% 50% 49%
Masters Graduation Rates 74% 80% 73%
Bachelors’ Degree salary % increase from salary at enrollment
11.6% 14.0% 16.7%
Graduate Degree salary % increase from salary at enrollment
11.0% 11.5% 23.0%
ASHFORD Students and Alumni: Persistence, Graduation & Salary Increases
* Survey not conducted in 2012
Our Approach to Quality Education
LEADERSHIP
Dr. Greg Geoffroy Chairman-elect, AU Trustees 38 Yrs Academic Leadership President Emeritus, Iowa St. 10 Years as President:
Expanded Diversity Built Infrastructure Bioeconomy Institute
SVP & Provost, U. Maryland Ph.D. Chemistry, Caltech
Dr. Richard Pattenaude Ashford U. President Chairman, NEASC Higher Ed 23 Yrs. Academic Leadership Chancellor, U. Maine System
7 years
President, U. Southern Maine 16 Years
Ph.D. Political Science, U. of Colorado
ASHFORD UNIVERSITY & UNIVERSITY of the ROCKIES
AFFORDABILITY ACCESS SUCCESS QUALITY
Delivering value to students through FOUR PILLARS
AFFORDABILITY AFFORDABILITY ACCESS QUALITY SUCCESS
47% 37%
15%
0%
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
$-
$100
$200
$300
$400
$500
$600
DeVry - DV UoP - APOL
Strayer - STRA
Grand Canyon - LOPE
Ashford - BPI
Ashford Military
AMU - APEI
% D
iffer
ence
$ pe
r Cre
dit
51% Affordable
ACCESS AFFORDABILITY ACCESS QUALITY SUCCESS
• Better Student Benchmarking Data • Rich Data on Outcomes • Used By 40 Institutions • Assessment of Learning Data
Apple™/ Android™ MOBILE ACCESS
• Constellation • Students • Grade Book
• Admin • Classroom • Faculty
} • More Affordable • Proprietary Learning Platform • Rapid uptake • Patent Pending &
ACCESS through TECHNOLOGY
QUALITY AFFORDABILITY ACCESS QUALITY SUCCESS
Quality Initiatives Learning • Additional Full-Time Faculty • Smaller Class Sizes • Continued Technology Investment • InsideTrack
University Advisors
• Extend relationship to 26 wks • Problem-solving Focus
Student Support
• 2 Advisors thru 4th Course • Predictive Modeling • Better Persistence
SUCCESS AFFORDABILITY ACCESS QUALITY SUCCESS
Student Inquiry • First Contact with Students • 200 Staff • Data Analytics • Goal: Student Readiness
Orientation
• 2 Weeks • 100% Free • All AAs & BAs w/ zero credits
The Ashford Promise
• 3-Week Refund Policy • Drop Underperforms • All Tuition, Fees Refunded • No Debt Incurred
Career Support • Career Support Services
– Resume building – Job Search – Interview Prep
• Alumni Networking • Employer Awareness
Student Success Initiatives
Branding
BRANDING STRATEGY
• Data Analytics: Target Best Performing Lead Sources Based on Persistence
• Increased Awareness by National Target Audience
• Messages Reinforce Four Pillars
• Working Adult Demographic • Messaging Reflects Working Families • Reinforces Technology and Increased Access
• Increased Lead Cost Offset by Better Persistence
BRANDING STRATEGY
“Technology Changes Everything”
90% of Potential Students Think the Future of Education is Virtual
BRANDING STRATEGY
“Technology Changes Everything”
90% of Potential Students Think the Future of Education is Virtual
BRANDING STRATEGY
“Technology Changes Everything”
RESULTS:
• 80% increase in Organic traffic on Ashford’s website
• 100% increase in Brand Awareness
• 114% increase in Awareness among fully employed
• Positive Sentiment Up 40% in August
• Ashford seen as Innovative, Forward Thinking
• 19% Increase in Non-Aggregator Enrollments
Financial Review
AFFORDABILITY ACCESS QUALITY SUCCESS
Financial Model Highlights
• Highly Competitive Tuition Pricing One of the lowest in the sector Below Title IV Loan Limits
• Branding: Recalibrate Marketing Mix
• Capital Efficient Business
• Strong Cash Position, No Debt
AFFORDABILITY ACCESS QUALITY SUCCESS
History of Consistent Performance
31,558
53,688
77,892 86,642
91,358
5,000
25,000
45,000
65,000
85,000
105,000
2008 2009 2010 2011 Q3 12 YTD
Enrollments
$218.3
$454.3
$713.2
$933.3
$758.8
$50.0
$250.0
$450.0
$650.0
$850.0
$1,050.0
2008 2009 2010 2011 Q3 12 YTD
Revenue
AFFORDABILITY ACCESS QUALITY SUCCESS
Operating Margin
15.3% 18.0%
30.3% 29.3%
23.4%
0.0%
10.0%
20.0%
30.0%
40.0%
2008 2009 2010 2011 Q3 12 YTD
AFFORDABILITY ACCESS QUALITY SUCCESS
Cash Flow and EPS
$70.7
$131.7
$189.9 $220.8
$93.6
$0
$70
$140
$210
$280
2008 2009 2010 2011 Q3 12 YTD
Net Cash Provided By Operating Activities
$0.16
$0.74
$2.14
$3.02
$2.00
$0.00
$0.80
$1.60
$2.40
$3.20
2008 2009 2010 2011 Q3 12 YTD
Fully-Diluted Earnings Per Common Share
AFFORDABILITY ACCESS QUALITY SUCCESS
Consistent Regulatory Metrics
Well Positioned for Gainful Employment: Repayment Rates Debt to Income Debt to Discretionary Income
2011 2010 2009 2008 2007
Ashford 2-Yr. CDR --- 10.2% 15.3% 13.3% 13.3%
Rockies 2-Yr. CDR --- 4.0% 3.3% 2.5% 0%
Ashford 90 /10 Ratio 86.8% 85.0% 85.5% 86.8%
Rockies 90 /10 Ratio 85.0% 85.9% 84.6% 80.8%
REGULATORY TIMELINE AFFORDABILITY ACCESS QUALITY SUCCESS
2013 2012
Data Submissions Site Visit Substantial
Presence Plan HLC Board
Meeting
Site Visit Re-Application Submittal
WASC Board Meeting
June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul