10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended: March 31, 2017
	OR
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _____ to _____
	Commission file number: 1-13988

DeVry Education Group Inc.

(Exact name of registrant as specified in its charter)

DELAWARE	36-3150143
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
3005 HIGHLAND PARKWAY	60515
DOWNERS GROVE, ILLINOIS	(Zip Code)
(Address of principal executive offices)

Registrant’s telephone number; including area code:

(630) 515-7700

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ     No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	þ	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨     No þ

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

April 27, 2017 — 62,626,000 shares of Common Stock, $0.01 par value

DEVRY EDUCATION GROUP INC.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2017

TABLE OF CONTENTS

		Page #
	PART I – FINANCIAL INFORMATION
Item 1	— Financial Statements (Unaudited)
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income (Loss)	5
	Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	7
Item 2	— Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3	— Quantitative and Qualitative Disclosures About Market Risk	55
Item 4	— Controls and Procedures	56
	PART II – OTHER INFORMATION
Item 1	— Legal Proceedings	57
Item 1A	— Risk Factors	57
Item 2	— Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 6	— Exhibits	60
Signatures		61

2

DEVRY EDUCATION GROUP INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			June 30,			March 31,
	2017			2016			2016
	(in thousands, except share and par value amounts)
ASSETS:
Current Assets:
Cash and Cash Equivalents	$	209,879		$	308,164		$	330,214
Marketable Securities and Investments		3,950			3,609			3,528
Restricted Cash		4,798			7,183			10,995
Accounts Receivable, Net		165,691			162,389			170,035
Prepaid Expenses and Other		44,274			36,760			36,754
Total Current Assets		428,592			518,105			551,526
Land, Building and Equipment:
Land		49,085			55,690			50,001
Building		477,200			488,347			478,253
Equipment		537,257			521,209			512,825
Construction in Progress		17,067			22,560			20,241
		1,080,609			1,087,806			1,061,320
Accumulated Depreciation		(593,627	)		(566,043	)		(548,980	)
Land, Building and Equipment Held for Sale, Net		11,280			-			-
Land, Building and Equipment, Net		498,262			521,763			512,340
Other Assets:
Deferred Income Taxes, Net		35,497			52,608			24,242
Intangible Assets, Net		422,949			342,856			371,046
Goodwill		861,001			588,007			565,012
Perkins Program Fund, Net		13,450			13,450			13,450
Other Assets, Net		58,058			60,207			59,443
Total Other Assets		1,390,955			1,057,128			1,033,193
TOTAL ASSETS	$	2,317,809		$	2,096,996		$	2,097,059
LIABILITIES:
Current Liabilities:
Accounts Payable	$	46,521		$	64,687		$	54,222
Accrued Salaries, Wages and Benefits		80,965			93,328			88,472
Accrued Expenses		96,015			103,379			88,754
Deferred Revenue		178,664			100,442			170,106
Total Current Liabilities		402,165			361,836			401,554
Other Liabilities:
Revolving Loan		120,000			-			-
Deferred Income Taxes, Net		30,228			29,936			27,692
Deferred Rent and Other		104,492			118,025			108,349
Total Other Liabilities		254,720			147,961			136,041
TOTAL LIABILITIES		656,885			509,797			537,595
COMMITMENTS AND CONTINGENCIES (NOTE 14)
NONCONTROLLING INTEREST		6,600			5,112			3,529
SHAREHOLDERS' EQUITY:
Common Stock, $0.01 Par Value, 200,000,000 Shares Authorized; 62,618,000, 62,549,000 and 62,909,000 Shares Outstanding at March 31, 2017, June 30, 2016 and March 31, 2016, respectively		778			765			764
Additional Paid-in Capital		404,800			372,175			364,006
Retained Earnings		1,837,738			1,771,068			1,794,012
Accumulated Other Comprehensive Loss		(37,013	)		(42,467	)		(91,348	)
Treasury Stock, at Cost, 15,208,000, 13,990,000 and 13,521,000 Shares at March 31, 2017, June 30, 2016 and March 31, 2016, respectively		(551,979	)		(519,454	)		(511,499	)
TOTAL SHAREHOLDERS' EQUITY		1,654,324			1,582,087			1,555,935
TOTAL LIABILITIES, NONCONTROLLING INTEREST AND SHAREHOLDERS' EQUITY	$	2,317,809		$	2,096,996		$	2,097,059

The accompanying notes are an integral part of these consolidated financial statements.

3

DEVRY EDUCATION GROUP INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,
	2017			2016			2017			2016
	(in thousands, except per share amounts)
REVENUE:
Tuition	$	399,322		$	425,966		$	1,217,613		$	1,243,624
Other Educational		52,767			48,255			140,718			128,212
Total Revenue		452,089			474,221			1,358,331			1,371,836
OPERATING COST AND EXPENSE:
Cost of Educational Services		239,244			252,867			729,704			738,965
Student Services and Administrative Expense		157,781			161,483			464,497			484,662
Restructuring Expense		7,771			2,873			17,868			39,870
Regulatory Settlements		-			-			56,252			-
Loss on Assets Held for Sale		-			-			4,764			-
Asset Impairment Charge		-			-			-			99,473
Gain on Sale of Assets		-			(3,849	)		-			(3,849	)
Total Operating Cost and Expense		404,796			413,374			1,273,085			1,359,121
Operating Income		47,293			60,847			85,246			12,715
INTEREST:
Interest Income		1,690			27			3,741			394
Interest Expense		(1,995	)		(1,408	)		(6,410	)		(5,581	)
Net Interest Expense		(305	)		(1,381	)		(2,669	)		(5,187	)
Income Before Income Taxes		46,988			59,466			82,577			7,528
Income Tax Provision		(6,966	)		(7,536	)		(2,651	)		(683	)
NET INCOME		40,022			51,930			79,926			6,845
Net Income Attributable to Noncontrolling Interest		(163	)		(5	)		(502	)		(42	)
NET INCOME ATTRIBUTABLE TO DEVRY EDUCATION GROUP	$	39,859		$	51,925		$	79,424		$	6,803
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO DEVRY EDUCATION GROUP SHAREHOLDERS:
Basic	$	0.63		$	0.81		$	1.25		$	0.11
Diluted	$	0.62		$	0.81		$	1.24		$	0.11
Cash Dividends Declared per Common Share	$	-		$	-		$	0.18		$	0.18

The accompanying notes are an integral part of these consolidated financial statements.

4

DEVRY EDUCATION GROUP INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,
	2017			2016			2017			2016
	(in thousands)
NET INCOME	$	40,022		$	51,930		$	79,926		$	6,845
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Currency Translation Gain (Loss)		13,755			41,842			5,293			(14,144	)
Change in Fair Value of Available-For-Sale Securities		60			17			161			(90	)
COMPREHENSIVE INCOME (LOSS)		53,837			93,789			85,380			(7,389	)
COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST		(451	)		(901	)		(617	)		262
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO DEVRY EDUCATION GROUP	$	53,386		$	92,888		$	84,763		$	(7,127	)

The accompanying notes are an integral part of these consolidated financial statements.

5

DEVRY EDUCATION GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended March 31,
	2017			2016
	(in thousands)
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income	$	79,926		$	6,845
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Stock-Based Compensation Expense		13,292			13,989
Depreciation		53,928			59,349
Amortization		9,015			4,490
Impairment of Goodwill and Intangible Assets		-			99,473
Provision for Refunds and Uncollectible Accounts		67,210			61,710
Deferred Income Taxes		(1,388	)		(13,793	)
Loss on Disposals, Accelerated Depreciation and Adjustments to Land, Building and Equipment		3,369			12,810
Unrealized Loss on Assets Held for Sale		4,764			-
Realized Gain on Sale of Assets		-			(3,849	)
Changes in Assets and Liabilities, Net of Effects from Acquisition Components:
Restricted Cash		2,385			(252	)
Accounts Receivable		(69,155	)		(83,744	)
Prepaid Expenses and Other		(18,336	)		(1,590	)
Accounts Payable		(15,955	)		(12,131	)
Accrued Salaries, Wages, Benefits and Expenses		(22,781	)		(2,461	)
Deferred Revenue		63,179			78,843
NET CASH PROVIDED BY OPERATING ACTIVITIES		169,453			219,689
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures		(32,529	)		(51,004	)
Payment for Purchase of Businesses, Net of Cash Acquired		(330,567	)		(170,577	)
Marketable Securities Purchased		(82	)		(94	)
Cash Received on Sale of Assets		-			24,788
Purchase of Noncontrolling Interest of Subsidiary		-			(3,114	)
NET CASH USED IN INVESTING ACTIVITIES		(363,178	)		(200,001	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Exercise of Stock Options		20,390			271
Proceeds from Stock Issued Under Colleague Stock Purchase Plan		635			875
Repurchase of Common Stock for Treasury		(30,552	)		(24,378	)
Cash Dividends Paid		(11,414	)		(11,563	)
Payments of Seller Financed Obligations		(3,943	)		(5,890	)
Borrowings Under Revolving Credit Facility		465,000			-
Repayments Under Revolving Credit Facility		(345,000	)		-
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		95,116			(40,685	)
Effects of Exchange Rate Differences		324			(1,811	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(98,285	)		(22,808	)
Cash and Cash Equivalents at Beginning of Period		308,164			353,022
Cash and Cash Equivalents at End of Period	$	209,879		$	330,214
Non-cash Investing and Financing Activity:
Increase (Decrease) in Redemption Value of Noncontrolling Interest Put Option	$	986		$	(3,019	)

The accompanying notes are an integral part of these consolidated financial statements.

6

DEVRY EDUCATION GROUP INC.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1: INTERIM FINANCIAL STATEMENTS

The interim Consolidated Financial Statements include accounts of DeVry Education Group Inc. (“DeVry Group”) and its wholly-owned and majority-owned subsidiaries. These financial statements are unaudited but, in the opinion of management, contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial condition and results of operations of DeVry Group. The June 30, 2016 data that is presented is derived from audited financial statements.

The interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto contained in DeVry Group's Annual Report on Form 10-K for the fiscal year ended June 30, 2016 and DeVry Group’s Quarterly Report on Form 10-Q for the quarters ended September 30, 2016 and December 31, 2016, each as filed with the Securities and Exchange Commission (“SEC”).

The results of operations for the three and nine months ended March 31, 2017, are not necessarily indicative of results to be expected for the entire fiscal year.

Following changes in strategic priorities that were implemented in the third quarter of fiscal year 2017, DeVry Group is reporting its financial performance based on four reporting segments (Medical and Healthcare, Professional Education, Technology and Business, and U.S. Traditional Postsecondary) beginning with this Quarterly Report on Form 10-Q for the quarter ended March 31, 2017. Prior periods are presented in accordance with these changes. Management has determined that these reporting segments align with DeVry Group’s current strategic priorities and resource allocation. DeVry Group’s Chief Operating Decision Maker, its President and Chief Executive Officer, regularly reviews financial information and evaluates operating and management performance based on these new segments. See “Note 15: Segment Information” for further discussion.

NOTE 2: ASSETS HELD FOR SALE

During the second quarter of fiscal year 2017, management committed to a plan to sell the DeVry University and Carrington College (“Carrington”) co-located campus in Pomona, California, which met criteria to be classified as an asset held for sale. This required a write-down of the assets to fair market value less costs to sell. The building is being marketed to prospective buyers and is available for immediate sale which is likely to occur within one year. Based on third party offers, management estimated the assets’ fair market values less costs to sell at approximately $11.3 million, which resulted in the carrying value exceeding the fair market value by $4.8 million. As a result, Land, Building and Equipment Held for Sale, Net of $11.3 million was recorded on the Consolidated Balance Sheet at March 31, 2017 and a $4.8 million pre-tax Loss on Assets Held for Sale was recorded in the Consolidated Statements of Income for the nine months ended March 31, 2017. The assets being held for sale are classified within the U.S. Traditional Postsecondary segment.

NOTE 3: REGULATORY SETTLEMENTS

In the second quarter of fiscal year 2017, DeVry Group, DeVry University Inc., and DeVry/New York Inc. (collectively, the “DeVry Parties”) and the Federal Trade Commission (“FTC”) agreed to a Stipulation as to Entry of an Order for Permanent Injunction and Monetary Judgment (the “Agreement”) resolving litigation brought by the FTC regarding DeVry University’s use of employment statistics in former advertising. Under the terms of the Agreement, the DeVry Parties agreed to pay $49.4 million to be distributed at the sole discretion of the FTC, to forgive $30.4 million of institutional loans issued before September 30, 2015, and to forgive outstanding DeVry University accounts receivable balances by $20.2 million for former students. In addition, the DeVry Parties agreed that DeVry Group institutions marketing to U.S. consumers will maintain specific substantiation to support any future advertising regarding graduate outcomes and educational benefits, and will implement training and other agreed-upon compliance measures. DeVry Group chose to settle the FTC litigation after filing an answer denying all allegations of wrongdoing.

In the second quarter of fiscal year 2017, DeVry Group also recorded charges related to the resolution of an inquiry made by the Office of the Attorney General of the State of New York (“NYAG”) to the DeVry Parties regarding DeVry University’s use of employment and salary statistics in former advertising. The DeVry Parties chose to resolve the NYAG inquiry by entering into an Assurance of Discontinuance (the “Assurance”) with the NYAG on January 27, 2017, without admitting or denying the allegations therein. Pursuant to the Assurance, the DeVry Parties agreed to pay $2.25 million for consumer restitution and $0.5 million in penalties, fees and costs. In addition, the DeVry Parties agreed that DeVry Group institutions marketing to New York consumers will maintain specific substantiation and present certain statistics as prescribed to support any future advertising regarding graduate outcomes and educational benefits, and will implement other agreed-upon compliance measures.

7

Student services and access to federal student loans are not impacted by the Agreement or the Assurance and at no time has the academic quality of a DeVry University education been questioned. See “Note 14: Commitments and Contingencies” for further discussion.

The regulatory settlements expense of $56.3 million recorded during the first nine months of fiscal year 2017 consists of the $49.4 million cash payment to the FTC, the $4.1 million unreserved and expensed institutional loans and the $2.75 million cash payment to the NYAG. Of these regulatory settlement charges, $4.1 million was allocated to the U.S. Traditional Postsecondary segment and $52.2 million was allocated to the DeVry Group home office which is classified as “Home Office and Other” in “Note 15: Segment Information.”

In the second quarter of fiscal year 2017, DeVry University reached a settlement agreement with the U.S. Department of Education (“ED”) regarding its January 27, 2016 Notice of Intent to Limit (“Notice”). The Notice related narrowly to a specific graduate employment statistic previously used by DeVry University, calculated since 1975. The settlement includes, among other things, an agreement to no longer use the statistic in question or to make any other representations regarding the graduate employment outcomes of DeVry University graduates from 1975 to October 1980. DeVry University will also refrain from making any future graduate employment representations without possessing graduate-specific information, and, for five years after the effective date of the settlement, to post a letter of credit with ED equal to 10% of DeVry University’s annual Title IV disbursement. A $68.4 million letter of credit was posted in the second quarter of fiscal year 2017 in relation to this requirement. Also, as a result of the settlement agreement, DeVry University’s participation in Title IV programs will be under provisional certification. The settlement in no way hinders DeVry University’s ability to serve current or future students. DeVry University resolved the Notice in full cooperation with ED. The settlement allows DeVry University to continue communicating its strong student outcomes, while providing assurances regarding the extent of its graduate employment data. See “Note 13: Debt” and “Note 14: Commitments and Contingencies” for further discussion.

NOTE 4: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The Consolidated Financial Statements include the accounts of DeVry Group and its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Where our ownership interest is less than 100 percent, the noncontrolling ownership interest is reported on our Consolidated Balance Sheets. The noncontrolling ownership interest earnings portion is classified as “Net Income Attributable to Noncontrolling Interest” in our Consolidated Statements of Income. Unless indicated, or the context requires otherwise, references to years refer to DeVry Group’s fiscal years.

Cash and Cash Equivalents

Cash and cash equivalents can include time deposits, high-grade commercial paper, money market funds and bankers acceptances with original maturities of three months or less. Short-term investment objectives are to minimize risk and maintain liquidity. These investments are stated at cost (which approximates fair value) because of their short duration or liquid nature. DeVry Group places its cash and temporary cash investments with high credit quality institutions. Cash and cash equivalent balances in U.S. bank accounts are generally in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. Cash and cash equivalent balances in Brazilian bank accounts are generally in excess of the deposit insurance limits for Brazilian banks. DeVry Group has not experienced any losses on its cash and cash equivalents.

Management periodically evaluates the creditworthiness of the security issuers and financial institutions with which it invests and maintains deposit accounts.

Financial Aid and Restricted Cash

A significant portion of revenue is received from students who participate in government financial aid and assistance programs which are subject to political and governmental budgetary considerations. There is no assurance that such funding will be maintained at current levels. Extensive and complex regulations in the U.S. and Brazil govern all of the government financial assistance programs in which students participate. Administration of these programs is periodically reviewed by various regulatory agencies. Any regulatory violation could be the basis for disciplinary action, which could include the suspension, limitation or termination from such financial aid programs.

8

Restricted cash represents amounts received from federal and state governments under various student aid grant and loan programs and such restricted funds are held in separate bank accounts. Once the financial aid authorization and disbursement process for the student has been completed, the funds are transferred to unrestricted accounts, and these funds then become available for use in DeVry Group’s operations. This authorization and disbursement process that precedes the transfer of funds generally occurs within the period of the academic term for which such funds were authorized.

As a requirement of continuing operations in Pennsylvania, DeVry Group is required to maintain a “minimum protective endowment” of at least $500,000. These funds are required as long as DeVry Group operates campuses in the state. DeVry Group accounts for these funds as restricted cash.

Revenue Recognition

Tuition

Chamberlain University (“Chamberlain”), DeVry Education of Brazil (“DeVry Brazil”) higher education, DeVry University and Carrington tuition revenue is recognized on a straight-line basis over their respective applicable academic terms. In addition, American University of the Caribbean School of Medicine (“AUC”), Ross University School of Medicine (“RUSM”) and Ross University School of Veterinary Medicine (“RUSVM”) basic science curriculum revenue is recognized on a straight-line basis over the applicable academic term. The clinical portion of the AUC, RUSM and RUSVM education programs are conducted under the supervision of primarily U.S. teaching hospitals and veterinary schools. AUC, RUSM and RUSVM are responsible for the billing and collection of tuition from their students during the period of clinical education. Revenue is recognized on a weekly basis based on actual program attendance during the period of the clinical program. Fees paid to the hospitals and veterinary schools for supervision of AUC, RUSM and RUSVM students are charged to expense on the same basis. Becker Professional Education (“Becker”) and DeVry Brazil’s live classroom test preparation, and DeVry Brazil’s online tuition revenue is recognized on a straight-line basis over the applicable delivery period. Revenue from Becker conferences and training services, which are generally short-term in duration, is recognized when the conference or training service is provided.

Other Educational

Sales of Becker subscriptions, membership dues, certifications, textbooks, electronic books and other educational products, including Becker self-study sales, are included in Other Educational Revenue in the Consolidated Statements of Income. Revenue from Becker subscriptions and membership dues is recognized on a straight-line basis over the applicable subscription or membership period. Revenue from Becker certifications is recognized when the certification process is complete. Textbooks, electronic books and other educational products revenue is recognized when the sale occurs. In addition, fees from international licensees of the Becker programs are included in Other Educational Revenue and recognized when confirmation of course delivery is received.

Refunds and Provisions

Estimates of DeVry Group’s expected refunds are determined at the outset of each academic term, based upon actual experience in previous terms. Inputs to this analysis include refunds issued, withdrawal rates and historical amounts owed by students for that portion of a term that was completed. Management reassesses collectability throughout the period revenue is recognized by the DeVry Group institutions, on a student-by-student basis. This reassessment is based upon new information and changes in facts and circumstances relevant to a student's ability to pay. Management also reassesses collectability when a student withdraws from the institution and has unpaid tuition charges. Such unpaid charges do not meet the threshold of reasonably collectible and are recognized as revenue on a cash basis.

The provisions for refunds, which are reported as a reduction to Tuition Revenue in the Consolidated Statements of Income, are recognized in the same ratable fashion as revenue to most appropriately match these costs with the tuition revenue in that term. Provisions for refunds were $10.9 million and $35.4 million for the three and nine months ended March 31, 2017, respectively, and $11.5 million and $34.7 million for the three and nine months ended March 31, 2016, respectively.

9

Provisions for refunds are monitored and adjusted as necessary within the academic term and adjusted for actual refunds issued and withdrawn student accounts receivable balances at the completion of an academic term. If a student withdraws prior to completing an academic term, federal and state regulations and accreditation criteria permit DeVry Group to retain only a set percentage of the total tuition received from such student, which varies with, but generally equals or exceeds, the percentage of the academic term completed by such student. Payment amounts received by DeVry Group in excess of such set percentages of tuition are refunded to the student or the appropriate funding source. All refunds are netted against revenue during the applicable academic term. Reserves related to refunds and uncollectible accounts totaled $51.2 million, $64.5 million and $65.9 million at March 31, 2017, June 30, 2016 and March 31, 2016, respectively. During the second quarter of fiscal year 2017, certain student accounts were forgiven as part of the FTC settlement as discussed in “Note 3: Regulatory Settlements” and “Note 14: Commitments and Contingencies.” These write-offs resulted in a $24.2 million reduction in the reserve balance.

The allowance for uncollectible accounts is determined by analyzing the current aging of accounts receivable and historical loss rates on collections of accounts receivable. In addition, management considers projections of future receivable levels and collection loss rates. We monitor the inputs to this analysis periodically throughout the year. Provisions required to maintain the allowance at appropriate levels are charged to expense in each period as required. Provisions for uncollectible accounts, which are included in the Cost of Educational Services in the Consolidated Statements of Income, were $11.6 million and $31.8 million for the three and nine months ended March 31, 2017, respectively, and $9.6 million and $27.0 million for the three and nine months ended March 31, 2016, respectively.

Internal-Use Software Development Costs

DeVry Group capitalizes certain internal-use software development costs that are amortized using the straight-line method over the estimated lives of the software, not to exceed seven years. Capitalized costs include external direct costs of equipment, materials and services consumed in developing or obtaining internal-use software and payroll-related costs for employees directly associated with the internal-use software development project. Capitalization of such costs ceases at the point at which the project is substantially complete and ready for its intended purpose. Capitalized internal-use software development costs for projects not yet complete are included as Construction in Progress in the Land, Building and Equipment section of the Consolidated Balance Sheets. As of March 31, 2017, June 30, 2016 and March 31, 2016, the net balance of capitalized internal-use software development costs was $13.3 million, $18.3 million and $21.7 million, respectively.

Impairment of Long-Lived Assets

DeVry Group evaluates the carrying amount of its significant long-lived assets whenever changes in circumstances or events indicate that the value of such assets may not be fully recoverable. Events that may trigger an impairment analysis could include a decision by management to exit a market or a line of business or to consolidate operating locations. In the first nine months of fiscal year 2017 and in fiscal year 2016, management consolidated operations at DeVry University, Carrington and DeVry Group’s home office. These decisions resulted in pre-tax accelerated depreciation and write-offs on leasehold improvements and equipment of $3.6 million and $12.2 million during the nine months ended March 31, 2017 and 2016, respectively. The accelerated depreciation and write-off charges are included in Restructuring Expense in the Consolidated Statements of Income (see “Note 11: Restructuring Charges”). For a discussion of the impairment review of goodwill and intangible assets see “Note 10: Intangible Assets.”

Perkins Program Fund

DeVry University is required under U.S. federal aid program regulations to make contributions to the Federal Perkins Student Loan Fund, most recently at a rate equal to 33% of new contributions by the U.S. federal government. No new U.S. federal government contributions were received in the first nine months of fiscal year 2017 or in fiscal year 2016. DeVry Group carries its investment in such contributions at original value, net of allowances for expected losses on loan collections of $2.6 million at each of March 31, 2017, June 30, 2016 and March 31, 2016. The allowance for future loan losses is based upon an analysis of actual loan losses experienced since the inception of the program. As previous borrowers repay their Perkins loans, their payments are used to fund new loans, thus creating a revolving loan fund. The U.S. federal government contributions to this revolving loan program do not belong to DeVry Group and are not recorded in its financial statements. Under current law, upon termination of the program by the U.S. federal government or withdrawal from future program participation by DeVry University, subsequent student loan repayments would be divided between the U.S. federal government and DeVry University to satisfy their respective cumulative contributions to the fund. Authorization of the Federal Perkins Student Loan Program expired on September 30, 2015. On December 17, 2015, Congress extended the authorization of the Federal Perkins Student Loan Program to September 30, 2017.

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Foreign Currency Translation

The financial position and results of operations of the AUC, RUSM and RUSVM Caribbean operations are measured using the U.S. dollar as the functional currency. As such, there is no translation gain or loss associated with these operations. DeVry Brazil’s operations and Becker’s international operations are measured using the local currency as the functional currency. Assets and liabilities of these entities are translated to U.S. dollars using exchange rates in effect at the balance sheet dates. Income and expense items are translated at monthly average exchange rates. The resultant translation adjustments are included in the component of Shareholders’ Equity designated as Accumulated Other Comprehensive Loss. Transaction gains or losses during each of the three-month and nine-month periods ended March 31, 2017 and 2016 were not material.

Noncontrolling Interest

DeVry Group currently maintains a 97.9% ownership interest in DeVry Brazil with the remaining 2.1% owned by members of the current DeVry Brazil senior management group. The adjustment to increase or decrease the DeVry Brazil noncontrolling interest each reporting period for its proportionate share of DeVry Brazil’s profit (loss) flows through the Consolidated Statements of Income based on DeVry Group’s noncontrolling interest accounting policy.

In July 2015, DeVry Group purchased additional DeVry Brazil stock from the DeVry Brazil management group. Beginning July 1, 2015, DeVry Group has the right to exercise a call option and purchase any remaining DeVry Brazil stock from DeVry Brazil management. Likewise, DeVry Brazil management has had the right to exercise a put option and sell its remaining ownership interest in DeVry Brazil to DeVry Group. Since the put option is out of the control of DeVry Group, authoritative guidance requires the noncontrolling interest, which includes the value of the put option, to be displayed outside of the equity section of the Consolidated Balance Sheets.

The DeVry Brazil management put option is being accreted to its redemption value in accordance with the terms of the related stock purchase agreement. The adjustment to increase or decrease the put option to its expected redemption value each reporting period is recorded in retained earnings in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).

The following is a reconciliation of the noncontrolling interest balance (in thousands):

	Three Months Ended March 31,					Nine Months Ended March 31,
	2017			2016		2017		2016
Balance at Beginning of Period	$	6,720		$	2,813	$	5,112	$	9,620
Net Income Attributable to Noncontrolling Interest		163			5		502		42
Payment for Purchase of Noncontrolling Interest of Subsidiary		-			-		-		(3,114	)
(Decrease) Increase in Redemption Value of Noncontrolling Interest Put Option		(283	)		711		986		(3,019	)
Balance at End of Period	$	6,600		$	3,529	$	6,600	$	3,529

Earnings per Common Share

Basic earnings per share is computed by dividing net income attributable to DeVry Group by the weighted average number of common shares outstanding during the period plus unvested participating restricted stock units (“RSUs”). Diluted earnings per share is computed by dividing net income attributable to DeVry Group by the weighted average number of shares assuming dilution. Diluted shares are computed using the Treasury Stock Method and reflect the additional shares that would be outstanding if dilutive stock-based grants were exercised during the period. Excluded from the computations of diluted earnings per share were options to purchase 1,670,000 and 2,514,000 shares of common stock for the three and nine months ended March 31, 2017, respectively, and 2,828,000 and 2,765,000 shares of common stock for the three and nine months ended March 31, 2016, respectively. These outstanding stock-based grants were excluded because the exercise prices were greater than the average market price of the common shares or the assumed proceeds upon exercise under the Treasury Stock Method resulted in the repurchase of more shares than would be issued; thus, their effect would be anti-dilutive.

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The following is a reconciliation of basic shares to diluted shares (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2017		2016		2017		2016
Weighted Average Shares Outstanding		62,811		63,107		62,695		63,378
Unvested Participating RSUs		855		815		855		781
Basic Shares		63,666		63,922		63,550		64,159
Effect of Dilutive Stock Options		600		431		441		318
Diluted Shares		64,266		64,353		63,991		64,477

Treasury Stock

DeVry Group’s Board of Directors (the “Board”) has authorized share repurchase programs on ten occasions (see “Note 8: Dividends and Share Repurchase Programs”). The tenth share repurchase program was approved on February 16, 2017 and commenced in February 2017. Shares that are repurchased by DeVry Group are recorded as Treasury Stock at cost and result in a reduction of Shareholders’ Equity.

From time to time, shares of its common stock are delivered back to DeVry Group under a swap arrangement resulting from employees’ exercise of incentive stock options pursuant to the terms of the DeVry Group Stock Incentive Plans (see “Note 5: Stock-Based Compensation”). In addition, shares of its common stock are delivered back to DeVry Group for payment of withholding taxes from employees for vesting RSUs. These shares are recorded as Treasury Stock at cost and result in a reduction of Shareholders’ Equity.

Treasury shares are reissued on a monthly basis, at market value, to the DeVry Group Colleague Stock Purchase Plan in exchange for employee payroll deductions. When treasury shares are reissued, DeVry Group uses an average cost method to reduce the Treasury Stock balance. Gains on the difference between the average cost and the reissuance price are credited to Additional Paid-in Capital. Losses on the difference are charged to Additional Paid-in Capital to the extent that previous net gains from reissuance are included therein, otherwise such losses are charged to Retained Earnings.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenue and expense reported during the period. Actual results could differ from those estimates.

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss is composed of the change in cumulative translation adjustment, primarily at DeVry Brazil, and unrealized gains on available-for-sale marketable securities, net of the effects of income taxes.

The Accumulated Other Comprehensive Loss balance at March 31, 2017, consists of $37.3 million of cumulative translation losses ($36.5 million attributable to DeVry Group and $0.8 million attributable to noncontrolling interest) and $0.3 million of unrealized gains on available-for-sale marketable securities, net of tax of $0.2 million and all attributable to DeVry Group. At June 30, 2016, this balance consisted of $42.6 million of cumulative translation losses ($41.7 million attributable to DeVry Group and $0.9 million attributable to noncontrolling interest) and $0.1 million of unrealized gains on available-for-sale marketable securities, net of tax of $0.1 million and all attributable to DeVry Group. At March 31, 2016, this balance consisted of $91.5 million of cumulative translation losses ($89.6 million attributable to DeVry Group and $1.9 million attributable to noncontrolling interest) and $0.2 million of unrealized gains on available-for-sale marketable securities, net of tax of $0.2 million and all attributable to DeVry Group.

Advertising Expense

Advertising costs are recognized as expense in the period in which materials are purchased or services are performed. Advertising expense, which is included in Student Services and Administrative Expense in the Consolidated Statements of Income, was $56.2 million and $160.2 million for the three and nine months ended March 31, 2017, respectively, and $57.3 million and $173.0 million for the three and nine months ended March 31, 2016, respectively.

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Restructuring Charges

DeVry Group’s financial statements include charges related to severance and related benefits for reductions in staff. These charges also include early lease termination or cease-of-use costs and accelerated depreciation and gains and losses on disposals of property and equipment related to campus and administrative office consolidations (see “Note 11: Restructuring Charges”).

Recent Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04: “Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This guidance was issued to simplify the goodwill impairment test by eliminating Step 2. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The amendments should be adopted for the annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. Management anticipates the adoption will not have a significant impact on DeVry Group’s Consolidated Financial Statements. We expect to early adopt ASU 2017-04 during the fourth quarter of fiscal year 2017.

In November 2016, FASB issued ASU No. 2016-18: “Statement of Cash Flows (Topic 230): Restricted Cash.” This guidance was issued to address the diversity that exists in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendments will require that the statement of cash flows explain the change during the period in total cash, cash equivalents and restricted cash. The amendments are effective for the financial statements issued for fiscal years after December 15, 2017, and interim periods within those fiscal years. The amendments will be applied using a retrospective transition method to each period presented. Management anticipates the adoption will not have a significant impact on DeVry Group’s Consolidated Financial Statements. Changes in the restricted cash balance will no longer be included as cash provided by or used in operating activities since these balances will now be included in the beginning and ending balances of cash in the statement of cash flows. We expect to early adopt ASU 2016-18 during the fourth quarter of fiscal year 2017.

In August 2016, FASB issued ASU No. 2016-15: “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This guidance was issued to address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments are effective for the financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Management has determined that our current accounting policies align with this guidance. Therefore, this guidance will have no impact on the Consolidated Financial Statements.

In June 2016, FASB issued ASU No. 2016-13: “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance was issued to provide financial statement users with more decision-useful information about the expected losses on financial instruments by replacing the incurred loss impairment methodology with a methodology that reflects expected credit losses by requiring a broader range of reasonable and supportable information to inform credit loss estimates. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management is evaluating the impact the guidance will have on DeVry Group’s Consolidated Financial Statements when adopted.

In March 2016, FASB issued ASU No. 2016-09: “Compensation–Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This guidance was issued to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, forfeitures, and classification on the statement of cash flows. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. We will adopt ASU No. 2016-09 in the first quarter of fiscal year 2018. Excess tax benefits and tax deficiencies will no longer be recorded to additional paid-in capital, but rather to income tax expense or benefit in the income statement, which may increase volatility in the income statement. An accounting policy election exists to account for forfeitures as they occur. Also, adoption will require changes to classification of certain stock-based compensation transactions on the statement of cash flows. The cash outflow from employee taxes paid when shares are withheld by the employer will be reclassified from operating activities to financing activities on the statement of cash flows. These changes are not expected to have a significant impact on DeVry Group’s Consolidated Financial Statements.

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In February 2016, FASB issued ASU No. 2016-02: “Leases (Topic 842).” This guidance was issued to increase transparency and comparability among organizations by recognizing right-to-use assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Management is evaluating the impact the guidance will have on DeVry Group’s Consolidated Financial Statements and believes the adoption will impact the Consolidated Balance Sheet with significant increases in assets and liabilities.

In January 2016, FASB issued ASU No. 2016-01: “Financial Instruments–Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This guidance was issued to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The guidance eliminates the classification of equity securities into different categories (that is, trading or available-for-sale) and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. This guidance will require DeVry Group to record the changes in the fair value of its available-for-sale equity investments through net income. Management anticipates the adoption will not have a significant impact on DeVry Group’s Consolidated Financial Statements.

In September 2015, FASB issued ASU No. 2015-16: “Business Combinations (Topic 805): Simplifying Accounting for Measurement-Period Adjustments.” This guidance was issued to simplify the accounting for provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period in which the combination occurs and where the provisional amounts have been adjusted during the measurement period. The amendments in this guidance require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This guidance requires DeVry Group to record and disclose measurement-period adjustments for business combinations as a period adjustment as opposed to a retroactive adjustment to the opening balance sheet of the acquired entity. The guidance is effective for DeVry Group’s current fiscal year and has had no impact on current year financial reporting.

In May 2014, FASB issued ASU No. 2014-09: “Revenue from Contracts with Customers (Topic 606).” This guidance was issued to clarify the principles for recognizing revenue and develop a common revenue standard for GAAP and International Financial Reporting Standards (“IFRS”). The guidance is effective for the fiscal years and interim periods within those years beginning after December 15, 2017. DeVry Group will implement this guidance effective July 1, 2018 using the retrospective approach. Management anticipates the adoption will not have a significant impact on DeVry Group’s Consolidated Financial Statements.

Reclassifications

In the fourth quarter of fiscal year 2016, we retrospectively adopted ASU No. 2015-17: “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” This guidance was issued to simplify the accounting for classification of deferred taxes on the balance sheet. The guidance eliminates the previous requirement for organizations to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Instead, organizations will now be required to classify all deferred tax assets and liabilities as noncurrent. As a result, we decreased current deferred income tax assets by $43.1 million, increased noncurrent deferred income tax assets by $24.2 million and decreased noncurrent deferred income tax liabilities by $18.8 million on the March 31, 2016 Consolidated Balance Sheet. This reclassification had no effect on reported net income.

Beginning in the third quarter of fiscal year 2017, we changed our reportable segments as described in “Note 15: Segment Information.” Prior period amounts have been reclassified to conform to the current reportable segment presentation within the Notes to Consolidated Financial Statements.

NOTE 5: STOCK-BASED COMPENSATION

DeVry Group maintains three stock-based incentive plans: the 2003 Stock Incentive Plan, the Amended and Restated Incentive Plan of 2005 and the Second Amended and Restated Incentive Plan of 2013. Under these plans, directors, key executives and managerial employees are eligible to receive incentive stock or nonqualified options to purchase shares of DeVry Group’s common stock. The Second Amended and Restated Incentive Plan of 2013 and the Amended and Restated Incentive Plan of 2005 also permit the granting of stock appreciation rights, RSUs, performance-based RSUs and other stock and cash-based compensation. Although options remain outstanding under the 2003 and 2005 incentive plans, no further stock-based grants will be issued from these plans. The Second Amended and Restated Incentive Plan of 2013 and the Amended and Restated Incentive Plan of 2005 are administered by the Compensation Committee of the Board. Options are granted for terms of up to ten years and can vest immediately or over periods of up to five years. The requisite service period is equal to the vesting period. The option price under the plans is the fair market value of the shares on the date of the grant.

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Stock-based compensation expense is measured at the grant date based on the fair value of the award. DeVry Group accounts for stock-based compensation granted to retirement eligible employees that fully vests upon an employee’s retirement under the non-substantive vesting period approach. Under this approach, the entire stock-based compensation expense is recognized at the grant date for stock-based grants issued to retirement eligible employees. For non-retirement eligible employees, stock-based compensation expense is recognized as expense over the employee requisite service period, reduced by an estimated forfeiture rate.

At March 31, 2017, 6,518,677 authorized but unissued shares of common stock were reserved for issuance under DeVry Group’s stock-based incentive plans.

The following is a summary of options activity for the nine months ended March 31, 2017:

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Number of			Exercise		Contractual		Value
	Options			Price		Life (in Years)		(in thousands)
Outstanding at July 1, 2016		3,574,336		$	32.79
Options Granted		397,700			23.78
Options Exercised		(912,734	)		22.81
Options Forfeited		(12,409	)		30.00
Options Expired		(24,081	)		31.16
Outstanding at March 31, 2017		3,022,812			34.65		5.37	$	16,948
Exercisable at March 31, 2017		2,029,550		$	39.68		3.66	$	5,285

The following is a summary of stock appreciation rights activity for the nine months ended March 31, 2017:

						Weighted
	Number of			Weighted		Average		Aggregate
	Stock			Average		Remaining		Intrinsic
	Appreciation			Exercise		Contractual		Value
	Rights			Price		Life (in Years)		(in thousands)
Outstanding at July 1, 2016		118,065		$	42.74
Rights Granted		-			-
Rights Exercised		(18,565	)		30.41
Rights Canceled		-			-
Outstanding at March 31, 2017		99,500			45.04		0.67	$	-
Exercisable at March 31, 2017		99,500		$	45.04		0.67	$	-

The total intrinsic value of options exercised for the nine months ended March 31, 2017 and 2016 was $5.5 million and $0.1 million, respectively.

The fair value of DeVry Group’s stock option awards was estimated using a binomial model. This model uses historical cancelation and exercise experience of DeVry Group to determine the option value. It also takes into account the illiquid nature of employee options during the vesting period.

The weighted average estimated grant date fair value of options granted at market price under DeVry Group’s stock-based incentive plans during the first nine months of fiscal years 2017 and 2016 was $9.09 and $10.17, per share, respectively. The fair value of DeVry Group’s stock option grants was estimated assuming the following weighted average assumptions:

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	Fiscal Year
	2017			2016
Expected Life (in Years)		6.88			6.78
Expected Volatility		42.41	%		41.35	%
Risk-free Interest Rate		1.41	%		1.85	%
Dividend Yield		1.19	%		1.01	%
Pre-vesting Forfeiture Rate		10.00	%		3.00	%

The expected life of the options granted is based on the weighted average exercise life with age and salary adjustment factors from historical exercise behavior. DeVry Group’s expected volatility is computed by combining and weighting the implied market volatility, the most recent volatility over the expected life of the option grant and DeVry Group’s long-term historical volatility. The pre-vesting stock option forfeiture rate is based on DeVry Group’s historical stock option forfeiture experience. The main driver for the increased pre-vesting forfeiture rate is the change in the business environment at DeVry Group and its institutions, which has resulted in increased turnover in executive management.

If factors change and different assumptions are employed in the valuation of stock-based grants in future periods, the stock-based compensation expense that DeVry Group records may differ significantly from what was recorded in previous periods.

During the first nine months of fiscal year 2017, DeVry Group granted 648,160 RSUs to selected employees and directors. Of these, 223,230 were performance-based RSUs and 424,930 were non-performance-based RSUs. Performance-based RSUs are earned by the recipients over a three-year period based on achievement of certain mission-based, academic goals, when a minimum level of DeVry Group earnings before interest, taxes, depreciation and amortization (“EBITDA”) or return on invested capital (“ROIC”) is attained. Non-performance-based RSUs are subject to restrictions which lapse ratably over one, three or four-year periods on the grant anniversary date based on the recipient’s continued service on the Board or employment with DeVry Group or upon retirement. During the restriction period, the recipient of the non-performance based RSUs shall have the right to receive dividend equivalents. This right does not pertain to the performance-based RSUs. The following is a summary of RSUs activity for the nine months ended March 31, 2017:

				Weighted
				Average
	Number of			Grant Date
	RSUs			Fair Value
Nonvested at July 1, 2016		1,139,350		$	27.78
RSUs Granted		648,160			23.89
RSUs Vested		(367,839	)		27.22
RSUs Forfeited		(100,555	)		26.94
Nonvested at March 31, 2017		1,319,116		$	26.09

The weighted average estimated grant date fair value of RSUs granted at market price under DeVry Group’s stock-based incentive plans during the first nine months of fiscal years 2017 and 2016 was $23.89 and $25.84, per share, respectively.

The following table shows total stock-based compensation expense included in the Consolidated Statements of Income (in thousands):

	Three Months Ended March 31,						Nine Months Ended March 31,
	2017			2016			2017			2016
Cost of Educational Services	$	1,267		$	1,209		$	4,254		$	4,477
Student Services and Administrative Expense		2,692			2,568			9,038			9,512
Stock-Based Compensation Expense		3,959			3,777			13,292			13,989
Income Tax Benefit		(1,383	)		(1,439	)		(4,653	)		(5,157	)
Net Stock-Based Compensation Expense	$	2,576		$	2,338		$	8,639		$	8,832

As of March 31, 2017, $21.8 million of total pre-tax unrecognized stock-based compensation expense related to nonvested grants is expected to be recognized over a weighted average period of 2.4 years. The total fair value of options and RSUs vested during the nine months ended March 31, 2017 and 2016 was approximately $13.0 million and $15.9 million, respectively.

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There was no capitalized stock-based compensation cost at each of March 31, 2017, June 30, 2016 and March 31, 2016.

DeVry Group has an established practice of issuing new shares of common stock to satisfy stock-based grant exercises. However, DeVry Group also may issue treasury shares to satisfy stock-based grant exercises under certain of its stock-based incentive plans.

NOTE 6: FAIR VALUE MEASUREMENTS

DeVry Group has elected not to measure any assets or liabilities at fair value other than those required to be measured at fair value on a recurring basis. Assets measured at fair value on a nonrecurring basis include goodwill, intangible assets and assets of businesses where the long-term value of the operations have been impaired.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The guidance specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The guidance establishes fair value measurement classifications under the following hierarchy:

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

When available, DeVry Group uses quoted market prices to determine fair value, and such measurements are classified within Level 1. In some cases where market prices are not available, DeVry Group makes use of observable market-based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market-based parameters such as interest rates and yield curves. These measurements are classified within Level 3.

Fair value measurements are classified according to the lowest level input or value-driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable.

Assets measured at fair value on a nonrecurring basis include goodwill and indefinite-lived intangibles arising from a business combination. These assets are not amortized and charged to expense over time. Instead, goodwill and indefinite-lived intangibles must be reviewed annually for impairment or more frequently if circumstances arise indicating potential impairment. This impairment review was most recently completed as of May 31, 2016. See “Note 10: Intangible Assets” for further discussion on the impairment review including valuation techniques and assumptions.

During the second quarter of fiscal year 2017, management committed to a plan to sell the DeVry University and Carrington co-located campus in Pomona, California, which met criteria to be classified as an asset held for sale. This required a write-down of the assets to fair market value less costs to sell. The building is being marketed to prospective buyers and is available for immediate sale which is likely to occur within one year. We used significant unobservable inputs (Level 3) in our analysis, including third party offers received to acquire the building. Based on third party offers, management estimated the assets’ fair market values less costs to sell at approximately $11.3 million, which resulted in the carrying value exceeding the fair market value by $4.8 million. As a result, Land, Building and Equipment Held for Sale, Net of $11.3 million was recorded on the Consolidated Balance Sheet at March 31, 2017 and a $4.8 million pre-tax Loss on Assets Held for Sale was recorded in the Consolidated Statements of Income for the nine months ended March 31, 2017. See “Note 2: Assets Held for Sale” for further discussion.

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The following table presents DeVry Group's assets and liabilities at March 31, 2017, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands).

	Level 1		Level 2		Level 3
Cash and Cash Equivalents	$	209,879	$	-	$	-
Available-for-Sale Investments:
Marketable Securities, short-term		3,950		-		-
Institutional Loans Receivable, Net		-		46,284		-
Deferred Acquisition Obligations		-		28,531		-
FIES Long-Term Receivable		-		13,633		-
Total Financial Assets at Fair Value	$	213,829	$	88,448	$	-

The following table presents DeVry Group's assets and liabilities at June 30, 2016, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands).

	Level 1		Level 2		Level 3
Cash and Cash Equivalents	$	308,164	$	-	$	-
Available-for-Sale Investments:
Marketable Securities, short-term		3,609		-		-
Institutional Loans Receivable, Net		-		49,025		-
Deferred Acquisition Obligations		-		32,121		-
FIES Long-Term Receivable		-		13,057		-
Total Financial Assets at Fair Value	$	311,773	$	94,203	$	-

The following table presents DeVry Group's assets and liabilities at March 31, 2016, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands).

	Level 1		Level 2		Level 3
Cash and Cash Equivalents	$	330,214	$	-	$	-
Available-for-Sale Investments:
Marketable Securities, short-term		3,528		-		-
Institutional Loans Receivable, Net		-		51,743		-
Deferred Acquisition Obligations		-		32,860		-
FIES Long-Term Receivable		-		17,593		-
Total Financial Assets at Fair Value	$	333,742	$	102,196	$	-

Cash and Cash Equivalents and Investments in short-term Marketable Securities are valued using a market approach based on quoted market prices of identical instruments.

The fair value of the institutional loans receivable included in Accounts Receivable, Net and Other Assets, Net on the Consolidated Balance Sheets as of March 31, 2017, June 30, 2016 and March 31, 2016 is estimated by discounting the future cash flows using current rates for similar arrangements. See “Note 7: Financing Receivables” for further discussion on these institutional loans receivable.

The fair value of the deferred acquisition obligations is estimated by discounting the future cash flows using current rates for similar arrangements. $15.8 million, $7.7 million and $12.2 million was classified as Accrued Expenses on the Consolidated Balance Sheets at March 31, 2017, June 30, 2016 and March 31, 2016, respectively, and $12.8 million, $24.4 million and $20.7 million was classified as Deferred Rent and Other Liabilities on the Consolidated Balance Sheets at March 31, 2017, June 30, 2016 and March 31, 2016, respectively.

The fair value of DeVry Brazil’s receivable under Brazil’s FIES public loan program included in Other Assets, Net on the Consolidated Balance Sheets as of March 31, 2017, June 30, 2016 and March 31, 2016 is estimated by discounting the future cash flows using published market data on Brazilian interest and inflation rates.

As of June 30, 2016 and March 31, 2016, there were no assets or liabilities measured at fair value using Level 3 inputs.

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NOTE 7: FINANCING RECEIVABLES

DeVry Group’s institutional loan programs are available to students at its Chamberlain, AUC, RUSM, RUSVM, DeVry University and Carrington institutions. These loan programs are designed to assist students who are unable to completely cover educational costs consisting of tuition, books and fees and are available only after all other student financial assistance has been applied toward those purposes. In addition, AUC, RUSM and RUSVM loans may be used for students’ living expenses. Repayment plans for institutional loan program balances are developed to address the financial circumstances of the particular student. Interest charges accrue each month on the unpaid balance. Chamberlain, DeVry University and Carrington require that students begin repaying loans while they are still in school with a minimum payment level designed to demonstrate their capability to repay and reduce the possibility of over borrowing and targeted to minimize interest being accrued on the loan balance. Payments may increase upon completing or departing the program. After a student leaves school, the student typically will have a monthly installment repayment plan. In addition, the Becker CPA Review Course can be financed through Becker with an 18-month term loan program.

Reserves for uncollectible loans are determined by analyzing the current aging of accounts receivable and historical loss rates of loans at each institution. Management performs this analysis periodically throughout the year. Since all of DeVry Group’s financing receivables are generated through the extension of credit to fund educational costs, all such receivables are considered part of the same loan portfolio.

The following table details the institutional loan balances along with the related allowances for credit losses (in thousands).

	March 31, 2017						June 30, 2016						March 31, 2016
Gross Institutional Loans				$	57,947					$	69,825					$	71,915
Allowance for Credit Losses:
Balance at July 1	$	(20,800	)				$	(20,630	)				$	(20,630	)
Charge-offs and Adjustments		16,820						7,388						6,290
Recoveries		(497	)					(461	)					(141	)
Additional Provision		(7,186	)					(7,097	)					(5,691	)
Balance at End of Period					(11,663	)					(20,800	)					(20,172	)
Net Institutional Loans				$	46,284					$	49,025					$	51,743

During the second quarter of fiscal year 2017, certain institutional loan balances were forgiven as part of the FTC settlement as discussed in “Note 3: Regulatory Settlements” and “Note 14: Commitments and Contingencies.” The amounts related to this settlement were $17.5 million in active outstanding balances which carried related allowance for credit loss reserves of $13.4 million. Also forgiven were $12.9 million of inactive loan balances and accrued interest which had previously been removed from the Net Institutional Loans balance.

Of the net balances above, $18.6 million, $21.7 million and $25.9 million was classified as Accounts Receivable, Net on the Consolidated Balance Sheets at March 31, 2017, June 30, 2016 and March 31, 2016, respectively, and $27.7 million, $27.3 million and $25.8 million, representing amounts due beyond one year, was classified as Other Assets, Net on the Consolidated Balance Sheets at March 31, 2017, June 30, 2016 and March 31, 2016, respectively.

The following tables detail the credit risk profiles of the institutional loan balances based on payment activity and an aging analysis of past due institutional loans (in thousands).

	March 31,		June 30,		March 31,
	2017		2016		2016
Institutional Loans:
Performing	$	47,536	$	50,045	$	52,775
Nonperforming		10,411		19,780		19,140
Total Institutional Loans	$	57,947	$	69,825	$	71,915

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	30-59 Days Past Due		60-89 Days Past Due		90-119 Days Past Due		Greater Than 120 Days Past Due		Total Past Due		Current		Total Institutional Loans
Institutional Loans:
March 31, 2017	$	5,784	$	1,318	$	829	$	10,411	$	18,342	$	39,605	$	57,947
June 30, 2016	$	8,038	$	1,512	$	924	$	19,780	$	30,254	$	39,571	$	69,825
March 31, 2016	$	5,882	$	2,896	$	1,130	$	19,140	$	29,048	$	42,867	$	71,915

Loans are considered nonperforming if they are more than 120 days past due. At March 31, 2017, nonperforming loans totaled $10.4 million, of which $10.2 million had a specific allowance for credit losses. At June 30, 2016, nonperforming loans totaled $19.8 million, of which $19.7 million had a specific allowance for credit losses. At March 31, 2016, nonperforming loans totaled $19.1 million, of which $18.8 million had a specific allowance for credit losses.

NOTE 8: DIVIDENDS AND SHARE REPURCHASE PROGRAMS

DeVry Group paid dividends of $11.4 million, $11.6 million and $11.6 million on December 22, 2016, June 24, 2016 and December 23, 2015, respectively. On February 16, 2017, the Board determined to discontinue cash dividend payments. Future dividends will be at the discretion of the Board.

DeVry Group has repurchased shares under the following programs as of March 31, 2017:

Date	Shares		Total Cost
Authorized	Repurchased		(in millions)
November 15, 2006		908,399	$	35.0
May 13, 2008		1,027,417		50.0
November 11, 2009		972,205		50.0
August 11, 2010		1,103,628		50.0
November 10, 2010		968,105		50.0
May 20, 2011		2,396,143		100.0
November 2, 2011		3,478,299		100.0
August 29, 2012		2,005,317		62.7
December 15, 2015		1,672,250		36.6
February 16, 2017		302,214		10.0
Totals		14,833,977	$	544.3

On December 15, 2015, the Board authorized DeVry Group’s ninth share repurchase program, which allowed DeVry Group to repurchase up to $100 million of its common stock through December 31, 2017. A total of 802,948 shares were repurchased during the nine months ended March 31, 2017 under the ninth share repurchase program for an aggregate of $20.5 million. On February 16, 2017, the Board terminated the ninth share repurchase program and authorized DeVry Group’s tenth share repurchase program, which allows DeVry Group to repurchase up to $300 million of its common stock through December 31, 2020. A total of 302,214 shares were repurchased during the nine months ended March 31, 2017 under the tenth share repurchase program for an aggregate of $10.0 million. The timing and amount of any repurchase will be determined based on evaluation of market conditions and other factors. These repurchases may be made through the open market, including block purchases, in privately negotiated transactions, or otherwise. The buyback will be funded through available cash balances and/or borrowings and may be suspended or discontinued at any time.

Shares of stock repurchased under the programs are held as treasury shares. These repurchased shares have reduced the weighted average number of shares of common stock outstanding for basic and diluted earnings per share calculations.

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NOTE 9: BUSINESS COMBINATIONS

Association of Certified Anti-Money Laundering Specialists

On July 1, 2016, Becker completed the acquisition of 100% of the stock of the Association of Certified Anti-Money Laundering Specialists (“ACAMS”) for $330.6 million, net of cash of $23.5 million. The payment for this purchase was made in the first quarter of fiscal year 2017, and was funded with available domestic cash balances and $175 million in borrowings under DeVry Group’s revolving credit facility. ACAMS is the largest international membership organization dedicated to enhancing the knowledge and skills of anti-money laundering and financial crime prevention professionals. The acquisition furthers Becker’s global growth strategy into professional education and enhances Becker’s position as a leading provider of lifelong learning for professionals.

The operations of ACAMS are included in DeVry Group’s Professional Education segment. The results of ACAMS’s operations have been included in the Consolidated Financial Statements of DeVry Group since the date of acquisition.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands).

	July 1, 2016
Current Assets	$	24,895
Property and Equipment		432
Other Long-term Assets		3,200
Intangible Assets		88,600
Goodwill		274,620
Total Assets Acquired		391,747
Liabilities Assumed		37,619
Net Assets Acquired	$	354,128

Goodwill, which represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired, was all assigned to the Becker reporting unit which is classified within the Professional Education segment. Factors that contributed to a purchase price resulting in the recognition of goodwill include ACAMS’s strategic fit into Becker’s expanding presence in professional education, the reputation of the ACAMS brand as a leader in the industry and potential future growth opportunity. None of the goodwill acquired is expected to be deductible for income tax purposes. Of the $88.6 million of acquired intangible assets, $39.9 million was assigned to Trade Names, which has been determined not to be subject to amortization. The remaining acquired intangible assets were determined to be subject to amortization with an average useful life of approximately nine years. The preliminary values and estimated useful lives by asset type are as follows (in thousands):

	July 1, 2016
	Value Assigned		Estimated Useful Life
Customer Relationships	$	42,500	10 years
Curriculum		5,000	3 years
Non-compete Agreements		700	1 year
Proprietary Technology		500	4 years

There is no pro forma presentation of operating results for this acquisition due to the insignificant effect on consolidated operations.

Faculdade de Imperatriz

On June 1, 2016, DeVry Brazil completed the acquisition of Faculdade de Imperatriz (“Facimp”). Under the terms of the agreement, DeVry Brazil agreed to pay approximately $6.8 million in cash, in exchange for 100% of the stock of Facimp. Approximately $3.5 million of payments were made in the fourth quarter of fiscal year 2016, with additional aggregate payments of approximately $3.3 million required over the succeeding four years. Facimp serves approximately 2,000 students in the city of Imperatriz, and offers undergraduate programs such as a business, accounting, economics, law, nursing, pharmacy, dentistry, pedagogy, systems information and marketing. The acquisition of Facimp further expands DeVry Brazil’s presence in the northeast areas of the country.

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The operations of Facimp are included in DeVry Group’s Technology and Business segment. The results of Facimp’s operations have been included in the Consolidated Financial Statements of DeVry Group since the date of acquisition.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands).

	June 1, 2016
Current Assets	$	1,626
Property and Equipment		291
Intangible Assets		2,652
Goodwill		4,997
Total Assets Acquired		9,566
Liabilities Assumed		2,756
Net Assets Acquired	$	6,810

Goodwill, which represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired, was all assigned to the DeVry Brazil reporting unit which is classified within the Technology and Business segment. Factors that contributed to a purchase price resulting in the recognition of goodwill include Facimp’s strategic fit into DeVry Group’s expanding presence in northeast Brazil, the reputation of the educational programs and the acquired assembled workforce. None of the goodwill acquired is expected to be deductible for income tax purposes. Of the $2.7 million of acquired intangible assets, $2.1 million was assigned to Accreditations and $0.5 million was assigned to Trade Names. None of the acquired intangible assets were determined to be subject to amortization.

There is no pro forma presentation of operating results for this acquisition due to the insignificant effect on consolidated operations.

Grupo Ibmec Educacional S.A.

On December 15, 2015, DeVry Brazil completed the acquisition of Grupo Ibmec Educacional S.A. (“Grupo Ibmec”). Under the terms of the agreement, DeVry Brazil agreed to pay approximately $191.0 million in cash, in exchange for 100% of the stock of Grupo Ibmec. Approximately $180.5 million of payments were made in the second quarter of fiscal year 2016, with additional aggregate payments of approximately $10.5 million required over the succeeding six years. Grupo Ibmec is a nationally recognized educational institution and has been widely-known for its academic excellence for more than 40 years. Grupo Ibmec serves more than 15,000 undergraduate and graduate students onsite and online throughout Brazil. The acquisition of Grupo Ibmec continues the process of expanding DeVry Group’s presence in Brazil.

The operations of Grupo Ibmec are included in DeVry Group’s Technology and Business segment. The results of Grupo Ibmec’s operations have been included in the Consolidated Financial Statements of DeVry Group since the date of acquisition.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands).

	December 15, 2015
Current Assets	$	27,615
Property and Equipment		17,968
Other Long-term Assets		2,639
Intangible Assets		59,275
Goodwill		107,888
Total Assets Acquired		215,385
Liabilities Assumed		24,423
Net Assets Acquired	$	190,962

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Goodwill, which represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired, was all assigned to the DeVry Brazil reporting unit which is classified within the Technology and Business segment. Factors that contributed to a purchase price resulting in the recognition of goodwill include Grupo Ibmec’s strategic fit into DeVry Group’s expanding presence in Brazil, the reputation of the educational programs and the acquired assembled workforce. None of the goodwill acquired is expected to be deductible for income tax purposes. Of the $59.3 million of acquired intangible assets, $34.7 million was assigned to Accreditations and $18.4 million was assigned to Trade Names, both of which have been determined not to be subject to amortization. The remaining acquired intangible assets were determined to be subject to amortization with an average useful life of five years. The values and estimated useful lives by asset type are as follows (in thousands):

	December 15, 2015
	Value Assigned		Estimated Useful Life
Student Relationships	$	4,360	5 years
Curriculum		1,821	5 years

There is no pro forma presentation of operating results for this acquisition due to the insignificant effect on consolidated operations.

NOTE 10: INTANGIBLE ASSETS

Intangible assets relate mainly to acquired business operations. These assets consist of the acquisition fair value of certain identifiable intangible assets acquired and goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired.

Intangible assets consist of the following (in thousands):

	March 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Weighted Average Amortization Period
Amortizable Intangible Assets:
Student Relationships	$	13,014	$	(9,149	)	5 Years
Customer Relationships		42,900		(3,735	)	10 Years
Non-compete Agreements		1,640		(1,439	)	3 Years
Curriculum/Software		8,113		(2,699	)	4 Years
Franchise Contracts		11,087		(1,335	)	18 Years
Clinical Agreements		411		(102	)	15 Years
Trade Names		1,196		(957	)	10 Years
Proprietary Technology		500		(94	)	4 Years
Total	$	78,861	$	(19,510	)
Indefinite-Lived Intangible Assets:
Trade Names	$	111,008
Trademarks		1,645
Ross Title IV Eligibility and Accreditations		14,100
Intellectual Property		13,940
Chamberlain Title IV Eligibility and Accreditations		1,200
Carrington Title IV Eligibility and Accreditations		20,200
AUC Title IV Eligibility and Accreditations		100,000
DeVry Brazil Accreditation		101,505
Total	$	363,598

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	June 30, 2016
	Gross Carrying Amount		Accumulated Amortization
Amortizable Intangible Assets:
Student Relationships	$	14,530	$	(7,150	)
Customer Relationships		400		(170	)
Non-compete Agreements		940		(799	)
Curriculum/Software		4,038		(1,914	)
Franchise Contracts		10,968		(863	)
Clinical Agreements		406		(81	)
Trade Names		1,183		(858	)
Total	$	32,465	$	(11,835	)
Indefinite-Lived Intangible Assets:
Trade Names	$	70,731
Trademarks		1,645
Ross Title IV Eligibility and Accreditations		14,100
Intellectual Property		13,940
Chamberlain Title IV Eligibility and Accreditations		1,200
Carrington Title IV Eligibility and Accreditations		20,200
AUC Title IV Eligibility and Accreditations		100,000
DeVry Brazil Accreditation		100,410
Total	$	322,226

	March 31, 2016
	Gross Carrying Amount		Accumulated Amortization
Amortizable Intangible Assets:
Student Relationships	$	13,082	$	(5,430	)
Customer Relationships		400		(160	)
Test Prep Relationships		900		(900	)
Non-compete Agreements		940		(752	)
Curriculum/Software		3,881		(1,786	)
Outplacement Relationships		3,900		(1,959	)
Franchise Contracts		9,875		(640	)
Clinical Agreements		366		(67	)
Trade Names		1,064		(746	)
Total	$	34,408	$	(12,440	)
Indefinite-Lived Intangible Assets:
Trade Names	$	66,808
Trademarks		1,645
Ross Title IV Eligibility and Accreditations		14,100
Intellectual Property		13,940
Chamberlain Title IV Eligibility and Accreditations		1,200
Carrington Title IV Eligibility and Accreditations		60,700
AUC Title IV Eligibility and Accreditations		100,000
DeVry Brazil Accreditation		90,685
Total	$	349,078

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Amortization expense for amortized intangible assets was $2.8 million and $8.5 million for the three and nine months ended March 31, 2017, respectively, and $1.4 million and $4.0 million for the three and nine months ended March 31, 2016, respectively. Estimated amortization expense for amortizable intangible assets for the next five fiscal years ending June 30 and in the aggregate, by reporting unit, is as follows (in thousands):

Fiscal Year	DeVry Brazil		Becker		Total
2017	$	3,721	$	7,482	$	11,203
2018		2,994		6,501		9,495
2019		2,152		6,422		8,574
2020		1,515		4,671		6,186
2021		949		4,440		5,389
Thereafter		7,326		19,686		27,012

All amortizable intangible assets except student relationships and customer relationships are being amortized on a straight-line basis. The amount being amortized for student relationships is based on the estimated progression of the students through the respective Faculdade Boa Viagem (“FBV”), Centro Universitário Vale do Ipojuca (“Unifavip”), Damásio Educacional (“Damasio”) and Grupo Ibmec programs, giving consideration to the revenue and cash flow associated with both existing students and new applicants. The amount being amortized for customer relationships related to ACAMS is based on the estimated retention of the customers, giving consideration to the revenue and cash flow associated with these existing customers.

Indefinite-lived intangible assets related to trademarks, trade names, Title IV eligibility, accreditations and intellectual property are not amortized, as there are no legal, regulatory, contractual, economic or other factors that limit the useful life of these intangible assets to the reporting entity.

In accordance with GAAP, goodwill and indefinite-lived intangibles arising from a business combination are not amortized and charged to expense over time. Instead, these assets must be reviewed annually for impairment or more frequently if circumstances arise indicating potential impairment. DeVry Group’s annual impairment review was most recently completed during the fourth quarter of fiscal year 2016, at which time there were impairment losses recorded related to Carrington goodwill and the Carrington Accreditation and Title IV Eligibility indefinite-lived intangible asset totaling $48.2 million. No impairment loss associated with recorded goodwill or indefinite-lived intangible assets for any other reporting unit was realized as estimated fair values exceeded carrying amounts.

DeVry Group had six reporting units which contained goodwill as of the third quarter of fiscal year 2017. These reporting units constitute components for which discrete financial information is available and regularly reviewed by segment management and the Board. If the carrying amount of a reporting unit containing the goodwill exceeds the fair value of that reporting unit, an impairment loss is recognized to the extent the “implied fair value” of the reporting unit goodwill is less than the carrying amount of the goodwill. In analyzing the results of operations and business conditions of all six reporting units as of March 31, 2017, it was determined that no triggering event had occurred during the first nine months of fiscal year 2017 that would indicate the carrying value of a reporting unit had exceeded its fair value.

For indefinite-lived intangible assets, management first analyzes qualitative factors including results of operations and business conditions of the seven reporting units that contained indefinite-lived intangible assets, significant changes in cash flows at the individual indefinite-lived intangible asset level, if applicable, as well as how much previously calculated fair values exceed carrying values to determine if it is more likely than not that the intangible assets associated with these reporting units have been impaired. Based on its analysis, management has determined that, as of March 31, 2017, no triggering event had occurred during the first nine months of fiscal year 2017 that would indicate the carrying value of an indefinite-lived intangible asset had exceeded its fair value.

These interim triggering event conclusions were based on the fact that the qualitative analysis of DeVry Group’s reporting units and indefinite-lived intangible assets resulted in no impairment indicators as of the end of fiscal year 2016, except at the Carrington and DeVry University reporting units, and that no interim events or deviations from planned operating results occurred as of March 31, 2017, that would cause management to reassess these conclusions.

In regards to Carrington, although the revenue for the first nine months of fiscal year 2017 was below plan, operating income was better than the fiscal year 2017 operating plan which was used in the May 31, 2016 impairment analysis; thus, management believes that no indicator of further impairment currently exists with this reporting unit. Should declines in student enrollment at Carrington result in financial performance that is significantly below management expectations, the carrying value of this reporting unit may exceed its fair value and indefinite-lived intangible assets could be impaired. This could require a write-off of up to $20.2 million.

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The DeVry University reporting unit operating income for the first nine months of fiscal year 2017 was in-line with the operating plan that was used in the May 31, 2016 impairment analysis. This reporting unit is expected to meet planned positive operating results for fiscal year 2017. As a result, management did not believe business conditions had deteriorated such that it was more likely than not that the fair value of DeVry University was below carrying value for this reporting unit or its associated indefinite-lived intangible assets as of March 31, 2017. Based on the May 31, 2016 impairment review, DeVry University’s current and forecasted profitability is sufficient to maintain a fair value greater than its carrying value. The fair value of this reporting unit exceeded its carrying value by 6% as of the May 31, 2016 valuation date. DeVry University has been able to adjust operating expenses to offset in excess of 90% of the revenue declines experienced over the last two years. This has resulted in positive cash flows sufficient to produce a fair value in excess of the carrying value of this reporting unit. Management monitors enrollment and financial performance of the reporting unit. Should management not be able to adjust costs to offset future declines in student enrollment and revenue, resulting in financial performance that is significantly below management expectations, the carrying value of this reporting unit may exceed its fair value, and goodwill and indefinite-lived intangible assets could be impaired. Also, regulatory changes and the outcome of legal or regulatory actions could have a material adverse effect on the financial condition, results of operations and cash flows of DeVry University and impose significant restrictions on the ability of DeVry University to operate. These scenarios could require a write-off of up to $23.8 million of indefinite-lived intangible assets and goodwill.

Operating income and cash flows at all other reporting units for the first nine months of fiscal year 2017 were not materially different from the budgeted amounts used in the impairment analysis as of May 31, 2016. Full year operating results are also forecast to not materially differ from the full year operating plan. Thus, management does not believe any of the reporting units or their associated indefinite-lived intangible assets fair values would have declined enough to fall below the carrying values as of March 31, 2017.

Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions. Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates which could lead to additional impairments of intangible assets.

At March 31, 2017, intangible assets from business combinations totaled $422.9 million and goodwill totaled $861.0 million. Together, these assets equaled approximately 55% of total assets as of such date, and any impairment could significantly affect future results of operations.

The table below summarizes goodwill balances by reporting unit (in thousands):

	March 31,		June 30		March 31,
Reporting Unit	2017		2016		2016
Chamberlain	$	4,716	$	4,716	$	4,716
AUC		68,321		68,321		68,321
RUSM and RUSVM		237,173		237,173		237,173
Becker		306,444		32,043		32,386
DeVry Brazil		222,151		223,558		194,409
DeVry University		22,196		22,196		22,196
Carrington		-		-		5,811
Total	$	861,001	$	588,007	$	565,012

The table below summarizes goodwill balances by reporting segment (in thousands):

	March 31,		June 30,		March 31,
Reporting Segment	2017		2016		2016
Medical and Healthcare	$	310,210	$	310,210	$	310,210
Professional Education		306,444		32,043		32,386
Technology and Business		222,151		223,558		194,409
U.S. Traditional Postsecondary		22,196		22,196		28,007
Total	$	861,001	$	588,007	$	565,012

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The table below summarizes the changes in the carrying amount of goodwill by segment (in thousands):

									U.S. Traditional Postsecondary
	Medical					Technology					Accumulated
	and		Professional			and					Impairment
	Healthcare		Education			Business			Gross		Losses			Total
Balance at June 30, 2014	$	310,210	$	33,217		$	55,472		$	207,913	$	(86,933	)	$	519,879
Acquisitions		-		-			55,915			-		-			55,915
Foreign exchange rate changes		-		(420	)		(23,045	)		-		-			(23,465	)
Balance at June 30, 2015		310,210		32,797			88,342			207,913		(86,933	)		552,329
Purchase Accounting Adjustments		-		-			4,575			-		-			4,575
Acquisitions		-		-			108,246			-		-			108,246
Impairments		-		-			-			-		(92,973	)		(92,973	)
Foreign exchange rate changes		-		(411	)		(6,754	)		-		-			(7,165	)
Balance at March 31, 2016		310,210		32,386			194,409			207,913		(179,906	)		565,012
Acquisitions		-		-			7,761			-		-			7,761
Impairments		-		-			-			-		(5,811	)		(5,811	)
Foreign exchange rate changes		-		(343	)		21,388			-		-			21,045
Balance at June 30, 2016		310,210		32,043			223,558			207,913		(185,717	)		588,007
Purchase Accounting Adjustments		-		-			(3,122	)		-		-			(3,122	)
Acquisitions		-		274,620			-			-		-			274,620
Foreign exchange rate changes		-		(219	)		1,715			-		-			1,496
Balance at March 31, 2017	$	310,210	$	306,444		$	222,151		$	207,913	$	(185,717	)	$	861,001

The increase in the goodwill balance from June 30, 2016 in the Professional Education segment is the result of the addition of $274.6 million with the acquisition of ACAMS.

The table below summarizes the indefinite-lived intangible asset balances by reporting segment (in thousands):

	March 31,		June 30,		March 31,
Reporting Segment	2017		2016		2016
Medical and Healthcare	$	137,500	$	137,500	$	137,500
Professional Education		67,812		27,912		27,912
Technology and Business		136,441		134,969		121,321
U.S. Traditional Postsecondary		21,845		21,845		62,345
Total	$	363,598	$	322,226	$	349,078

Total indefinite-lived intangible assets increased by $41.4 million from June 30, 2016. The increase is the result of the addition of $39.9 million with the acquisition of ACAMS and by a change in the value of the Brazilian Real compared to the U.S. dollar. Since DeVry Brazil intangible assets are recorded in the local currency, fluctuations in the value of the Brazilian Real in relation to the U.S. dollar will cause changes in the balance of these assets.

NOTE 11: RESTRUCTURING CHARGES

During the third quarter and first nine months of fiscal year 2017 and 2016, DeVry Group recorded restructuring charges related to real estate consolidations and reductions in force (“RIF”) at DeVry University, Carrington, the administrative support operations of the medical and veterinary schools and DeVry Group home office. DeVry Group home office is classified as “Home Office and Other” in “Note 15: Segment Information.” These RIF charges, which reduced the DeVry Group workforce by 207 and 303 total positions in the first nine months of fiscal years 2017 and 2016, respectively, represented severance pay and benefits for these employees. These pre-tax restructuring charges by segment were as follows (in thousands):

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	Three Months Ended March 31, 2017							Nine Months Ended March 31, 2017
	Real Estate			Termination Benefits		Total		Real Estate		Termination Benefits		Total
Medical and Healthcare	$	137		$	530	$	667	$	137	$	530	$	667
U.S. Traditional Postsecondary		2,347			3,345		5,692		9,835		3,345		13,180
Home Office and Other		(222	)		1,634		1,412		1,706		2,315		4,021
Total	$	2,262		$	5,509	$	7,771	$	11,678	$	6,190	$	17,868

	Three Months Ended March 31, 2016						Nine Months Ended March 31, 2016
	Real Estate		Termination Benefits		Total		Real Estate		Termination Benefits		Total
Professional Education	$	300	$	-	$	300	$	300	$	-	$	300
U.S. Traditional Postsecondary		729		1,844		2,573		31,901		7,669		39,570
Total	$	1,029	$	1,844	$	2,873	$	32,201	$	7,669	$	39,870

The following table summarizes the separation and restructuring plan activity for the fiscal years 2017 and 2016, for which cash payments are required (in thousands):

Liability balance at June 30, 2015	$	26,992
Increase in liability (separation and other charges)		67,495
Reduction in liability (payments and adjustments)		(46,264	)
Liability balance at June 30, 2016		48,223
Increase in liability (separation and other charges)		14,889
Reduction in liability (payments and adjustments)		(23,074	)
Liability balance at March 31, 2017	$	40,038

Of this liability balance, $17.7 million is recorded as Accrued Expenses and $22.3 million is recorded as Deferred Rent and Other Liabilities on the Consolidated Balance Sheet at March 31, 2017. These liability balances primarily represent rent accruals and costs for employees that have either not yet separated from DeVry Group or their full severance has not yet been paid. All of these remaining costs are expected to be paid over the next 12 months except for rent charges which may be paid out for periods of up to 8 years.

NOTE 12: INCOME TAXES

The effective income tax rates on income were 14.8% and 3.2% for the third quarter and first nine months of fiscal year 2017, respectively, compared to 12.7% and 9.1% for the third quarter and first nine months of fiscal year 2016. A tax benefit of $22.1 million was recorded in the second quarter of fiscal year 2017 for settlement costs of various regulatory authority litigation. A tax benefit of $13.4 million was recorded in the second quarter of fiscal year 2016 for the impairment and write-down of intangible assets. The effective tax rate excluding the regulatory settlement and impairment costs were 17.8% and 13.2% for the first nine months of fiscal years 2017 and 2016, respectively. The tax rates increased in fiscal year 2017 compared to fiscal year 2016 due to an increase in earnings from U.S. operations, which are taxed at a higher rate than income from foreign operations. DeVry Group’s effective income tax rate reflects benefits derived from significant operations outside the U.S. Earnings of these international operations are not subject to U.S. federal or state income taxes, so long as such earnings are not repatriated, as discussed below. Four of DeVry Group’s operating units, AUC, which operates in St. Maarten, RUSM, which operates in Dominica, RUSVM, which operates in St. Kitts, and DeVry Brazil, which operates in Brazil, all benefit from local tax incentives. AUC’s effective tax rate reflects benefits derived from investment incentives. RUSM and RUSVM each have agreements with their respective domestic governments that exempt them from local income taxation. Both of these agreements have been extended to provide, in the case of RUSM, an indefinite period of exemption and, in the case of RUSVM, exemption until 2037. DeVry Brazil’s effective tax rate reflects benefits derived from its participation in PROUNI, a Brazilian program for providing scholarships to a portion of its undergraduate students.

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DeVry Group has not recorded a U.S. federal or state tax provision for the undistributed earnings of its international subsidiaries. It is DeVry Group’s intention to indefinitely reinvest accumulated cash balances, future cash flows and post-acquisition undistributed earnings and profits to improve the facilities and operations of its international schools and pursue future opportunities outside the U.S. In accordance with this plan, cash held by the international subsidiaries will not be available for general company purposes, and under current laws, will not be subject to U.S. taxation. As of March 31, 2017, June 30, 2016 and March 31, 2016, cumulative undistributed earnings attributable to international operations were approximately $994 million, $891 million and $861 million, respectively.

NOTE 13: DEBT

Revolving Credit Facility

DeVry Group entered into a revolving credit facility on March 31, 2015 which expires on March 31, 2020. The Credit Agreement provides for a multi-currency revolving credit facility in the amount of $400 million (the “Aggregate Commitment”) with availability in currencies other than U.S. dollars of up to $200 million. Subject to certain conditions set forth in the Credit Agreement, the Aggregate Commitment may be increased up to $550 million. Up to $50 million of the Aggregate Commitment was available for letters of credit. On October 4, 2016, DeVry Group entered into a First Amendment to Credit Agreement (the “Credit Agreement Amendment”), which amends the Aggregate Commitment to increase the amount available for letters of credit from $50 million to $100 million. This increase was requested to accommodate the requirements of the negotiated settlement agreement with the U.S. Department of Education which requires DeVry University to post a letter of credit for $68.4 million (see “Note 3: Regulatory Settlements” and “Note 14: Commitments and Contingencies” for additional information regarding this settlement agreement). DeVry Group may select interest rates for borrowings under the Credit Agreement equal to LIBOR or a LIBOR-equivalent rate for Eurocurrency Rate Loans or a base rate, plus an applicable rate based on DeVry Group’s consolidated leverage ratio, as defined in the Credit Agreement. The applicable rate ranges from 2% to 3% for Eurocurrency Rate Loans and from 1% to 2% for Base Rate Loans. As of March 31, 2017, DeVry Group borrowings under this agreement were $120 million with a weighted average interest rate of 3.45%. There were no outstanding borrowings under the revolving credit facility as of June 30, 2016 or March 31, 2016. Borrowings were made in the first quarter of fiscal year 2017 to fund the acquisition of ACAMS as discussed in “Note 9: Business Combinations.” Additional borrowings were made in the second quarter of fiscal year 2017 to fund the FTC settlement discussed in “Note 3: Regulatory Settlements” and “Note 14: Commitments and Contingencies.” There are no required principal payments under this revolving credit agreement and all borrowings and letters of credit mature on March 31, 2020. As a result of the agreement extending beyond one year, the borrowings are classified as long-term with the exception of amounts expected to be repaid in the 12 months subsequent to the balance sheet date, if any. DeVry Group letters of credit outstanding under this agreement were $68.5 million as of March 31, 2017 and $0.1 million as of each of June 30, 2016 and March 31, 2016. As of March 31, 2017, DeVry Group is charged an annual fee equal to 2.5% of the undrawn face amount of the outstanding letters of credit under the agreement, payable quarterly. The agreement also requires payment of a commitment fee equal to 0.4% of the undrawn portion of the credit facility as of March 31, 2017. The interest rate, letter of credit fees and commitment fees are adjustable quarterly, based upon DeVry Group’s achievement of certain financial ratios.

The revolving credit agreement contains covenants that, among other things, require maintenance of certain financial ratios, as defined in the agreement. Maintenance of these financial ratios could place restrictions on DeVry Group’s ability to pay dividends. These financial ratios include a consolidated fixed charge coverage ratio, a consolidated leverage ratio and a U.S. Department of Education financial responsibility ratio based upon a composite score of an equity ratio, a primary reserve ratio and a net income ratio. Failure to maintain any of these ratios or to comply with other covenants contained in the agreement would constitute an event of default and could result in termination of the agreement and require payment of all outstanding borrowings and replacement of outstanding letters of credit. DeVry Group was in compliance with the debt covenants as of March 31, 2017.

The stock of all U.S. and certain foreign subsidiaries of DeVry Group is pledged as collateral for the borrowings under the revolving credit facility.

DeVry Group also has liabilities recorded for deferred purchase price agreements with sellers related to the purchases of Faculdade Diferencial Integral (“Facid”), Faculdade Idea (“Faci”), Damasio, Grupo Ibmec and Facimp (see “Note 9: Business Combinations” for discussion of the Grupo Ibmec and Facimp acquisitions). This financing is in the form of holdbacks of a portion of the purchase price of these acquisitions or installment payments. Payments are made under these agreements based on payment schedules or the resolution of any pre-acquisition contingencies.

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NOTE 14: COMMITMENTS AND CONTINGENCIES

DeVry Group is subject to lawsuits, administrative proceedings, regulatory reviews and investigations associated with financial assistance programs and other matters arising in the normal conduct of its business. The following is a description of pending legal and regulatory matters that may be considered other than ordinary, routine and incidental to the business. Descriptions of certain matters from prior SEC filings may not be carried forward in this report to the extent we believe such matters no longer are required to be disclosed or there has not been, to our knowledge, significant activity relating to them. The timing or outcome of the following matters, or their possible impact on DeVry Group’s business, financial condition or results of operations, cannot be predicted at this time. The continued defense, resolution or settlement of any of the following matters could require us to expend significant resources and could have a material adverse effect on our business, financial condition, results of operations and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

In April 2013, DeVry Group received a Civil Investigative Demand (a “CID”) issued by the Office of the Attorney General of the Commonwealth of Massachusetts. The CID was issued in connection with an investigation into whether DeVry Group caused false claims and/or false statements to be submitted to the Commonwealth of Massachusetts relating to student loans, guarantees, and grants provided to DeVry Group’s Massachusetts students and required DeVry Group to answer interrogatories and to provide documents relating to periods on or after January 1, 2007. DeVry Group responded to the CID in May 2013. In July 2016, DeVry Group received a second CID from the Office requesting information regarding DeVry University advertising, admissions materials, placement rates, and credit/transferability agreements. DeVry Group is in the process of responding to the second CID.

On July 15, 2014, DeVry Group received a letter dated July 9, 2014, from the Office of the Attorney General of the State of New York (“NYAG”). The letter requested cooperation with the NYAG’s inquiry into whether recent television advertisements and website marketing regarding DeVry University may have violated federal and state laws prohibiting false advertising and deceptive practices. DeVry Group, DeVry University, Inc., and DeVry/New York Inc. (collectively, the “DeVry Parties”) chose to resolve the NYAG inquiry by entering into an Assurance of Discontinuance (the “Assurance”) with the NYAG on January 27, 2017, without admitting or denying the allegations therein. Pursuant to the Assurance, the DeVry Parties agreed to pay $2.25 million for consumer restitution and $0.5 million in penalties, fees and costs. In addition, the DeVry Parties agreed that DeVry Group institutions marketing to New York consumers will maintain specific substantiation and present certain statistics as prescribed to support any future advertising regarding graduate outcomes and educational benefits, and will implement other agreed-upon compliance measures.

On August 28, 2015, DeVry University received a request from the Multi-Regional and Foreign School Participation Division of the Federal Student Aid office of the Department of Education (“ED FSA”) for documents and information regarding published employment outcomes and relative earnings information of DeVry University graduates (the “Inquiry”). The stated purpose of the Inquiry was to permit ED FSA to assess DeVry University's compliance with applicable regulations under Title IV. On January 27, 2016, DeVry University received a Notice of Intent to Limit from ED FSA (the “January 2016 Notice”), based on a portion of the Inquiry, informing DeVry University of ED FSA’s intention to impose certain limitations on the participation of DeVry University in programs authorized pursuant to Title IV. The proposed limitations related to representations in advertising and marketing, regarding the post-graduation employment outcomes of DeVry University students over a period from 1975 to October 1980 (the “Since 1975 Representation”). On October 13, 2016, DeVry University and the U.S. Department of Education (“ED”) reached a negotiated agreement to settle the January 2016 Notice (the “ED Settlement”). Under the terms of the ED Settlement, among other things, without admitting wrongdoing, DeVry University (1) may no longer make representations regarding the graduate employment outcomes of DeVry University graduates from 1975 to October 1980, including advertising regarding the cumulative graduate employment outcomes since 1975, (2) will maintain or undertake certain recordkeeping and compliance practices to support future representations regarding graduate employment rates and (3) will post a notice on its website and in its enrollment agreements regarding the Since 1975 Representation. The ED Settlement also provides that, except for Heightened Cash Monitoring 1 status, ED will not impose conditions on the timing of, or documentation requirements for, disbursement of aid due to matters relating to lack of substantiation for the Since 1975 Representation. As a result of the ED Settlement, DeVry University’s participation in the Title IV programs will be subject to provisional certification for five years and DeVry University will be required to post a letter of credit equal to the greater of 10% of DeVry University’s annual Title IV disbursements or $68.4 million for a five-year period. Institutions under provisional certification must obtain ED approval before it may award or disburse Title IV funds based on a substantial change, including the establishment of a new location or the addition of an educational program. Provisional certification status also carries fewer due process protections than full certification. As a result, ED may withdraw an institution’s provisional certification more easily than if it is fully certified. Provisional certification does not otherwise limit access to Title IV program funds by students attending the institution.

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On January 27, 2016, the Federal Trade Commission (“FTC”) filed a civil complaint (the “FTC lawsuit”) against the DeVry Parties in the United States District Court for the Central District of California alleging that certain of DeVry University’s advertising claims were false or misleading or unsubstantiated at the time they were made in violation of Section 5(a) of the Federal Trade Commission Act. The parties settled the FTC lawsuit by stipulation, which was entered by the district court as a Stipulated Order for Permanent Injunction and Monetary Judgment (the “Order”) on December 19, 2016. Pursuant to the Order, the DeVry Parties paid $49.4 million to the FTC to be distributed at the sole discretion of the FTC; forgave $30.4 million of institutional loans issued before September 30, 2015; and forgave outstanding DeVry University accounts receivable balances of $20.2 million for former students. The Order also requires DeVry Group institutions marketing to U.S. consumers to maintain specific substantiation to support any future advertising regarding graduate outcomes and educational benefits, and to implement training and other agreed-upon compliance measures.

On May 13, 2016, a putative class action lawsuit was filed by the Pension Trust Fund for Operating Engineers, individually and on behalf of others similarly situated, against DeVry Group, Daniel Hamburger, Richard M. Gunst, and Timothy J. Wiggins in the United States District Court for the Northern District of Illinois. The complaint was filed on behalf of a putative class of persons who purchased DeVry Group common stock between February 4, 2011 and January 27, 2016. Citing the FTC lawsuit and the ED January 2016 Notice, the plaintiff claims that defendants made false or misleading statements regarding DeVry University’s graduate employment rate and the earnings of DeVry University graduates relative to the graduates of other universities and colleges. As a result of these false or misleading statements about DeVry University graduate outcomes, plaintiff alleges, defendants overstated DeVry Group’s growth, revenue and earnings potential and made false or misleading statements about DeVry Group’s business, operations and prospects. The plaintiff alleges direct liability against all defendants for violations of §10(b) and Rule 10b-5 of the Exchange Act and asserted liability against the individual defendants pursuant to §20(a) of the Exchange Act. The plaintiff seeks monetary damages, interest, attorneys’ fees, costs and other unspecified relief. On July 13, 2016, the Utah Retirement System (“URS”) moved for appointment as lead plaintiff and approval of its selection of counsel, which was not opposed by the Pension Trust Fund for Operating Engineers and URS was appointed as lead plaintiff on August 24, 2016. URS filed a second amended complaint (“SAC”) on December 23, 2016. The SAC seeks to represent a putative class of persons who purchased DeVry Group common stock between August 26, 2011 and January 27, 2016 and names an additional individual defendant, Patrick J. Unzicker. Like the original complaint, the SAC asserts claims against all defendants for alleged violations of §10(b) and Rule 10b-5 of the Exchange Act and asserted liability against the individual defendants pursuant to §20(a) of the Exchange Act for alleged material misstatements or omissions regarding DeVry University graduate outcomes. On January 27, 2017, defendants moved to dismiss the SAC.

On or about June 21, 2016, T’Lani Robinson and Robby Brown filed an arbitration demand with the American Arbitration Association in Chicago, seeking to represent a putative class of students who received a DeVry University education from January 1, 2008 until April 8, 2016 (“Putative Class Period”). Following DeVry Group’s filing of a declaratory judgment action in the United States District Court for the Northern District of Illinois seeking, among other things, an order declaring that federal court is the appropriate venue for this putative class action, on September 12, 2016, Robinson and Brown voluntarily withdrew their demand for arbitration. On September 20, 2016, Robinson and Brown answered the declaratory judgement action and filed a putative class action counterclaim, individually and on behalf of others similarly situated, against DeVry Group Inc., DeVry University, Inc., and DeVry/New York, Inc. in the United States District Court for the Northern District of Illinois. The counterclaim asserted causes of action for breach of contract, misrepresentation, concealment, negligence, violations of the Illinois Uniform Deceptive Trade Practices Act, the Illinois Consumer Fraud and Deceptive Trade Practices Act, and the Illinois Private Business and Vocational Schools Act, conversion, unjust enrichment, and declaratory relief. The plaintiffs sought monetary, declaratory, injunctive, and other unspecified relief. On November 4, 2016, following a stipulated dismissal of the declaratory action, the DeVry Parties moved to dismiss the counterclaim after which plaintiffs voluntarily withdrew it. On December 2, 2016, Robinson and Brown filed an amended complaint adding two additional named plaintiffs. The amended complaint purports to assert nationwide class claims under the above-referenced Illinois statutes and common law theories on behalf of those who, during the Putative Class Period, (i) enrolled in DeVry University; (ii) financed their education with DeVry University with direct loans administered by ED; or (iii) entered into an enrollment agreement with DeVry University and otherwise paid for a DeVry University education. The amended complaint also seeks to represent a fourth class of individuals residing in, or enrolled in a DeVry University campus located in, California during the Putative Class Period bringing claims under the California Business and Profession Code. In addition to the claims previously asserted as described above, the amended complaint adds a claim for breach of fiduciary duty owed students in administering Title IV funds. The DeVry Parties moved to dismiss the amended complaint on January 13, 2017.

On October 14, 2016, a putative class action lawsuit was filed by Debbie Petrizzo and five other former DeVry University students, individually and on behalf of others similarly situated, against the DeVry Parties in the United States District Court for the Northern District of Illinois (the “Petrizzo Case”). The complaint was filed on behalf of a putative class of persons consisting of those who enrolled in and/or attended classes at DeVry University from at least 2002 through the present and who were unable to find employment within their chosen field of study within six months of graduation. Citing the FTC lawsuit, the plaintiffs claimed that defendants made false or misleading statements regarding DeVry University’s graduate employment rate and asserted claims for unjust enrichment and violations of six different states’ consumer fraud, unlawful trade practices, and consumer protection laws. The plaintiffs sought monetary, declaratory, injunctive, and other unspecified relief.

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On October 28, 2016, a putative class action lawsuit was filed by Jairo Jara and eleven others, individually and on behalf of others similarly situated, against the DeVry Parties in the United States District Court for the Northern District of Illinois (the “Jara Case”). The individual plaintiffs claim to have graduated from DeVry University in 2001 or later and sought to proceed on behalf of a putative class of persons consisting of those who obtained a degree from DeVry University and who were unable to find employment within their chosen field of study within six months of graduation. Citing the FTC lawsuit, the plaintiffs claimed that defendants made false or misleading statements regarding DeVry University’s graduate employment rate and asserted claims for unjust enrichment and violations of ten different states’ consumer fraud, unlawful trade practices, and consumer protection laws. The plaintiffs sought monetary, declaratory, injunctive, and other unspecified relief.

By Order dated November 28, 2016, the district court ordered the Petrizzo and Jara Cases be consolidated under the Petrizzo caption for all further purposes. On December 5, 2016, plaintiffs filed an amended consolidated complaint on behalf of 38 individual plaintiffs and others similarly situated. The amended consolidated complaint seeks to bring claims on behalf of the named individuals and a putative nationwide class of individuals for unjust enrichment and alleged violations of the Illinois Consumer Fraud and Deceptive Practices Act and the Illinois Private Businesses and Vocational Schools Act of 2012. In additional, it purports to assert causes of action on behalf of certain of the named individuals and 15 individual state-specific putative classes for alleged violations of 15 different states’ consumer fraud, unlawful trade practices, and consumer protection laws. Finally, it seeks to bring individual claims under Georgia state law on behalf of certain named plaintiffs. The plaintiffs seek monetary, declaratory, injunctive, and other unspecified relief. The DeVry Parties moved to dismiss the complaint on February 3, 2017.

On January 17, 2017, Harriet Myers filed a complaint derivatively on behalf of DeVry Group in the United States District Court for the Northern District of Illinois against individual defendants Daniel M. Hamburger, Timothy J. Wiggins, Richard M. Gunst, Patrick J. Unzicker, Christopher B. Begley, David S. Brown, Lisa W. Wardell, Ann Weaver Hart, Lyle Logan, Alan G. Merten, Fernando Ruiz, Ronald L. Taylor and James D. White. DeVry Group was named as a nominal defendant only. The plaintiffs have agreed to a stipulated order moving the case to United States District Court for the District of Delaware. Citing the FTC lawsuit and settlement, the January 2016 Notice and ED settlement, and the allegations in the lawsuit filed by the Pension Trust Fund for Operating Engineers, each referenced above, the plaintiff alleges that the individual defendants have breached their fiduciary duties and violated federal securities law since at least 2011. The plaintiff asserts that the individual defendants permitted DeVry Group to engage in unlawful conduct, failed to correct misconduct or prevent its recurrence, and failed to ensure the accurate dissemination of information to shareholders. The complaint attempts to state three claims: (i) breach of fiduciary duty by all named defendants for allegedly allowing the illegal conduct to occur, (ii) unjust enrichment by all individual defendants in the receipt of compensation, and (iii) violation of Section 14(a) by failing to disclose the alleged illegal scheme in proxy statements and falsely stating that compensation was based on “pay for performance” where those performance results were allegedly false. Plaintiff seeks on behalf of DeVry Group monetary, injunctive and other unspecified relief.

NOTE 15: SEGMENT INFORMATION

DeVry Group’s principal business is providing postsecondary education. During the third quarter of fiscal year 2017, DeVry Group affected a change to reportable segments to align with current strategic priorities and resource allocation. DeVry Group presents four reportable segments: “Medical and Healthcare,” which includes the operations of Chamberlain and the medical and veterinary schools (which includes AUC, RUSM and RUSVM); “Professional Education,” which includes the operations of Becker; “Technology and Business,” which includes the operations of DeVry Brazil; and “U.S. Traditional Postsecondary,” which includes the operations of DeVry University and Carrington.

These segments are consistent with the method by which the Chief Operating Decision Maker (DeVry Group’s President and Chief Executive Officer) evaluates performance and allocates resources. Performance evaluations are based, in part, on each segment’s operating income. Intersegment sales are accounted for at amounts comparable to sales to nonaffiliated customers and are eliminated in consolidation. “Home Office and Other” includes activity not allocated to a reportable segment and is included to reconcile segment results to the Consolidated Financial Statements. The accounting policies of the segments are the same as those described in “Note 4: Summary of Significant Accounting Policies.”

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Summary financial information by reporting segment is as follows (in thousands):

	Three Months Ended March 31,						Nine Months Ended March 31,
	2017			2016			2017			2016
Revenue:
Medical and Healthcare	$	208,153		$	210,215		$	609,331		$	590,616
Professional Education		29,810			23,683			91,906			71,417
Technology and Business		61,810			48,062			193,437			121,405
U.S. Traditional Postsecondary		152,951			193,008			465,666			590,643
Intersegment Elimination and Other		(635	)		(747	)		(2,009	)		(2,245	)
Total Consolidated Revenue	$	452,089		$	474,221		$	1,358,331		$	1,371,836
Operating Income (Loss):
Medical and Healthcare	$	50,150		$	57,450		$	146,166		$	140,920
Professional Education		2,619			5,905			8,810			15,638
Technology and Business		5,358			(1,583	)		16,864			(1,447	)
U.S. Traditional Postsecondary (1)		(5,724	)		2,942			(21,411	)		(132,827	)
Home Office and Other (1)		(5,110	)		(3,867	)		(65,183	)		(9,569	)
Total Consolidated Operating Income	$	47,293		$	60,847		$	85,246		$	12,715
Segment Assets:
Medical and Healthcare	$	888,413		$	830,493		$	888,413		$	830,493
Professional Education		450,769			109,478			450,769			109,478
Technology and Business		609,624			504,640			609,624			504,640
U.S. Traditional Postsecondary		258,810			570,976			258,810			570,976
Home Office and Other (2)		110,193			81,472			110,193			81,472
Total Consolidated Assets	$	2,317,809		$	2,097,059		$	2,317,809		$	2,097,059
Additions to Long-Lived Assets:
Medical and Healthcare	$	3,574		$	2,798		$	10,418		$	16,571
Professional Education		66			220			363,724			815
Technology and Business		4,882			5,557			12,495			194,111
U.S. Traditional Postsecondary		1,679			2,945			5,080			14,182
Home Office and Other		1,922			2,080			4,464			9,667
Total Consolidated Additions to Long-Lived Assets	$	12,123		$	13,600		$	396,181		$	235,346
Reconciliation to Consolidated Financial Statements:
Capital Expenditures	$	12,123		$	9,956		$	32,529		$	51,004
Increase in Capital Assets from Acquisitions		-			-			4,913			13,487
Increase in Intangible Assets and Goodwill		-			3,644			358,739			170,855
Total Increase in Consolidated Long-Lived Assets	$	12,123		$	13,600		$	396,181		$	235,346
Depreciation Expense:
Medical and Healthcare	$	6,652		$	7,526		$	19,850		$	21,057
Professional Education		119			66			466			549
Technology and Business		2,881			1,272			6,991			3,535
U.S. Traditional Postsecondary		5,773			7,805			17,689			24,719
Home Office and Other		2,936			3,310			8,932			9,489
Total Consolidated Depreciation Expense	$	18,361		$	19,979		$	53,928		$	59,349
Intangible Asset Amortization Expense:
Professional Education	$	1,893		$	147		$	5,679		$	447
Technology and Business		899			1,200			2,808			3,325
U.S. Traditional Postsecondary		-			65			-			190
Total Consolidated Amortization Expense	$	2,792		$	1,412		$	8,487		$	3,962

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(1) U.S. Traditional Postsecondary and Home Office and Other Operating Income includes $4.1 million and $52.2 million in charges, respectively, in the nine months ended March 31, 2017 for regulatory settlements as described in "Note 3: Regulatory Settlements."

(2) In addition to the change in reportable segments, Home Office and Other Segment Assets and Total Consolidated Assets in fiscal year 2016 have been revised to reflect the reclassification of deferred tax assets and liabilities related to adoption of ASU No. 2015-17 "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes."

DeVry Group conducts its educational operations in the U.S., Dominica, St. Kitts, St. Maarten, Brazil, Canada, Europe, the Middle East, India, China and the Pacific Rim. Other international revenue, which is derived principally from Europe and the Pacific Rim, was less than 5% of total revenue for each of the three-month and nine-month periods ended March 31, 2017 and 2016. Revenue and long-lived assets by geographic area are as follows (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2017		2016		2017		2016
Revenue from Unaffiliated Customers:
Domestic Operations	$	305,639	$	336,927	$	901,261	$	982,656
International Operations:
Dominica, St. Kitts and St. Maarten		83,237		88,263		260,083		262,963
Brazil		61,810		48,063		193,437		121,405
Other		1,403		968		3,550		4,812
Total International		146,450		137,294		457,070		389,180
Total Consolidated Revenue	$	452,089	$	474,221	$	1,358,331	$	1,371,836
Long-Lived Assets:
Domestic Operations	$	260,101	$	309,281	$	260,101	$	309,281
International Operations:
Dominica, St. Kitts and St. Maarten		188,511		183,146		188,511		183,146
Brazil		117,412		92,779		117,412		92,779
Other		3,746		27		3,746		27
Total International		309,669		275,952		309,669		275,952
Total Consolidated Long-Lived Assets	$	569,770	$	585,233	$	569,770	$	585,233

No one customer accounted for more than 10% of DeVry Group's consolidated revenue.

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Through its website, DeVry Education Group Inc. (“DeVry Group”) offers its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed with the Securities and Exchange Commission (“SEC”). DeVry Group’s website is http://www.devryeducationgroup.com.

The following discussion of DeVry Group’s results of operations and financial condition should be read in conjunction with DeVry Group’s Consolidated Financial Statements and the related Notes thereto in “Item 1 – Financial Statements” in this Quarterly Report on Form 10-Q and DeVry Group’s Consolidated Financial Statements and related Notes thereto in “Item 8 – Financial Statements and Supplementary Data” in DeVry Group’s Annual Report on Form 10-K for the fiscal year ended June 30, 2016. DeVry Group’s Annual Report on Form 10-K includes a description of critical accounting policies and estimates and assumptions used in the preparation of DeVry Group’s financial statements. These include, but are not limited to, the use of estimates and assumptions that affect the reported amounts of assets and liabilities; revenue and expense recognition; allowance for uncollectible accounts; internal-use developed software; land, building and equipment; stock-based compensation; valuation of goodwill and other intangible assets; valuation of long-lived assets; and income taxes.

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The seasonal pattern of DeVry Group’s enrollments and its educational programs’ starting dates affect the results of operations and the timing of cash flows. Therefore, management believes that comparisons of its results of operations should primarily be made to the corresponding period in the preceding year. Comparisons of financial position should be made to both the end of the previous fiscal year and to the end of the corresponding quarterly period in the preceding year.

Following changes in strategic priorities that were implemented in the third quarter of fiscal year 2017, DeVry Group is reporting its financial performance based on four reporting segments (Medical and Healthcare, Professional Education, Technology and Business, and U.S. Traditional Postsecondary) beginning with this Quarterly Report on Form 10-Q for the quarter ended March 31, 2017. Prior periods are presented in accordance with these changes. Management has determined that these reporting segments align with DeVry Group’s current strategic priorities and resource allocation. DeVry Group’s Chief Operating Decision Maker, its President and Chief Executive Officer, regularly reviews financial information and evaluates operating and management performance based on these new segments. See Item 1, “Note 15: Segment Information” to the Consolidated Financial Statements for further discussion.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q, including those that affect DeVry Group’s expectations or plans, may constitute “forward-looking statements” subject to the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as DeVry Group or its management “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “foresees,” “intends,” “plans” or other words or phrases of similar import. Such statements are inherently uncertain and may involve risks and uncertainties that could cause future results to differ materially from those projected or implied by these forward-looking statements. Potential risks and uncertainties that could affect DeVry Group’s results are described throughout this report, including those in Item 1, “Note 14: Commitments and Contingencies” to the Consolidated Financial Statements, “Item 1 – Legal Proceedings,” “Item 1A – Risk Factors,” and in DeVry Group’s Annual Report on Form 10-K for the fiscal year ended June 30, 2016 filed with the SEC on August 25, 2016, including, without limitation, in “Item 1A – Risk Factors” and in the subsections of “Item 1 – Business” entitled “Market Trends and Competition,” “Student Admissions,” “Accreditation,” “Tuition and Fees,” “Financial Aid and Financing Student Education,” “Legislative and Regulatory Requirements,” “Career Services,” “Seasonality” and “Employees.”

All forward-looking statements included in this report speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we are not under any obligation to update any forward-looking information whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements.

OVERVIEW

During the third quarter of fiscal year 2017, DeVry Group’s revenue and net income decreased compared to the year-ago quarter. Revenue in the Medical and Healthcare and U.S. Traditional Postsecondary segments declined in the third quarter, which was partially offset by revenue growth in the Professional Education and Technology and Business segments. Operational and financial highlights for the third quarter and first nine months of fiscal year 2017 include:

· Chamberlain University (“Chamberlain”) revenue grew by 2.4% compared to the year-ago quarter. For the March 2017 session, total student enrollment at Chamberlain increased 7.3% to 29,726 students compared to the same term last year. Chamberlain continues to invest in its programs, student services and campus locations. In the third quarter of fiscal year 2017, Chamberlain College of Nursing was approved to become Chamberlain University, and Chamberlain received approval to launch a Master of Public Health (“MPH”) degree program.MPH classes are expected to start in July 2017.

· DeVry Education of Brazil (“DeVry Brazil”) revenue grew by 28.6% compared to the year-ago quarter (grew 5.3% excluding the effect of the increase in value of the Brazilian Real as compared to the U.S dollar). For the March 2017 session, total student enrollment at DeVry Brazil increased 0.4% to 79,564 students compared to the same term last year.

· DeVry Group recorded pre-tax restructuring charges of $7.8 million in the third quarter of fiscal year 2017. Of these charges, $5.5 million related to severance for workforce reductions and $2.3 million related to real estate consolidations. During the remainder of fiscal year 2017, DeVry Group expects to continue cost reduction efforts which would result in additional restructuring charges.

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· The DeVry Group Board of Directors (“the Board”) approved its tenth share repurchase program in February 2017, authorizing DeVry Group to repurchase up to $300 million of its common stock through December 31, 2020 and determined to discontinue cash dividend payments. In connection with such action, the Board simultaneously terminated further stock repurchases under DeVry Group’s ninth share repurchase program and commenced its tenth, share repurchase program by repurchasing a total of 428,348 shares of its common stock at an average cost of $33.08 per share during the third quarter of fiscal year 2017.

· DeVry Group generated $169.5 million of operating cash flow during the first nine months of fiscal year 2017. As of March 31, 2017, cash and cash equivalents totaled $209.9 million and outstanding borrowings totaled $120.0 million.

USE OF NON-GAAP FINANCIAL INFORMATION AND SUPPLEMENTAL RECONCILIATION SCHEDULE

During the third quarter and first nine months of fiscal year 2017, DeVry Group recorded special items related to the following:

· Restructuring charges related to severance for workforce reductions and real estate consolidations at the medical and veterinary schools, DeVry University, Carrington College (“Carrington”) and DeVry Group’s home office in order to align its cost structure with enrollments.

· Charges arising from the settlement agreements with the Federal Trade Commission (“FTC”) and Office of the Attorney General of the State of New York (“NYAG”).

· A charge related to an asset fair value write-down of its Pomona, California campus.

During the third quarter and first nine months of fiscal year 2016, DeVry Group recorded special items related to the following:

· Restructuring charges related to severance for workforce reductions and real estate consolidations at DeVry University and real estate consolidations at Carrington in order to align its cost structure with enrollments.

· An asset impairment charge related to the write-down of Carrington's intangible assets and goodwill.

· An asset fair value write-down at Becker Professional Education (“Becker”).

· A gain on the sale of the DeVry University, Fremont, California campus and student housing facilities.

The following table illustrates the effects of the special items on DeVry Group’s earnings. Management believes that the non-GAAP disclosure of net income and earnings per share excluding these special items provides investors with useful supplemental information regarding the underlying business trends and performance of DeVry Group’s ongoing operations and is useful for period-over-period comparisons of such operations given the special nature of the restructuring charges, regulatory settlements, loss on assets held for sale, asset impairment charges and gain on sale of assets. DeVry Group uses these supplemental financial measures internally in its management and budgeting process. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, DeVry Group’s reported results prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The following table reconciles these non-GAAP measures to the most directly comparable GAAP information (in thousands, except per share amounts):

	Three Months Ended March 31,						Nine Months Ended March 31,
	2017			2016			2017			2016
Net Income	$	39,859		$	51,925		$	79,424		$	6,803
Earnings per Share (diluted)	$	0.62		$	0.81		$	1.24		$	0.11
Restructuring Expense	$	7,771		$	2,873		$	17,868		$	39,870
Effect on Earnings per Share (diluted)	$	0.12		$	0.04		$	0.28		$	0.62
Regulatory Settlements	$	-		$	-		$	56,252		$	-
Effect on Earnings per Share (diluted)	$	-		$	-		$	0.88		$	-
Loss on Assets Held for Sale	$	-		$	-		$	4,764		$	-
Effect on Earnings per Share (diluted)	$	-		$	-		$	0.07		$	-
Asset Impairment Charge	$	-		$	-		$	-		$	99,473
Effect on Earnings per Share (diluted)	$	-		$	-		$	-		$	1.54
Gain on Sale of Assets	$	-		$	(3,849	)	$	-		$	(3,849	)
Effect on Earnings per Share (diluted)	$	-		$	(0.06	)	$	-		$	(0.06	)
Income Tax Impact on Non-GAAP Adjustments (1)	$	(2,685	)	$	(5,356	)	$	(29,942	)	$	(28,250	)
Effect on Earnings per Share (diluted)	$	(0.04	)	$	(0.08	)	$	(0.46	)	$	(0.44	)
Net Income Excluding Special Items, net of tax	$	44,945		$	45,593		$	128,366		$	114,047
Earnings per Share Excluding Special Items (diluted)	$	0.70		$	0.71		$	2.01		$	1.77
Diluted Shares used in EPS calculation		64,266			64,353			63,991			64,477

(1) Represents the income tax impact of non-GAAP adjustments that is recognized in our GAAP financial statements.

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RESULTS OF OPERATIONS

The following table presents information with respect to the relative size to revenue of each item in the Consolidated Statements of Income for the first three and nine months of both the current and prior fiscal year. Percentages may not add because of rounding.

	Three Months Ended March 31,						Nine Months Ended March 31,
	2017			2016			2017			2016
Revenue		100.0	%		100.0	%		100.0	%		100.0	%
Cost of Educational Services		52.9	%		53.3	%		53.7	%		53.9	%
Student Services and Administrative Expense		34.9	%		34.1	%		34.2	%		35.3	%
Restructuring Expense		1.7	%		0.6	%		1.3	%		2.9	%
Regulatory Settlements		0.0	%		0.0	%		4.1	%		0.0	%
Loss on Assets Held for Sale		0.0	%		0.0	%		0.4	%		0.0	%
Asset Impairment Charge		0.0	%		0.0	%		0.0	%		7.3	%
Gain on Sale of Assets		0.0	%		(0.8	)%		0.0	%		(0.3	)%
Total Operating Cost and Expense		89.5	%		87.2	%		93.7	%		99.1	%
Operating Income		10.5	%		12.8	%		6.3	%		0.9	%
Net Interest Expense		(0.1	)%		(0.3	)%		(0.2	)%		(0.4	)%
Income Before Income Taxes		10.4	%		12.5	%		6.1	%		0.5	%
Income Tax Provision		(1.5	)%		(1.6	)%		(0.2	)%		(0.0	)%
Net Income		8.9	%		11.0	%		5.9	%		0.5	%
Net Income Attributable to Noncontrolling Interest		(0.0	)%		(0.0	)%		(0.0	)%		(0.0	)%
Net Income Attributable to DeVry Education Group		8.8	%		10.9	%		5.8	%		0.5	%

REVENUE

The following tables present revenue by reporting segment detailing the changes from the year-ago comparative periods including disclosures of the effect of acquisitions and changes in the value of the Brazilian Real compared to the U.S. dollar. Total consolidated revenue for the third quarter of fiscal year 2017 of $452.1 million decreased $22.1 million or 4.7% compared to the year-ago quarter. For the first nine months of fiscal year 2017, total consolidated revenue decreased $13.5 million or 1.0% to $1,358.3 million compared to the year-ago period. Included in the third quarter and first nine months of fiscal year 2017 revenue are:

· $8.5 million and $68.9 million, respectively, related to the fiscal year 2017 acquisition at Becker of Association of Anti-Money Laundering Specialists (“ACAMS”) and acquisitions at DeVry Education of Brazil (“DeVry Brazil”) of Grupo Ibmec Educacional S.A. (“Grupo Ibmec”) which occurred in the second quarter of fiscal year 2016 and Faculdade de Imperatriz (“Facimp”) which occurred in the fourth quarter of fiscal year 2016.

· $11.2 million and $22.9 million related to the increase in value of the Brazilian Real compared to the U.S. dollar, respectively. Constant currency calculations assume conversions of local currency amounts at exchange rates in effect in the year-ago period compared to those conversions at exchange rates in effect during the current fiscal year period.

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Revenue results by segment are discussed in more detail in the sections below.

	Three Months Ended March 31, 2017
	(in thousands)
	Medical and Healthcare			Professional Education			Technology and Business			U.S. Traditional Postsecondary			Home Office and Other			Consolidated
Revenue:
Fiscal Year 2016 as Reported	$	210,215		$	23,683		$	48,062		$	193,008		$	(747	)	$	474,221
Organic Growth (Decline)		(2,062	)		(728	)		938			(40,057	)		112			(41,797	)
Effect of Acquisitions		-			6,855			1,605			-			-			8,460
Effect of Currency Change		-			-			11,205			-			-			11,205
Fiscal Year 2017 as Reported	$	208,153		$	29,810		$	61,810		$	152,951		$	(635	)	$	452,089
Fiscal Year 2017 % Change:
Organic Growth (Decline)		(1.0	)%		(3.1	)%		2.0	%		(20.8	)%		NM			(8.8	)%
Effect of Acquisitions		-			28.9	%		3.3	%		-			NM			1.8	%
Constant Currency Change		(1.0	)%		25.9	%		5.3	%		(20.8	)%		NM			(7.0	)%
Effect of Currency Change		-			-			23.3	%		-			NM			2.4	%
Fiscal Year 2017 % Change as Reported		(1.0	)%		25.9	%		28.6	%		(20.8	)%		NM			(4.7	)%

	Nine Months Ended March 31, 2017
	(in thousands)
	Medical and Healthcare			Professional Education			Technology and Business			U.S. Traditional Postsecondary			Home Office and Other			Consolidated
Revenue:
Fiscal Year 2016 as Reported	$	590,616		$	71,417		$	121,405		$	590,643		$	(2,245	)	$	1,371,836
Organic Growth (Decline)		18,715			(5,010	)		5,726			(124,977	)		236			(105,310	)
Effect of Acquisitions		-			25,499			43,439			-			-			68,938
Effect of Currency Change		-			-			22,867			-			-			22,867
Fiscal Year 2017 as Reported	$	609,331		$	91,906		$	193,437		$	465,666		$	(2,009	)	$	1,358,331
Fiscal Year 2017 % Change:
Organic Growth (Decline)		3.2	%		(7.0	)%		4.7	%		(21.2	)%		NM			(7.7	)%
Effect of Acquisitions		-			35.7	%		35.8	%		-			NM			5.0	%
Constant Currency Change		3.2	%		28.7	%		40.5	%		(21.2	)%		NM			(2.7	)%
Effect of Currency Change		-			-			18.8	%		-			NM			1.7	%
Fiscal Year 2017 % Change as Reported		3.2	%		28.7	%		59.3	%		(21.2	)%		NM			(1.0	)%

NM - Not Meaningful

Management expects that for the fourth quarter of fiscal year 2017, revenue will decline 3 to 4 percent compared to the fourth quarter of fiscal year 2016. Revenue growth within the Medical and Healthcare, Technology and Business, and Professional Education segments are expected to be offset by U.S. Traditional Postsecondary’s continuing revenue declines resulting from the impact of lower new and total student enrollment.

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Medical and Healthcare

Medical and Healthcare segment revenue decreased 1.0% to $208.2 million in the third quarter and increased 3.2% to $609.3 million for the first nine months of fiscal year 2017 compared to the year-ago periods. Revenue decreases at the medical and veterinary schools in both the third quarter and the first nine months of fiscal year 2017 were partially offset for the quarter, and fully offset for the first nine months, by revenue increases at Chamberlain. Key trends for Chamberlain and the medical and veterinary schools are set forth below.

Chamberlain University

Chamberlain University Undergraduate and Graduate Student Enrollment:

	Fiscal Year 2017
Term	July 2016			Sept. 2016			Nov. 2016			Jan. 2017			Mar. 2017
New Students		2,144			5,003			2,660			4,185			2,713
% Change from Prior Year		(1.7	)%		1.2	%		3.2	%		(3.0	)%		11.7	%
Total Students		25,229			28,781			28,268			29,789			29,726
% Change from Prior Year		15.9	%		11.5	%		10.2	%		6.6	%		7.3	%

	Fiscal Year 2016
Term	July 2015			Sept. 2015			Nov. 2015			Jan. 2016			Mar. 2016			May 2016
New Students		2,180			4,942			2,577			4,316			2,429			3,635
% Change from Prior Year		5.5	%		27.9	%		20.6	%		16.6	%		12.1	%		13.4	%
Total Students		21,760			25,802			25,654			27,938			27,694			27,406
% Change from Prior Year		23.6	%		23.3	%		23.3	%		21.2	%		19.8	%		18.9	%

Chamberlain revenue increased 2.4% and 6.6% for the third quarter and first nine months of fiscal year 2017, respectively, compared to the year-ago periods, driven primarily by enrollment increases. Negatively impacting revenue growth in the current fiscal year was a change in the BSN curriculum which reduced the number of credit hours required for graduation to align with requirements in several states. The July through January 2017 session new student, year-over-year enrollment comparisons showing lower or negative growth were the result of increased competition. In addition, enrollment caps at some newer Chamberlain locations and, prior to the January 2017 session, management’s enrollment limits in the Family Nurse Practitioner (“FNP”) program contributed to lower new student enrollment. Beginning with the January 2017 session, Chamberlain lifted the self-imposed enrollment limits on the FNP program which had a positive impact on new student enrollment.

Chamberlain has been notified by the Texas Board of Nursing (“TBN”) that effective January 19, 2017, the Chamberlain campus in Houston, Texas was placed on conditional approval as a result of falling below the state required first time pass rate of Chamberlain Houston graduates on the National Council of Nursing Licensure Exam (“NCLEX”). Conditional status prohibits the campus from admitting new students to its program through September 2017. Management expects that it will be able to increase and maintain NCLEX scores above the threshold by September 30, 2017, and that the TBN will allow Chamberlain to return to full approval in October 2017. Average total enrollment at this campus in fiscal year 2017 is 403 students which represents less than 5 percent of total Chamberlain campus-based enrollment for fiscal year 2017. This change in status does not affect the other two Chamberlain campuses in Texas.

Chamberlain currently operates 20 campuses in 14 states and was recently granted initial approval to construct a campus in New Orleans, Louisiana. After obtaining appropriate regulatory approvals, we anticipate a campus opening in fiscal year 2019. Chamberlain will focus on further strengthening programs and resources in a competitive environment. Management believes Chamberlain remains well-positioned to support the high demand for nursing well into the future.

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Tuition Rates:

· Effective for sessions beginning in May 2016, tuition is $675 per credit hour for students enrolling in the Chamberlain Bachelor of Science in Nursing (“BSN”) and Licensed Practical Nurse to Registered Nurse (“LPN-to-RN”) programs. This rate represents a 1.5% increase over the prior year. This amount does not include the cost of supplies, transportation and living expenses; books are included.

· Effective for sessions beginning in May 2016, tuition is $590 per credit hour for students enrolled in the Chamberlain Registered Nurse to Bachelor of Science in Nursing (“RN-to-BSN”) online degree option. Tuition for students enrolled in the online Master of Science in Nursing (“MSN”) program is $650 per credit hour. The online Doctor of Nursing Practice (“DNP”) program is offered at $750 per credit hour. All of these tuition rates are unchanged from the prior year.

Medical and Veterinary Schools

Medical and Veterinary Schools Student Enrollment:

	Fiscal Year 2017
Term	Sept. 2016			Jan. 2017
New Students		806			462
% Change from Prior Year		(18.7	)%		(10.8	)%
Total Students		6,168			5,863
% Change from Prior Year		(5.8	)%		(8.0	)%

	Fiscal Year 2016
Term	Sept. 2015			Jan. 2016			May 2016
New Students		991			518			535
% Change from Prior Year		17.7	%		(7.5	)%		(13.3	)%
Total Students		6,546			6,374			5,850
% Change from Prior Year		2.2	%		3.7	%		(2.1	)%

Medical and veterinary schools revenue decreased 5.7% and 1.1% for the third quarter and first nine months of fiscal year 2017, respectively, compared to the year-ago periods, driven primarily by enrollment declines at American University of the Caribbean (“AUC”) and Ross University School of Medicine (“RUSM”), partially offset by tuition price increases at AUC and RUSM, and enrollment increases at Ross University School of Veterinary Medicine (“RUSVM”). As displayed in the table above, consolidated medical and veterinary school new and total student enrollment declined in each of the last three semesters. The enrollment declines were primarily the result of increased competition. Management is reviewing alternatives for differentiating the medical and veterinary schools from the competition and improving the effectiveness of marketing strategies, including restructuring the marketing organization, and shifting from traditional media and event-driven marketing to greater use of digital and social media channels to drive awareness throughout the year.

Management believes the demand for medical education remains strong and can support management’s longer-term growth expectations to grow new enrollments in the low-single digit range; however, heightened competition may adversely affect the medical and veterinary schools’ ability to continue to attract qualified students to its programs.

Tuition Rates:

· Effective September 2016, tuition rates for the beginning basic sciences and final clinical rotation portions of AUC’s medical program are $20,960 and $23,450, respectively, per semester. These tuition rates represent a 3.5% increase over the prior academic year.

· Effective September 2016, tuition rates for the beginning basic sciences and final clinical rotation portions of the programs at RUSM are $21,325 and $23,530, respectively, per semester. These tuition rates represent a 3.6% increase over the prior academic year.

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· Effective September 2016, tuition rates for the basic sciences and final clinical portion of the programs at RUSVM are $18,310 and $22,985, respectively, per semester. These tuition rates have not increased over the prior academic year.

The respective tuition rates for AUC, RUSM and RUSVM do not include the cost of transportation, living expenses and health insurance.

Professional Education

Revenue in the Professional Education segment, which is composed solely of Becker, increased 25.9% to $29.8 million in the third quarter and increased 28.7% to $91.9 million for the first nine months of fiscal year 2017 compared to the year-ago periods. Included in the third quarter and first nine months of fiscal year 2017 revenue is $6.9 million and $25.5 million, respectively, related to the fiscal year 2017 acquisition of ACAMS. The acquisition of ACAMS in the first quarter of fiscal year 2017 accounted for all of the revenue growth at Becker. Excluding ACAMS, Becker revenue decreased 3.1% and 7.0% in the third quarter and first nine months of fiscal year 2017, respectively, compared to the year-ago periods. The decrease is driven by a decline in the number of CPA exam candidates taking the Becker review course compared to the prior year.

Technology and Business

Revenue in the Technology and Business segment, which is composed solely of DeVry Brazil, increased 28.6% to $61.8 million in the third quarter and increased 59.3% to $193.4 million for the first nine months of fiscal year 2017 compared to the year-ago periods. Included in the third quarter and first nine months of fiscal year 2017 revenue is $1.6 million and $43.4 million, respectively, related to the second quarter of fiscal year 2016 acquisition of Grupo Ibmec and the fourth quarter of fiscal year 2016 acquisition of Facimp. The increase in value of the Brazilian Real compared to the U.S. dollar increased reported revenue for the third quarter and first nine months of fiscal year 2017 by $11.2 million and $22.9 million, respectively, compared to the year-ago periods. On a constant currency basis, revenue increased by 5.3% and 40.5% in the third quarter and first nine months of fiscal year 2017, respectively, compared to the year-ago periods. The fiscal year 2016 acquisitions of Grupo Ibmec and Facimp contributed approximately 63% and 88% of this revenue growth at DeVry Brazil in the third quarter and first nine months of fiscal year 2017, respectively, compared to the year-ago periods.

Brazil’s economy continues to present challenges for enrollment growth and is creating pricing pressures in the education sector. DeVry Brazil’s new student enrollment has been negatively impacted by these conditions as well as reductions in the “Fundo de Financiamento Estudantil” or “Students Financing Fund” (“FIES”) program. Should economic conditions continue to weaken and additional austerity measures be instituted by the Brazilian government, DeVry Brazil’s ability to grow its student enrollment may be further impacted.

Key trends for DeVry Brazil are set forth below.

DeVry Brazil Student Enrollment:

	Fiscal Year 2017						Fiscal Year 2016
Term	Sept. 2016			Mar. 2017			Sept. 2015			Mar. 2016
New Students		15,892			22,531			14,399			24,768
% Change over Prior Year		10.4	%		(9.0	)%		176.0	%		26.4	%
Total Students		76,862			79,564			57,819			79,280
% Change over Prior Year		32.9	%		0.4	%		72.1	%		35.0	%

These enrollment figures include students enrolled in degree-granting programs and exclude students enrolled in the test preparation programs at Damásio Educacional (“Damasio”). The effect of acquisitions on the enrollment figures are as follows:

· The acquisition of Facimp, which occurred in the fourth quarter of fiscal year 2016, added 622 new student enrollments and 2,050 total student enrollment to the March 2017 semester totals. Excluding the effect of this acquisition, new enrollment decreased 11.5% and total enrollment decreased 2.2% in the March 2017 semester compared to the year-ago semester.

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· The acquisitions of Grupo Ibmec, which occurred in the second quarter of fiscal year 2016, and Facimp added 3,322 new student enrollments and 16,688 total student enrollment to the September 2016 semester totals. Excluding the effect of these acquisitions, new enrollment decreased 12.7% and total enrollment increased 4.1% in the September 2016 semester compared to the year-ago semester.

· The acquisition of Grupo Ibmec added 4,364 new student enrollments and 16,348 total student enrollments to the March 2016 semester totals. Excluding the effect of this acquisition, new enrollment increased 4.2% and total enrollment increased 7.2% in the March 2016 semester compared to the year-ago semester.

· Acquisitions occurring after the first quarter of fiscal year 2015 added 9,444 new student enrollments and 22,249 total student enrollments to the September 2015 semester totals. Excluding the effect of these acquisitions, new enrollment decreased 5.0% and total enrollment increased 5.9% in the September 2015 semester compared to the year-ago semester.

DeVry Brazil’s institutions and program offerings are subject to regulation by Brazil’s Ministry of Education (“MEC”) which may impose limits on the number of students who can be enrolled in its programs. Previous restrictions at Faculdade Área1 (“ÁREA1”) were removed in September 2015. There are currently no restrictions on any DeVry Brazil institutions or programs.

DeVry Brazil students are eligible for loans under Brazil’s FIES public loan program, which is financed by the Brazilian government. As of June 30, 2016, approximately 31% of DeVry Brazil’s degree-seeking students have obtained financing under the FIES program. This represents approximately 29% of DeVry Brazil’s revenue. The Brazilian government has stated that it is supportive of the FIES program, which is an important factor in helping to increase the number of college graduates. However, changes enacted in calendar year 2015 to the FIES regulations have added restrictions limiting student eligibility for FIES funding and extended the government’s time to pay participating institutions. These changes include reducing the number of new FIES contracts, decreasing the monthly maximum family income limits that students’ families must not exceed in order to qualify for a FIES loan and adding minimum required entrance test scores in order to qualify for a FIES loan. In addition, the Brazilian government reduced the frequency of payments to participating institutions and increased the annual interest rate borrowers are charged from 3.4% to 6.5%.

DeVry Brazil institutions have increased efforts to attract more non-FIES students in order to diversify its payer mix. Also, DeVry Brazil is working with private lenders to increase funding sources for prospective students. Management believes DeVry Brazil institutions offer programs of study and operate in areas of the country that the Brazilian government favors in issuing FIES loans. However, the changes in the FIES program have impacted DeVry Brazil’s growth due to fewer students qualifying for the FIES program.

U.S. Traditional Postsecondary

U.S. Traditional Postsecondary segment revenue decreased 20.8% to $153.0 million in the third quarter and decreased 21.2% to $465.7 million for the first nine months of fiscal year 2017 compared to the year-ago periods, as a result of a decline in student enrollment as DeVry University repositions itself to stabilize enrollment. DeVry University revenue decreased 23.7% to $119.4 million in the third quarter and decreased 23.8% to $362.7 million for the first nine months of fiscal year 2017 compared to the year-ago periods. Increased discounting and use of scholarships have also contributed to the decline in revenue. In addition, revenue decreased at Carrington by 8.3% and 10.1%, compared to the year-ago quarter and nine-month period, respectively, also driven by a decline in total student enrollment. Enrollment declines are expected to continue at each institution for the remainder of fiscal year 2017, which will result in lower revenue. Key trends for DeVry University and Carrington are set forth below.

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DeVry University

DeVry University Undergraduate Student Enrollment:

	Fiscal Year 2017
Term	July 2016			Sept. 2016			Nov. 2016			Jan. 2017			Mar. 2017
New Students		2,953			3,432			3,092			2,528			2,545
% Change over Prior Year		(26.2	)%		(14.3	)%		7.2	%		(16.7	)%		(14.3	)%
Total Students		24,213			24,540			24,015			22,994			22,192
% Change over Prior Year		(22.6	)%		(22.9	)%		(20.3	)%		(21.6	)%		(20.9	)%

	Fiscal Year 2016
Term	July 2015			Sept. 2015			Nov. 2015			Jan. 2016			Mar. 2016			May 2016
New Students		4,000			4,006			2,883			3,036			2,970			2,982
% Change over Prior Year		(18.6	)%		(24.0	)%		(31.4	)%		(29.1	)%		(28.5	)%		(21.9	)%
Total Students		31,293			31,843			30,132			29,313			28,069			26,492
% Change over Prior Year		(15.9	)%		(20.1	)%		(21.2	)%		(22.7	)%		(22.4	)%		(23.3	)%

DeVry University Graduate Student Enrollment:

	Fiscal Year 2017
Term	July 2016			Sept. 2016			Nov. 2016			Jan. 2017			Mar. 2017
Total Coursetakers		9,742			10,146			9,589			9,553			9,185
% Change from Prior Year		(19.4	)%		(21.6	)%		(23.1	)%		(22.8	)%		(21.5	)%

	Fiscal Year 2016
Term	July 2015			Sept. 2015			Nov. 2015			Jan. 2016			Mar. 2016			May 2016
Total Coursetakers		12,084			12,937			12,463			12,368			11,699			10,810
% Change from Prior Year		(12.7	)%		(16.7	)%		(17.7	)%		(18.1	)%		(20.1	)%		(21.7	)%

The term “coursetaker” refers to the number of courses taken by a student. Thus, one student taking two courses is counted as two coursetakers.

DeVry University new undergraduate student enrollment increased 7.2% for the November 2016 session compared to the same session last year. This increase was principally the result of former students of ITT Educational Services enrolling in DeVry University programs after it ceased operations.

Tuition Rates:

· For fiscal year 2017, DeVry University’s U.S. undergraduate tuition is $609 per credit hour for new students. If a student was enrolled before September 2015, they will continue to pay $609 per credit hour for up to seven credit hours and $365 for each credit hour in excess of seven credit hours, as they are covered under DeVry University’s Fixed Tuition Promise (“FTP”). DeVry University has frozen both undergraduate and graduate tuition for the past several years. These amounts do not include the cost of books, supplies, transportation and living expenses.

· For fiscal year 2017, Keller Graduate School of Management (“Keller”) program tuition per course is $2,298. This rate is unchanged from the prior year.

· Any tuition rate increases after July 2017 will apply only to newly enrolled students. Existing students will pay the tuition they were paying at the time DeVry University adopted its FTP or, if later, at the time of their enrollment. To remain eligible for the FTP students may not miss more than five consecutive sessions.

Management believes the decreases in undergraduate and graduate enrollment and the resulting continued decline in revenue have been due to several internal and external factors which have resulted in a reduction in interest and lower demand for DeVry University’s programs, including the following:

· Heightened competition from both public and private-sector education providers. Management believes heightened competition at the local level has increased, as traditional four-year colleges are targeting adult students, DeVry University’s largest student segment, to a much greater extent. In addition, public-sector and independent colleges are taking share from national competitors.

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· Our competitors offer programs and degrees at a lower price than DeVry University. While students appear willing to pay a higher price for private independent colleges, DeVry University is more expensive than many of its public and private-sector competitors. This has resulted in increasing pricing pressure, which hinders revenue growth. DeVry University has not raised its per credit hour tuition since July 2012 and does not anticipate having the ability to raise prices in the near-term.

· Management has purposefully reduced new student enrollments by discontinuing programs that do not differentiate DeVry University or support the “DeVry Tech” value proposition. This “DeVry Tech” initiative infuses a foundation of technology skills, or “Tech Path,” into all of DeVry University program offerings.

· Regulatory and other legal actions and the claims contained in these actions may have diminished DeVry University’s reputation in the education sector. These actions and the resulting negative publicity may have decreased interest by potential students. Management believes the settlement of the FTC litigation and our denying of all wrongdoing should enable DeVry University to alleviate potential student concerns; however, we cannot quantify how this may affect future enrollment.

· The regulatory environment in which DeVry University currently operates and the national attention on the for-profit education industry, including the failure of several high profile competitors, hinders our ability to attract new students, which is expected to continue into the foreseeable future.

· The state of the general economic environment has had an impact on price sensitivity and the ability and willingness of students to incur debt to finance their education. Also, during periods when unemployment rates decline or remain stable, as in recent years, prospective students have more employment options and may forgo or delay obtaining a postsecondary education.

New student enrollment declines will continue to drive down total student enrollment, which will result in revenue declines on the magnitude of the percentage declines in total students. To address the issue of declining enrollment, DeVry University is focused on implementing management’s transformation strategy, which includes both near-term actions to stabilize enrollments and maintain positive economics and longer-term investments to increase competitiveness and differentiation. Management’s plans include attracting additional new students and improving the persistence of existing students. Over the long-term, management’s goal is to transform DeVry University by improving the student experience and programs, addressing affordability and improving awareness of the university’s programs. Management expects to accomplish this with more effective marketing, launching new, flexible programs, creating shorter programs, creating certificate programs, deploying a new student-centric scheduling system, optimizing the pricing structure and the use of scholarships, and increasing focus on corporate and employer relationships. Indicative of our efforts to improve enrollment is the launch of the “DeVry Tech” initiative in January 2017. Whether a student is taking a healthcare program, a business program or a technology program, they will graduate with not only an expertise in their chosen major, but also a strong foundation of technology skills that will help them bring together people, processes, data and devices to help solve business problems for their employer. Management believes this approach will further establish a reputation for DeVry University graduates as highly valued employees recognized for using technology to solve problems.

DeVry University enrollment declines have reduced revenue by almost 50% since fiscal year 2014. In response, management has focused on increasing cost efficiencies and has reduced costs by approximately 48% over this time period through the following methods:

· Analyzing facility usage requirements and rightsizing the DeVry University footprint in each market in which it operates. Management made the decision to close or consolidate certain DeVry University campuses while balancing the potential impact on enrollment and student satisfaction. Since the beginning of fiscal year 2014, DeVry University has closed 39 campus locations and completed additional campus size reductions. This is expected to result in full fiscal year 2017 facility costs that are approximately $34 million, or 45%, lower compared to fiscal year 2014. As of the commencement of the March 2017 session, DeVry University operates 60 campus locations, and management continues to evaluate campus performance. Management has made the decision to sell the DeVry University owned facility in Pomona, California and is intending to remain in this market in a smaller leased space. Management is also currently renegotiating leases in several other markets to reduce space and lower future operating costs.

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· Optimizing course scheduling to better utilize classrooms and faculty and simplifying program offerings. The average class size at DeVry University has increased from historical levels of 17 students to 20.5 students in fiscal year 2017.

· Adjusting staffing and management structure within DeVry University. Total full-time faculty and administrative headcount at DeVry University has decreased from 2,595 in fiscal year 2014 to 1,270 in fiscal year 2017. Direct cost of instruction labor costs are expected to be approximately 58% lower in fiscal year 2017 compared to fiscal year 2014. This process of adjusting staffing costs will continue into the near-term as management continually evaluates needs based on enrollment trends. This may result in future staff reductions as well as management realignment. DeVry Group home office administration costs have also been reduced and will continue to be evaluated based on the need to support a smaller DeVry University organization. Home office costs allocated to DeVry University have declined approximately 29% for the first nine months of fiscal year 2017 compared to the year-ago nine-month period.

· Managing advertising expenditures. In the first nine months of fiscal year 2017, management reduced advertising expense by $14 million compared to the year-ago period. Advertising expense in the fourth quarter of fiscal year 2017 is expected to decline as well, but at a lower rate.

Carrington College

Carrington College Student Enrollment:

	Fiscal Year 2017
Term	Sept. 2016			Dec. 2016			Mar. 2017
New Students		2,338			1,437			1,892
% Change from Prior Year		(9.5	)%		(22.7	)%		(8.1	)%
Total Students		6,638			5,910			6,026
% Change from Prior Year		(12.2	)%		(18.0	)%		(16.1	)%

	Fiscal Year 2016
Term	Sept. 2015			Dec. 2015			Mar. 2016			June 2016
New Students		2,584			1,858			2,058			1,681
% Change from Prior Year		(1.5	)%		(4.8	)%		(5.9	)%		(39.3	)%
Total Students		7,560			7,211			7,181			6,466
% Change from Prior Year		(1.0	)%		(3.1	)%		(6.0	)%		(13.9	)%

Enrollment declines are the result of changing demand for career education given low unemployment and rising wages. To improve enrollment results, management is focused on bringing relevant programs to serve areas of the workforce where supply and demand imbalances continue to exist.

Tuition Rates:

· On a per credit hour basis, tuition for Carrington programs ranges from $302 per credit hour to $1,684 per credit hour, with the wide range due to the nature of the programs. General education courses are charged at $335 to $371 per credit hour. Students are charged a non-refundable registration fee of $100, and they are also charged separately for books, program-specific supplies and/or testing. A student services fee ranging from $30 to $150, depending on the program, is charged as well. Total program tuition ranges from approximately $12,000 to $15,000 for most certificate programs up to approximately $60,000 for a few advanced programs.

COSTS AND EXPENSES

Cost of Educational Services

The largest component of Cost of Educational Services is the cost of faculty and staff who support educational operations. This expense category also includes the costs of facilities, adjunct faculty, supplies, bookstore and other educational materials, student education-related support activities and the provision for uncollectible student accounts.

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Cost of Educational Services decreased 5.4% to $239.2 million during the third quarter and decreased 1.3% to $729.7 million in the first nine months of fiscal year 2017 compared to the year-ago periods. Excluding the effect of the increase in value of the Brazilian Real compared to the U.S. dollar, total consolidated Cost of Educational Services decreased 8.6% and 3.3% during the third quarter and first nine months of fiscal year 2017, respectively, compared to the year-ago periods. This decrease is primarily the result of cost reduction measures at DeVry University. Cost of Educational Services within DeVry University was lower by 28.3% and 27.7% in the third quarter and first nine months of fiscal year 2017, respectively, compared to the year-ago periods. This was partially offset by costs added as a result of the acquisitions of ACAMS in fiscal year 2017 and Grupo Ibmec and Facimp in fiscal year 2016, totaling $3.8 million and $43.9 million during the third quarter and first nine months of fiscal year 2017, respectively, as well as costs associated with enrollment growth at Chamberlain.

As a percentage of revenue, Cost of Educational Services decreased to 52.9% and 53.7% in the third quarter and first nine months of fiscal year 2017, respectively, compared to 53.3% and 53.9%, respectively, during the year-ago periods.

Student Services and Administrative Expense

The Student Services and Administrative Expense category includes expenses related to student admissions, marketing and advertising, general and administrative, curriculum development and amortization expense of finite-lived intangible assets related to acquisitions of businesses.

Student Services and Administrative Expense decreased 2.3% to $157.8 million during the third quarter and decreased 4.2% to $464.5 million during the first nine months of fiscal year 2017 compared to the year-ago periods. Excluding the effect of the increase in value of the Brazilian Real compared to the U.S. dollar, total consolidated Student Services and Administrative Expense decreased 3.3% and 4.8% during the third quarter and first nine months of fiscal year 2017, respectively, compared to the year-ago periods. The decrease was primarily the result of cost reduction measures. Over the past several years, DeVry Group has reduced costs through staffing adjustments primarily at DeVry University, Carrington and DeVry Group home office while maintaining services that assist students with successful outcomes. Also, management is finding ways to be more efficient in marketing and recruiting efforts. In October 2016, DeVry Group hired a Chief Marketing Officer responsible for streamlining marketing efficiencies across all DeVry Group institutions. Student Services and Administrative Expense within DeVry University was lower by 14.8% and 17.9% in the third quarter and first nine months of fiscal year 2017, respectively, compared to the year-ago periods. This was partially offset by costs added as a result of the acquisitions of ACAMS in fiscal year 2017 and Grupo Ibmec and Facimp in fiscal year 2016, totaling $5.7 million and $23.8 million during the third quarter and first nine months of fiscal year 2017, respectively. Amortization of finite-lived intangible assets increased by $1.4 million and $4.5 million during the third quarter and first nine months of fiscal year 2017 compared to the year-ago periods, as a result of the intangible assets added with the acquisitions of ACAMS and Grupo Ibmec. Amortization expense is included entirely in the Student Services and Administrative Expense category.

As a percentage of revenue, Student Services and Administrative Expense increased to 34.9% and decreased to 34.2% in the third quarter and first nine months of fiscal year 2017, respectively, compared to 34.1% and 35.3%, respectively, during the year-ago periods. The increase during the third quarter was primarily the result of the timing of advertising spending at DeVry University and an increase in amortization expense. The decrease during the first nine months of fiscal year 2017 was primarily a result of the effectiveness of the cost reduction measures noted above.

Management expects that for the fourth quarter of fiscal year 2017, total operating costs will decrease 4 to 5 percent compared to the fourth quarter of fiscal year 2016, driven by the impact of savings from DeVry Group’s continued cost reduction measures which will be partially offset by increases related to the acquisitions of ACAMS and Facimp.

Restructuring Expense

During the third quarter and first nine months of fiscal year 2017 and 2016, DeVry Group recorded restructuring charges related to real estate consolidations and reductions in force (“RIF”) at DeVry University, Carrington, the administrative support operations of the medical and veterinary schools and DeVry Group home office. DeVry Group home office is classified as “Home Office and Other” in “Note 15: Segment Information” to the Consolidated Financial Statements in Item 1 of this Form 10-Q. These RIF charges, which reduced the DeVry Group workforce by 207 and 303 total positions in the first nine months of fiscal years 2017 and 2016, respectively, represented severance pay and benefits for these employees. These pre-tax restructuring charges by segment were as follows (in thousands):

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	Three Months Ended March 31, 2017							Nine Months Ended March 31, 2017
	Real Estate			Termination Benefits		Total		Real Estate		Termination Benefits		Total
Medical and Healthcare	$	137		$	530	$	667	$	137	$	530	$	667
U.S. Traditional Postsecondary		2,347			3,345		5,692		9,835		3,345		13,180
Home Office and Other		(222	)		1,634		1,412		1,706		2,315		4,021
Total	$	2,262		$	5,509	$	7,771	$	11,678	$	6,190	$	17,868

	Three Months Ended March 31, 2016						Nine Months Ended March 31, 2016
	Real Estate		Termination Benefits		Total		Real Estate		Termination Benefits		Total
Professional Education	$	300	$	-	$	300	$	300	$	-	$	300
U.S. Traditional Postsecondary		729		1,844		2,573		31,901		7,669		39,570
Total	$	1,029	$	1,844	$	2,873	$	32,201	$	7,669	$	39,870

Cash payments for the fiscal year 2017 and 2016 charges were $23.1 million in the first nine months of fiscal year 2017. The remaining accrual for these charges is $40.0 million as of March 31, 2017. The balance is expected to be paid within the next 12 months except for rent charges which may be paid out for periods of up to 8 years. Additional restructuring expense of approximately $10-15 million is expected to be recorded in the remainder of fiscal year 2017 as DeVry Group continues to reduce cost where enrollment levels necessitate such realignment of expense.

Regulatory Settlements

In the second quarter of fiscal year 2017, DeVry Group, DeVry University, Inc. and DeVry/New York Inc. (collectively, the “DeVry Parties”) and the FTC agreed to a Stipulation as to Entry of an Order for Permanent Injunction and Monetary Judgment (the “Agreement”) resolving litigation brought by the FTC regarding DeVry University’s use of employment statistics in former advertising. Under the terms of the Agreement, the DeVry Parties agreed to pay $49.4 million to be distributed at the sole discretion of the FTC, to forgive $30.4 million of institutional loans issued before September 30, 2015, and to forgive outstanding DeVry University accounts receivable balances by $20.2 million for former students. In addition, the DeVry Parties agreed that DeVry Group institutions marketing to U.S. consumers will maintain specific substantiation to support any future advertising regarding graduate outcomes and educational benefits, and will implement training and other agreed-upon compliance measures. DeVry Group chose to settle the FTC litigation after filing an answer denying all allegations of wrongdoing.

In the second quarter of fiscal year 2017, DeVry Group also recorded charges related to the resolution of an inquiry made by the NYAG to the DeVry Parties regarding DeVry University’s use of employment and salary statistics in former advertising. The DeVry Parties chose to resolve the NYAG inquiry by entering into an Assurance of Discontinuance (the “Assurance”) with the NYAG on January 27, 2017, without admitting or denying the allegations therein. Pursuant to the Assurance, the DeVry Parties agreed to pay $2.25 million for consumer restitution and $0.5 million in penalties, fees and costs. In addition, the DeVry Parties agreed that DeVry Group institutions marketing to New York consumers will maintain specific substantiation and present certain statistics as prescribed to support any future advertising regarding graduate outcomes and educational benefits, and will implement other agreed-upon compliance measures.

Student services and access to federal student loans are not impacted by the Agreement or the Assurance, and at no time has the academic quality of a DeVry University education been questioned. See “Note 3: Regulatory Settlements” and “Note 14: Commitments and Contingencies” to the Consolidated Financial Statements in Item 1 of this Form 10-Q for further discussion.

The regulatory settlements expense of $56.3 million recorded during the first nine months of fiscal year 2017 consists of the $49.4 million cash payment to the FTC, the $4.1 million unreserved and expensed institutional loans and the $2.75 million cash payment to the NYAG. Of these regulatory settlement charges, $4.1 million was allocated to the U.S. Traditional Postsecondary segment and $52.2 million was allocated to the DeVry Group home office which is classified as “Home Office and Other” in “Note 15: Segment Information” to the Consolidated Financial Statements in Item 1 of this Form 10-Q.

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Loss on Assets Held for Sale

During the second quarter of fiscal year 2017, management committed to a plan to sell the DeVry University and Carrington co-located campus in Pomona, California, which met criteria to be classified as an asset held for sale. This required a write-down of the assets to fair market value less costs to sell. Based on third party offers, management estimated the assets’ fair market values less costs to sell at approximately $11.3 million, which resulted in the carrying value exceeding the fair market value by $4.8 million. As a result, during the second quarter of fiscal year 2017, management recorded a pre-tax $4.8 million Loss on Assets Held for Sale in the Consolidated Statements of Income. The loss was classified within the U.S. Traditional Postsecondary segment. See “Note 2: Assets Held for Sale” to the Consolidated Financial Statements in Item 1 of this Form 10-Q for further discussion on the loss on assets held for sale.

Asset Impairment Charge

During the second quarter of fiscal year 2016, revenue and operating income for DeVry Group’s Carrington reporting unit were significantly below management’s expectations primarily driven by lower student enrollments. Carrington’s revenue, though increased from the second quarter of fiscal year 2015, was 12% below plan during the second quarter of fiscal year 2016, which contributed to an operating loss in the period compared to planned operating income. This plan was used in DeVry Group’s intangible asset impairment testing as of May 31, 2015. This testing indicated a fair value of the Carrington reporting unit that was approximately 8% above carrying value. Although management believed its planned business and operational strategies, which included new teaching locations and adding high demand programs to current locations in order to leverage existing facilities, would reverse the negative revenue and operating income trend, there was uncertainty as to the timing of this reversal. Accordingly, management revised its forecast and future cash flow projections for Carrington, and performed an interim impairment analysis in the second quarter of fiscal year 2016. As a result, during the second quarter of fiscal year 2016, DeVry recorded a non-cash, pre-tax impairment charge of $99.5 million related to its Carrington reporting unit. See “Note 10: Intangible Assets” to the Consolidated Financial Statements in Item 1 of this Form 10-Q, for additional disclosure on the impairment analyses.

OPERATING INCOME

DeVry Group generated operating income of $47.3 million and $85.2 million in the third quarter and first nine months of fiscal year 2017, respectively. Total consolidated operating income decreased $13.6 million for the third quarter and increased $72.5 million for the first nine months of fiscal year 2017 compared to the year-ago periods. The primary drivers of the increase in operating income for the first nine months of fiscal year 2017 were a $99.5 million decrease in asset impairment charge and a $22.0 million decrease in restructuring expense. These were partially offset by the regulatory settlements and loss on assets held for sale charges of $56.3 million and $4.8 million for the first nine months of fiscal year 2017. Excluding the effect of these special charges, consolidated operating income decreased 8.0% in the third quarter and increased 10.7% in the first nine months of fiscal year 2017 compared to the year-ago periods. The decrease in operating income for the third quarter was a result of decreased revenue at the medical and veterinary schools and Becker, excluding ACAMS, and incremental costs at Chamberlain that could not be offset with the savings from cost reduction efforts across DeVry Group institutions. For the first nine months of fiscal year 2017, these cost reduction efforts and revenue growth in the Technology and Business segment more than offset the effect on operating income of the revenue decline at the medical and veterinary schools, DeVry University and Carrington.

Medical and Healthcare

Medical and Healthcare segment operating income decreased 12.7% to $50.2 million in the third quarter and increased 3.7% to $146.2 million for the first nine months of fiscal year 2017 compared to the year-ago periods. The decrease in operating income for the third quarter was a result of decreased revenue at the medical and veterinary schools that could not be offset with the savings from cost reduction efforts across the segment and expenses necessary to support growth. Revenue increases at Chamberlain in the first nine months of fiscal year 2017 and cost reductions throughout the segment more than offset the decreased revenue at the medical and veterinary schools and the increase in expenses to support growth.

Professional Education

Professional Education segment operating income decreased 55.6% to $2.6 million in the third quarter and decreased 43.7% to $8.8 million for the first nine months of fiscal year 2017 compared to the year-ago periods. The decreased operating income is the result of a decline in revenue in Becker’s CPA review business driven by a decline in the number of CPA exam candidates taking the Becker review course compared to the prior year. Also, contributing to the decline in operating income was ACAMS revenue seasonality.

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Technology and Business

Technology and Business segment operating income of $5.4 million and $16.9 million in the third quarter and first nine months of fiscal year 2017, respectively, compared to operating losses of $1.6 million and $1.4 million during the year-ago periods. The effects from changes in exchange rates improved operating income by $1.3 million and $4.7 million in the third quarter and the first nine months of fiscal year 2017, respectively. Operating income was also improved due to cost reductions and the acquisitions of Grupo Ibmec and Facimp.

U.S. Traditional Postsecondary

U.S. Traditional Postsecondary segment operating losses were $5.7 million and $21.4 million in the third quarter and first nine months of fiscal year 2017, respectively, compared to operating income of $2.9 million and operating loss of $132.8 million in the year-ago quarter and nine-month periods, respectively. Excluding $5.7 million of restructuring expense, which increased from $2.6 million in the year-ago quarter, and a reduction of $3.8 million in gain on sale of assets, the segment operations broke even for the third quarter of fiscal year 2017 compared to $1.7 million in operating income in the year-ago quarter. Excluding $13.2 million of restructuring expense, which decreased from $39.6 million in the year-ago first nine months, regulatory settlements of $4.1 million, loss on assets held for sale of $4.8 million, a reduction of $99.5 million in asset impairment charges, and a reduction of $3.8 million in gain on sale of assets, the segment generated operating income of $0.6 million for the first nine months of fiscal year 2017 compared to $2.4 million in the year-ago period. Revenue at DeVry University and Carrington continued to decline in both the third quarter and first nine months of fiscal year 2017, resulting from the impact of lower new and total student enrollments at both institutions and the higher use of scholarships and discounts at DeVry University. Partially offsetting the revenue declines were savings from cost reduction measures, which offset 96% and 99% of the lower revenue for the third quarter and first nine months of fiscal year 2017, respectively, in the segment. Total segment expenses for the third quarter and first nine months of fiscal year 2017, excluding special charges, decreased $38.4 million and $123.2 million or 20.0% and 20.9%, respectively, compared to the year-ago periods. Management continues to mitigate the effects of this challenging environment by aligning its cost structure with student enrollment. Management believes further cost control measures will be necessary.

NET INTEREST EXPENSE

Net interest expense for the third quarter and first nine months of fiscal year 2017 of $0.3 million and $2.7 million, respectively, was $1.1 million and $2.5 million lower than the year-ago periods. The reduction was primarily the result of increased interest income due to higher invested cash balances at DeVry Brazil, partially offset by increased interest expense related to borrowings and outstanding letters of credit under the revolving credit facility during the first nine months of fiscal year 2017 (see “Note 13: Debt” to the Consolidated Financial Statements in Item 1 of this Form 10-Q for further details).

INCOME TAXES

The effective income tax rates on income were 14.8% and 3.2% for the third quarter and first nine months of fiscal year 2017, respectively, compared to 12.7% and 9.1% for the third quarter and first nine months of fiscal year 2016. A tax benefit of $22.1 million was recorded in the second quarter of fiscal year 2017 for settlement costs of various regulatory authority litigation. A tax benefit of $13.4 million was recorded in the second quarter of fiscal year 2016 for the impairment and write-down of intangible assets. The effective tax rate excluding the regulatory settlement and impairment costs were 17.8% and 13.2% for the first nine months of fiscal years 2017 and 2016, respectively. The tax rates increased in fiscal year 2017 compared to fiscal year 2016 due to an increase in earnings from U.S. operations, which are taxed at a higher rate than income from foreign operations. DeVry Group’s effective income tax rate reflects benefits derived from significant operations outside the U.S. Earnings of these international operations are not subject to U.S. federal or state income taxes, so long as such earnings are not repatriated, as discussed below. Four of DeVry Group’s operating units, AUC, which operates in St. Maarten, RUSM, which operates in Dominica, RUSVM, which operates in St. Kitts, and DeVry Brazil, which operates in Brazil, all benefit from local tax incentives. AUC’s effective tax rate reflects benefits derived from investment incentives. RUSM and RUSVM each have agreements with their respective domestic governments that exempt them from local income taxation. Both of these agreements have been extended to provide, in the case of RUSM, an indefinite period of exemption and, in the case of RUSVM, exemption until 2037. DeVry Brazil’s effective tax rate reflects benefits derived from its participation in PROUNI, a Brazilian program for providing scholarships to a portion of its undergraduate students.

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DeVry Group intends to indefinitely reinvest international earnings and cash flow to improve and expand facilities and operations at AUC, RUSM, RUSVM and DeVry Brazil, and pursue other business opportunities outside the U.S. Accordingly, DeVry Group has not recorded a provision for the payment of U.S. income taxes on these earnings.

LIQUIDITY AND CAPITAL RESOURCES

Student Payments

DeVry Group’s primary source of liquidity is the cash received from payments for student tuition, books, other educational materials and fees. These payments include funds originating as financial aid from various federal and state loan and grant programs, student and family educational loans (“private loans”), employer educational reimbursements and student and family financial resources. DeVry Group continues to provide financing options for its students, including DeVry Group’s institutional loan programs.

The following table summarizes DeVry Group’s cash receipts from tuition and related fee payments by fund source as a percentage of total revenue for fiscal years 2016 and 2015, respectively.

	Fiscal Year
	2016			2015
Funding Source:
Federal Assistance (Title IV) Program Funding (Grants and Loans)		58	%		59	%
Brazil FIES Public Loan Program		4	%		2	%
State Grants		1	%		1	%
Private Loans		1	%		1	%
Student accounts, cash payments, private scholarships, employer and military provided tuition assistance and other		36	%		37	%
Total		100	%		100	%

The pattern of cash receipts during the year is seasonal. DeVry Group’s accounts receivable balances peak immediately after tuition bills are issued each semester/session. Accounts receivable reaches its lowest level at the end of each semester/session, dropping to its lowest point during the year at the end of December.

At March 31, 2017, total accounts receivable, net of related reserves, was $165.7 million compared to $170.0 million at March 31, 2016. Excluding the effect of the increase in the value of the Brazilian Real compared to the U.S. dollar, total accounts receivable, net of related reserves, decreased $10.6 million. The main drivers of the decrease were lower enrollment and revenue and the impact of forgiving unreserved balances of institutional loans as part of the FTC settlement (See “Note 3: Regulatory Settlements” to the Consolidated Financial Statements in Item 1 of this Form 10-Q).

Financial Aid

Like other higher education institutions, DeVry Group is highly dependent upon the timely receipt of federal financial aid funds. All financial aid and assistance programs are subject to political and governmental budgetary considerations. In the U.S., the Higher Education Act (“HEA”) guides the federal government’s support of postsecondary education. If there are changes to financial aid programs that restrict student eligibility or reduce funding levels, DeVry Group’s financial condition and cash flows could be materially and adversely affected. Please see “Item 1A – Risk Factors” in DeVry Group’s Annual Report on Form 10-K for the fiscal year ended June 30, 2016 filed with the SEC on August 25, 2016, for a discussion of student financial aid related risks. Certain of these risks are updated in “Item 1A – Risk Factors” of this Form 10-Q.

In addition, government-funded financial assistance programs are governed by extensive and complex regulations in the U.S. and Brazil. Like any other educational institution, DeVry Group’s administration of these programs is periodically reviewed by various regulatory agencies and is subject to audit or investigation by other governmental authorities. Any violation could be the basis for penalties or other disciplinary action, including initiation of a suspension, limitation or termination proceeding. Comprehensive program reviews of Carrington College-California and DeVry University were initiated in June and August 2014, respectively, and remain open and ongoing. On January 27, 2016, DeVry University received a preliminary program review report from the U.S. Department of Education (“ED”), which identified findings relating to its fiscal administration, student eligibility and administrative capability and provides DeVry University an opportunity to respond to the preliminary findings. DeVry University provided a comprehensive response to the report on October 11, 2016 disputing most of the findings. The timing or final outcome of the DeVry University program review, or its possible impact on the business, financial condition or results of operations of DeVry University or DeVry Group cannot be predicted at this time.

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If ED determines that we have failed to demonstrate either financial responsibility or administrative capability in any pending program review, or otherwise determines that an institution has violated the terms of its Program Participation Agreement (“PPA”), we could be subject to sanctions including: fines, penalties, reimbursement for discharged loan obligations, a requirement to post a letter of credit, suspension or termination of our eligibility to participate in the Title IV programs. ED regulations regarding financial responsibility provide that, if any one of DeVry Group’s Title IV-eligible institutions is unable to pay its obligations under its PPA as a result of operational issues and/or an enforcement action, DeVry Group’s other Title IV-eligible institutions, regardless of their compliance with applicable laws and regulations, would not be able to maintain their Title IV eligibility without assisting in the repayment of the first institution’s Title IV obligations. Additionally, as a result of the ED Settlement discussed below, DeVry Group has agreed to be jointly and severally liable with DeVry University under the terms of the Provisional PPA governing DeVry University’s participation in ED’s Title IV programs. As a result, even though DeVry Group’s Title IV-eligible institutions are operated through independent entities, an enforcement action against one of our institutions could also have a material adverse effect on the business, financial condition, results of operations and cash flows of DeVry Group’s other institutions and for DeVry Group as a whole, and could result in the imposition of significant restrictions on the ability for DeVry Group’s other institutions and for DeVry Group to operate.

On August 28, 2015, DeVry University received a request from the Multi-Regional and Foreign School Participation Division of the Federal Student Aid office of the Department of Education (“ED FSA”) for documents and information regarding published employment outcomes and relative earnings information of DeVry University graduates (the “Inquiry”). The stated purpose of the Inquiry was to permit ED FSA to assess DeVry University's compliance with applicable regulations under Title IV. On January 27, 2016, DeVry University received a Notice of Intent to Limit from ED FSA (the “January 2016 Notice”), based on a portion of the Inquiry, informing DeVry University of ED FSA’s intention to impose certain limitations on the participation of DeVry University in programs authorized pursuant to Title IV. The proposed limitations related to representations in advertising and marketing, regarding the post-graduation employment outcomes of DeVry University students over a period from 1975 to October 1980 (the “Since 1975 Representation”). On October 13, 2016, DeVry University and ED reached a negotiated agreement to settle the January 2016 Notice (the “ED Settlement”). Under the terms of the ED Settlement, among other things, without admitting wrongdoing, DeVry University (1) may no longer make representations regarding the graduate employment outcomes of DeVry University graduates from 1975 to October 1980, including advertising regarding the cumulative graduate employment outcomes since 1975, (2) will maintain or undertake certain recordkeeping and compliance practices to support future representations regarding graduate employment rates and (3) will post a notice on its website and in its enrollment agreements regarding the Since 1975 Representation. The ED Settlement also provides that, except for Heightened Cash Monitoring 1 status, ED will not impose conditions on the timing of, or documentation requirements for, disbursement of aid due to matters relating to lack of substantiation for the Since 1975 Representation. As a result of the ED Settlement, DeVry University’s participation in the Title IV programs will be subject to provisional certification for five years and DeVry University will be required to post a letter of credit equal to the greater of 10% of DeVry University’s annual Title IV disbursements or $68.4 million for a five-year period. Institutions under provisional certification must obtain ED approval before it may award or disburse Title IV funds based on a substantial change, including the establishment of a new location or the addition of an educational program. Provisional certification status also carries fewer due process protections than full certification. As a result, ED may withdraw an institution’s provisional certification more easily than if it is fully certified. Provisional certification does not otherwise limit access to Title IV program funds by students attending the institution. The timing or outcome of unresolved matters from the Inquiry, or their possible impact on the business, financial condition or results of operations of DeVry University or DeVry Group cannot be predicted at this time. The defense, resolution, or settlement of any matter potentially under review arising from the Inquiry, could require us to expend significant resources and could have a material adverse effect on our business, financial condition, results of operations and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

Gainful Employment (“GE”) regulations became effective on July 1, 2015. Programs that fail GE accountability metrics in two out of any three consecutive years or do not pass in any four consecutive years will be disqualified from participation in the Title IV programs for a period of three years, and an institution is prohibited from establishing Title IV eligibility for any substantially similar program during that period.

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Less than 11% of DeVry Group’s 2014-2015 academic year programs fell into the failing category, and less than 15% of DeVry Group’s programs fell into the zone category, including the RUSVM’s veterinary medicine program. Required warnings to enrolled and prospective students with respect to GE programs considered under the regulations to be in jeopardy of losing Title IV eligibility were provided in February 2017. Management expects that certain programs will be able to avoid falling into the zone or failing categories in future years through adjustments to program price, or, if appropriate and consistent with programmatic standards, the duration of programs. For programs where such adjustments or initiatives are not feasible, which may include RUSVM’s veterinary medicine program, we may discontinue such programs or direct students to third-party lenders for financial support of student tuition and other expenses. These adjustments or initiatives, or any requirement to issue warnings to enrolled and prospective students, could have a significant impact on our business, financial condition, results of operations and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Management expects RUSVM will continue to be in the zone for the 2015-2016 and 2016-2017 academic years, as well as, if potential initiatives to improve graduate incomes are not executable, are not executed or are unsuccessful, the 2017-2018 academic year, notwithstanding strong student outcomes and very low Cohort Default Rates for RUSVM graduates (0.7% as of September 30, 2013, the latest 3-year cohort period for which official data is available). In March 2017, ED delayed implementation of some portions of the GE reporting regulations until July 1, 2017. While the delay does not affect RUSVM’s status, ED indicated in the delay announcement that its action was taken to allow ED to further review the GE regulations and their implementation. Nonetheless, management believes that, if the GE regulations and guidance are not changed prior to 2019 and RUSVM’s veterinary program is determined by ED to be the zone for the 2015-2016 and 2016-2017 academic years, RUSVM would be required to issue warnings to students as early as 2019 that Title IV funding may no longer continue and, if RUSVM’s veterinary program is determined to be in the zone for the 2017-2018 academic year, RUSVM students would no longer have access to Title IV student aid as early as the beginning of 2020.

An ED regulation known as the “90/10 Rule” affects only proprietary postsecondary institutions, such as Chamberlain, AUC, RUSM, RUSVM, DeVry University and Carrington. Under this regulation, an institution that derives more than 90% of its revenue on a cash basis from Title IV student financial assistance programs in two consecutive fiscal years loses eligibility to participate in these programs for at least two fiscal years. The following table details the percentage of revenue on a cash basis from federal financial assistance programs (excluding Department of Veterans Affairs (“VA”) and military tuition assistance benefits) for each of DeVry Group’s Title IV-eligible institutions for fiscal years 2016 and 2015, respectively.

	Fiscal Year
	2016			2015
Chamberlain University		64	%		65	%
American University of the Caribbean School of Medicine		79	%		80	%
Ross University School of Medicine		82	%		80	%
Ross University School of Veterinary Medicine		83	%		84	%
DeVry University		63	%		66	%
Carrington College:
California		78	%		76	%
Boise		69	%		70	%
Portland		77	%		76	%
Phoenix		80	%		80	%

In September 2016, DeVry Group committed to voluntarily limit the amount of revenue that each of its six Title IV institutions derive from federal funding to 85%, including VA and military tuition assistance benefits. Management plans to have its institutions meet this lower threshold by July 2017 and will publicly report the results.

Under the terms of DeVry Group institutions’ participation in financial aid programs, certain cash received from state governments and ED is maintained in restricted bank accounts. DeVry Group receives these funds either after the financial aid authorization and disbursement process for the benefit of the student is completed, or just prior to that authorization. Once the authorization and disbursement process for a particular student is completed, the funds may be transferred to unrestricted accounts and become available for DeVry Group to use in operations. This process generally occurs during the academic term for which such funds have been authorized. Cash in the amount of $4.8 million, 7.2 million and $11.0 million was held in restricted bank accounts at March 31, 2017, June 30, 2016 and March 31, 2016, respectively.

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A separate financial responsibility test for continued participation by an institution’s students in U.S. federal financial assistance programs is based upon a composite score of three ratios: an equity ratio that measures the institution’s capital resources; a primary reserve ratio that measures an institution’s ability to fund its operations from current resources; and a net income ratio that measures an institution’s ability to operate profitably. A minimum score of 1.5 is necessary to meet ED’s financial standards. Institutions with scores of less than 1.5 but greater than or equal to 1.0 are considered financially responsible, but require additional oversight. These schools are subject to heightened cash monitoring and other participation requirements. An institution with a score less than 1.0 is considered not financially responsible. However, a school with a score less than 1.0 may continue to participate in the Title IV programs under provisional certification. In addition, this lower score typically requires that the school be subject to heightened cash monitoring requirements and post a letter of credit (equal to a minimum of 10 percent of the Title IV aid it received in the institution's most recent fiscal year).

For the past several years, DeVry Group’s composite score has exceeded the required minimum of 1.5. If DeVry Group becomes unable to meet requisite financial responsibility standards or otherwise demonstrate, within the regulations, its ability to continue to provide educational services, then DeVry Group could be subject to heightened cash monitoring or be required to post a letter of credit to enable its students to continue to participate in federal financial assistance programs.

Cash Provided by Operating Activities

The following table provides a summary of cash flows from operations (in thousands):

	Nine Months Ended March 31,
	2017			2016
Net Income	$	79,926		$	6,845
Non-cash Items		150,190			234,179
Changes in Assets and Liabilities, Net of Effects from Acquisition Components		(60,663	)		(21,335	)
Net Cash Provided by Operating Activities	$	169,453		$	219,689

Cash generated from operations in the first nine months of fiscal year 2017 was $169.5 million compared to $219.7 million in the year-ago nine-month period. Net income increased by $73.1 million in the first nine months of fiscal year 2017 compared to the year-ago nine-month period. The decrease in non-cash items in the first nine months of fiscal year 2017 compared to the year-ago nine-month period, was primarily the result of the $99.5 million asset impairment charge related to the Carrington reporting unit in fiscal year 2016 and a decrease in depreciation and write-offs of leasehold improvements and equipment. This was the result of a decrease in real estate consolidations and the associated asset disposals at DeVry University in the first nine months of fiscal year 2017 compared to the year-ago nine-month period. This was partially offset by an increase in the provision for refunds and uncollectible accounts primarily at Chamberlain and an increase in amortization expense of intangible assets related to the acquisitions of ACAMS in the first quarter of fiscal year 2017 and Grupo Ibmec in the second quarter of fiscal year 2016.

Changes from June 30, 2016, in Assets and Liabilities, Net of Effects from Acquisition of Businesses consisted of the following:

· The decrease in combined net prepaid expenses, accounts payable and accrued expenses was $57.1 million, which is $40.9 million more than the combined change in the year-ago period driven by overall cost reductions and the timing of the period-end relative to DeVry Group’s payroll and bill payment cycles.

· The decrease in combined restricted cash, accounts receivable (excluding the provisions for refunds and uncollectible accounts) and deferred revenue was $3.6 million, which is $1.6 million less than the combined change in the year-ago period. The main driver of this change was lower levels of accounts receivable and deferred revenue due to lower enrollment across various institutions.

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Cash Used in Investing Activities

Capital expenditures in the first nine months of fiscal year 2017 were $32.5 million, compared to $51.0 million in the year-ago nine-month period. The decrease in capital expenditures reflects less spending on new campuses at Chamberlain and lower spending at DeVry University.

Capital spending for the remainder of fiscal year 2017 is expected to support continued investment at the medical and veterinary schools and facility improvements at DeVry Brazil. Management anticipates full fiscal year 2017 capital spending to be in the range of $55 million to $60 million.

On July 1, 2016, Becker acquired ACAMS, located in Miami, Florida, for $330.6 million, net of cash acquired. DeVry Group funded the purchase with available domestic cash balances and $175 million in borrowings under its revolving credit facility. ACAMS is the largest international membership organization dedicated to enhancing the knowledge and skills of anti-money laundering and financial crime prevention professionals. The acquisition furthers Becker’s global growth strategy into professional education and enhances Becker’s position as a leading provider of lifelong learning for professionals.

During the third quarter of fiscal year 2016, DeVry Group sold the DeVry University Fremont, California, campus and student housing facilities. Net proceeds from this sale were $24.8 million which resulted in a $3.8 million gain on the sale. DeVry University leased back a portion of the campus facility where it may continue to operate until June 2017. The student housing facility was leased by DeVry University through June 30, 2016.

Cash Provided by (Used in) Financing Activities

DeVry Group’s consolidated cash balances of $209.9 million at March 31, 2017 included approximately $185.1 million of cash attributable to DeVry Group’s international operations. It is DeVry Group’s intention to indefinitely reinvest this cash, subsequent earnings and cash flow to improve and expand facilities and operations of its international schools and pursue future business opportunities outside the U.S. Therefore, cash held by international operations will not be available for domestic general corporate purposes. Management does not believe this policy will adversely affect DeVry Group’s overall liquidity. Should it be necessary to repatriate the international cash balances to the U.S., the repatriated cash would be subject to taxation at U.S. tax rates.

Historically, DeVry Group has produced positive domestic cash flows from operating activities sufficient to fund the delivery of its domestic educational programs and services as well as to fund capital investment and other activities including share repurchases and dividend payments. In addition, DeVry Group maintains a $400 million revolving line of credit which can be expanded to $550 million subject to bank approval. For the first nine months of fiscal year 2017, cash flows from domestic operating activities were approximately $85.1 million, which, along with $120 million borrowed under the revolving credit facility, were sufficient to fund $11.5 million of domestic capital investment, repurchase $30.6 million in common stock, pay dividends of $11.4 million, and provide funds for the acquisition of ACAMS and the FTC settlement payment.

Management believes current balances of unrestricted cash, cash generated from operations and the revolving credit facility will be sufficient to fund both DeVry Group’s current domestic and international operations, growth plans and current share repurchase program for the foreseeable future unless significant investment opportunities should arise.

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Revolving Credit Facility

DeVry Group entered into a revolving credit facility on March 31, 2015 which expires on March 31, 2020. The Credit Agreement provides for a multi-currency revolving credit facility in the amount of $400 million (the “Aggregate Commitment”) with availability in currencies other than U.S. dollars of up to $200 million. Subject to certain conditions set forth in the Credit Agreement, the Aggregate Commitment may be increased up to $550 million. Up to $50 million of the Aggregate Commitment was available for letters of credit. On October 4, 2016, DeVry Group entered into a First Amendment to Credit Agreement (the “Credit Agreement Amendment”), which amends the Aggregate Commitment to increase the amount available for letters of credit from $50 million to $100 million. This increase was requested to accommodate the requirements of the negotiated settlement agreement with the U.S. Department of Education which requires DeVry University to post a letter of credit for $68.4 million (see “Note 3: Regulatory Settlements” and “Note 14: Commitments and Contingencies” to the Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information regarding this settlement agreement). DeVry Group may select interest rates for borrowings under the Credit Agreement equal to LIBOR or a LIBOR-equivalent rate for Eurocurrency Rate Loans or a base rate, plus an applicable rate based on DeVry Group’s consolidated leverage ratio, as defined in the Credit Agreement. The applicable rate ranges from 2% to 3% for Eurocurrency Rate Loans and from 1% to 2% for Base Rate Loans. As of March 31, 2017, DeVry Group borrowings under this agreement were $120 million with a weighted average interest rate of 3.45%. There were no outstanding borrowings under the revolving credit facility as of June 30, 2016 or March 31, 2016. Borrowings were made in the first quarter of fiscal year 2017 to fund the acquisition of ACAMS as discussed in “Note 9: Business Combinations” to the Consolidated Financial Statements in Item 1 of this Form 10-Q. Additional borrowings were made in the second quarter of fiscal year 2017 to fund the FTC settlement discussed in “Note 3: Regulatory Settlements” and “Note 14: Commitments and Contingencies” to the Consolidated Financial Statements in Item 1 of this Form 10-Q. There are no required principal payments under this revolving credit agreement and all borrowings and letters of credit mature on March 31, 2020. As a result of the agreement extending beyond one year, the borrowings are classified as long-term with the exception of amounts expected to be repaid in the 12 months subsequent to the balance sheet date, if any. DeVry Group letters of credit outstanding under this agreement were $68.5 million as of March 31, 2017 and $0.1 million as of each of June 30, 2016 and March 31, 2016. As of March 31, 2017, DeVry Group is charged an annual fee equal to 2.5% of the undrawn face amount of the outstanding letters of credit under the agreement, payable quarterly. The agreement also requires payment of a commitment fee equal to 0.4% of the undrawn portion of the credit facility as of March 31, 2017. The interest rate, letter of credit fees and commitment fees are adjustable quarterly, based upon DeVry Group’s achievement of certain financial ratios.

The revolving credit agreement contains covenants that, among other things, require maintenance of certain financial ratios, as defined in the agreement. Maintenance of these financial ratios could place restrictions on DeVry Group’s ability to pay dividends. These financial ratios include a consolidated fixed charge coverage ratio, a consolidated leverage ratio and a U.S. Department of Education financial responsibility ratio based upon a composite score of an equity ratio, a primary reserve ratio and a net income ratio. Failure to maintain any of these ratios or to comply with other covenants contained in the agreement would constitute an event of default and could result in termination of the agreement and require payment of all outstanding borrowings and replacement of outstanding letters of credit. DeVry Group was in compliance with the debt covenants as of March 31, 2017.

The stock of all U.S. and certain foreign subsidiaries of DeVry Group is pledged as collateral for the borrowings under the revolving credit facility.

Other Contractual Arrangements

DeVry Group’s long-term contractual obligations consist of its $400 million revolving line of credit (discussed above), operating leases on facilities and equipment and agreements for various services.

In addition, DeVry Group has recorded liabilities for deferred purchase price agreements with sellers related to the acquisitions of Faculdade Diferencial Integral (“Facid”), Faculdade Ideal (“Faci”), Damasio, Grupo Ibmec and Facimp (see “Note 9: Business Combinations” to the Consolidated Financial Statements in Item 1 of this Form 10-Q for a discussion of the Grupo Ibmec and Facimp acquisitions). This financing is in the form of holdbacks of a portion of the purchase price of these acquisitions or installment payments. Payments are made under these agreements based on payment schedules or the resolution of any pre-acquisition contingencies.

DeVry Group is not a party to any off-balance sheet financing or contingent payment arrangements, nor are there any unconsolidated subsidiaries. DeVry Group has not extended any loans to any officer, director or other affiliated person. DeVry Group has not entered into any synthetic leases and there are no residual purchase or value commitments related to any facility lease. DeVry Group did not enter into any derivatives, swaps, futures contracts, calls, hedges or non-exchange traded contracts during the first nine months of fiscal year 2017. DeVry Group had no open derivative positions at March 31, 2017.

RECENT ACCOUNTING PRONOUNCEMENTS

For a discussion of recent accounting pronouncements, see “Note 4: Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 1 of this Form 10-Q.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

DeVry Group is not dependent upon the price levels, nor affected by fluctuations in pricing, of any particular commodity or group of commodities. However, more than 50% of DeVry Group’s costs are in the form of wages and benefits. Changes in employment market conditions or escalations in employee benefit costs could cause DeVry Group to experience cost increases at levels beyond what it has historically experienced.

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The financial position and results of operations of AUC, RUSM and RUSVM Caribbean operations are measured using the U.S. dollar as the functional currency. Substantially all of these financial transactions are denominated in the U.S. dollar.

The financial position and results of operations of DeVry Brazil operations are measured using the Brazilian Real as the functional currency. DeVry Brazil has not entered into any material long-term contracts to purchase or sell goods and services, other than the lease agreements on teaching facilities and contingencies relating to prior acquisitions. Currently, DeVry Group does not have any foreign exchange contracts or derivative financial instruments designed to mitigate changes in the value of the Brazilian Real. Brazilian-based assets constitute 26.3% of DeVry Group’s overall assets, and its Brazilian liabilities constitute 12.2% of overall liabilities. The value of the Brazilian Real has been volatile in relation to the U.S. dollar over the past several years. Since June 2015, the Brazilian Real’s value has declined by as much as 22% at December 2015, but recovered most of that loss by June 30, 2016. Over the first nine months of fiscal year 2017, the value has remained fairly steady. Based upon the current value of the net assets in DeVry Brazil’s operations, a change of $0.01 in the value of the Brazilian Real relative to the U.S. dollar results in a translation adjustment to Accumulated Other Comprehensive Loss of approximately $16.4 million. For the first nine months of fiscal year 2017, the volatility in the value of the Brazilian Real also resulted in higher U.S. translated revenue and operating income compared to the year-ago nine-month period.

The interest rate on DeVry Group’s revolving credit facility is based upon LIBOR or a LIBOR-equivalent rate for Eurocurrency Rate Loans or a base rate for periods typically ranging from one to three months. At March 31, 2017, DeVry Group had $120 million in outstanding borrowings under this facility with a weighted average interest rate of 3.45%. Based upon borrowings of $120 million, a 100 basis point increase in short-term interest rates would result in $1.2 million of additional annual interest expense.

DeVry Group’s customers are principally individual students enrolled in its various educational programs. Accordingly, concentration of accounts receivable credit risk is small relative to total revenue and accounts receivable. However, as discussed in “Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in subsection “Liquidity and Capital Resources” of this Form 10-Q, the DeVry Brazil FIES accounts receivable balance has remained elevated due to changes in government funding of the program. As of March 31, 2017, the FIES accounts receivable balance is $43.4 million. The FIES funding for calendar year 2015 accounts for $23.7 million of the total outstanding FIES balance. In January 2016, DeVry Brazil entered into a repayment agreement with the Brazilian government pursuant to which these 2015 funds will be paid in annual installments over three years. The first installment of $7.2 million was received by DeVry Brazil on July 1, 2016.

DeVry Group’s cash is held in accounts at various large, financially secure depository institutions. Although the amount on deposit at a given institution typically will exceed amounts subject to guarantee, DeVry Group has not experienced any deposit losses to date, nor does management expect to incur such losses in the future.

ITEM 4 – CONTROLS AND PROCEDURES

Principal Executive and Principal Financial Officer Certificates

The required compliance certificates signed by the DeVry Group’s Chief Executive Officer and Chief Financial Officer are included as Exhibits 31 and 32 of this Quarterly Report on Form 10-Q.

Disclosure Controls and Procedures

Disclosure controls and procedures are designed to help ensure that all the information required to be disclosed in DeVry Group’s reports filed under the Securities Exchange Act of 1934 (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified by the applicable rules and forms.

DeVry Group’s Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this report, that DeVry Group’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) are effective to ensure that information required to be disclosed in the reports that DeVry Group files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) is accumulated and communicated to DeVry Group’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

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Changes in Internal Control Over Financial Reporting

There were no changes in internal control over financial reporting that occurred during the first nine months of fiscal year 2017 that materially affected, or are reasonably likely to materially affect, DeVry Group’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

For a discussion of legal proceedings, see “Note 14: Commitments and Contingencies” to the Consolidated Financial Statements in Item 1 of this Form 10-Q.

ITEM 1A – RISK FACTORS

Risks Related to DeVry Group’s Highly Regulated Industry

In addition to the other information set forth in this report, and the update to the risk factors described below, the factors discussed in “Item 1A – Risk Factors” in DeVry Group’s Annual Report on Form 10-K for the fiscal year ended June 30, 2016, which could materially affect DeVry Group’s business, financial condition or future results, should be carefully considered. Such risks are not the only risks facing DeVry Group. Additional risks and uncertainties not currently known to DeVry Group or that management currently deems to be immaterial also may materially adversely affect its business, financial condition and/or operating results.

We are subject to risks relating to regulatory matters. If we fail to comply with the extensive regulatory requirements for our operations, we could face fines and penalties, including loss of access to federal and state student financial aid for our students as well as significant civil liability, which could have a material adverse effect on our business, financial condition, results of operations and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

As a provider of higher education, we are subject to extensive regulation. These regulatory requirements cover virtually all phases and aspects of our U.S. postsecondary operations, including educational program offerings, facilities, civil rights, safety, privacy, instructional and administrative staff, administrative procedures, marketing and recruiting, financial operations, payment of refunds to students who withdraw, acquisitions or openings of new schools or programs, addition of new educational programs and changes in our corporate structure and ownership.

In particular, in the U.S., the HEA subjects our U.S. degree-granting institutions (Chamberlain, DeVry University and Carrington) and all other higher education institutions, including our AUC, RUSM and RUSVM schools that participate in the various federal student financial aid programs under Title IV of the HEA (“Title IV”) to significant regulatory scrutiny. DeVry Group’s Title IV participating institutions collectively receive 58% of their revenue from students under Title IV-based federal grant and loan programs. As a result, the suspension, limitation or termination of any of the eligibility of any of our institutions to participate in Title IV financial aid programs could have a material adverse effect on our business, financial condition, results of operations and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

To participate in Title IV financial aid programs, an institution must receive and maintain authorization by the appropriate state education agencies, be accredited by an accrediting commission recognized by the U.S Department of Education (“ED”), and be certified by ED as an eligible institution, which ultimately is accomplished through the execution of a Program Participation Agreement (“PPA”).

57

Our institutions that participate in Title IV programs each do so pursuant to a PPA that, among other things, includes commitments to abide by all applicable laws and regulations, such as the Incentive Compensation, Substantial Misrepresentation, and Gainful Employment (“GE”) regulations. Alleged violations of such laws or regulations may form the basis of civil actions for violation of state and/or federal false claims statutes predicated on violations of a PPA, including pursuant to lawsuits brought by private plaintiffs on behalf of governments (qui tam actions), that have the potential to generate very significant damages linked to our receipt of Title IV funding from the government over a period of several years.

As described in “Note 14: Commitments and Contingencies” to the Consolidated Financial Statements in Item 1 of this Form 10-Q, DeVry University received a Notice of Intent to Limit from ED (the “January 2016 Notice”) informing DeVry University of ED’s intention to impose certain limitations on the participation of DeVry University in programs authorized pursuant to Title IV. DeVry University requested a hearing regarding ED’s proposed limitations and, on October 13, 2016, reached a negotiated settlement agreement with ED regarding the January 2016 Notice (the “ED Settlement”). Under the terms of the ED Settlement, among other things, without admitting wrongdoing, DeVry University (1) may no longer make representations regarding the graduate employment outcomes of DeVry University graduates from 1975 to October 1980, including advertising regarding the cumulative graduate employment outcomes since 1975, (2) will maintain or undertake certain recordkeeping and compliance practices to support future representations regarding graduate employment rates and (3) will post a notice on its website and in its enrollment agreements regarding the Since 1975 Representation. The ED Settlement also provides that, except for Heightened Cash Monitoring 1 status, ED will not impose conditions on the timing of, or documentation requirements for, disbursement of aid due to matters relating to lack of substantiation for the Since 1975 Representation. As a result of the ED Settlement, DeVry University’s participation in the Title IV programs will be subject to provisional certification for five years and DeVry University will be required to post a letter of credit equal to the greater of 10% of DeVry University’s annual Title IV disbursements or $68.4 million for a five-year period. Institutions under provisional certification must obtain ED approval before it may award or disburse Title IV funds based on a substantial change, including the establishment of a new location or the addition of an educational program. Provisional certification status also carries fewer due process protections than full certification. As a result, ED may withdraw an institution’s provisional certification more easily than if it is fully certified. Provisional certification does not otherwise limit access to Title IV program funds by students attending the institution.

GE regulations became effective on July 1, 2015. Programs that fail GE accountability metrics in two out of any three consecutive years or do not pass in any four consecutive years will be disqualified from participation in the Title IV programs for a period of three years, and an institution is prohibited from establishing Title IV eligibility for any substantially similar program during that period.

Less than 11% of DeVry Group’s 2014-2015 academic year programs fell into the failing category, and less than 15% of DeVry Group’s programs fell into the zone category, including the RUSVM’s veterinary medicine program. Required warnings to enrolled and prospective students with respect to GE programs considered under the regulations to be in jeopardy of losing Title IV eligibility were provided in February 2017. Management expects that certain programs will be able to avoid falling into the zone or failing categories in future years through adjustments to program price, or, if appropriate and consistent with programmatic standards, the duration of programs. For programs where such adjustments or initiatives are not feasible, which may include RUSVM’s veterinary medicine program, we may discontinue such programs or direct students to third-party lenders for financial support of student tuition and other expenses. These adjustments or initiatives, or any requirement to issue warnings to enrolled and prospective students, could have a significant impact on our business, financial condition, results of operations and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Management expects RUSVM will continue to be in the zone for the 2015-2016 and 2016-2017 academic years, as well as, if potential initiatives to improve graduate incomes are not executable, are not executed or are unsuccessful, the 2017-2018 academic year, notwithstanding strong student outcomes and very low Cohort Default Rates for RUSVM graduates (0.7% as of September 30, 2013, the latest 3-year cohort period for which official data is available). In March 2017, ED delayed implementation of some portions of the GE reporting regulations until July 1, 2017. While the delay does not affect RUSVM’s status, ED indicated in the delay announcement that its action was taken to allow ED to further review the GE regulations and their implementation. Nonetheless, management believes that, if the GE regulations and guidance are not changed prior to 2019 and RUSVM’s veterinary program is determined by ED to be the zone for the 2015-2016 and 2016-2017 academic years, RUSVM would be required to issue warnings to students as early as 2019 that Title IV funding may no longer continue, and, if RUSVM’s veterinary program is determined to be in the zone for the 2017-2018 academic year, RUSVM students would no longer have access to Title IV student aid as early as the beginning of 2020.

58

Our goodwill and intangible assets could potentially be impaired if our business results and financial condition were materially and adversely impacted by the risks and uncertainties.

DeVry Group’s market capitalization can be affected by, among other things, changes in industry or market conditions, changes in results of operations and changes in forecasts or market expectations related to future results. If DeVry Group’s market capitalization remains below its carrying value for a sustained period of time or if such a decline becomes indicative that the fair values of the DeVry Group reporting units have declined below their carrying values, an impairment test may result in a non-cash impairment charge. At March 31, 2017, intangible assets from business combinations totaled $442.9 million, and goodwill totaled $861.0 million. Together, these assets equaled approximately 55% of total assets as of such date. If DeVry Group’s business results and financial condition were materially and adversely impacted, then such intangible assets and goodwill could be impaired, requiring possible write-off of up to $422.9 million of intangible assets and up to $861.0 million of goodwill.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publically Announced Plans or Programs (1)		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
January 2017		78,880	$	32.70		78,880	$	64,915,685
February 2017		119,719	$	32.73		119,719	$	297,629,206
March 2017		229,749	$	33.40		229,749	$	289,956,022
Total		428,348	$	33.08		428,348	$	289,956,022

(1) On December 15, 2015, the Board of Directors authorized the ninth share repurchase program to buy back up to $100 million of DeVry Group common stock through December 31, 2017. On February 16, 2017, the Board of Directors terminated the ninth share repurchase program and authorized the tenth share repurchase program to buy back up to $300 million of DeVry Group common stock through December 31, 2020. The total remaining authorization under the tenth share repurchase program was $289,956,022 as of March 31, 2017.

Other Purchases of Equity Securities

Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publically Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 2017		468	$	33.50		NA		NA
February 2017		6,129	$	32.75		NA		NA
March 2017		-	$	-		NA		NA
Total		6,597	$	32.80		NA		NA

(1) Represents shares delivered back to DeVry Group for payment of withholding taxes from employees for vesting restricted stock units ("RSUs") and shares swapped for payment on exercise of incentive stock options pursuant to the terms of DeVry Group's stock incentive plans.

59

ITEM 6 – EXHIBITS

Exhibit 31	Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended
Exhibit 32	Certification Pursuant to Title 18 of the United States Code Section 1350
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

60

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	DeVry Education Group Inc.
Date: May 4, 2017
	By	/s/ Patrick J. Unzicker
		Patrick J. Unzicker
		Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)

61

EX-31

EXHIBIT 31

CERTIFICATION

I, Patrick J. Unzicker, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of DeVry Education Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report and based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

May 4, 2017	/s/  Patrick J. Unzicker
	Patrick J. Unzicker
	Senior Vice President, Chief
	Financial Officer and Treasurer

CERTIFICATION

I, Lisa W. Wardell, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of DeVry Education Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report and based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

May 4, 2017	/s/  Lisa W. Wardell
	Lisa W. Wardell
	President and Chief Executive Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The following statement is provided by the undersigned to accompany the Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) and shall not be deemed filed or deemed incorporated by reference into any filing pursuant to any provision of the Securities Exchange Act of 1934 or any other securities law.

Each of the undersigned certifies that the foregoing Quarterly Report on Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and that the information contained in this Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of DeVry Education Group Inc. for the periods reflected therein.

May 4, 2017	/s/  Patrick J. Unzicker
	Patrick J. Unzicker
	Senior Vice President, Chief
	Financial Officer and Treasurer
	/s/  Lisa W. Wardell
	Lisa W. Wardell
	President and Chief Executive Officer

XML

Document And Entity Information - shares	9 Months Ended
	Mar. 31, 2017	Apr. 27, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Entity Registrant Name	DEVRY EDUCATION GROUP INC.
Entity Central Index Key	0000730464
Current Fiscal Year End Date	--06-30
Entity Filer Category	Large Accelerated Filer
Trading Symbol	DV
Entity Common Stock, Shares Outstanding		62,626,000

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016
Current Assets:
Cash and Cash Equivalents	$ 209,879	$ 308,164	$ 330,214
Marketable Securities and Investments	3,950	3,609	3,528
Restricted Cash	4,798	7,183	10,995
Accounts Receivable, Net	165,691	162,389	170,035
Prepaid Expenses and Other	44,274	36,760	36,754
Total Current Assets	428,592	518,105	551,526
Land, Building and Equipment:
Land	49,085	55,690	50,001
Building	477,200	488,347	478,253
Equipment	537,257	521,209	512,825
Construction in Progress	17,067	22,560	20,241
Land, Building and Equipment, Gross	1,080,609	1,087,806	1,061,320
Accumulated Depreciation	(593,627)	(566,043)	(548,980)
Land, Building and Equipment Held for Sale, Net	11,280	0	0
Land, Building and Equipment, Net	498,262	521,763	512,340
Other Assets:
Deferred Income Taxes, Net	35,497	52,608	24,242
Intangible Assets, Net	422,949	342,856	371,046
Goodwill	861,001	588,007	565,012
Perkins Program Fund, Net	13,450	13,450	13,450
Other Assets, Net	58,058	60,207	59,443
Total Other Assets	1,390,955	1,057,128	1,033,193
TOTAL ASSETS	2,317,809	2,096,996	2,097,059
Current Liabilities:
Accounts Payable	46,521	64,687	54,222
Accrued Salaries, Wages and Benefits	80,965	93,328	88,472
Accrued Expenses	96,015	103,379	88,754
Deferred Revenue	178,664	100,442	170,106
Total Current Liabilities	402,165	361,836	401,554
Other Liabilities:
Revolving Loan	120,000	0	0
Deferred Income Taxes, Net	30,228	29,936	27,692
Deferred Rent and Other	104,492	118,025	108,349
Total Other Liabilities	254,720	147,961	136,041
TOTAL LIABILITIES	656,885	509,797	537,595
COMMITMENTS AND CONTINGENCIES (NOTE 14)
NONCONTROLLING INTEREST	6,600	5,112	3,529
SHAREHOLDERS' EQUITY:
Common Stock, $0.01 Par Value, 200,000,000 Shares Authorized; 62,618,000, 62,549,000 and 62,909,000 Shares Outstanding at March 31, 2017, June 30, 2016 and March 31, 2016, respectively	778	765	764
Additional Paid-in Capital	404,800	372,175	364,006
Retained Earnings	1,837,738	1,771,068	1,794,012
Accumulated Other Comprehensive Loss	(37,013)	(42,467)	(91,348)
Treasury Stock, at Cost, 15,208,000, 13,990,000 and 13,521,000 Shares at March 31, 2017, June 30, 2016 and March 31, 2016, respectively	(551,979)	(519,454)	(511,499)
TOTAL SHAREHOLDERS' EQUITY	1,654,324	1,582,087	1,555,935
TOTAL LIABILITIES, NONCONTROLLING INTEREST AND SHAREHOLDERS' EQUITY	$ 2,317,809	$ 2,096,996	$ 2,097,059

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016
Common Stock, Par Value	$ 0.01	$ 0.01	$ 0.01
Common Stock, Shares Authorized	200,000,000	200,000,000	200,000,000
Common Stock, Shares Outstanding	62,618,000	62,549,000	62,909,000
Treasury Stock, Shares	15,208,000	13,990,000	13,521,000

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
REVENUE:
Tuition	$ 399,322	$ 425,966	$ 1,217,613	$ 1,243,624
Other Educational	52,767	48,255	140,718	128,212
Total Revenue	452,089	474,221	1,358,331	1,371,836
OPERATING COST AND EXPENSE:
Cost of Educational Services	239,244	252,867	729,704	738,965
Student Services and Administrative Expense	157,781	161,483	464,497	484,662
Restructuring Expense	7,771	2,873	17,868	39,870
Regulatory Settlements	0	0	56,252	0
Loss on Assets Held for Sale	0	0	4,764	0
Impairment of Goodwill and Intangible Assets	0	0	0	99,473
Gain on Sale of Assets	0	(3,849)	0	(3,849)
Total Operating Cost and Expense	404,796	413,374	1,273,085	1,359,121
Operating Income	47,293	60,847	85,246	12,715
INTEREST:
Interest Income	1,690	27	3,741	394
Interest Expense	(1,995)	(1,408)	(6,410)	(5,581)
Net Interest Expense	(305)	(1,381)	(2,669)	(5,187)
Income Before Income Taxes	46,988	59,466	82,577	7,528
Income Tax Provision	(6,966)	(7,536)	(2,651)	(683)
NET INCOME	40,022	51,930	79,926	6,845
Net Income Attributable to Noncontrolling Interest	(163)	(5)	(502)	(42)
NET INCOME ATTRIBUTABLE TO DEVRY EDUCATION GROUP	$ 39,859	$ 51,925	$ 79,424	$ 6,803
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO DEVRY EDUCATION GROUP SHAREHOLDERS:
Basic	$ 0.63	$ 0.81	$ 1.25	$ 0.11
Diluted	0.62	0.81	1.24	0.11
Cash Dividends Declared per Common Share	$ 0	$ 0	$ 0.18	$ 0.18

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
NET INCOME	$ 40,022	$ 51,930	$ 79,926	$ 6,845
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Currency Translation Gain (Loss)	13,755	41,842	5,293	(14,144)
Change in Fair Value of Available-For-Sale Securities	60	17	161	(90)
COMPREHENSIVE INCOME (LOSS)	53,837	93,789	85,380	(7,389)
COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST	(451)	(901)	(617)	262
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO DEVRY EDUCATION GROUP	$ 53,386	$ 92,888	$ 84,763	$ (7,127)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income	$ 79,926	$ 6,845
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Stock-Based Compensation Expense	13,292	13,989
Depreciation	53,928	59,349
Amortization	9,015	4,490
Impairment of Goodwill and Intangible Assets	0	99,473
Provision for Refunds and Uncollectible Accounts	67,210	61,710
Deferred Income Taxes	(1,388)	(13,793)
Loss on Disposals, Accelerated Depreciation and Adjustments to Land, Building and Equipment	3,369	12,810
Unrealized Loss on Assets Held for Sale	4,764	0
Realized Gain on Sale of Assets	0	(3,849)
Changes in Assets and Liabilities, Net of Effects from Acquisition Components:
Restricted Cash	2,385	(252)
Accounts Receivable	(69,155)	(83,744)
Prepaid Expenses and Other	(18,336)	(1,590)
Accounts Payable	(15,955)	(12,131)
Accrued Salaries, Wages, Benefits and Expenses	(22,781)	(2,461)
Deferred Revenue	63,179	78,843
NET CASH PROVIDED BY OPERATING ACTIVITIES	169,453	219,689
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures	(32,529)	(51,004)
Payment for Purchase of Businesses, Net of Cash Acquired	(330,567)	(170,577)
Marketable Securities Purchased	(82)	(94)
Cash Received on Sale of Assets	0	24,788
Purchase of Noncontrolling Interest of Subsidiary	0	(3,114)
NET CASH USED IN INVESTING ACTIVITIES	(363,178)	(200,001)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Exercise of Stock Options	20,390	271
Proceeds from Stock Issued Under Colleague Stock Purchase Plan	635	875
Repurchase of Common Stock for Treasury	(30,552)	(24,378)
Cash Dividends Paid	(11,414)	(11,563)
Payments of Seller Financed Obligations	(3,943)	(5,890)
Borrowings Under Revolving Credit Facility	465,000	0
Repayments Under Revolving Credit Facility	(345,000)	0
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	95,116	(40,685)
Effects of Exchange Rate Differences	324	(1,811)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(98,285)	(22,808)
Cash and Cash Equivalents at Beginning of Period	308,164	353,022
Cash and Cash Equivalents at End of Period	209,879	330,214
Non-cash Investing and Financing Activity:
Increase (Decrease) in Redemption Value of Noncontrolling Interest Put Option	$ 986	$ (3,019)

XML

INTERIM FINANCIAL STATEMENTS

9 Months Ended

Mar. 31, 2017

Interim Financial Statements [Abstract]

INTERIM FINANCIAL STATEMENTS

NOTE 1: INTERIM FINANCIAL STATEMENTS

The interim Consolidated Financial Statements include accounts of DeVry Education Group Inc. (“DeVry Group”) and its wholly-owned and majority-owned subsidiaries. These financial statements are unaudited but, in the opinion of management, contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial condition and results of operations of DeVry Group. The June 30, 2016 data that is presented is derived from audited financial statements.

The interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto contained in DeVry Group's Annual Report on Form 10-K for the fiscal year ended June 30, 2016 and DeVry Group’s Quarterly Report on Form 10-Q for the quarters ended September 30, 2016 and December 31, 2016, each as filed with the Securities and Exchange Commission (“SEC”).

The results of operations for the three and nine months ended March 31, 2017, are not necessarily indicative of results to be expected for the entire fiscal year.

Following changes in strategic priorities that were implemented in the third quarter of fiscal year 2017, DeVry Group is reporting its financial performance based on four reporting segments (Medical and Healthcare, Professional Education, Technology and Business, and U.S. Traditional Postsecondary) beginning with this Quarterly Report on Form 10-Q for the quarter ended March 31, 2017. Prior periods are presented in accordance with these changes. Management has determined that these reporting segments align with DeVry Group’s current strategic priorities and resource allocation. DeVry Group’s Chief Operating Decision Maker, its President and Chief Executive Officer, regularly reviews financial information and evaluates operating and management performance based on these new segments. See “Note 15: Segment Information” for further discussion.   

XML

ASSETS HELD FOR SALE

9 Months Ended

Mar. 31, 2017

Assets Held-for-sale, Not Part of Disposal Group [Abstract]

ASSETS HELD FOR SALE

NOTE 2: ASSETS HELD FOR SALE

During the second quarter of fiscal year 2017, management committed to a plan to sell the DeVry University and Carrington College (“Carrington”) co-located campus in Pomona, California, which met criteria to be classified as an asset held for sale. This required a write-down of the assets to fair market value less costs to sell. The building is being marketed to prospective buyers and is available for immediate sale which is likely to occur within one year. Based on third party offers, management estimated the assets’ fair market values less costs to sell at approximately $11.3 million, which resulted in the carrying value exceeding the fair market value by $4.8 million. As a result, Land, Building and Equipment Held for Sale, Net of $11.3 million was recorded on the Consolidated Balance Sheet at March 31, 2017 and a $4.8 million pre-tax Loss on Assets Held for Sale was recorded in the Consolidated Statements of Income for the nine months ended March 31, 2017. The assets being held for sale are classified within the U.S. Traditional Postsecondary segment.

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REGULATORY SETTLEMENTS

9 Months Ended

Mar. 31, 2017

Income Statement [Abstract]

REGULATORY SETTLEMENTS

NOTE 3: REGULATORY SETTLEMENTS

In the second quarter of fiscal year 2017, DeVry Group, DeVry University Inc., and DeVry/New York Inc. (collectively, the “DeVry Parties”) and the Federal Trade Commission (“FTC”) agreed to a Stipulation as to Entry of an Order for Permanent Injunction and Monetary Judgment (the “Agreement”) resolving litigation brought by the FTC regarding DeVry University’s use of employment statistics in former advertising. Under the terms of the Agreement, the DeVry Parties agreed to pay $49.4 million to be distributed at the sole discretion of the FTC, to forgive $30.4 million of institutional loans issued before September 30, 2015, and to forgive outstanding DeVry University accounts receivable balances by $20.2 million for former students. In addition, the DeVry Parties agreed that DeVry Group institutions marketing to U.S. consumers will maintain specific substantiation to support any future advertising regarding graduate outcomes and educational benefits, and will implement training and other agreed-upon compliance measures. DeVry Group chose to settle the FTC litigation after filing an answer denying all allegations of wrongdoing.

In the second quarter of fiscal year 2017, DeVry Group also recorded charges related to the resolution of an inquiry made by the Office of the Attorney General of the State of New York (“NYAG”) to the DeVry Parties regarding DeVry University’s use of employment and salary statistics in former advertising. The DeVry Parties chose to resolve the NYAG inquiry by entering into an Assurance of Discontinuance (the “Assurance”) with the NYAG on January 27, 2017, without admitting or denying the allegations therein. Pursuant to the Assurance, the DeVry Parties agreed to pay $2.25 million for consumer restitution and $0.5 million in penalties, fees and costs. In addition, the DeVry Parties agreed that DeVry Group institutions marketing to New York consumers will maintain specific substantiation and present certain statistics as prescribed to support any future advertising regarding graduate outcomes and educational benefits, and will implement other agreed-upon compliance measures.

Student services and access to federal student loans are not impacted by the Agreement or the Assurance and at no time has the academic quality of a DeVry University education been questioned. See “Note 14: Commitments and Contingencies” for further discussion.

The regulatory settlements expense of $56.3 million recorded during the first nine months of fiscal year 2017 consists of the $49.4 million cash payment to the FTC, the $4.1 million unreserved and expensed institutional loans and the $2.75 million cash payment to the NYAG. Of these regulatory settlement charges, $4.1 million was allocated to the U.S. Traditional Postsecondary segment and $52.2 million was allocated to the DeVry Group home office which is classified as “Home Office and Other” in “Note 15: Segment Information.”

In the second quarter of fiscal year 2017, DeVry University reached a settlement agreement with the U.S. Department of Education (“ED”) regarding its January 27, 2016 Notice of Intent to Limit (“Notice”). The Notice related narrowly to a specific graduate employment statistic previously used by DeVry University, calculated since 1975. The settlement includes, among other things, an agreement to no longer use the statistic in question or to make any other representations regarding the graduate employment outcomes of DeVry University graduates from 1975 to October 1980. DeVry University will also refrain from making any future graduate employment representations without possessing graduate-specific information, and, for five years after the effective date of the settlement, to post a letter of credit with ED equal to 10% of DeVry University’s annual Title IV disbursement. A $68.4 million letter of credit was posted in the second quarter of fiscal year 2017 in relation to this requirement. Also, as a result of the settlement agreement, DeVry University’s participation in Title IV programs will be under provisional certification. The settlement in no way hinders DeVry University’s ability to serve current or future students. DeVry University resolved the Notice in full cooperation with ED. The settlement allows DeVry University to continue communicating its strong student outcomes, while providing assurances regarding the extent of its graduate employment data. See “Note 13: Debt” and “Note 14: Commitments and Contingencies” for further discussion.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 4: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The Consolidated Financial Statements include the accounts of DeVry Group and its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Where our ownership interest is less than 100 percent, the noncontrolling ownership interest is reported on our Consolidated Balance Sheets. The noncontrolling ownership interest earnings portion is classified as “Net Income Attributable to Noncontrolling Interest” in our Consolidated Statements of Income. Unless indicated, or the context requires otherwise, references to years refer to DeVry Group’s fiscal years.

Cash and Cash Equivalents

Cash and cash equivalents can include time deposits, high-grade commercial paper, money market funds and bankers acceptances with original maturities of three months or less. Short-term investment objectives are to minimize risk and maintain liquidity. These investments are stated at cost (which approximates fair value) because of their short duration or liquid nature. DeVry Group places its cash and temporary cash investments with high credit quality institutions. Cash and cash equivalent balances in U.S. bank accounts are generally in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. Cash and cash equivalent balances in Brazilian bank accounts are generally in excess of the deposit insurance limits for Brazilian banks. DeVry Group has not experienced any losses on its cash and cash equivalents.

Management periodically evaluates the creditworthiness of the security issuers and financial institutions with which it invests and maintains deposit accounts.

Financial Aid and Restricted Cash

A significant portion of revenue is received from students who participate in government financial aid and assistance programs which are subject to political and governmental budgetary considerations. There is no assurance that such funding will be maintained at current levels. Extensive and complex regulations in the U.S. and Brazil govern all of the government financial assistance programs in which students participate. Administration of these programs is periodically reviewed by various regulatory agencies. Any regulatory violation could be the basis for disciplinary action, which could include the suspension, limitation or termination from such financial aid programs.

Restricted cash represents amounts received from federal and state governments under various student aid grant and loan programs and such restricted funds are held in separate bank accounts. Once the financial aid authorization and disbursement process for the student has been completed, the funds are transferred to unrestricted accounts, and these funds then become available for use in DeVry Group’s operations. This authorization and disbursement process that precedes the transfer of funds generally occurs within the period of the academic term for which such funds were authorized.

As a requirement of continuing operations in Pennsylvania, DeVry Group is required to maintain a “minimum protective endowment” of at least $500,000. These funds are required as long as DeVry Group operates campuses in the state. DeVry Group accounts for these funds as restricted cash.

 

Revenue Recognition

Tuition

Chamberlain University (“Chamberlain”), DeVry Education of Brazil (“DeVry Brazil”) higher education, DeVry University and Carrington tuition revenue is recognized on a straight-line basis over their respective applicable academic terms. In addition, American University of the Caribbean School of Medicine (“AUC”), Ross University School of Medicine (“RUSM”) and Ross University School of Veterinary Medicine (“RUSVM”) basic science curriculum revenue is recognized on a straight-line basis over the applicable academic term. The clinical portion of the AUC, RUSM and RUSVM education programs are conducted under the supervision of primarily U.S. teaching hospitals and veterinary schools. AUC, RUSM and RUSVM are responsible for the billing and collection of tuition from their students during the period of clinical education. Revenue is recognized on a weekly basis based on actual program attendance during the period of the clinical program. Fees paid to the hospitals and veterinary schools for supervision of AUC, RUSM and RUSVM students are charged to expense on the same basis. Becker Professional Education (“Becker”) and DeVry Brazil’s live classroom test preparation, and DeVry Brazil’s online tuition revenue is recognized on a straight-line basis over the applicable delivery period. Revenue from Becker conferences and training services, which are generally short-term in duration, is recognized when the conference or training service is provided.

Other Educational

Sales of Becker subscriptions, membership dues, certifications, textbooks, electronic books and other educational products, including Becker self-study sales, are included in Other Educational Revenue in the Consolidated Statements of Income. Revenue from Becker subscriptions and membership dues is recognized on a straight-line basis over the applicable subscription or membership period. Revenue from Becker certifications is recognized when the certification process is complete. Textbooks, electronic books and other educational products revenue is recognized when the sale occurs. In addition, fees from international licensees of the Becker programs are included in Other Educational Revenue and recognized when confirmation of course delivery is received.

Refunds and Provisions

Estimates of DeVry Group’s expected refunds are determined at the outset of each academic term, based upon actual experience in previous terms. Inputs to this analysis include refunds issued, withdrawal rates and historical amounts owed by students for that portion of a term that was completed. Management reassesses collectability throughout the period revenue is recognized by the DeVry Group institutions, on a student-by-student basis. This reassessment is based upon new information and changes in facts and circumstances relevant to a student's ability to pay. Management also reassesses collectability when a student withdraws from the institution and has unpaid tuition charges. Such unpaid charges do not meet the threshold of reasonably collectible and are recognized as revenue on a cash basis.

The provisions for refunds, which are reported as a reduction to Tuition Revenue in the Consolidated Statements of Income, are recognized in the same ratable fashion as revenue to most appropriately match these costs with the tuition revenue in that term. Provisions for refunds were $10.9 million and $35.4 million for the three and nine months ended March 31, 2017, respectively, and $11.5 million and $34.7 million for the three and nine months ended March 31, 2016, respectively.

Provisions for refunds are monitored and adjusted as necessary within the academic term and adjusted for actual refunds issued and withdrawn student accounts receivable balances at the completion of an academic term. If a student withdraws prior to completing an academic term, federal and state regulations and accreditation criteria permit DeVry Group to retain only a set percentage of the total tuition received from such student, which varies with, but generally equals or exceeds, the percentage of the academic term completed by such student. Payment amounts received by DeVry Group in excess of such set percentages of tuition are refunded to the student or the appropriate funding source. All refunds are netted against revenue during the applicable academic term. Reserves related to refunds and uncollectible accounts totaled $51.2 million, $64.5 million and $65.9 million at March 31, 2017, June 30, 2016 and March 31, 2016, respectively. During the second quarter of fiscal year 2017, certain student accounts were forgiven as part of the FTC settlement as discussed in “Note 3: Regulatory Settlements” and “Note 14: Commitments and Contingencies.” These write-offs resulted in a $24.2 million reduction in the reserve balance.

The allowance for uncollectible accounts is determined by analyzing the current aging of accounts receivable and historical loss rates on collections of accounts receivable. In addition, management considers projections of future receivable levels and collection loss rates. We monitor the inputs to this analysis periodically throughout the year. Provisions required to maintain the allowance at appropriate levels are charged to expense in each period as required. Provisions for uncollectible accounts, which are included in the Cost of Educational Services in the Consolidated Statements of Income, were $11.6 million and $31.8 million for the three and nine months ended March 31, 2017, respectively, and $9.6 million and $27.0 million for the three and nine months ended March 31, 2016, respectively.

 

Internal-Use Software Development Costs

DeVry Group capitalizes certain internal-use software development costs that are amortized using the straight-line method over the estimated lives of the software, not to exceed seven years. Capitalized costs include external direct costs of equipment, materials and services consumed in developing or obtaining internal-use software and payroll-related costs for employees directly associated with the internal-use software development project. Capitalization of such costs ceases at the point at which the project is substantially complete and ready for its intended purpose. Capitalized internal-use software development costs for projects not yet complete are included as Construction in Progress in the Land, Building and Equipment section of the Consolidated Balance Sheets. As of March 31, 2017, June 30, 2016 and March 31, 2016, the net balance of capitalized internal-use software development costs was $13.3 million, $18.3 million and $21.7 million, respectively.

 

Impairment of Long-Lived Assets

DeVry Group evaluates the carrying amount of its significant long-lived assets whenever changes in circumstances or events indicate that the value of such assets may not be fully recoverable. Events that may trigger an impairment analysis could include a decision by management to exit a market or a line of business or to consolidate operating locations. In the first nine months of fiscal year 2017 and in fiscal year 2016, management consolidated operations at DeVry University, Carrington and DeVry Group’s home office. These decisions resulted in pre-tax accelerated depreciation and write-offs on leasehold improvements and equipment of $3.6 million and $12.2 million during the nine months ended March 31, 2017 and 2016, respectively. The accelerated depreciation and write-off charges are included in Restructuring Expense in the Consolidated Statements of Income (see “Note 11: Restructuring Charges”). For a discussion of the impairment review of goodwill and intangible assets see “Note 10: Intangible Assets.”

 

Perkins Program Fund

DeVry University is required under U.S. federal aid program regulations to make contributions to the Federal Perkins Student Loan Fund, most recently at a rate equal to 33% of new contributions by the U.S. federal government. No new U.S. federal government contributions were received in the first nine months of fiscal year 2017 or in fiscal year 2016. DeVry Group carries its investment in such contributions at original value, net of allowances for expected losses on loan collections of $2.6 million at each of March 31, 2017, June 30, 2016 and March 31, 2016. The allowance for future loan losses is based upon an analysis of actual loan losses experienced since the inception of the program. As previous borrowers repay their Perkins loans, their payments are used to fund new loans, thus creating a revolving loan fund. The U.S. federal government contributions to this revolving loan program do not belong to DeVry Group and are not recorded in its financial statements. Under current law, upon termination of the program by the U.S. federal government or withdrawal from future program participation by DeVry University, subsequent student loan repayments would be divided between the U.S. federal government and DeVry University to satisfy their respective cumulative contributions to the fund. Authorization of the Federal Perkins Student Loan Program expired on September 30, 2015. On December 17, 2015, Congress extended the authorization of the Federal Perkins Student Loan Program to September 30, 2017.

 

Foreign Currency Translation

The financial position and results of operations of the AUC, RUSM and RUSVM Caribbean operations are measured using the U.S. dollar as the functional currency. As such, there is no translation gain or loss associated with these operations. DeVry Brazil’s operations and Becker’s international operations are measured using the local currency as the functional currency. Assets and liabilities of these entities are translated to U.S. dollars using exchange rates in effect at the balance sheet dates. Income and expense items are translated at monthly average exchange rates. The resultant translation adjustments are included in the component of Shareholders’ Equity designated as Accumulated Other Comprehensive Loss. Transaction gains or losses during each of the three-month and nine-month periods ended March 31, 2017 and 2016 were not material.

Noncontrolling Interest

DeVry Group currently maintains a 97.9% ownership interest in DeVry Brazil with the remaining 2.1% owned by members of the current DeVry Brazil senior management group. The adjustment to increase or decrease the DeVry Brazil noncontrolling interest each reporting period for its proportionate share of DeVry Brazil’s profit (loss) flows through the Consolidated Statements of Income based on DeVry Group’s noncontrolling interest accounting policy.

 

In July 2015, DeVry Group purchased additional DeVry Brazil stock from the DeVry Brazil management group. Beginning July 1, 2015, DeVry Group has the right to exercise a call option and purchase any remaining DeVry Brazil stock from DeVry Brazil management. Likewise, DeVry Brazil management has had the right to exercise a put option and sell its remaining ownership interest in DeVry Brazil to DeVry Group. Since the put option is out of the control of DeVry Group, authoritative guidance requires the noncontrolling interest, which includes the value of the put option, to be displayed outside of the equity section of the Consolidated Balance Sheets.

The DeVry Brazil management put option is being accreted to its redemption value in accordance with the terms of the related stock purchase agreement. The adjustment to increase or decrease the put option to its expected redemption value each reporting period is recorded in retained earnings in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).

The following is a reconciliation of the noncontrolling interest balance (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Balance at Beginning of Period	$	6,720	$	2,813	$	5,112	$	9,620
Net Income Attributable to Noncontrolling Interest		163		5		502		42
Payment for Purchase of Noncontrolling Interest of Subsidiary		-		-		-		(3,114)
(Decrease) Increase in Redemption Value of Noncontrolling Interest Put Option		(283)		711		986		(3,019)
Balance at End of Period	$	6,600	$	3,529	$	6,600	$	3,529

Earnings per Common Share

Basic earnings per share is computed by dividing net income attributable to DeVry Group by the weighted average number of common shares outstanding during the period plus unvested participating restricted stock units (“RSUs”). Diluted earnings per share is computed by dividing net income attributable to DeVry Group by the weighted average number of shares assuming dilution. Diluted shares are computed using the Treasury Stock Method and reflect the additional shares that would be outstanding if dilutive stock-based grants were exercised during the period. Excluded from the computations of diluted earnings per share were options to purchase 1,670,000 and 2,514,000 shares of common stock for the three and nine months ended March 31, 2017, respectively, and 2,828,000 and 2,765,000 shares of common stock for the three and nine months ended March 31, 2016, respectively. These outstanding stock-based grants were excluded because the exercise prices were greater than the average market price of the common shares or the assumed proceeds upon exercise under the Treasury Stock Method resulted in the repurchase of more shares than would be issued; thus, their effect would be anti-dilutive.

 

The following is a reconciliation of basic shares to diluted shares (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Weighted Average Shares Outstanding		62,811		63,107		62,695		63,378
Unvested Participating RSUs		855		815		855		781
Basic Shares		63,666		63,922		63,550		64,159
Effect of Dilutive Stock Options		600		431		441		318
Diluted Shares		64,266		64,353		63,991		64,477

Treasury Stock

DeVry Group’s Board of Directors (the “Board”) has authorized share repurchase programs on ten occasions (see “Note 8: Dividends and Share Repurchase Programs”). The tenth share repurchase program was approved on February 16, 2017 and commenced in February 2017. Shares that are repurchased by DeVry Group are recorded as Treasury Stock at cost and result in a reduction of Shareholders’ Equity.

From time to time, shares of its common stock are delivered back to DeVry Group under a swap arrangement resulting from employees’ exercise of incentive stock options pursuant to the terms of the DeVry Group Stock Incentive Plans (see “Note 5: Stock-Based Compensation”). In addition, shares of its common stock are delivered back to DeVry Group for payment of withholding taxes from employees for vesting RSUs. These shares are recorded as Treasury Stock at cost and result in a reduction of Shareholders’ Equity.

Treasury shares are reissued on a monthly basis, at market value, to the DeVry Group Colleague Stock Purchase Plan in exchange for employee payroll deductions. When treasury shares are reissued, DeVry Group uses an average cost method to reduce the Treasury Stock balance. Gains on the difference between the average cost and the reissuance price are credited to Additional Paid-in Capital. Losses on the difference are charged to Additional Paid-in Capital to the extent that previous net gains from reissuance are included therein, otherwise such losses are charged to Retained Earnings.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenue and expense reported during the period. Actual results could differ from those estimates.

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss is composed of the change in cumulative translation adjustment, primarily at DeVry Brazil, and unrealized gains on available-for-sale marketable securities, net of the effects of income taxes.

The Accumulated Other Comprehensive Loss balance at March 31, 2017, consists of $37.3 million of cumulative translation losses ($36.5 million attributable to DeVry Group and $0.8 million attributable to noncontrolling interest) and $0.3 million of unrealized gains on available-for-sale marketable securities, net of tax of $0.2 million and all attributable to DeVry Group. At June 30, 2016, this balance consisted of $42.6 million of cumulative translation losses ($41.7 million attributable to DeVry Group and $0.9 million attributable to noncontrolling interest) and $0.1 million of unrealized gains on available-for-sale marketable securities, net of tax of $0.1 million and all attributable to DeVry Group. At March 31, 2016, this balance consisted of $91.5 million of cumulative translation losses ($89.6 million attributable to DeVry Group and $1.9 million attributable to noncontrolling interest) and $0.2 million of unrealized gains on available-for-sale marketable securities, net of tax of $0.2 million and all attributable to DeVry Group.

 

Advertising Expense

Advertising costs are recognized as expense in the period in which materials are purchased or services are performed. Advertising expense, which is included in Student Services and Administrative Expense in the Consolidated Statements of Income, was $56.2 million and $160.2 million for the three and nine months ended March 31, 2017, respectively, and $57.3 million and $173.0 million for the three and nine months ended March 31, 2016, respectively.

 

Restructuring Charges

DeVry Group’s financial statements include charges related to severance and related benefits for reductions in staff. These charges also include early lease termination or cease-of-use costs and accelerated depreciation and gains and losses on disposals of property and equipment related to campus and administrative office consolidations (see “Note 11: Restructuring Charges”).

Recent Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04: “Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This guidance was issued to simplify the goodwill impairment test by eliminating Step 2. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The amendments should be adopted for the annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. Management anticipates the adoption will not have a significant impact on DeVry Group’s Consolidated Financial Statements. We expect to early adopt ASU 2017-04 during the fourth quarter of fiscal year 2017.

In November 2016, FASB issued ASU No. 2016-18: “Statement of Cash Flows (Topic 230): Restricted Cash.” This guidance was issued to address the diversity that exists in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendments will require that the statement of cash flows explain the change during the period in total cash, cash equivalents and restricted cash. The amendments are effective for the financial statements issued for fiscal years after December 15, 2017, and interim periods within those fiscal years. The amendments will be applied using a retrospective transition method to each period presented. Management anticipates the adoption will not have a significant impact on DeVry Group’s Consolidated Financial Statements. Changes in the restricted cash balance will no longer be included as cash provided by or used in operating activities since these balances will now be included in the beginning and ending balances of cash in the statement of cash flows. We expect to early adopt ASU 2016-18 during the fourth quarter of fiscal year 2017.

In August 2016, FASB issued ASU No. 2016-15: “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This guidance was issued to address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments are effective for the financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Management has determined that our current accounting policies align with this guidance. Therefore, this guidance will have no impact on the Consolidated Financial Statements.

In June 2016, FASB issued ASU No. 2016-13: “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance was issued to provide financial statement users with more decision-useful information about the expected losses on financial instruments by replacing the incurred loss impairment methodology with a methodology that reflects expected credit losses by requiring a broader range of reasonable and supportable information to inform credit loss estimates. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management is evaluating the impact the guidance will have on DeVry Group’s Consolidated Financial Statements when adopted.

In March 2016, FASB issued ASU No. 2016-09: “Compensation–Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This guidance was issued to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, forfeitures, and classification on the statement of cash flows. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. We will adopt ASU No. 2016-09 in the first quarter of fiscal year 2018. Excess tax benefits and tax deficiencies will no longer be recorded to additional paid-in capital, but rather to income tax expense or benefit in the income statement, which may increase volatility in the income statement. An accounting policy election exists to account for forfeitures as they occur. Also, adoption will require changes to classification of certain stock-based compensation transactions on the statement of cash flows. The cash outflow from employee taxes paid when shares are withheld by the employer will be reclassified from operating activities to financing activities on the statement of cash flows. These changes are not expected to have a significant impact on DeVry Group’s Consolidated Financial Statements.

In February 2016, FASB issued ASU No. 2016-02: “Leases (Topic 842).” This guidance was issued to increase transparency and comparability among organizations by recognizing right-to-use assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Management is evaluating the impact the guidance will have on DeVry Group’s Consolidated Financial Statements and believes the adoption will impact the Consolidated Balance Sheet with significant increases in assets and liabilities.

In January 2016, FASB issued ASU No. 2016-01: “Financial Instruments–Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This guidance was issued to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The guidance eliminates the classification of equity securities into different categories (that is, trading or available-for-sale) and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. This guidance will require DeVry Group to record the changes in the fair value of its available-for-sale equity investments through net income. Management anticipates the adoption will not have a significant impact on DeVry Group’s Consolidated Financial Statements.

In September 2015, FASB issued ASU No. 2015-16: “Business Combinations (Topic 805): Simplifying Accounting for Measurement-Period Adjustments.” This guidance was issued to simplify the accounting for provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period in which the combination occurs and where the provisional amounts have been adjusted during the measurement period. The amendments in this guidance require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This guidance requires DeVry Group to record and disclose measurement-period adjustments for business combinations as a period adjustment as opposed to a retroactive adjustment to the opening balance sheet of the acquired entity. The guidance is effective for DeVry Group’s current fiscal year and has had no impact on current year financial reporting.

In May 2014, FASB issued ASU No. 2014-09: “Revenue from Contracts with Customers (Topic 606).” This guidance was issued to clarify the principles for recognizing revenue and develop a common revenue standard for GAAP and International Financial Reporting Standards (“IFRS”). The guidance is effective for the fiscal years and interim periods within those years beginning after December 15, 2017. DeVry Group will implement this guidance effective July 1, 2018 using the retrospective approach. Management anticipates the adoption will not have a significant impact on DeVry Group’s Consolidated Financial Statements.

Reclassifications

In the fourth quarter of fiscal year 2016, we retrospectively adopted ASU No. 2015-17: “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” This guidance was issued to simplify the accounting for classification of deferred taxes on the balance sheet. The guidance eliminates the previous requirement for organizations to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Instead, organizations will now be required to classify all deferred tax assets and liabilities as noncurrent. As a result, we decreased current deferred income tax assets by $43.1 million, increased noncurrent deferred income tax assets by $24.2 million and decreased noncurrent deferred income tax liabilities by $18.8 million on the March 31, 2016 Consolidated Balance Sheet. This reclassification had no effect on reported net income.

 

Beginning in the third quarter of fiscal year 2017, we changed our reportable segments as described in “Note 15: Segment Information.” Prior period amounts have been reclassified to conform to the current reportable segment presentation within the Notes to Consolidated Financial Statements.

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STOCK-BASED COMPENSATION

9 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

NOTE 5: STOCK-BASED COMPENSATION

DeVry Group maintains three stock-based incentive plans: the 2003 Stock Incentive Plan, the Amended and Restated Incentive Plan of 2005 and the Second Amended and Restated Incentive Plan of 2013. Under these plans, directors, key executives and managerial employees are eligible to receive incentive stock or nonqualified options to purchase shares of DeVry Group’s common stock. The Second Amended and Restated Incentive Plan of 2013 and the Amended and Restated Incentive Plan of 2005 also permit the granting of stock appreciation rights, RSUs, performance-based RSUs and other stock and cash-based compensation. Although options remain outstanding under the 2003 and 2005 incentive plans, no further stock-based grants will be issued from these plans. The Second Amended and Restated Incentive Plan of 2013 and the Amended and Restated Incentive Plan of 2005 are administered by the Compensation Committee of the Board. Options are granted for terms of up to ten years and can vest immediately or over periods of up to five years. The requisite service period is equal to the vesting period. The option price under the plans is the fair market value of the shares on the date of the grant.

Stock-based compensation expense is measured at the grant date based on the fair value of the award. DeVry Group accounts for stock-based compensation granted to retirement eligible employees that fully vests upon an employee’s retirement under the non-substantive vesting period approach. Under this approach, the entire stock-based compensation expense is recognized at the grant date for stock-based grants issued to retirement eligible employees. For non-retirement eligible employees, stock-based compensation expense is recognized as expense over the employee requisite service period, reduced by an estimated forfeiture rate.

At March 31, 2017, 6,518,677 authorized but unissued shares of common stock were reserved for issuance under DeVry Group’s stock-based incentive plans.

 

The following is a summary of options activity for the nine months ended March 31, 2017:

					Weighted
			Weighted		Average		Aggregate
			Average		Remaining		Intrinsic
	Number of		Exercise		Contractual		Value
	Options		Price		Life (in Years)		(in thousands)
Outstanding at July 1, 2016		3,574,336	$	32.79
Options Granted		397,700		23.78
Options Exercised		(912,734)		22.81
Options Forfeited		(12,409)		30.00
Options Expired		(24,081)		31.16
Outstanding at March 31, 2017		3,022,812		34.65		5.37	$	16,948
Exercisable at March 31, 2017		2,029,550	$	39.68		3.66	$	5,285

The following is a summary of stock appreciation rights activity for the nine months ended March 31, 2017:

					Weighted
	Number of		Weighted		Average		Aggregate
	Stock		Average		Remaining		Intrinsic
	Appreciation		Exercise		Contractual		Value
	Rights		Price		Life (in Years)		(in thousands)
Outstanding at July 1, 2016		118,065	$	42.74
Rights Granted		-		-
Rights Exercised		(18,565)		30.41
Rights Canceled		-		-
Outstanding at March 31, 2017		99,500		45.04		0.67	$	-
Exercisable at March 31, 2017		99,500	$	45.04		0.67	$	-

The total intrinsic value of options exercised for the nine months ended March 31, 2017 and 2016 was $5.5 million and $0.1 million, respectively.

 

The fair value of DeVry Group’s stock option awards was estimated using a binomial model. This model uses historical cancelation and exercise experience of DeVry Group to determine the option value. It also takes into account the illiquid nature of employee options during the vesting period.

The weighted average estimated grant date fair value of options granted at market price under DeVry Group’s stock-based incentive plans during the first nine months of fiscal years 2017 and 2016 was $9.09 and $10.17, per share, respectively. The fair value of DeVry Group’s stock option grants was estimated assuming the following weighted average assumptions:

  

	Fiscal Year
	2017			2016
Expected Life (in Years)		6.88			6.78
Expected Volatility		42.41	%		41.35	%
Risk-free Interest Rate		1.41	%		1.85	%
Dividend Yield		1.19	%		1.01	%
Pre-vesting Forfeiture Rate		10.00	%		3.00	%

The expected life of the options granted is based on the weighted average exercise life with age and salary adjustment factors from historical exercise behavior. DeVry Group’s expected volatility is computed by combining and weighting the implied market volatility, the most recent volatility over the expected life of the option grant and DeVry Group’s long-term historical volatility. The pre-vesting stock option forfeiture rate is based on DeVry Group’s historical stock option forfeiture experience. The main driver for the increased pre-vesting forfeiture rate is the change in the business environment at DeVry Group and its institutions, which has resulted in increased turnover in executive management.

If factors change and different assumptions are employed in the valuation of stock-based grants in future periods, the stock-based compensation expense that DeVry Group records may differ significantly from what was recorded in previous periods.

During the first nine months of fiscal year 2017, DeVry Group granted 648,160 RSUs to selected employees and directors. Of these, 223,230 were performance-based RSUs and 424,930 were non-performance-based RSUs. Performance-based RSUs are earned by the recipients over a three-year period based on achievement of certain mission-based, academic goals, when a minimum level of DeVry Group earnings before interest, taxes, depreciation and amortization (“EBITDA”) or return on invested capital (“ROIC”) is attained. Non-performance-based RSUs are subject to restrictions which lapse ratably over one, three or four-year periods on the grant anniversary date based on the recipient’s continued service on the Board or employment with DeVry Group or upon retirement. During the restriction period, the recipient of the non-performance based RSUs shall have the right to receive dividend equivalents. This right does not pertain to the performance-based RSUs. The following is a summary of RSUs activity for the nine months ended March 31, 2017:

 

			Weighted
			Average
	Number of		Grant Date
	RSUs		Fair Value
Nonvested at July 1, 2016		1,139,350	$	27.78
RSUs Granted		648,160		23.89
RSUs Vested		(367,839)		27.22
RSUs Forfeited		(100,555)		26.94
Nonvested at March 31, 2017		1,319,116	$	26.09

The weighted average estimated grant date fair value of RSUs granted at market price under DeVry Group’s stock-based incentive plans during the first nine months of fiscal years 2017 and 2016 was $23.89 and $25.84, per share, respectively.

 

The following table shows total stock-based compensation expense included in the Consolidated Statements of Income (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Cost of Educational Services	$	1,267	$	1,209	$	4,254	$	4,477
Student Services and Administrative Expense		2,692		2,568		9,038		9,512
Stock-Based Compensation Expense		3,959		3,777		13,292		13,989
Income Tax Benefit		(1,383)		(1,439)		(4,653)		(5,157)
Net Stock-Based Compensation Expense	$	2,576	$	2,338	$	8,639	$	8,832

As of March 31, 2017, $21.8 million of total pre-tax unrecognized stock-based compensation expense related to nonvested grants is expected to be recognized over a weighted average period of 2.4 years. The total fair value of options and RSUs vested during the nine months ended March 31, 2017 and 2016 was approximately $13.0 million and $15.9 million, respectively.

 

There was no capitalized stock-based compensation cost at each of March 31, 2017, June 30, 2016 and March 31, 2016.

DeVry Group has an established practice of issuing new shares of common stock to satisfy stock-based grant exercises. However, DeVry Group also may issue treasury shares to satisfy stock-based grant exercises under certain of its stock-based incentive plans.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 6: FAIR VALUE MEASUREMENTS

DeVry Group has elected not to measure any assets or liabilities at fair value other than those required to be measured at fair value on a recurring basis. Assets measured at fair value on a nonrecurring basis include goodwill, intangible assets and assets of businesses where the long-term value of the operations have been impaired.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The guidance specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The guidance establishes fair value measurement classifications under the following hierarchy:

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

When available, DeVry Group uses quoted market prices to determine fair value, and such measurements are classified within Level 1. In some cases where market prices are not available, DeVry Group makes use of observable market-based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market-based parameters such as interest rates and yield curves. These measurements are classified within Level 3.

Fair value measurements are classified according to the lowest level input or value-driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable.

Assets measured at fair value on a nonrecurring basis include goodwill and indefinite-lived intangibles arising from a business combination. These assets are not amortized and charged to expense over time. Instead, goodwill and indefinite-lived intangibles must be reviewed annually for impairment or more frequently if circumstances arise indicating potential impairment. This impairment review was most recently completed as of May 31, 2016. See “Note 10: Intangible Assets” for further discussion on the impairment review including valuation techniques and assumptions.

During the second quarter of fiscal year 2017, management committed to a plan to sell the DeVry University and Carrington co-located campus in Pomona, California, which met criteria to be classified as an asset held for sale. This required a write-down of the assets to fair market value less costs to sell. The building is being marketed to prospective buyers and is available for immediate sale which is likely to occur within one year. We used significant unobservable inputs (Level 3) in our analysis, including third party offers received to acquire the building. Based on third party offers, management estimated the assets’ fair market values less costs to sell at approximately $11.3 million, which resulted in the carrying value exceeding the fair market value by $4.8 million. As a result, Land, Building and Equipment Held for Sale, Net of $11.3 million was recorded on the Consolidated Balance Sheet at March 31, 2017 and a $4.8 million pre-tax Loss on Assets Held for Sale was recorded in the Consolidated Statements of Income for the nine months ended March 31, 2017. See “Note 2: Assets Held for Sale” for further discussion.

  

The following table presents DeVry Group's assets and liabilities at March 31, 2017, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands).

	Level 1		Level 2		Level 3
Cash and Cash Equivalents	$	209,879	$	-	$	-
Available-for-Sale Investments:
Marketable Securities, short-term		3,950		-		-
Institutional Loans Receivable, Net		-		46,284		-
Deferred Acquisition Obligations		-		28,531		-
FIES Long-Term Receivable		-		13,633		-
Total Financial Assets at Fair Value	$	213,829	$	88,448	$	-

The following table presents DeVry Group's assets and liabilities at June 30, 2016, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands).

	Level 1		Level 2		Level 3
Cash and Cash Equivalents	$	308,164	$	-	$	-
Available-for-Sale Investments:
Marketable Securities, short-term		3,609		-		-
Institutional Loans Receivable, Net		-		49,025		-
Deferred Acquisition Obligations		-		32,121		-
FIES Long-Term Receivable		-		13,057		-
Total Financial Assets at Fair Value	$	311,773	$	94,203	$	-

The following table presents DeVry Group's assets and liabilities at March 31, 2016, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands).

	Level 1		Level 2		Level 3
Cash and Cash Equivalents	$	330,214	$	-	$	-
Available-for-Sale Investments:
Marketable Securities, short-term		3,528		-		-
Institutional Loans Receivable, Net		-		51,743		-
Deferred Acquisition Obligations		-		32,860		-
FIES Long-Term Receivable		-		17,593		-
Total Financial Assets at Fair Value	$	333,742	$	102,196	$	-

Cash and Cash Equivalents and Investments in short-term Marketable Securities are valued using a market approach based on quoted market prices of identical instruments.

The fair value of the institutional loans receivable included in Accounts Receivable, Net and Other Assets, Net on the Consolidated Balance Sheets as of March 31, 2017, June 30, 2016 and March 31, 2016 is estimated by discounting the future cash flows using current rates for similar arrangements. See “Note 7: Financing Receivables” for further discussion on these institutional loans receivable.

The fair value of the deferred acquisition obligations is estimated by discounting the future cash flows using current rates for similar arrangements. $15.8 million, $7.7 million and $12.2 million was classified as Accrued Expenses on the Consolidated Balance Sheets at March 31, 2017, June 30, 2016 and March 31, 2016, respectively, and $12.8 million, $24.4 million and $20.7 million was classified as Deferred Rent and Other Liabilities on the Consolidated Balance Sheets at March 31, 2017, June 30, 2016 and March 31, 2016, respectively.

 

The fair value of DeVry Brazil’s receivable under Brazil’s FIES public loan program included in Other Assets, Net on the Consolidated Balance Sheets as of March 31, 2017, June 30, 2016 and March 31, 2016 is estimated by discounting the future cash flows using published market data on Brazilian interest and inflation rates.

As of June 30, 2016 and March 31, 2016, there were no assets or liabilities measured at fair value using Level 3 inputs.

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FINANCING RECEIVABLES

9 Months Ended

Mar. 31, 2017

Receivables [Abstract]

FINANCING RECEIVABLES

NOTE 7: FINANCING RECEIVABLES

DeVry Group’s institutional loan programs are available to students at its Chamberlain, AUC, RUSM, RUSVM, DeVry University and Carrington institutions. These loan programs are designed to assist students who are unable to completely cover educational costs consisting of tuition, books and fees and are available only after all other student financial assistance has been applied toward those purposes. In addition, AUC, RUSM and RUSVM loans may be used for students’ living expenses. Repayment plans for institutional loan program balances are developed to address the financial circumstances of the particular student. Interest charges accrue each month on the unpaid balance. Chamberlain, DeVry University and Carrington require that students begin repaying loans while they are still in school with a minimum payment level designed to demonstrate their capability to repay and reduce the possibility of over borrowing and targeted to minimize interest being accrued on the loan balance. Payments may increase upon completing or departing the program. After a student leaves school, the student typically will have a monthly installment repayment plan. In addition, the Becker CPA Review Course can be financed through Becker with an 18-month term loan program.

Reserves for uncollectible loans are determined by analyzing the current aging of accounts receivable and historical loss rates of loans at each institution. Management performs this analysis periodically throughout the year. Since all of DeVry Group’s financing receivables are generated through the extension of credit to fund educational costs, all such receivables are considered part of the same loan portfolio.

The following table details the institutional loan balances along with the related allowances for credit losses (in thousands).

	March 31, 2017				June 30, 2016				March 31, 2016
Gross Institutional Loans			$	57,947			$	69,825			$	71,915
Allowance for Credit Losses:
Balance at July 1	$	(20,800)			$	(20,630)			$	(20,630)
Charge-offs and Adjustments		16,820				7,388				6,290
Recoveries		(497)				(461)				(141)
Additional Provision		(7,186)				(7,097)				(5,691)
Balance at End of Period				(11,663)				(20,800)				(20,172)
Net Institutional Loans			$	46,284			$	49,025			$	51,743

During the second quarter of fiscal year 2017, certain institutional loan balances were forgiven as part of the FTC settlement as discussed in “Note 3: Regulatory Settlements” and “Note 14: Commitments and Contingencies.” The amounts related to this settlement were $17.5 million in active outstanding balances which carried related allowance for credit loss reserves of $13.4 million. Also forgiven were $12.9 million of inactive loan balances and accrued interest which had previously been removed from the Net Institutional Loans balance.

Of the net balances above, $18.6 million, $21.7 million and $25.9 million was classified as Accounts Receivable, Net on the Consolidated Balance Sheets at March 31, 2017, June 30, 2016 and March 31, 2016, respectively, and $27.7 million, $27.3 million and $25.8 million, representing amounts due beyond one year, was classified as Other Assets, Net on the Consolidated Balance Sheets at March 31, 2017, June 30, 2016 and March 31, 2016, respectively.

 

The following tables detail the credit risk profiles of the institutional loan balances based on payment activity and an aging analysis of past due institutional loans (in thousands).

	March 31,		June 30,		March 31,
	2017		2016		2016
Institutional Loans:
Performing	$	47,536	$	50,045	$	52,775
Nonperforming		10,411		19,780		19,140
Total Institutional Loans	$	57,947	$	69,825	$	71,915

							Greater
	30-59		60-89		90-119		Than 120						Total
	Days Past		Days Past		Days Past		Days Past		Total				Institutional
	Due		Due		Due		Due		Past Due		Current		Loans
Institutional Loans:
March 31, 2017	$	5,784	$	1,318	$	829	$	10,411	$	18,342	$	39,605	$	57,947
June 30, 2016	$	8,038	$	1,512	$	924	$	19,780	$	30,254	$	39,571	$	69,825
March 31, 2016	$	5,882	$	2,896	$	1,130	$	19,140	$	29,048	$	42,867	$	71,915

Loans are considered nonperforming if they are more than 120 days past due. At March 31, 2017, nonperforming loans totaled $10.4 million, of which $10.2 million had a specific allowance for credit losses. At June 30, 2016, nonperforming loans totaled $19.8 million, of which $19.7 million had a specific allowance for credit losses. At March 31, 2016, nonperforming loans totaled $19.1 million, of which $18.8 million had a specific allowance for credit losses.

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DIVIDENDS AND SHARE REPURCHASE PROGRAMS

9 Months Ended

Mar. 31, 2017

Dividends And Share Repurchase Program [Abstract]

DIVIDENDS AND SHARE REPURCHASE PROGRAMS

NOTE 8: DIVIDENDS AND SHARE REPURCHASE PROGRAMS

DeVry Group paid dividends of $11.4 million, $11.6 million and $11.6 million on December 22, 2016, June 24, 2016 and December 23, 2015, respectively. On February 16, 2017, the Board determined to discontinue cash dividend payments. Future dividends will be at the discretion of the Board.

 

DeVry Group has repurchased shares under the following programs as of March 31, 2017:

Date	Shares		Total Cost
Authorized	Repurchased		(in millions)
November 15, 2006		908,399	$	35.0
May 13, 2008		1,027,417		50.0
November 11, 2009		972,205		50.0
August 11, 2010		1,103,628		50.0
November 10, 2010		968,105		50.0
May 20, 2011		2,396,143		100.0
November 2, 2011		3,478,299		100.0
August 29, 2012		2,005,317		62.7
December 15, 2015		1,672,250		36.6
February 16, 2017		302,214		10.0
Totals		14,833,977	$	544.3

On December 15, 2015, the Board authorized DeVry Group’s ninth share repurchase program, which allowed DeVry Group to repurchase up to $100 million of its common stock through December 31, 2017. A total of 802,948 shares were repurchased during the nine months ended March 31, 2017 under the ninth share repurchase program for an aggregate of $20.5 million. On February 16, 2017, the Board terminated the ninth share repurchase program and authorized DeVry Group’s tenth share repurchase program, which allows DeVry Group to repurchase up to $300 million of its common stock through December 31, 2020. A total of 302,214 shares were repurchased during the nine months ended March 31, 2017 under the tenth share repurchase program for an aggregate of $10.0 million. The timing and amount of any repurchase will be determined based on evaluation of market conditions and other factors. These repurchases may be made through the open market, including block purchases, in privately negotiated transactions, or otherwise. The buyback will be funded through available cash balances and/or borrowings and may be suspended or discontinued at any time.

 

Shares of stock repurchased under the programs are held as treasury shares. These repurchased shares have reduced the weighted average number of shares of common stock outstanding for basic and diluted earnings per share calculations.

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BUSINESS COMBINATIONS

9 Months Ended

Mar. 31, 2017

Business Combinations [Abstract]

BUSINESS COMBINATIONS

NOTE 9: BUSINESS COMBINATIONS

Association of Certified Anti-Money Laundering Specialists

On July 1, 2016, Becker completed the acquisition of 100% of the stock of the Association of Certified Anti-Money Laundering Specialists (“ACAMS”) for $330.6 million, net of cash of $23.5 million. The payment for this purchase was made in the first quarter of fiscal year 2017, and was funded with available domestic cash balances and $175 million in borrowings under DeVry Group’s revolving credit facility. ACAMS is the largest international membership organization dedicated to enhancing the knowledge and skills of anti-money laundering and financial crime prevention professionals. The acquisition furthers Becker’s global growth strategy into professional education and enhances Becker’s position as a leading provider of lifelong learning for professionals.

 

The operations of ACAMS are included in DeVry Group’s Professional Education segment. The results of ACAMS’s operations have been included in the Consolidated Financial Statements of DeVry Group since the date of acquisition.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands).

	July 1, 2016
Current Assets	$	24,895
Property and Equipment		432
Other Long-term Assets		3,200
Intangible Assets		88,600
Goodwill		274,620
Total Assets Acquired		391,747
Liabilities Assumed		37,619
Net Assets Acquired	$	354,128

Goodwill, which represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired, was all assigned to the Becker reporting unit which is classified within the Professional Education segment. Factors that contributed to a purchase price resulting in the recognition of goodwill include ACAMS’s strategic fit into Becker’s expanding presence in professional education, the reputation of the ACAMS brand as a leader in the industry and potential future growth opportunity. None of the goodwill acquired is expected to be deductible for income tax purposes. Of the $88.6 million of acquired intangible assets, $39.9 million was assigned to Trade Names, which has been determined not to be subject to amortization. The remaining acquired intangible assets were determined to be subject to amortization with an average useful life of approximately nine years. The preliminary values and estimated useful lives by asset type are as follows (in thousands):

 

	July 1, 2016
	Value		Estimated
	Assigned		Useful Life
Customer Relationships	$	42,500	10 years
Curriculum		5,000	3 years
Non-compete Agreements		700	1 year
Proprietary Technology		500	4 years

There is no pro forma presentation of operating results for this acquisition due to the insignificant effect on consolidated operations.

Faculdade de Imperatriz

On June 1, 2016, DeVry Brazil completed the acquisition of Faculdade de Imperatriz (“Facimp”). Under the terms of the agreement, DeVry Brazil agreed to pay approximately $6.8 million in cash, in exchange for 100% of the stock of Facimp. Approximately $3.5 million of payments were made in the fourth quarter of fiscal year 2016, with additional aggregate payments of approximately $3.3 million required over the succeeding four years. Facimp serves approximately 2,000 students in the city of Imperatriz, and offers undergraduate programs such as a business, accounting, economics, law, nursing, pharmacy, dentistry, pedagogy, systems information and marketing. The acquisition of Facimp further expands DeVry Brazil’s presence in the northeast areas of the country.

  

The operations of Facimp are included in DeVry Group’s Technology and Business segment. The results of Facimp’s operations have been included in the Consolidated Financial Statements of DeVry Group since the date of acquisition.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands).

	June 1, 2016
Current Assets	$	1,626
Property and Equipment		291
Intangible Assets		2,652
Goodwill		4,997
Total Assets Acquired		9,566
Liabilities Assumed		2,756
Net Assets Acquired	$	6,810

Goodwill, which represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired, was all assigned to the DeVry Brazil reporting unit which is classified within the Technology and Business segment. Factors that contributed to a purchase price resulting in the recognition of goodwill include Facimp’s strategic fit into DeVry Group’s expanding presence in northeast Brazil, the reputation of the educational programs and the acquired assembled workforce. None of the goodwill acquired is expected to be deductible for income tax purposes. Of the $2.7 million of acquired intangible assets, $2.1 million was assigned to Accreditations and $0.5 million was assigned to Trade Names. None of the acquired intangible assets were determined to be subject to amortization.

 

There is no pro forma presentation of operating results for this acquisition due to the insignificant effect on consolidated operations.

Grupo Ibmec Educacional S.A.

On December 15, 2015, DeVry Brazil completed the acquisition of Grupo Ibmec Educacional S.A. (“Grupo Ibmec”). Under the terms of the agreement, DeVry Brazil agreed to pay approximately $191.0 million in cash, in exchange for 100% of the stock of Grupo Ibmec. Approximately $180.5 million of payments were made in the second quarter of fiscal year 2016, with additional aggregate payments of approximately $10.5 million required over the succeeding six years. Grupo Ibmec is a nationally recognized educational institution and has been widely-known for its academic excellence for more than 40 years. Grupo Ibmec serves more than 15,000 undergraduate and graduate students onsite and online throughout Brazil. The acquisition of Grupo Ibmec continues the process of expanding DeVry Group’s presence in Brazil.

 

The operations of Grupo Ibmec are included in DeVry Group’s Technology and Business segment. The results of Grupo Ibmec’s operations have been included in the Consolidated Financial Statements of DeVry Group since the date of acquisition.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands).

	December 15,
	2015
Current Assets	$	27,615
Property and Equipment		17,968
Other Long-term Assets		2,639
Intangible Assets		59,275
Goodwill		107,888
Total Assets Acquired		215,385
Liabilities Assumed		24,423
Net Assets Acquired	$	190,962

Goodwill, which represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired, was all assigned to the DeVry Brazil reporting unit which is classified within the Technology and Business segment. Factors that contributed to a purchase price resulting in the recognition of goodwill include Grupo Ibmec’s strategic fit into DeVry Group’s expanding presence in Brazil, the reputation of the educational programs and the acquired assembled workforce. None of the goodwill acquired is expected to be deductible for income tax purposes. Of the $59.3 million of acquired intangible assets, $34.7 million was assigned to Accreditations and $18.4 million was assigned to Trade Names, both of which have been determined not to be subject to amortization. The remaining acquired intangible assets were determined to be subject to amortization with an average useful life of five years. The values and estimated useful lives by asset type are as follows (in thousands):

 

	December 15, 2015
	Value		Estimated
	Assigned		Useful Life
Student Relationships	$	4,360	5 years
Curriculum		1,821	5 years

There is no pro forma presentation of operating results for this acquisition due to the insignificant effect on consolidated operations.

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INTANGIBLE ASSETS

9 Months Ended

Mar. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 10: INTANGIBLE ASSETS

Intangible assets relate mainly to acquired business operations. These assets consist of the acquisition fair value of certain identifiable intangible assets acquired and goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired.

Intangible assets consist of the following (in thousands):

	March 31, 2017
	Gross				Weighted Average
	Carrying		Accumulated		Amortization
	Amount		Amortization		Period
Amortizable Intangible Assets:
Student Relationships	$	13,014	$	(9,149)	5 Years
Customer Relationships		42,900		(3,735)	10 Years
Non-compete Agreements		1,640		(1,439)	3 Years
Curriculum/Software		8,113		(2,699)	4 Years
Franchise Contracts		11,087		(1,335)	18 Years
Clinical Agreements		411		(102)	15 Years
Trade Names		1,196		(957)	10 Years
Proprietary Technology		500		(94)	4 Years
Total	$	78,861	$	(19,510)
Indefinite-Lived Intangible Assets:
Trade Names	$	111,008
Trademarks		1,645
Ross Title IV Eligibility and Accreditations		14,100
Intellectual Property		13,940
Chamberlain Title IV Eligibility and Accreditations		1,200
Carrington Title IV Eligibility and Accreditations		20,200
AUC Title IV Eligibility and Accreditations		100,000
DeVry Brazil Accreditation		101,505
Total	$	363,598

	June 30, 2016
	Gross
	Carrying		Accumulated
	Amount		Amortization
Amortizable Intangible Assets:
Student Relationships	$	14,530	$	(7,150)
Customer Relationships		400		(170)
Non-compete Agreements		940		(799)
Curriculum/Software		4,038		(1,914)
Franchise Contracts		10,968		(863)
Clinical Agreements		406		(81)
Trade Names		1,183		(858)
Total	$	32,465	$	(11,835)
Indefinite-Lived Intangible Assets:
Trade Names	$	70,731
Trademarks		1,645
Ross Title IV Eligibility and Accreditations		14,100
Intellectual Property		13,940
Chamberlain Title IV Eligibility and Accreditations		1,200
Carrington Title IV Eligibility and Accreditations		20,200
AUC Title IV Eligibility and Accreditations		100,000
DeVry Brazil Accreditation		100,410
Total	$	322,226

	March 31, 2016
	Gross
	Carrying		Accumulated
	Amount		Amortization
Amortizable Intangible Assets:
Student Relationships	$	13,082	$	(5,430)
Customer Relationships		400		(160)
Test Prep Relationships		900		(900)
Non-compete Agreements		940		(752)
Curriculum/Software		3,881		(1,786)
Outplacement Relationships		3,900		(1,959)
Franchise Contracts		9,875		(640)
Clinical Agreements		366		(67)
Trade Names		1,064		(746)
Total	$	34,408	$	(12,440)
Indefinite-Lived Intangible Assets:
Trade Names	$	66,808
Trademarks		1,645
Ross Title IV Eligibility and Accreditations		14,100
Intellectual Property		13,940
Chamberlain Title IV Eligibility and Accreditations		1,200
Carrington Title IV Eligibility and Accreditations		60,700
AUC Title IV Eligibility and Accreditations		100,000
DeVry Brazil Accreditation		90,685
Total	$	349,078

Amortization expense for amortized intangible assets was $2.8 million and $8.5 million for the three and nine months ended March 31, 2017, respectively, and $1.4 million and $4.0 million for the three and nine months ended March 31, 2016, respectively. Estimated amortization expense for amortizable intangible assets for the next five fiscal years ending June 30 and in the aggregate, by reporting unit, is as follows (in thousands):

 

Fiscal Year	DeVry Brazil		Becker		Total
2017	$	3,721	$	7,482	$	11,203
2018		2,994		6,501		9,495
2019		2,152		6,422		8,574
2020		1,515		4,671		6,186
2021		949		4,440		5,389
Thereafter		7,326		19,686		27,012

All amortizable intangible assets except student relationships and customer relationships are being amortized on a straight-line basis. The amount being amortized for student relationships is based on the estimated progression of the students through the respective Faculdade Boa Viagem (“FBV”), Centro Universitário Vale do Ipojuca (“Unifavip”), Damásio Educacional (“Damasio”) and Grupo Ibmec programs, giving consideration to the revenue and cash flow associated with both existing students and new applicants. The amount being amortized for customer relationships related to ACAMS is based on the estimated retention of the customers, giving consideration to the revenue and cash flow associated with these existing customers.

Indefinite-lived intangible assets related to trademarks, trade names, Title IV eligibility, accreditations and intellectual property are not amortized, as there are no legal, regulatory, contractual, economic or other factors that limit the useful life of these intangible assets to the reporting entity.

In accordance with GAAP, goodwill and indefinite-lived intangibles arising from a business combination are not amortized and charged to expense over time. Instead, these assets must be reviewed annually for impairment or more frequently if circumstances arise indicating potential impairment. DeVry Group’s annual impairment review was most recently completed during the fourth quarter of fiscal year 2016, at which time there were impairment losses recorded related to Carrington goodwill and the Carrington Accreditation and Title IV Eligibility indefinite-lived intangible asset totaling $48.2 million. No impairment loss associated with recorded goodwill or indefinite-lived intangible assets for any other reporting unit was realized as estimated fair values exceeded carrying amounts.

 

DeVry Group had six reporting units which contained goodwill as of the third quarter of fiscal year 2017. These reporting units constitute components for which discrete financial information is available and regularly reviewed by segment management and the Board. If the carrying amount of a reporting unit containing the goodwill exceeds the fair value of that reporting unit, an impairment loss is recognized to the extent the “implied fair value” of the reporting unit goodwill is less than the carrying amount of the goodwill. In analyzing the results of operations and business conditions of all six reporting units as of March 31, 2017, it was determined that no triggering event had occurred during the first nine months of fiscal year 2017 that would indicate the carrying value of a reporting unit had exceeded its fair value.

For indefinite-lived intangible assets, management first analyzes qualitative factors including results of operations and business conditions of the seven reporting units that contained indefinite-lived intangible assets, significant changes in cash flows at the individual indefinite-lived intangible asset level, if applicable, as well as how much previously calculated fair values exceed carrying values to determine if it is more likely than not that the intangible assets associated with these reporting units have been impaired. Based on its analysis, management has determined that, as of March 31, 2017, no triggering event had occurred during the first nine months of fiscal year 2017 that would indicate the carrying value of an indefinite-lived intangible asset had exceeded its fair value.

These interim triggering event conclusions were based on the fact that the qualitative analysis of DeVry Group’s reporting units and indefinite-lived intangible assets resulted in no impairment indicators as of the end of fiscal year 2016, except at the Carrington and DeVry University reporting units, and that no interim events or deviations from planned operating results occurred as of March 31, 2017, that would cause management to reassess these conclusions.

In regards to Carrington, although the revenue for the first nine months of fiscal year 2017 was below plan, operating income was better than the fiscal year 2017 operating plan which was used in the May 31, 2016 impairment analysis; thus, management believes that no indicator of further impairment currently exists with this reporting unit. Should declines in student enrollment at Carrington result in financial performance that is significantly below management expectations, the carrying value of this reporting unit may exceed its fair value and indefinite-lived intangible assets could be impaired. This could require a write-off of up to $20.2 million.

 

The DeVry University reporting unit operating income for the first nine months of fiscal year 2017 was in-line with the operating plan that was used in the May 31, 2016 impairment analysis. This reporting unit is expected to meet planned positive operating results for fiscal year 2017. As a result, management did not believe business conditions had deteriorated such that it was more likely than not that the fair value of DeVry University was below carrying value for this reporting unit or its associated indefinite-lived intangible assets as of March 31, 2017. Based on the May 31, 2016 impairment review, DeVry University’s current and forecasted profitability is sufficient to maintain a fair value greater than its carrying value. The fair value of this reporting unit exceeded its carrying value by 6% as of the May 31, 2016 valuation date. DeVry University has been able to adjust operating expenses to offset in excess of 90% of the revenue declines experienced over the last two years. This has resulted in positive cash flows sufficient to produce a fair value in excess of the carrying value of this reporting unit. Management monitors enrollment and financial performance of the reporting unit. Should management not be able to adjust costs to offset future declines in student enrollment and revenue, resulting in financial performance that is significantly below management expectations, the carrying value of this reporting unit may exceed its fair value, and goodwill and indefinite-lived intangible assets could be impaired. Also, regulatory changes and the outcome of legal or regulatory actions could have a material adverse effect on the financial condition, results of operations and cash flows of DeVry University and impose significant restrictions on the ability of DeVry University to operate. These scenarios could require a write-off of up to $23.8 million of indefinite-lived intangible assets and goodwill.

Operating income and cash flows at all other reporting units for the first nine months of fiscal year 2017 were not materially different from the budgeted amounts used in the impairment analysis as of May 31, 2016. Full year operating results are also forecast to not materially differ from the full year operating plan. Thus, management does not believe any of the reporting units or their associated indefinite-lived intangible assets fair values would have declined enough to fall below the carrying values as of March 31, 2017.

Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions. Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates which could lead to additional impairments of intangible assets.

At March 31, 2017, intangible assets from business combinations totaled $422.9 million and goodwill totaled $861.0 million. Together, these assets equaled approximately 55% of total assets as of such date, and any impairment could significantly affect future results of operations.

 

The table below summarizes goodwill balances by reporting unit (in thousands):

	March 31,		June 30		March 31,
Reporting Unit	2017		2016		2016
Chamberlain	$	4,716	$	4,716	$	4,716
AUC		68,321		68,321		68,321
RUSM and RUSVM		237,173		237,173		237,173
Becker		306,444		32,043		32,386
DeVry Brazil		222,151		223,558		194,409
DeVry University		22,196		22,196		22,196
Carrington		-		-		5,811
Total	$	861,001	$	588,007	$	565,012

The table below summarizes goodwill balances by reporting segment (in thousands):

	March 31,		June 30,		March 31,
Reporting Segment	2017		2016		2016
Medical and Healthcare	$	310,210	$	310,210	$	310,210
Professional Education		306,444		32,043		32,386
Technology and Business		222,151		223,558		194,409
U.S. Traditional Postsecondary		22,196		22,196		28,007
Total	$	861,001	$	588,007	$	565,012

The table below summarizes the changes in the carrying amount of goodwill by segment (in thousands):

							U.S. Traditional
							Postsecondary
	Medical				Technology				Accumulated
	and		Professional		and				Impairment
	Healthcare		Education		Business		Gross		Losses		Total
Balance at June 30, 2014	$	310,210	$	33,217	$	55,472	$	207,913	$	(86,933)	$	519,879
Acquisitions		-		-		55,915		-		-		55,915
Foreign exchange rate changes		-		(420)		(23,045)		-		-		(23,465)
Balance at June 30, 2015		310,210		32,797		88,342		207,913		(86,933)		552,329
Purchase Accounting Adjustments		-		-		4,575		-		-		4,575
Acquisitions		-		-		108,246		-		-		108,246
Impairments		-		-		-		-		(92,973)		(92,973)
Foreign exchange rate changes		-		(411)		(6,754)		-		-		(7,165)
Balance at March 31, 2016		310,210		32,386		194,409		207,913		(179,906)		565,012
Acquisitions		-		-		7,761		-		-		7,761
Impairments		-		-		-		-		(5,811)		(5,811)
Foreign exchange rate changes		-		(343)		21,388		-		-		21,045
Balance at June 30, 2016		310,210		32,043		223,558		207,913		(185,717)		588,007
Purchase Accounting Adjustments		-		-		(3,122)		-		-		(3,122)
Acquisitions		-		274,620		-		-		-		274,620
Foreign exchange rate changes		-		(219)		1,715		-		-		1,496
Balance at March 31, 2017	$	310,210	$	306,444	$	222,151	$	207,913	$	(185,717)	$	861,001

The increase in the goodwill balance from June 30, 2016 in the Professional Education segment is the result of the addition of $274.6 million with the acquisition of ACAMS.

 

The table below summarizes the indefinite-lived intangible asset balances by reporting segment (in thousands):

	March 31,		June 30,		March 31,
Reporting Segment	2017		2016		2016
Medical and Healthcare	$	137,500	$	137,500	$	137,500
Professional Education		67,812		27,912		27,912
Technology and Business		136,441		134,969		121,321
U.S. Traditional Postsecondary		21,845		21,845		62,345
Total	$	363,598	$	322,226	$	349,078

Total indefinite-lived intangible assets increased by $41.4 million from June 30, 2016. The increase is the result of the addition of $39.9 million with the acquisition of ACAMS and by a change in the value of the Brazilian Real compared to the U.S. dollar. Since DeVry Brazil intangible assets are recorded in the local currency, fluctuations in the value of the Brazilian Real in relation to the U.S. dollar will cause changes in the balance of these assets.

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RESTRUCTURING CHARGES

9 Months Ended

Mar. 31, 2017

Restructuring and Related Activities [Abstract]

RESTRUCTURING CHARGES

NOTE 11: RESTRUCTURING CHARGES

During the third quarter and first nine months of fiscal year 2017 and 2016, DeVry Group recorded restructuring charges related to real estate consolidations and reductions in force (“RIF”) at DeVry University, Carrington, the administrative support operations of the medical and veterinary schools and DeVry Group home office. DeVry Group home office is classified as “Home Office and Other” in “Note 15: Segment Information.” These RIF charges, which reduced the DeVry Group workforce by 207 and 303 total positions in the first nine months of fiscal years 2017 and 2016, respectively, represented severance pay and benefits for these employees. These pre-tax restructuring charges by segment were as follows (in thousands):

	Three Months Ended March 31, 2017						Nine Months Ended March 31, 2017
	Real		Termination				Real		Termination
	Estate		Benefits		Total		Estate		Benefits		Total
Medical and Healthcare	$	137	$	530	$	667	$	137	$	530	$	667
U.S. Traditional Postsecondary		2,347		3,345		5,692		9,835		3,345		13,180
Home Office and Other		(222)		1,634		1,412		1,706		2,315		4,021
Total	$	2,262	$	5,509	$	7,771	$	11,678	$	6,190	$	17,868

	Three Months Ended March 31, 2016						Nine Months Ended March 31, 2016
	Real		Termination				Real		Termination
	Estate		Benefits		Total		Estate		Benefits		Total
Professional Education	$	300	$	-	$	300	$	300	$	-	$	300
U.S. Traditional Postsecondary		729		1,844		2,573		31,901		7,669		39,570
Total	$	1,029	$	1,844	$	2,873	$	32,201	$	7,669	$	39,870

The following table summarizes the separation and restructuring plan activity for the fiscal years 2017 and 2016, for which cash payments are required (in thousands):

Liability balance at June 30, 2015	$	26,992
Increase in liability (separation and other charges)		67,495
Reduction in liability (payments and adjustments)		(46,264)
Liability balance at June 30, 2016		48,223
Increase in liability (separation and other charges)		14,889
Reduction in liability (payments and adjustments)		(23,074)
Liability balance at March 31, 2017	$	40,038

Of this liability balance, $17.7 million is recorded as Accrued Expenses and $22.3 million is recorded as Deferred Rent and Other Liabilities on the Consolidated Balance Sheet at March 31, 2017. These liability balances primarily represent rent accruals and costs for employees that have either not yet separated from DeVry Group or their full severance has not yet been paid. All of these remaining costs are expected to be paid over the next 12 months except for rent charges which may be paid out for periods of up to 8 years.

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INCOME TAXES

9 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 12: INCOME TAXES

The effective income tax rates on income were 14.8% and 3.2% for the third quarter and first nine months of fiscal year 2017, respectively, compared to 12.7% and 9.1% for the third quarter and first nine months of fiscal year 2016. A tax benefit of $22.1 million was recorded in the second quarter of fiscal year 2017 for settlement costs of various regulatory authority litigation. A tax benefit of $13.4 million was recorded in the second quarter of fiscal year 2016 for the impairment and write-down of intangible assets. The effective tax rate excluding the regulatory settlement and impairment costs were 17.8% and 13.2% for the first nine months of fiscal years 2017 and 2016, respectively. The tax rates increased in fiscal year 2017 compared to fiscal year 2016 due to an increase in earnings from U.S. operations, which are taxed at a higher rate than income from foreign operations. DeVry Group’s effective income tax rate reflects benefits derived from significant operations outside the U.S. Earnings of these international operations are not subject to U.S. federal or state income taxes, so long as such earnings are not repatriated, as discussed below. Four of DeVry Group’s operating units, AUC, which operates in St. Maarten, RUSM, which operates in Dominica, RUSVM, which operates in St. Kitts, and DeVry Brazil, which operates in Brazil, all benefit from local tax incentives. AUC’s effective tax rate reflects benefits derived from investment incentives. RUSM and RUSVM each have agreements with their respective domestic governments that exempt them from local income taxation. Both of these agreements have been extended to provide, in the case of RUSM, an indefinite period of exemption and, in the case of RUSVM, exemption until 2037. DeVry Brazil’s effective tax rate reflects benefits derived from its participation in PROUNI, a Brazilian program for providing scholarships to a portion of its undergraduate students.

DeVry Group has not recorded a U.S. federal or state tax provision for the undistributed earnings of its international subsidiaries. It is DeVry Group’s intention to indefinitely reinvest accumulated cash balances, future cash flows and post-acquisition undistributed earnings and profits to improve the facilities and operations of its international schools and pursue future opportunities outside the U.S. In accordance with this plan, cash held by the international subsidiaries will not be available for general company purposes, and under current laws, will not be subject to U.S. taxation. As of March 31, 2017, June 30, 2016 and March 31, 2016, cumulative undistributed earnings attributable to international operations were approximately $994 million, $891 million and $861 million, respectively.

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DEBT

9 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

DEBT

NOTE 13: DEBT

Revolving Credit Facility

DeVry Group entered into a revolving credit facility on March 31, 2015 which expires on March 31, 2020. The Credit Agreement provides for a multi-currency revolving credit facility in the amount of $400 million (the “Aggregate Commitment”) with availability in currencies other than U.S. dollars of up to $200 million. Subject to certain conditions set forth in the Credit Agreement, the Aggregate Commitment may be increased up to $550 million. Up to $50 million of the Aggregate Commitment was available for letters of credit. On October 4, 2016, DeVry Group entered into a First Amendment to Credit Agreement (the “Credit Agreement Amendment”), which amends the Aggregate Commitment to increase the amount available for letters of credit from $50 million to $100 million. This increase was requested to accommodate the requirements of the negotiated settlement agreement with the U.S. Department of Education which requires DeVry University to post a letter of credit for $68.4 million (see “Note 3: Regulatory Settlements” and “Note 14: Commitments and Contingencies” for additional information regarding this settlement agreement). DeVry Group may select interest rates for borrowings under the Credit Agreement equal to LIBOR or a LIBOR-equivalent rate for Eurocurrency Rate Loans or a base rate, plus an applicable rate based on DeVry Group’s consolidated leverage ratio, as defined in the Credit Agreement. The applicable rate ranges from 2% to 3% for Eurocurrency Rate Loans and from 1% to 2% for Base Rate Loans. As of March 31, 2017, DeVry Group borrowings under this agreement were $120 million with a weighted average interest rate of 3.45%. There were no outstanding borrowings under the revolving credit facility as of June 30, 2016 or March 31, 2016. Borrowings were made in the first quarter of fiscal year 2017 to fund the acquisition of ACAMS as discussed in “Note 9: Business Combinations.” Additional borrowings were made in the second quarter of fiscal year 2017 to fund the FTC settlement discussed in “Note 3: Regulatory Settlements” and “Note 14: Commitments and Contingencies.” There are no required principal payments under this revolving credit agreement and all borrowings and letters of credit mature on March 31, 2020. As a result of the agreement extending beyond one year, the borrowings are classified as long-term with the exception of amounts expected to be repaid in the 12 months subsequent to the balance sheet date, if any. DeVry Group letters of credit outstanding under this agreement were $68.5 million as of March 31, 2017 and $0.1 million as of each of June 30, 2016 and March 31, 2016. As of March 31, 2017, DeVry Group is charged an annual fee equal to 2.5% of the undrawn face amount of the outstanding letters of credit under the agreement, payable quarterly. The agreement also requires payment of a commitment fee equal to 0.4% of the undrawn portion of the credit facility as of March 31, 2017. The interest rate, letter of credit fees and commitment fees are adjustable quarterly, based upon DeVry Group’s achievement of certain financial ratios.

The revolving credit agreement contains covenants that, among other things, require maintenance of certain financial ratios, as defined in the agreement. Maintenance of these financial ratios could place restrictions on DeVry Group’s ability to pay dividends. These financial ratios include a consolidated fixed charge coverage ratio, a consolidated leverage ratio and a U.S. Department of Education financial responsibility ratio based upon a composite score of an equity ratio, a primary reserve ratio and a net income ratio. Failure to maintain any of these ratios or to comply with other covenants contained in the agreement would constitute an event of default and could result in termination of the agreement and require payment of all outstanding borrowings and replacement of outstanding letters of credit. DeVry Group was in compliance with the debt covenants as of March 31, 2017.

The stock of all U.S. and certain foreign subsidiaries of DeVry Group is pledged as collateral for the borrowings under the revolving credit facility.

DeVry Group also has liabilities recorded for deferred purchase price agreements with sellers related to the purchases of Faculdade Diferencial Integral (“Facid”), Faculdade Idea (“Faci”), Damasio, Grupo Ibmec and Facimp (see “Note 9: Business Combinations” for discussion of the Grupo Ibmec and Facimp acquisitions). This financing is in the form of holdbacks of a portion of the purchase price of these acquisitions or installment payments. Payments are made under these agreements based on payment schedules or the resolution of any pre-acquisition contingencies.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 14: COMMITMENTS AND CONTINGENCIES

DeVry Group is subject to lawsuits, administrative proceedings, regulatory reviews and investigations associated with financial assistance programs and other matters arising in the normal conduct of its business. The following is a description of pending legal and regulatory matters that may be considered other than ordinary, routine and incidental to the business. Descriptions of certain matters from prior SEC filings may not be carried forward in this report to the extent we believe such matters no longer are required to be disclosed or there has not been, to our knowledge, significant activity relating to them. The timing or outcome of the following matters, or their possible impact on DeVry Group’s business, financial condition or results of operations, cannot be predicted at this time. The continued defense, resolution or settlement of any of the following matters could require us to expend significant resources and could have a material adverse effect on our business, financial condition, results of operations and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

In April 2013, DeVry Group received a Civil Investigative Demand (a “CID”) issued by the Office of the Attorney General of the Commonwealth of Massachusetts. The CID was issued in connection with an investigation into whether DeVry Group caused false claims and/or false statements to be submitted to the Commonwealth of Massachusetts relating to student loans, guarantees, and grants provided to DeVry Group’s Massachusetts students and required DeVry Group to answer interrogatories and to provide documents relating to periods on or after January 1, 2007. DeVry Group responded to the CID in May 2013. In July 2016, DeVry Group received a second CID from the Office requesting information regarding DeVry University advertising, admissions materials, placement rates, and credit/transferability agreements. DeVry Group is in the process of responding to the second CID.

On July 15, 2014, DeVry Group received a letter dated July 9, 2014, from the Office of the Attorney General of the State of New York (“NYAG”). The letter requested cooperation with the NYAG’s inquiry into whether recent television advertisements and website marketing regarding DeVry University may have violated federal and state laws prohibiting false advertising and deceptive practices. DeVry Group, DeVry University, Inc., and DeVry/New York Inc. (collectively, the “DeVry Parties”) chose to resolve the NYAG inquiry by entering into an Assurance of Discontinuance (the “Assurance”) with the NYAG on January 27, 2017, without admitting or denying the allegations therein. Pursuant to the Assurance, the DeVry Parties agreed to pay $2.25 million for consumer restitution and $0.5 million in penalties, fees and costs. In addition, the DeVry Parties agreed that DeVry Group institutions marketing to New York consumers will maintain specific substantiation and present certain statistics as prescribed to support any future advertising regarding graduate outcomes and educational benefits, and will implement other agreed-upon compliance measures.

On August 28, 2015, DeVry University received a request from the Multi-Regional and Foreign School Participation Division of the Federal Student Aid office of the Department of Education (“ED FSA”) for documents and information regarding published employment outcomes and relative earnings information of DeVry University graduates (the “Inquiry”). The stated purpose of the Inquiry was to permit ED FSA to assess DeVry University's compliance with applicable regulations under Title IV. On January 27, 2016, DeVry University received a Notice of Intent to Limit from ED FSA (the “January 2016 Notice”), based on a portion of the Inquiry, informing DeVry University of ED FSA’s intention to impose certain limitations on the participation of DeVry University in programs authorized pursuant to Title IV. The proposed limitations related to representations in advertising and marketing, regarding the post-graduation employment outcomes of DeVry University students over a period from 1975 to October 1980 (the “Since 1975 Representation”). On October 13, 2016, DeVry University and the U.S. Department of Education (“ED”) reached a negotiated agreement to settle the January 2016 Notice (the “ED Settlement”). Under the terms of the ED Settlement, among other things, without admitting wrongdoing, DeVry University (1) may no longer make representations regarding the graduate employment outcomes of DeVry University graduates from 1975 to October 1980, including advertising regarding the cumulative graduate employment outcomes since 1975, (2) will maintain or undertake certain recordkeeping and compliance practices to support future representations regarding graduate employment rates and (3) will post a notice on its website and in its enrollment agreements regarding the Since 1975 Representation. The ED Settlement also provides that, except for Heightened Cash Monitoring 1 status, ED will not impose conditions on the timing of, or documentation requirements for, disbursement of aid due to matters relating to lack of substantiation for the Since 1975 Representation. As a result of the ED Settlement, DeVry University’s participation in the Title IV programs will be subject to provisional certification for five years and DeVry University will be required to post a letter of credit equal to the greater of 10% of DeVry University’s annual Title IV disbursements or $68.4 million for a five-year period. Institutions under provisional certification must obtain ED approval before it may award or disburse Title IV funds based on a substantial change, including the establishment of a new location or the addition of an educational program. Provisional certification status also carries fewer due process protections than full certification. As a result, ED may withdraw an institution’s provisional certification more easily than if it is fully certified. Provisional certification does not otherwise limit access to Title IV program funds by students attending the institution.

On January 27, 2016, the Federal Trade Commission (“FTC”) filed a civil complaint (the “FTC lawsuit”) against the DeVry Parties in the United States District Court for the Central District of California alleging that certain of DeVry University’s advertising claims were false or misleading or unsubstantiated at the time they were made in violation of Section 5(a) of the Federal Trade Commission Act. The parties settled the FTC lawsuit by stipulation, which was entered by the district court as a Stipulated Order for Permanent Injunction and Monetary Judgment (the “Order”) on December 19, 2016. Pursuant to the Order, the DeVry Parties paid $49.4 million to the FTC to be distributed at the sole discretion of the FTC; forgave $30.4 million of institutional loans issued before September 30, 2015; and forgave outstanding DeVry University accounts receivable balances of $20.2 million for former students. The Order also requires DeVry Group institutions marketing to U.S. consumers to maintain specific substantiation to support any future advertising regarding graduate outcomes and educational benefits, and to implement training and other agreed-upon compliance measures.

On May 13, 2016, a putative class action lawsuit was filed by the Pension Trust Fund for Operating Engineers, individually and on behalf of others similarly situated, against DeVry Group, Daniel Hamburger, Richard M. Gunst, and Timothy J. Wiggins in the United States District Court for the Northern District of Illinois. The complaint was filed on behalf of a putative class of persons who purchased DeVry Group common stock between February 4, 2011 and January 27, 2016. Citing the FTC lawsuit and the ED January 2016 Notice, the plaintiff claims that defendants made false or misleading statements regarding DeVry University’s graduate employment rate and the earnings of DeVry University graduates relative to the graduates of other universities and colleges. As a result of these false or misleading statements about DeVry University graduate outcomes, plaintiff alleges, defendants overstated DeVry Group’s growth, revenue and earnings potential and made false or misleading statements about DeVry Group’s business, operations and prospects. The plaintiff alleges direct liability against all defendants for violations of §10(b) and Rule 10b-5 of the Exchange Act and asserted liability against the individual defendants pursuant to §20(a) of the Exchange Act. The plaintiff seeks monetary damages, interest, attorneys’ fees, costs and other unspecified relief. On July 13, 2016, the Utah Retirement System (“URS”) moved for appointment as lead plaintiff and approval of its selection of counsel, which was not opposed by the Pension Trust Fund for Operating Engineers and URS was appointed as lead plaintiff on August 24, 2016. URS filed a second amended complaint (“SAC”) on December 23, 2016. The SAC seeks to represent a putative class of persons who purchased DeVry Group common stock between August 26, 2011 and January 27, 2016 and names an additional individual defendant, Patrick J. Unzicker. Like the original complaint, the SAC asserts claims against all defendants for alleged violations of §10(b) and Rule 10b-5 of the Exchange Act and asserted liability against the individual defendants pursuant to §20(a) of the Exchange Act for alleged material misstatements or omissions regarding DeVry University graduate outcomes. On January 27, 2017, defendants moved to dismiss the SAC.

On or about June 21, 2016, T’Lani Robinson and Robby Brown filed an arbitration demand with the American Arbitration Association in Chicago, seeking to represent a putative class of students who received a DeVry University education from January 1, 2008 until April 8, 2016 (“Putative Class Period”). Following DeVry Group’s filing of a declaratory judgment action in the United States District Court for the Northern District of Illinois seeking, among other things, an order declaring that federal court is the appropriate venue for this putative class action, on September 12, 2016, Robinson and Brown voluntarily withdrew their demand for arbitration. On September 20, 2016, Robinson and Brown answered the declaratory judgement action and filed a putative class action counterclaim, individually and on behalf of others similarly situated, against DeVry Group Inc., DeVry University, Inc., and DeVry/New York, Inc. in the United States District Court for the Northern District of Illinois. The counterclaim asserted causes of action for breach of contract, misrepresentation, concealment, negligence, violations of the Illinois Uniform Deceptive Trade Practices Act, the Illinois Consumer Fraud and Deceptive Trade Practices Act, and the Illinois Private Business and Vocational Schools Act, conversion, unjust enrichment, and declaratory relief. The plaintiffs sought monetary, declaratory, injunctive, and other unspecified relief. On November 4, 2016, following a stipulated dismissal of the declaratory action, the DeVry Parties moved to dismiss the counterclaim after which plaintiffs voluntarily withdrew it. On December 2, 2016, Robinson and Brown filed an amended complaint adding two additional named plaintiffs. The amended complaint purports to assert nationwide class claims under the above-referenced Illinois statutes and common law theories on behalf of those who, during the Putative Class Period, (i) enrolled in DeVry University; (ii) financed their education with DeVry University with direct loans administered by ED; or (iii) entered into an enrollment agreement with DeVry University and otherwise paid for a DeVry University education. The amended complaint also seeks to represent a fourth class of individuals residing in, or enrolled in a DeVry University campus located in, California during the Putative Class Period bringing claims under the California Business and Profession Code. In addition to the claims previously asserted as described above, the amended complaint adds a claim for breach of fiduciary duty owed students in administering Title IV funds. The DeVry Parties moved to dismiss the amended complaint on January 13, 2017.

On October 14, 2016, a putative class action lawsuit was filed by Debbie Petrizzo and five other former DeVry University students, individually and on behalf of others similarly situated, against the DeVry Parties in the United States District Court for the Northern District of Illinois (the “Petrizzo Case”). The complaint was filed on behalf of a putative class of persons consisting of those who enrolled in and/or attended classes at DeVry University from at least 2002 through the present and who were unable to find employment within their chosen field of study within six months of graduation. Citing the FTC lawsuit, the plaintiffs claimed that defendants made false or misleading statements regarding DeVry University’s graduate employment rate and asserted claims for unjust enrichment and violations of six different states’ consumer fraud, unlawful trade practices, and consumer protection laws. The plaintiffs sought monetary, declaratory, injunctive, and other unspecified relief.

On October 28, 2016, a putative class action lawsuit was filed by Jairo Jara and eleven others, individually and on behalf of others similarly situated, against the DeVry Parties in the United States District Court for the Northern District of Illinois (the “Jara Case”). The individual plaintiffs claim to have graduated from DeVry University in 2001 or later and sought to proceed on behalf of a putative class of persons consisting of those who obtained a degree from DeVry University and who were unable to find employment within their chosen field of study within six months of graduation. Citing the FTC lawsuit, the plaintiffs claimed that defendants made false or misleading statements regarding DeVry University’s graduate employment rate and asserted claims for unjust enrichment and violations of ten different states’ consumer fraud, unlawful trade practices, and consumer protection laws. The plaintiffs sought monetary, declaratory, injunctive, and other unspecified relief.

By Order dated November 28, 2016, the district court ordered the Petrizzo and Jara Cases be consolidated under the Petrizzo caption for all further purposes. On December 5, 2016, plaintiffs filed an amended consolidated complaint on behalf of 38 individual plaintiffs and others similarly situated. The amended consolidated complaint seeks to bring claims on behalf of the named individuals and a putative nationwide class of individuals for unjust enrichment and alleged violations of the Illinois Consumer Fraud and Deceptive Practices Act and the Illinois Private Businesses and Vocational Schools Act of 2012. In additional, it purports to assert causes of action on behalf of certain of the named individuals and 15 individual state-specific putative classes for alleged violations of 15 different states’ consumer fraud, unlawful trade practices, and consumer protection laws. Finally, it seeks to bring individual claims under Georgia state law on behalf of certain named plaintiffs. The plaintiffs seek monetary, declaratory, injunctive, and other unspecified relief. The DeVry Parties moved to dismiss the complaint on February 3, 2017.

On January 17, 2017, Harriet Myers filed a complaint derivatively on behalf of DeVry Group in the United States District Court for the Northern District of Illinois against individual defendants Daniel M. Hamburger, Timothy J. Wiggins, Richard M. Gunst, Patrick J. Unzicker, Christopher B. Begley, David S. Brown, Lisa W. Wardell, Ann Weaver Hart, Lyle Logan, Alan G. Merten, Fernando Ruiz, Ronald L. Taylor and James D. White. DeVry Group was named as a nominal defendant only. The plaintiffs have agreed to a stipulated order moving the case to United States District Court for the District of Delaware. Citing the FTC lawsuit and settlement, the January 2016 Notice and ED settlement, and the allegations in the lawsuit filed by the Pension Trust Fund for Operating Engineers, each referenced above, the plaintiff alleges that the individual defendants have breached their fiduciary duties and violated federal securities law since at least 2011. The plaintiff asserts that the individual defendants permitted DeVry Group to engage in unlawful conduct, failed to correct misconduct or prevent its recurrence, and failed to ensure the accurate dissemination of information to shareholders. The complaint attempts to state three claims: (i) breach of fiduciary duty by all named defendants for allegedly allowing the illegal conduct to occur, (ii) unjust enrichment by all individual defendants in the receipt of compensation, and (iii) violation of Section 14(a) by failing to disclose the alleged illegal scheme in proxy statements and falsely stating that compensation was based on “pay for performance” where those performance results were allegedly false. Plaintiff seeks on behalf of DeVry Group monetary, injunctive and other unspecified relief.

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SEGMENT INFORMATION

9 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

SEGMENT INFORMATION

NOTE 15: SEGMENT INFORMATION

DeVry Group’s principal business is providing postsecondary education. During the third quarter of fiscal year 2017, DeVry Group affected a change to reportable segments to align with current strategic priorities and resource allocation. DeVry Group presents four reportable segments: “Medical and Healthcare,” which includes the operations of Chamberlain and the medical and veterinary schools (which includes AUC, RUSM and RUSVM); “Professional Education,” which includes the operations of Becker; “Technology and Business,” which includes the operations of DeVry Brazil; and “U.S. Traditional Postsecondary,” which includes the operations of DeVry University and Carrington.

These segments are consistent with the method by which the Chief Operating Decision Maker (DeVry Group’s President and Chief Executive Officer) evaluates performance and allocates resources. Performance evaluations are based, in part, on each segment’s operating income. Intersegment sales are accounted for at amounts comparable to sales to nonaffiliated customers and are eliminated in consolidation. “Home Office and Other” includes activity not allocated to a reportable segment and is included to reconcile segment results to the Consolidated Financial Statements. The accounting policies of the segments are the same as those described in “Note 4: Summary of Significant Accounting Policies.”

Summary financial information by reporting segment is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Revenue:
Medical and Healthcare	$	208,153	$	210,215	$	609,331	$	590,616
Professional Education		29,810		23,683		91,906		71,417
Technology and Business		61,810		48,062		193,437		121,405
U.S. Traditional Postsecondary		152,951		193,008		465,666		590,643
Intersegment Elimination and Other		(635)		(747)		(2,009)		(2,245)
Total Consolidated Revenue	$	452,089	$	474,221	$	1,358,331	$	1,371,836
Operating Income (Loss):
Medical and Healthcare	$	50,150	$	57,450	$	146,166	$	140,920
Professional Education		2,619		5,905		8,810		15,638
Technology and Business		5,358		(1,583)		16,864		(1,447)
U.S. Traditional Postsecondary (1)		(5,724)		2,942		(21,411)		(132,827)
Home Office and Other (1)		(5,110)		(3,867)		(65,183)		(9,569)
Total Consolidated Operating Income	$	47,293	$	60,847	$	85,246	$	12,715
Segment Assets:
Medical and Healthcare	$	888,413	$	830,493	$	888,413	$	830,493
Professional Education		450,769		109,478		450,769		109,478
Technology and Business		609,624		504,640		609,624		504,640
U.S. Traditional Postsecondary		258,810		570,976		258,810		570,976
Home Office and Other (2)		110,193		81,472		110,193		81,472
Total Consolidated Assets	$	2,317,809	$	2,097,059	$	2,317,809	$	2,097,059
Additions to Long-Lived Assets:
Medical and Healthcare	$	3,574	$	2,798	$	10,418	$	16,571
Professional Education		66		220		363,724		815
Technology and Business		4,882		5,557		12,495		194,111
U.S. Traditional Postsecondary		1,679		2,945		5,080		14,182
Home Office and Other		1,922		2,080		4,464		9,667
Total Consolidated Additions to Long-Lived Assets	$	12,123	$	13,600	$	396,181	$	235,346
Reconciliation to Consolidated Financial Statements:
Capital Expenditures	$	12,123	$	9,956	$	32,529	$	51,004
Increase in Capital Assets from Acquisitions		-		-		4,913		13,487
Increase in Intangible Assets and Goodwill		-		3,644		358,739		170,855
Total Increase in Consolidated Long-Lived Assets	$	12,123	$	13,600	$	396,181	$	235,346
Depreciation Expense:
Medical and Healthcare	$	6,652	$	7,526	$	19,850	$	21,057
Professional Education		119		66		466		549
Technology and Business		2,881		1,272		6,991		3,535
U.S. Traditional Postsecondary		5,773		7,805		17,689		24,719
Home Office and Other		2,936		3,310		8,932		9,489
Total Consolidated Depreciation Expense	$	18,361	$	19,979	$	53,928	$	59,349
Intangible Asset Amortization Expense:
Professional Education	$	1,893	$	147	$	5,679	$	447
Technology and Business		899		1,200		2,808		3,325
U.S. Traditional Postsecondary		-		65		-		190
Total Consolidated Amortization Expense	$	2,792	$	1,412	$	8,487	$	3,962

(1) U.S. Traditional Postsecondary and Home Office and Other Operating Income includes $4.1 million and $52.2 million in charges, respectively, in the nine months ended March 31, 2017 for regulatory settlements as described in "Note 3: Regulatory Settlements."

(2) In addition to the change in reportable segments, Home Office and Other Segment Assets and Total Consolidated Assets in fiscal year 2016 have been revised to reflect the reclassification of deferred tax assets and liabilities related to adoption of ASU No. 2015-17 "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes."

DeVry Group conducts its educational operations in the U.S., Dominica, St. Kitts, St. Maarten, Brazil, Canada, Europe, the Middle East, India, China and the Pacific Rim. Other international revenue, which is derived principally from Europe and the Pacific Rim, was less than 5% of total revenue for each of the three-month and nine-month periods ended March 31, 2017 and 2016. Revenue and long-lived assets by geographic area are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Revenue from Unaffiliated Customers:
Domestic Operations	$	305,639	$	336,927	$	901,261	$	982,656
International Operations:
Dominica, St. Kitts and St. Maarten		83,237		88,263		260,083		262,963
Brazil		61,810		48,063		193,437		121,405
Other		1,403		968		3,550		4,812
Total International		146,450		137,294		457,070		389,180
Total Consolidated Revenue	$	452,089	$	474,221	$	1,358,331	$	1,371,836
Long-Lived Assets:
Domestic Operations	$	260,101	$	309,281	$	260,101	$	309,281
International Operations:
Dominica, St. Kitts and St. Maarten		188,511		183,146		188,511		183,146
Brazil		117,412		92,779		117,412		92,779
Other		3,746		27		3,746		27
Total International		309,669		275,952		309,669		275,952
Total Consolidated Long-Lived Assets	$	569,770	$	585,233	$	569,770	$	585,233

No one customer accounted for more than 10% of DeVry Group's consolidated revenue.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The Consolidated Financial Statements include the accounts of DeVry Group and its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Where our ownership interest is less than 100 percent, the noncontrolling ownership interest is reported on our Consolidated Balance Sheets. The noncontrolling ownership interest earnings portion is classified as “Net Income Attributable to Noncontrolling Interest” in our Consolidated Statements of Income. Unless indicated, or the context requires otherwise, references to years refer to DeVry Group’s fiscal years.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents can include time deposits, high-grade commercial paper, money market funds and bankers acceptances with original maturities of three months or less. Short-term investment objectives are to minimize risk and maintain liquidity. These investments are stated at cost (which approximates fair value) because of their short duration or liquid nature. DeVry Group places its cash and temporary cash investments with high credit quality institutions. Cash and cash equivalent balances in U.S. bank accounts are generally in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. Cash and cash equivalent balances in Brazilian bank accounts are generally in excess of the deposit insurance limits for Brazilian banks. DeVry Group has not experienced any losses on its cash and cash equivalents.

Management periodically evaluates the creditworthiness of the security issuers and financial institutions with which it invests and maintains deposit accounts.

Marketable Securities and Investments

Financial Aid and Restricted Cash

A significant portion of revenue is received from students who participate in government financial aid and assistance programs which are subject to political and governmental budgetary considerations. There is no assurance that such funding will be maintained at current levels. Extensive and complex regulations in the U.S. and Brazil govern all of the government financial assistance programs in which students participate. Administration of these programs is periodically reviewed by various regulatory agencies. Any regulatory violation could be the basis for disciplinary action, which could include the suspension, limitation or termination from such financial aid programs.

Restricted cash represents amounts received from federal and state governments under various student aid grant and loan programs and such restricted funds are held in separate bank accounts. Once the financial aid authorization and disbursement process for the student has been completed, the funds are transferred to unrestricted accounts, and these funds then become available for use in DeVry Group’s operations. This authorization and disbursement process that precedes the transfer of funds generally occurs within the period of the academic term for which such funds were authorized.

As a requirement of continuing operations in Pennsylvania, DeVry Group is required to maintain a “minimum protective endowment” of at least $500,000. These funds are required as long as DeVry Group operates campuses in the state. DeVry Group accounts for these funds as restricted cash.

Revenue Recognition

Revenue Recognition

Tuition

Chamberlain University (“Chamberlain”), DeVry Education of Brazil (“DeVry Brazil”) higher education, DeVry University and Carrington tuition revenue is recognized on a straight-line basis over their respective applicable academic terms. In addition, American University of the Caribbean School of Medicine (“AUC”), Ross University School of Medicine (“RUSM”) and Ross University School of Veterinary Medicine (“RUSVM”) basic science curriculum revenue is recognized on a straight-line basis over the applicable academic term. The clinical portion of the AUC, RUSM and RUSVM education programs are conducted under the supervision of primarily U.S. teaching hospitals and veterinary schools. AUC, RUSM and RUSVM are responsible for the billing and collection of tuition from their students during the period of clinical education. Revenue is recognized on a weekly basis based on actual program attendance during the period of the clinical program. Fees paid to the hospitals and veterinary schools for supervision of AUC, RUSM and RUSVM students are charged to expense on the same basis. Becker Professional Education (“Becker”) and DeVry Brazil’s live classroom test preparation, and DeVry Brazil’s online tuition revenue is recognized on a straight-line basis over the applicable delivery period. Revenue from Becker conferences and training services, which are generally short-term in duration, is recognized when the conference or training service is provided.

Other Educational

Sales of Becker subscriptions, membership dues, certifications, textbooks, electronic books and other educational products, including Becker self-study sales, are included in Other Educational Revenue in the Consolidated Statements of Income. Revenue from Becker subscriptions and membership dues is recognized on a straight-line basis over the applicable subscription or membership period. Revenue from Becker certifications is recognized when the certification process is complete. Textbooks, electronic books and other educational products revenue is recognized when the sale occurs. In addition, fees from international licensees of the Becker programs are included in Other Educational Revenue and recognized when confirmation of course delivery is received.

Refunds and Provisions

Estimates of DeVry Group’s expected refunds are determined at the outset of each academic term, based upon actual experience in previous terms. Inputs to this analysis include refunds issued, withdrawal rates and historical amounts owed by students for that portion of a term that was completed. Management reassesses collectability throughout the period revenue is recognized by the DeVry Group institutions, on a student-by-student basis. This reassessment is based upon new information and changes in facts and circumstances relevant to a student's ability to pay. Management also reassesses collectability when a student withdraws from the institution and has unpaid tuition charges. Such unpaid charges do not meet the threshold of reasonably collectible and are recognized as revenue on a cash basis.

The provisions for refunds, which are reported as a reduction to Tuition Revenue in the Consolidated Statements of Income, are recognized in the same ratable fashion as revenue to most appropriately match these costs with the tuition revenue in that term. Provisions for refunds were $10.9 million and $35.4 million for the three and nine months ended March 31, 2017, respectively, and $11.5 million and $34.7 million for the three and nine months ended March 31, 2016, respectively.

Provisions for refunds are monitored and adjusted as necessary within the academic term and adjusted for actual refunds issued and withdrawn student accounts receivable balances at the completion of an academic term. If a student withdraws prior to completing an academic term, federal and state regulations and accreditation criteria permit DeVry Group to retain only a set percentage of the total tuition received from such student, which varies with, but generally equals or exceeds, the percentage of the academic term completed by such student. Payment amounts received by DeVry Group in excess of such set percentages of tuition are refunded to the student or the appropriate funding source. All refunds are netted against revenue during the applicable academic term. Reserves related to refunds and uncollectible accounts totaled $51.2 million, $64.5 million and $65.9 million at March 31, 2017, June 30, 2016 and March 31, 2016, respectively. During the second quarter of fiscal year 2017, certain student accounts were forgiven as part of the FTC settlement as discussed in “Note 3: Regulatory Settlements” and “Note 14: Commitments and Contingencies.” These write-offs resulted in a $24.2 million reduction in the reserve balance.

The allowance for uncollectible accounts is determined by analyzing the current aging of accounts receivable and historical loss rates on collections of accounts receivable. In addition, management considers projections of future receivable levels and collection loss rates. We monitor the inputs to this analysis periodically throughout the year. Provisions required to maintain the allowance at appropriate levels are charged to expense in each period as required. Provisions for uncollectible accounts, which are included in the Cost of Educational Services in the Consolidated Statements of Income, were $11.6 million and $31.8 million for the three and nine months ended March 31, 2017, respectively, and $9.6 million and $27.0 million for the three and nine months ended March 31, 2016, respectively.

Internal-Use Software Development Costs

Internal-Use Software Development Costs

DeVry Group capitalizes certain internal-use software development costs that are amortized using the straight-line method over the estimated lives of the software, not to exceed seven years. Capitalized costs include external direct costs of equipment, materials and services consumed in developing or obtaining internal-use software and payroll-related costs for employees directly associated with the internal-use software development project. Capitalization of such costs ceases at the point at which the project is substantially complete and ready for its intended purpose. Capitalized internal-use software development costs for projects not yet complete are included as Construction in Progress in the Land, Building and Equipment section of the Consolidated Balance Sheets. As of March 31, 2017, June 30, 2016 and March 31, 2016, the net balance of capitalized internal-use software development costs was $13.3 million, $18.3 million and $21.7 million, respectively.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

DeVry Group evaluates the carrying amount of its significant long-lived assets whenever changes in circumstances or events indicate that the value of such assets may not be fully recoverable. Events that may trigger an impairment analysis could include a decision by management to exit a market or a line of business or to consolidate operating locations. In the first nine months of fiscal year 2017 and in fiscal year 2016, management consolidated operations at DeVry University, Carrington and DeVry Group’s home office. These decisions resulted in pre-tax accelerated depreciation and write-offs on leasehold improvements and equipment of $3.6 million and $12.2 million during the nine months ended March 31, 2017 and 2016, respectively. The accelerated depreciation and write-off charges are included in Restructuring Expense in the Consolidated Statements of Income (see “Note 11: Restructuring Charges”). For a discussion of the impairment review of goodwill and intangible assets see “Note 10: Intangible Assets.”

Perkins Program Fund

Perkins Program Fund

DeVry University is required under U.S. federal aid program regulations to make contributions to the Federal Perkins Student Loan Fund, most recently at a rate equal to 33% of new contributions by the U.S. federal government. No new U.S. federal government contributions were received in the first nine months of fiscal year 2017 or in fiscal year 2016. DeVry Group carries its investment in such contributions at original value, net of allowances for expected losses on loan collections of $2.6 million at each of March 31, 2017, June 30, 2016 and March 31, 2016. The allowance for future loan losses is based upon an analysis of actual loan losses experienced since the inception of the program. As previous borrowers repay their Perkins loans, their payments are used to fund new loans, thus creating a revolving loan fund. The U.S. federal government contributions to this revolving loan program do not belong to DeVry Group and are not recorded in its financial statements. Under current law, upon termination of the program by the U.S. federal government or withdrawal from future program participation by DeVry University, subsequent student loan repayments would be divided between the U.S. federal government and DeVry University to satisfy their respective cumulative contributions to the fund. Authorization of the Federal Perkins Student Loan Program expired on September 30, 2015. On December 17, 2015, Congress extended the authorization of the Federal Perkins Student Loan Program to September 30, 2017.

Foreign Currency Translation

Foreign Currency Translation

The financial position and results of operations of the AUC, RUSM and RUSVM Caribbean operations are measured using the U.S. dollar as the functional currency. As such, there is no translation gain or loss associated with these operations. DeVry Brazil’s operations and Becker’s international operations are measured using the local currency as the functional currency. Assets and liabilities of these entities are translated to U.S. dollars using exchange rates in effect at the balance sheet dates. Income and expense items are translated at monthly average exchange rates. The resultant translation adjustments are included in the component of Shareholders’ Equity designated as Accumulated Other Comprehensive Loss. Transaction gains or losses during each of the three-month and nine-month periods ended March 31, 2017 and 2016 were not material.

Noncontrolling Interest

Noncontrolling Interest

DeVry Group currently maintains a 97.9% ownership interest in DeVry Brazil with the remaining 2.1% owned by members of the current DeVry Brazil senior management group. The adjustment to increase or decrease the DeVry Brazil noncontrolling interest each reporting period for its proportionate share of DeVry Brazil’s profit (loss) flows through the Consolidated Statements of Income based on DeVry Group’s noncontrolling interest accounting policy.

 

In July 2015, DeVry Group purchased additional DeVry Brazil stock from the DeVry Brazil management group. Beginning July 1, 2015, DeVry Group has the right to exercise a call option and purchase any remaining DeVry Brazil stock from DeVry Brazil management. Likewise, DeVry Brazil management has had the right to exercise a put option and sell its remaining ownership interest in DeVry Brazil to DeVry Group. Since the put option is out of the control of DeVry Group, authoritative guidance requires the noncontrolling interest, which includes the value of the put option, to be displayed outside of the equity section of the Consolidated Balance Sheets.

The DeVry Brazil management put option is being accreted to its redemption value in accordance with the terms of the related stock purchase agreement. The adjustment to increase or decrease the put option to its expected redemption value each reporting period is recorded in retained earnings in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).

The following is a reconciliation of the noncontrolling interest balance (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Balance at Beginning of Period	$	6,720	$	2,813	$	5,112	$	9,620
Net Income Attributable to Noncontrolling Interest		163		5		502		42
Payment for Purchase of Noncontrolling Interest of Subsidiary		-		-		-		(3,114)
(Decrease) Increase in Redemption Value of Noncontrolling Interest Put Option		(283)		711		986		(3,019)
Balance at End of Period	$	6,600	$	3,529	$	6,600	$	3,529

Earnings per Common Share

Earnings per Common Share

Basic earnings per share is computed by dividing net income attributable to DeVry Group by the weighted average number of common shares outstanding during the period plus unvested participating restricted stock units (“RSUs”). Diluted earnings per share is computed by dividing net income attributable to DeVry Group by the weighted average number of shares assuming dilution. Diluted shares are computed using the Treasury Stock Method and reflect the additional shares that would be outstanding if dilutive stock-based grants were exercised during the period. Excluded from the computations of diluted earnings per share were options to purchase 1,670,000 and 2,514,000 shares of common stock for the three and nine months ended March 31, 2017, respectively, and 2,828,000 and 2,765,000 shares of common stock for the three and nine months ended March 31, 2016, respectively. These outstanding stock-based grants were excluded because the exercise prices were greater than the average market price of the common shares or the assumed proceeds upon exercise under the Treasury Stock Method resulted in the repurchase of more shares than would be issued; thus, their effect would be anti-dilutive.

 

The following is a reconciliation of basic shares to diluted shares (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Weighted Average Shares Outstanding		62,811		63,107		62,695		63,378
Unvested Participating RSUs		855		815		855		781
Basic Shares		63,666		63,922		63,550		64,159
Effect of Dilutive Stock Options		600		431		441		318
Diluted Shares		64,266		64,353		63,991		64,477

Treasury Stock

Treasury Stock

DeVry Group’s Board of Directors (the “Board”) has authorized share repurchase programs on ten occasions (see “Note 8: Dividends and Share Repurchase Programs”). The tenth share repurchase program was approved on February 16, 2017 and commenced in February 2017. Shares that are repurchased by DeVry Group are recorded as Treasury Stock at cost and result in a reduction of Shareholders’ Equity.

From time to time, shares of its common stock are delivered back to DeVry Group under a swap arrangement resulting from employees’ exercise of incentive stock options pursuant to the terms of the DeVry Group Stock Incentive Plans (see “Note 5: Stock-Based Compensation”). In addition, shares of its common stock are delivered back to DeVry Group for payment of withholding taxes from employees for vesting RSUs. These shares are recorded as Treasury Stock at cost and result in a reduction of Shareholders’ Equity.

Treasury shares are reissued on a monthly basis, at market value, to the DeVry Group Colleague Stock Purchase Plan in exchange for employee payroll deductions. When treasury shares are reissued, DeVry Group uses an average cost method to reduce the Treasury Stock balance. Gains on the difference between the average cost and the reissuance price are credited to Additional Paid-in Capital. Losses on the difference are charged to Additional Paid-in Capital to the extent that previous net gains from reissuance are included therein, otherwise such losses are charged to Retained Earnings.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenue and expense reported during the period. Actual results could differ from those estimates.

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss is composed of the change in cumulative translation adjustment, primarily at DeVry Brazil, and unrealized gains on available-for-sale marketable securities, net of the effects of income taxes.

The Accumulated Other Comprehensive Loss balance at March 31, 2017, consists of $37.3 million of cumulative translation losses ($36.5 million attributable to DeVry Group and $0.8 million attributable to noncontrolling interest) and $0.3 million of unrealized gains on available-for-sale marketable securities, net of tax of $0.2 million and all attributable to DeVry Group. At June 30, 2016, this balance consisted of $42.6 million of cumulative translation losses ($41.7 million attributable to DeVry Group and $0.9 million attributable to noncontrolling interest) and $0.1 million of unrealized gains on available-for-sale marketable securities, net of tax of $0.1 million and all attributable to DeVry Group. At March 31, 2016, this balance consisted of $91.5 million of cumulative translation losses ($89.6 million attributable to DeVry Group and $1.9 million attributable to noncontrolling interest) and $0.2 million of unrealized gains on available-for-sale marketable securities, net of tax of $0.2 million and all attributable to DeVry Group.

Advertising Expense

Advertising Expense

Advertising costs are recognized as expense in the period in which materials are purchased or services are performed. Advertising expense, which is included in Student Services and Administrative Expense in the Consolidated Statements of Income, was $56.2 million and $160.2 million for the three and nine months ended March 31, 2017, respectively, and $57.3 million and $173.0 million for the three and nine months ended March 31, 2016, respectively.

Restructuring Charges

Restructuring Charges

DeVry Group’s financial statements include charges related to severance and related benefits for reductions in staff. These charges also include early lease termination or cease-of-use costs and accelerated depreciation and gains and losses on disposals of property and equipment related to campus and administrative office consolidations (see “Note 11: Restructuring Charges”).

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04: “Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This guidance was issued to simplify the goodwill impairment test by eliminating Step 2. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The amendments should be adopted for the annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. Management anticipates the adoption will not have a significant impact on DeVry Group’s Consolidated Financial Statements. We expect to early adopt ASU 2017-04 during the fourth quarter of fiscal year 2017.

In November 2016, FASB issued ASU No. 2016-18: “Statement of Cash Flows (Topic 230): Restricted Cash.” This guidance was issued to address the diversity that exists in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendments will require that the statement of cash flows explain the change during the period in total cash, cash equivalents and restricted cash. The amendments are effective for the financial statements issued for fiscal years after December 15, 2017, and interim periods within those fiscal years. The amendments will be applied using a retrospective transition method to each period presented. Management anticipates the adoption will not have a significant impact on DeVry Group’s Consolidated Financial Statements. Changes in the restricted cash balance will no longer be included as cash provided by or used in operating activities since these balances will now be included in the beginning and ending balances of cash in the statement of cash flows. We expect to early adopt ASU 2016-18 during the fourth quarter of fiscal year 2017.

In August 2016, FASB issued ASU No. 2016-15: “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This guidance was issued to address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments are effective for the financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Management has determined that our current accounting policies align with this guidance. Therefore, this guidance will have no impact on the Consolidated Financial Statements.

In June 2016, FASB issued ASU No. 2016-13: “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance was issued to provide financial statement users with more decision-useful information about the expected losses on financial instruments by replacing the incurred loss impairment methodology with a methodology that reflects expected credit losses by requiring a broader range of reasonable and supportable information to inform credit loss estimates. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management is evaluating the impact the guidance will have on DeVry Group’s Consolidated Financial Statements when adopted.

In March 2016, FASB issued ASU No. 2016-09: “Compensation–Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This guidance was issued to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, forfeitures, and classification on the statement of cash flows. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. We will adopt ASU No. 2016-09 in the first quarter of fiscal year 2018. Excess tax benefits and tax deficiencies will no longer be recorded to additional paid-in capital, but rather to income tax expense or benefit in the income statement, which may increase volatility in the income statement. An accounting policy election exists to account for forfeitures as they occur. Also, adoption will require changes to classification of certain stock-based compensation transactions on the statement of cash flows. The cash outflow from employee taxes paid when shares are withheld by the employer will be reclassified from operating activities to financing activities on the statement of cash flows. These changes are not expected to have a significant impact on DeVry Group’s Consolidated Financial Statements.

In February 2016, FASB issued ASU No. 2016-02: “Leases (Topic 842).” This guidance was issued to increase transparency and comparability among organizations by recognizing right-to-use assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Management is evaluating the impact the guidance will have on DeVry Group’s Consolidated Financial Statements and believes the adoption will impact the Consolidated Balance Sheet with significant increases in assets and liabilities.

In January 2016, FASB issued ASU No. 2016-01: “Financial Instruments–Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This guidance was issued to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The guidance eliminates the classification of equity securities into different categories (that is, trading or available-for-sale) and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. This guidance will require DeVry Group to record the changes in the fair value of its available-for-sale equity investments through net income. Management anticipates the adoption will not have a significant impact on DeVry Group’s Consolidated Financial Statements.

In September 2015, FASB issued ASU No. 2015-16: “Business Combinations (Topic 805): Simplifying Accounting for Measurement-Period Adjustments.” This guidance was issued to simplify the accounting for provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period in which the combination occurs and where the provisional amounts have been adjusted during the measurement period. The amendments in this guidance require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This guidance requires DeVry Group to record and disclose measurement-period adjustments for business combinations as a period adjustment as opposed to a retroactive adjustment to the opening balance sheet of the acquired entity. The guidance is effective for DeVry Group’s current fiscal year and has had no impact on current year financial reporting.

In May 2014, FASB issued ASU No. 2014-09: “Revenue from Contracts with Customers (Topic 606).” This guidance was issued to clarify the principles for recognizing revenue and develop a common revenue standard for GAAP and International Financial Reporting Standards (“IFRS”). The guidance is effective for the fiscal years and interim periods within those years beginning after December 15, 2017. DeVry Group will implement this guidance effective July 1, 2018 using the retrospective approach. Management anticipates the adoption will not have a significant impact on DeVry Group’s Consolidated Financial Statements.

Reclassifications

Reclassifications

In the fourth quarter of fiscal year 2016, we retrospectively adopted ASU No. 2015-17: “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” This guidance was issued to simplify the accounting for classification of deferred taxes on the balance sheet. The guidance eliminates the previous requirement for organizations to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Instead, organizations will now be required to classify all deferred tax assets and liabilities as noncurrent. As a result, we decreased current deferred income tax assets by $43.1 million, increased noncurrent deferred income tax assets by $24.2 million and decreased noncurrent deferred income tax liabilities by $18.8 million on the March 31, 2016 Consolidated Balance Sheet. This reclassification had no effect on reported net income.

 

Beginning in the third quarter of fiscal year 2017, we changed our reportable segments as described in “Note 15: Segment Information.” Prior period amounts have been reclassified to conform to the current reportable segment presentation within the Notes to Consolidated Financial Statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Reconciliation of Non-Controlling Interest Balance

The following is a reconciliation of the noncontrolling interest balance (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Balance at Beginning of Period	$	6,720	$	2,813	$	5,112	$	9,620
Net Income Attributable to Noncontrolling Interest		163		5		502		42
Payment for Purchase of Noncontrolling Interest of Subsidiary		-		-		-		(3,114)
(Decrease) Increase in Redemption Value of Noncontrolling Interest Put Option		(283)		711		986		(3,019)
Balance at End of Period	$	6,600	$	3,529	$	6,600	$	3,529

Reconciliation of Basic Shares to Diluted Shares

The following is a reconciliation of basic shares to diluted shares (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Weighted Average Shares Outstanding		62,811		63,107		62,695		63,378
Unvested Participating RSUs		855		815		855		781
Basic Shares		63,666		63,922		63,550		64,159
Effect of Dilutive Stock Options		600		431		441		318
Diluted Shares		64,266		64,353		63,991		64,477

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STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of options Activity

The following is a summary of options activity for the nine months ended March 31, 2017:

					Weighted
			Weighted		Average		Aggregate
			Average		Remaining		Intrinsic
	Number of		Exercise		Contractual		Value
	Options		Price		Life (in Years)		(in thousands)
Outstanding at July 1, 2016		3,574,336	$	32.79
Options Granted		397,700		23.78
Options Exercised		(912,734)		22.81
Options Forfeited		(12,409)		30.00
Options Expired		(24,081)		31.16
Outstanding at March 31, 2017		3,022,812		34.65		5.37	$	16,948
Exercisable at March 31, 2017		2,029,550	$	39.68		3.66	$	5,285

Summary of stock appreciation rights activity

The following is a summary of stock appreciation rights activity for the nine months ended March 31, 2017:

					Weighted
	Number of		Weighted		Average		Aggregate
	Stock		Average		Remaining		Intrinsic
	Appreciation		Exercise		Contractual		Value
	Rights		Price		Life (in Years)		(in thousands)
Outstanding at July 1, 2016		118,065	$	42.74
Rights Granted		-		-
Rights Exercised		(18,565)		30.41
Rights Canceled		-		-
Outstanding at March 31, 2017		99,500		45.04		0.67	$	-
Exercisable at March 31, 2017		99,500	$	45.04		0.67	$	-

Fair Values of Stock Option Awards Estimated Weighted Average Assumptions

The fair value of DeVry Group’s stock option grants was estimated assuming the following weighted average assumptions:

  

	Fiscal Year
	2017			2016
Expected Life (in Years)		6.88			6.78
Expected Volatility		42.41	%		41.35	%
Risk-free Interest Rate		1.41	%		1.85	%
Dividend Yield		1.19	%		1.01	%
Pre-vesting Forfeiture Rate		10.00	%		3.00	%

Summary of Restricted Stock Units Activity

The following is a summary of RSUs activity for the nine months ended March 31, 2017:

 

			Weighted
			Average
	Number of		Grant Date
	RSUs		Fair Value
Nonvested at July 1, 2016		1,139,350	$	27.78
RSUs Granted		648,160		23.89
RSUs Vested		(367,839)		27.22
RSUs Forfeited		(100,555)		26.94
Nonvested at March 31, 2017		1,319,116	$	26.09

Total Stock-Based Compensation Expense Included in Consolidated Statement of Earnings

The following table shows total stock-based compensation expense included in the Consolidated Statements of Income (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Cost of Educational Services	$	1,267	$	1,209	$	4,254	$	4,477
Student Services and Administrative Expense		2,692		2,568		9,038		9,512
Stock-Based Compensation Expense		3,959		3,777		13,292		13,989
Income Tax Benefit		(1,383)		(1,439)		(4,653)		(5,157)
Net Stock-Based Compensation Expense	$	2,576	$	2,338	$	8,639	$	8,832

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents DeVry Group's assets and liabilities at March 31, 2017, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands).

	Level 1		Level 2		Level 3
Cash and Cash Equivalents	$	209,879	$	-	$	-
Available-for-Sale Investments:
Marketable Securities, short-term		3,950		-		-
Institutional Loans Receivable, Net		-		46,284		-
Deferred Acquisition Obligations		-		28,531		-
FIES Long-Term Receivable		-		13,633		-
Total Financial Assets at Fair Value	$	213,829	$	88,448	$	-

The following table presents DeVry Group's assets and liabilities at June 30, 2016, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands).

	Level 1		Level 2		Level 3
Cash and Cash Equivalents	$	308,164	$	-	$	-
Available-for-Sale Investments:
Marketable Securities, short-term		3,609		-		-
Institutional Loans Receivable, Net		-		49,025		-
Deferred Acquisition Obligations		-		32,121		-
FIES Long-Term Receivable		-		13,057		-
Total Financial Assets at Fair Value	$	311,773	$	94,203	$	-

The following table presents DeVry Group's assets and liabilities at March 31, 2016, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands).

	Level 1		Level 2		Level 3
Cash and Cash Equivalents	$	330,214	$	-	$	-
Available-for-Sale Investments:
Marketable Securities, short-term		3,528		-		-
Institutional Loans Receivable, Net		-		51,743		-
Deferred Acquisition Obligations		-		32,860		-
FIES Long-Term Receivable		-		17,593		-
Total Financial Assets at Fair Value	$	333,742	$	102,196	$	-

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FINANCING RECEIVABLES (Tables)

9 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Institutional Loan Balances and Related Allowances for Credit Losses

The following table details the institutional loan balances along with the related allowances for credit losses (in thousands).

	March 31, 2017				June 30, 2016				March 31, 2016
Gross Institutional Loans			$	57,947			$	69,825			$	71,915
Allowance for Credit Losses:
Balance at July 1	$	(20,800)			$	(20,630)			$	(20,630)
Charge-offs and Adjustments		16,820				7,388				6,290
Recoveries		(497)				(461)				(141)
Additional Provision		(7,186)				(7,097)				(5,691)
Balance at End of Period				(11,663)				(20,800)				(20,172)
Net Institutional Loans			$	46,284			$	49,025			$	51,743

Credit Risk Profiles of Institutional Student Loan Balances

The following tables detail the credit risk profiles of the institutional loan balances based on payment activity and an aging analysis of past due institutional loans (in thousands).

	March 31,		June 30,		March 31,
	2017		2016		2016
Institutional Loans:
Performing	$	47,536	$	50,045	$	52,775
Nonperforming		10,411		19,780		19,140
Total Institutional Loans	$	57,947	$	69,825	$	71,915

Institutional Student Loans Past Due

							Greater
	30-59		60-89		90-119		Than 120						Total
	Days Past		Days Past		Days Past		Days Past		Total				Institutional
	Due		Due		Due		Due		Past Due		Current		Loans
Institutional Loans:
March 31, 2017	$	5,784	$	1,318	$	829	$	10,411	$	18,342	$	39,605	$	57,947
June 30, 2016	$	8,038	$	1,512	$	924	$	19,780	$	30,254	$	39,571	$	69,825
March 31, 2016	$	5,882	$	2,896	$	1,130	$	19,140	$	29,048	$	42,867	$	71,915

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DIVIDENDS AND SHARE REPURCHASE PROGRAMS (Tables)

9 Months Ended

Mar. 31, 2017

Treasury Stock, Number of Shares and Restriction Disclosures [Abstract]

Shares Repurchased Under Programs

DeVry Group has repurchased shares under the following programs as of March 31, 2017:

Date	Shares		Total Cost
Authorized	Repurchased		(in millions)
November 15, 2006		908,399	$	35.0
May 13, 2008		1,027,417		50.0
November 11, 2009		972,205		50.0
August 11, 2010		1,103,628		50.0
November 10, 2010		968,105		50.0
May 20, 2011		2,396,143		100.0
November 2, 2011		3,478,299		100.0
August 29, 2012		2,005,317		62.7
December 15, 2015		1,672,250		36.6
February 16, 2017		302,214		10.0
Totals		14,833,977	$	544.3

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BUSINESS COMBINATIONS (Tables)

9 Months Ended

Mar. 31, 2017

Association Of Certified Anti-Money Laundering Specialists [Member]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands).

	July 1, 2016
Current Assets	$	24,895
Property and Equipment		432
Other Long-term Assets		3,200
Intangible Assets		88,600
Goodwill		274,620
Total Assets Acquired		391,747
Liabilities Assumed		37,619
Net Assets Acquired	$	354,128

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

The preliminary values and estimated useful lives by asset type are as follows (in thousands): 

	July 1, 2016
	Value		Estimated
	Assigned		Useful Life
Customer Relationships	$	42,500	10 years
Curriculum		5,000	3 years
Non-compete Agreements		700	1 year
Proprietary Technology		500	4 years

Faculdade de Imperatriz [Member]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands).

	June 1, 2016
Current Assets	$	1,626
Property and Equipment		291
Intangible Assets		2,652
Goodwill		4,997
Total Assets Acquired		9,566
Liabilities Assumed		2,756
Net Assets Acquired	$	6,810

Grupo Ibmec Educacional S A [Member]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands).

	December 15,
	2015
Current Assets	$	27,615
Property and Equipment		17,968
Other Long-term Assets		2,639
Intangible Assets		59,275
Goodwill		107,888
Total Assets Acquired		215,385
Liabilities Assumed		24,423
Net Assets Acquired	$	190,962

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

The values and estimated useful lives by asset type are as follows (in thousands): 

	December 15, 2015
	Value		Estimated
	Assigned		Useful Life
Student Relationships	$	4,360	5 years
Curriculum		1,821	5 years

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INTANGIBLE ASSETS (Tables)

9 Months Ended

Mar. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Intangible assets consist of the following (in thousands):

	March 31, 2017
	Gross				Weighted Average
	Carrying		Accumulated		Amortization
	Amount		Amortization		Period
Amortizable Intangible Assets:
Student Relationships	$	13,014	$	(9,149)	5 Years
Customer Relationships		42,900		(3,735)	10 Years
Non-compete Agreements		1,640		(1,439)	3 Years
Curriculum/Software		8,113		(2,699)	4 Years
Franchise Contracts		11,087		(1,335)	18 Years
Clinical Agreements		411		(102)	15 Years
Trade Names		1,196		(957)	10 Years
Proprietary Technology		500		(94)	4 Years
Total	$	78,861	$	(19,510)
Indefinite-Lived Intangible Assets:
Trade Names	$	111,008
Trademarks		1,645
Ross Title IV Eligibility and Accreditations		14,100
Intellectual Property		13,940
Chamberlain Title IV Eligibility and Accreditations		1,200
Carrington Title IV Eligibility and Accreditations		20,200
AUC Title IV Eligibility and Accreditations		100,000
DeVry Brazil Accreditation		101,505
Total	$	363,598

	June 30, 2016
	Gross
	Carrying		Accumulated
	Amount		Amortization
Amortizable Intangible Assets:
Student Relationships	$	14,530	$	(7,150)
Customer Relationships		400		(170)
Non-compete Agreements		940		(799)
Curriculum/Software		4,038		(1,914)
Franchise Contracts		10,968		(863)
Clinical Agreements		406		(81)
Trade Names		1,183		(858)
Total	$	32,465	$	(11,835)
Indefinite-Lived Intangible Assets:
Trade Names	$	70,731
Trademarks		1,645
Ross Title IV Eligibility and Accreditations		14,100
Intellectual Property		13,940
Chamberlain Title IV Eligibility and Accreditations		1,200
Carrington Title IV Eligibility and Accreditations		20,200
AUC Title IV Eligibility and Accreditations		100,000
DeVry Brazil Accreditation		100,410
Total	$	322,226

	March 31, 2016
	Gross
	Carrying		Accumulated
	Amount		Amortization
Amortizable Intangible Assets:
Student Relationships	$	13,082	$	(5,430)
Customer Relationships		400		(160)
Test Prep Relationships		900		(900)
Non-compete Agreements		940		(752)
Curriculum/Software		3,881		(1,786)
Outplacement Relationships		3,900		(1,959)
Franchise Contracts		9,875		(640)
Clinical Agreements		366		(67)
Trade Names		1,064		(746)
Total	$	34,408	$	(12,440)
Indefinite-Lived Intangible Assets:
Trade Names	$	66,808
Trademarks		1,645
Ross Title IV Eligibility and Accreditations		14,100
Intellectual Property		13,940
Chamberlain Title IV Eligibility and Accreditations		1,200
Carrington Title IV Eligibility and Accreditations		60,700
AUC Title IV Eligibility and Accreditations		100,000
DeVry Brazil Accreditation		90,685
Total	$	349,078

Estimated Amortization Expense for Amortized Intangible Assets

Estimated amortization expense for amortizable intangible assets for the next five fiscal years ending June 30 and in the aggregate, by reporting unit, is as follows (in thousands):

 

Fiscal Year	DeVry Brazil		Becker		Total
2017	$	3,721	$	7,482	$	11,203
2018		2,994		6,501		9,495
2019		2,152		6,422		8,574
2020		1,515		4,671		6,186
2021		949		4,440		5,389
Thereafter		7,326		19,686		27,012

Changes in Carrying Amount of Goodwill, by Segment

The table below summarizes goodwill balances by reporting unit (in thousands):

	March 31,		June 30		March 31,
Reporting Unit	2017		2016		2016
Chamberlain	$	4,716	$	4,716	$	4,716
AUC		68,321		68,321		68,321
RUSM and RUSVM		237,173		237,173		237,173
Becker		306,444		32,043		32,386
DeVry Brazil		222,151		223,558		194,409
DeVry University		22,196		22,196		22,196
Carrington		-		-		5,811
Total	$	861,001	$	588,007	$	565,012

The table below summarizes goodwill balances by reporting segment (in thousands):

	March 31,		June 30,		March 31,
Reporting Segment	2017		2016		2016
Medical and Healthcare	$	310,210	$	310,210	$	310,210
Professional Education		306,444		32,043		32,386
Technology and Business		222,151		223,558		194,409
U.S. Traditional Postsecondary		22,196		22,196		28,007
Total	$	861,001	$	588,007	$	565,012

The table below summarizes the changes in the carrying amount of goodwill by segment (in thousands):

							U.S. Traditional
							Postsecondary
	Medical				Technology				Accumulated
	and		Professional		and				Impairment
	Healthcare		Education		Business		Gross		Losses		Total
Balance at June 30, 2014	$	310,210	$	33,217	$	55,472	$	207,913	$	(86,933)	$	519,879
Acquisitions		-		-		55,915		-		-		55,915
Foreign exchange rate changes		-		(420)		(23,045)		-		-		(23,465)
Balance at June 30, 2015		310,210		32,797		88,342		207,913		(86,933)		552,329
Purchase Accounting Adjustments		-		-		4,575		-		-		4,575
Acquisitions		-		-		108,246		-		-		108,246
Impairments		-		-		-		-		(92,973)		(92,973)
Foreign exchange rate changes		-		(411)		(6,754)		-		-		(7,165)
Balance at March 31, 2016		310,210		32,386		194,409		207,913		(179,906)		565,012
Acquisitions		-		-		7,761		-		-		7,761
Impairments		-		-		-		-		(5,811)		(5,811)
Foreign exchange rate changes		-		(343)		21,388		-		-		21,045
Balance at June 30, 2016		310,210		32,043		223,558		207,913		(185,717)		588,007
Purchase Accounting Adjustments		-		-		(3,122)		-		-		(3,122)
Acquisitions		-		274,620		-		-		-		274,620
Foreign exchange rate changes		-		(219)		1,715		-		-		1,496
Balance at March 31, 2017	$	310,210	$	306,444	$	222,151	$	207,913	$	(185,717)	$	861,001

Summary of Indefinite-Lived Intangible Assets Balances by Reporting Segment

The table below summarizes the indefinite-lived intangible asset balances by reporting segment (in thousands):

	March 31,		June 30,		March 31,
Reporting Segment	2017		2016		2016
Medical and Healthcare	$	137,500	$	137,500	$	137,500
Professional Education		67,812		27,912		27,912
Technology and Business		136,441		134,969		121,321
U.S. Traditional Postsecondary		21,845		21,845		62,345
Total	$	363,598	$	322,226	$	349,078

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RESTRUCTURING CHARGES (Tables)

9 Months Ended

Mar. 31, 2017

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

These pre-tax restructuring charges by segment were as follows (in thousands):

	Three Months Ended March 31, 2017						Nine Months Ended March 31, 2017
	Real		Termination				Real		Termination
	Estate		Benefits		Total		Estate		Benefits		Total
Medical and Healthcare	$	137	$	530	$	667	$	137	$	530	$	667
U.S. Traditional Postsecondary		2,347		3,345		5,692		9,835		3,345		13,180
Home Office and Other		(222)		1,634		1,412		1,706		2,315		4,021
Total	$	2,262	$	5,509	$	7,771	$	11,678	$	6,190	$	17,868

	Three Months Ended March 31, 2016						Nine Months Ended March 31, 2016
	Real		Termination				Real		Termination
	Estate		Benefits		Total		Estate		Benefits		Total
Professional Education	$	300	$	-	$	300	$	300	$	-	$	300
U.S. Traditional Postsecondary		729		1,844		2,573		31,901		7,669		39,570
Total	$	1,029	$	1,844	$	2,873	$	32,201	$	7,669	$	39,870

Schedule of Restructuring Reserve by Type of Cost

The following table summarizes the separation and restructuring plan activity for the fiscal years 2017 and 2016, for which cash payments are required (in thousands):

Liability balance at June 30, 2015	$	26,992
Increase in liability (separation and other charges)		67,495
Reduction in liability (payments and adjustments)		(46,264)
Liability balance at June 30, 2016		48,223
Increase in liability (separation and other charges)		14,889
Reduction in liability (payments and adjustments)		(23,074)
Liability balance at March 31, 2017	$	40,038

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SEGMENT INFORMATION (Tables)

9 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Tabulation of Business Segment Information Based on Current Segmentation

Summary financial information by reporting segment is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Revenue:
Medical and Healthcare	$	208,153	$	210,215	$	609,331	$	590,616
Professional Education		29,810		23,683		91,906		71,417
Technology and Business		61,810		48,062		193,437		121,405
U.S. Traditional Postsecondary		152,951		193,008		465,666		590,643
Intersegment Elimination and Other		(635)		(747)		(2,009)		(2,245)
Total Consolidated Revenue	$	452,089	$	474,221	$	1,358,331	$	1,371,836
Operating Income (Loss):
Medical and Healthcare	$	50,150	$	57,450	$	146,166	$	140,920
Professional Education		2,619		5,905		8,810		15,638
Technology and Business		5,358		(1,583)		16,864		(1,447)
U.S. Traditional Postsecondary (1)		(5,724)		2,942		(21,411)		(132,827)
Home Office and Other (1)		(5,110)		(3,867)		(65,183)		(9,569)
Total Consolidated Operating Income	$	47,293	$	60,847	$	85,246	$	12,715
Segment Assets:
Medical and Healthcare	$	888,413	$	830,493	$	888,413	$	830,493
Professional Education		450,769		109,478		450,769		109,478
Technology and Business		609,624		504,640		609,624		504,640
U.S. Traditional Postsecondary		258,810		570,976		258,810		570,976
Home Office and Other (2)		110,193		81,472		110,193		81,472
Total Consolidated Assets	$	2,317,809	$	2,097,059	$	2,317,809	$	2,097,059
Additions to Long-Lived Assets:
Medical and Healthcare	$	3,574	$	2,798	$	10,418	$	16,571
Professional Education		66		220		363,724		815
Technology and Business		4,882		5,557		12,495		194,111
U.S. Traditional Postsecondary		1,679		2,945		5,080		14,182
Home Office and Other		1,922		2,080		4,464		9,667
Total Consolidated Additions to Long-Lived Assets	$	12,123	$	13,600	$	396,181	$	235,346
Reconciliation to Consolidated Financial Statements:
Capital Expenditures	$	12,123	$	9,956	$	32,529	$	51,004
Increase in Capital Assets from Acquisitions		-		-		4,913		13,487
Increase in Intangible Assets and Goodwill		-		3,644		358,739		170,855
Total Increase in Consolidated Long-Lived Assets	$	12,123	$	13,600	$	396,181	$	235,346
Depreciation Expense:
Medical and Healthcare	$	6,652	$	7,526	$	19,850	$	21,057
Professional Education		119		66		466		549
Technology and Business		2,881		1,272		6,991		3,535
U.S. Traditional Postsecondary		5,773		7,805		17,689		24,719
Home Office and Other		2,936		3,310		8,932		9,489
Total Consolidated Depreciation Expense	$	18,361	$	19,979	$	53,928	$	59,349
Intangible Asset Amortization Expense:
Professional Education	$	1,893	$	147	$	5,679	$	447
Technology and Business		899		1,200		2,808		3,325
U.S. Traditional Postsecondary		-		65		-		190
Total Consolidated Amortization Expense	$	2,792	$	1,412	$	8,487	$	3,962

(1) U.S. Traditional Postsecondary and Home Office and Other Operating Income includes $4.1 million and $52.2 million in charges, respectively, in the nine months ended March 31, 2017 for regulatory settlements as described in "Note 3: Regulatory Settlements."

(2) In addition to the change in reportable segments, Home Office and Other Segment Assets and Total Consolidated Assets in fiscal year 2016 have been revised to reflect the reclassification of deferred tax assets and liabilities related to adoption of ASU No. 2015-17 "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes."

Revenues and Long-Lived Assets by Geographic Area

Revenue and long-lived assets by geographic area are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Revenue from Unaffiliated Customers:
Domestic Operations	$	305,639	$	336,927	$	901,261	$	982,656
International Operations:
Dominica, St. Kitts and St. Maarten		83,237		88,263		260,083		262,963
Brazil		61,810		48,063		193,437		121,405
Other		1,403		968		3,550		4,812
Total International		146,450		137,294		457,070		389,180
Total Consolidated Revenue	$	452,089	$	474,221	$	1,358,331	$	1,371,836
Long-Lived Assets:
Domestic Operations	$	260,101	$	309,281	$	260,101	$	309,281
International Operations:
Dominica, St. Kitts and St. Maarten		188,511		183,146		188,511		183,146
Brazil		117,412		92,779		117,412		92,779
Other		3,746		27		3,746		27
Total International		309,669		275,952		309,669		275,952
Total Consolidated Long-Lived Assets	$	569,770	$	585,233	$	569,770	$	585,233

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ASSETS HELD FOR SALE - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2016
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment	$ 11,280	$ 0	$ 11,280	$ 0	$ 0
Impairment of Long-Lived Assets to be Disposed of	$ 0	$ 0	$ 4,764	$ 0

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REGULATORY SETTLEMENTS - Additional Information (Detail) $ in Thousands	9 Months Ended
	Mar. 31, 2017 USD ($)
Inquiry Settlement	$ 2,250
Inquiry Settlement Penalties	500
Inquiry Settlement Charge	2,750
Letter of Credit [Member]
Letter Of Credit Title IV Disbursement, Amount	68,400
Permanent Injunction And Monetary Judgment Agreement [Member]
Settlement Payment	49,400
Forgivable Of Loan	30,400
Forgivable Of Account Receivable	20,200
Regulatory Settlement Charge	56,300
Loan Write Offs	4,100
Business Technology And Management [Member]
Regulatory Settlement Charge	4,100
Home Office And Other [Member]
Regulatory Settlement Charge	$ 52,200

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Reconciliation of Non-Controlling Interest Balance) (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Noncontrolling Interest [Line Items]
Balance at Beginning of Period	$ 6,720	$ 2,813	$ 5,112	$ 9,620
Net Income Attributable to Noncontrolling Interest	163	5	502	42
Payment for Purchase of Noncontrolling Interest of Subsidiary	0	0	0	(3,114)
(Decrease) Increase in Redemption Value of Noncontrolling Interest Put Option	(283)	711	986	(3,019)
Balance at End of Period	$ 6,600	$ 3,529	$ 6,600	$ 3,529

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Reconciliation of Basic Shares to Diluted Shares) (Detail) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Weighted Average Shares Outstanding	62,811	63,107	62,695	63,378
Unvested Participating RSUs	855	815	855	781
Basic Shares	63,666	63,922	63,550	64,159
Effect of Dilutive Stock Options	600	431	441	318
Diluted Shares	64,266	64,353	63,991	64,477

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2016
Summary Of Significant Accounting Policies [Line Items]
Minimum protective endowment related to continuing operation in Pennsylvania	$ 500,000		$ 500,000
Reserves related to uncollectible accounts and refunds	51,200,000	$ 65,900,000	51,200,000	$ 65,900,000	$ 64,500,000
Net balance of capitalized software development costs	$ 13,300,000	$ 21,700,000	$ 13,300,000	$ 21,700,000	18,300,000
Anti-dilutive shares excluded from computations of earnings per share	1,670,000	2,828,000	2,514,000	2,765,000
Cumulative translation losses	$ 37,300,000	$ 91,500,000	$ 37,300,000	$ 91,500,000	42,600,000
Advertising expense	56,200,000	57,300,000	160,200,000	173,000,000
Provision for Doubtful Accounts			67,210,000	61,710,000
Impairment of Leasehold			3,600,000	12,200,000
Provisions For Refund Payments	10,900,000	11,500,000	35,400,000	34,700,000
Deferred Tax Liabilities, Net, Noncurrent	30,228,000	27,692,000	30,228,000	27,692,000	29,936,000
Federal Trade Commission Settlement Agreement [Member]
Summary Of Significant Accounting Policies [Line Items]
Allowance for Doubtful Accounts Receivable, Write-offs			24,200,000
Accounting Standards Update 2015-17 [Member]
Summary Of Significant Accounting Policies [Line Items]
Deferred Tax Assets, Net, Current		43,100,000		43,100,000
Deferred Tax Assets, Net, Noncurrent		24,200,000		24,200,000
Deferred Tax Liabilities, Net, Noncurrent		18,800,000		18,800,000
Noncontrolling Interest
Summary Of Significant Accounting Policies [Line Items]
Cumulative translation losses	800,000	1,900,000	800,000	1,900,000	900,000
Educational Services
Summary Of Significant Accounting Policies [Line Items]
Provision for Doubtful Accounts	$ 11,600,000	$ 9,600,000	$ 31,800,000	$ 27,000,000
Perkins Student Loan Fund
Summary Of Significant Accounting Policies [Line Items]
Percentage of Contributions	33.00%		33.00%
Allowances for expected losses on loan collections	$ 2,600,000		$ 2,600,000
DeVry Brazil
Summary Of Significant Accounting Policies [Line Items]
Ownership interest of parent in subsidiary	2.10%	2.10%	2.10%	2.10%
DeVry Education Group Inc.
Summary Of Significant Accounting Policies [Line Items]
Ownership interest of parent in subsidiary	97.90%	97.90%	97.90%	97.90%
Cumulative translation losses	$ 36,500,000	$ 89,600,000	$ 36,500,000	$ 89,600,000	41,700,000
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax, Total	300,000	200,000	300,000	200,000	100,000
Tax effect on unrealized gains on available-for-sale securities	$ 200,000	$ 200,000	$ 200,000	$ 200,000	$ 100,000

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STOCK-BASED COMPENSATION (Summary of Options Activity) (Detail) - Stock Option $ / shares in Units, $ in Thousands	9 Months Ended
	Mar. 31, 2017 USD ($) $ / shares shares
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Options, Outstanding at beginning of period | shares	3,574,336
Options, Granted | shares	397,700
Options, Exercised | shares	(912,734)
Options Forfeited | shares	(12,409)
Options Expired | shares	(24,081)
Options, Outstanding at end of period | shares	3,022,812
Options, Exercisable at end of period | shares	2,029,550
Weighted Average Exercise Price at beginning of period | $ / shares	$ 32.79
Weighted Average Exercise Price, Options Granted | $ / shares	23.78
Weighted Average Exercise Price, Options Exercised | $ / shares	22.81
Weighted Average Exercise Price, Options Forfeited | $ / shares	30
Weighted Average Exercise Price, Options Expired | $ / shares	31.16
Weighted Average Outstanding Price at end of period | $ / shares	34.65
Weighted Average Exercise Price, Exercisable at end of period | $ / shares	$ 39.68
Weighted Average Remaining Contractual Life, Outstanding at end of period	5 years 4 months 13 days
Weighted Average Remaining Contractual Life, Exercisable at end of period	3 years 7 months 28 days
Aggregate Intrinsic Value, Outstanding at End of period | $	$ 16,948
Aggregate Intrinsic Value, Exercisable at end of period | $	$ 5,285

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STOCK-BASED COMPENSATION (Summary of Stock Appreciation Rights Activity) (Detail) - Stock Appreciation Rights (SARs) [Member] $ / shares in Units, $ in Thousands	9 Months Ended
	Mar. 31, 2017 USD ($) $ / shares shares
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Outstanding at beginning of period | shares	118,065
Rights Granted | shares	0
Rights Exercised | shares	(18,565)
Rights Canceled | shares	0
Outstanding at end of period | shares	99,500
Exercisable at end of period | shares	99,500
Weighted Average Grant Date Fair Value, Nonvested beginning balance | $ / shares	$ 42.74
Weighted Average Exercise Price Rights Granted | $ / shares	0
Weighted Average Exercise Price Rights Exercised | $ / shares	30.41
Weighted Average Exercise Price Rights Canceled | $ / shares	0
Weighted Average Grant Date Fair Value, Nonvested ending balance | $ / shares	45.04
Weighted Average Exercise Price, Exercisable at end of period | $ / shares	$ 45.04
Weighted Average Remaining Contractual Life, Outstanding at end of period	8 months 1 day
Weighted Average Remaining Contractual Life, Exercisable at end of period	8 months 1 day
Aggregate Intrinsic Value, Outstanding at end of period | $	$ 0
Aggregate Intrinsic Value, Exercisable at end of period | $	$ 0

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STOCK-BASED COMPENSATION (Fair Values of Stock Option Awards Weighted Average Assumptions) (Detail)	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected Life (in Years)	6 years 10 months 17 days	6 years 9 months 11 days
Expected Volatility	42.41%	41.35%
Risk-free Interest Rate	1.41%	1.85%
Dividend Yield	1.19%	1.01%
Pre-vesting Forfeiture Rate	10.00%	3.00%

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STOCK-BASED COMPENSATION (Summary of Restricted Stock Units Activity) (Detail) - Restricted Stock Units (RSUs) [Member] - $ / shares	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding at beginning of period	1,139,350
Restricted Stock Units Outstanding, Shares Granted	648,160
Restricted Stock Units Outstanding, Shares Vested	(367,839)
Restricted Stock Units Outstanding, Shares Forfeited	(100,555)
Outstanding at end of period	1,319,116
Weighted Average Grant Date Fair Value, Nonvested beginning balance	$ 27.78
Weighted Average Grant Date Fair Value, Shares Granted	23.89	$ 25.84
Weighted Average Grant Date Fair Value, Shares Vested	27.22
Weighted Average Grant Date Fair Value, Shares Forfeited	26.94
Weighted Average Grant Date Fair Value, Nonvested ending balance	$ 26.09

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STOCK-BASED COMPENSATION (Total Stock-Based Compensation Expense Included in Consolidated Statement of Income) (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-Based Compensation Expense	$ 3,959	$ 3,777	$ 13,292	$ 13,989
Income Tax Benefit	(1,383)	(1,439)	(4,653)	(5,157)
Net Stock-Based Compensation Expense	2,576	2,338	8,639	8,832
Cost of Educational Services
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-Based Compensation Expense	1,267	1,209	4,254	4,477
Student Services And Administrative Expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-Based Compensation Expense	$ 2,692	$ 2,568	$ 9,038	$ 9,512

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STOCK-BASED COMPENSATION - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total intrinsic value of options exercised	$ 5.5	$ 0.1
Total pre-tax unrecognized compensation costs related to non-vested awards	$ 21.8
Total pre-tax unrecognized compensation costs related to non-vested awards expected to be recognized, years	2 years 4 months 24 days
Total fair value of options and Restricted Stock Units vested	$ 13.0	$ 15.9
Stock Incentive Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average estimated grant date fair values, for options granted at market price, per share	$ 9.09	$ 10.17
Common Stock, Capital Shares Reserved for Future Issuance	6,518,677
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 23.89	$ 25.84
Restricted Stock Units Outstanding, Shares Granted	648,160
Performance Based Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock Units Outstanding, Shares Granted	223,230
Non-Performance Based Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock Units Outstanding, Shares Granted	424,930

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FAIR VALUE MEASUREMENTS (Assets Measured at Fair Value on Recurring Basis) (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016
Available-for-Sale Investments:
Marketable Securities, short-term	$ 3,950	$ 3,609	$ 3,528
Institutional Loans Receivable, Net	46,284	49,025	51,743
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents	209,879	308,164	330,214
Available-for-Sale Investments:
Marketable Securities, short-term	3,950	3,609	3,528
Institutional Loans Receivable, Net	0	0	0
Deferred Acquisition Obligations	0	0	0
FIES Long-Term Receivable	0	0	0
Total Financial Assets at Fair Value	213,829	311,773	333,742
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents	0	0	0
Available-for-Sale Investments:
Marketable Securities, short-term	0	0	0
Institutional Loans Receivable, Net	46,284	49,025	51,743
Deferred Acquisition Obligations	28,531	32,121	32,860
FIES Long-Term Receivable	13,633	13,057	17,593
Total Financial Assets at Fair Value	88,448	94,203	102,196
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents	0	0	0
Available-for-Sale Investments:
Marketable Securities, short-term	0	0	0
Institutional Loans Receivable, Net	0	0	0
Deferred Acquisition Obligations	0	0	0
FIES Long-Term Receivable	0	0	0
Total Financial Assets at Fair Value	$ 0	$ 0	$ 0

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FAIR VALUE MEASUREMENTS - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment	$ 11,280	$ 0	$ 11,280	$ 0	$ 0
Impairment of Long-Lived Assets to be Disposed of	0	0	4,764	0
Accrued Expenses [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred Acquisition Obligations	15,800	12,200	15,800	12,200	7,700
Deferred Rent and Other Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred Acquisition Obligations	$ 12,800	$ 20,700	$ 12,800	$ 20,700	$ 24,400

XML

FINANCING RECEIVABLES (Institutional Loan Balances and Related Allowances for Credit Losses) (Detail) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2016
Financing Receivables [Line Items]
Gross Institutional Loans	$ 57,947	$ 71,915	$ 69,825
Allowance for Credit Losses:
Balance at July 1	(20,800)	(20,630)	(20,630)
Charge-offs and Adjustments	16,820	6,290	7,388
Recoveries	(497)	(141)	(461)
Additional Provision	(7,186)	(5,691)	(7,097)
Balance at End of Period	(11,663)	(20,172)	(20,800)
Net Institutional Loans	$ 46,284	$ 51,743	$ 49,025

XML

FINANCING RECEIVABLES (Credit Risk Profiles of Institutional Loan Balance) (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016
Financing Receivables [Line Items]
Total Institutional Loans	$ 57,947	$ 69,825	$ 71,915
Credit Risk Profiles Of Institutional Loans
Financing Receivables [Line Items]
Total Institutional Loans	57,947	69,825	71,915
Performing | Credit Risk Profiles Of Institutional Loans
Financing Receivables [Line Items]
Total Institutional Loans	47,536	50,045	52,775
Nonperforming | Credit Risk Profiles Of Institutional Loans
Financing Receivables [Line Items]
Total Institutional Loans	$ 10,411	$ 19,780	$ 19,140

XML

FINANCING RECEIVABLES (Institutional Loans Past Due) (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Institutional Loans, Past Due	$ 18,342	$ 30,254	$ 29,048
Institutional Loans, Current	39,605	39,571	42,867
Total Institutional Loans	57,947	69,825	71,915
Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Institutional Loans, Past Due	5,784	8,038	5,882
Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Institutional Loans, Past Due	1,318	1,512	2,896
Financing Receivables 90 To 119 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Institutional Loans, Past Due	829	924	1,130
Financing Receivables Greater Than 120 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Institutional Loans, Past Due	$ 10,411	$ 19,780	$ 19,140

XML

FINANCING RECEIVABLES - Additional Information (Detail) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2015
Financing Receivables [Line Items]
Number of days past due, to consider loans as nonperforming	120 days
Financing Receivable Allowance For Credit Losses	$ 11,663	$ 20,800	$ 20,172	$ 20,630
Notes Receivable Gross	57,947	69,825	71,915
Federal Trade Commission Settlement Agreement [Member] | Institutional Loan [Member]
Financing Receivables [Line Items]
Financing Receivable Allowance For Credit Losses	13,400
Notes Receivable Gross	17,500
Forgivable Of Loan	12,900
Nonperforming loan
Financing Receivables [Line Items]
Impaired Financing Receivable, with Related Allowance, Recorded Investment	10,400	19,800	19,100
Impaired Financing Receivable, Related Allowance	10,200	19,700	18,800
Accounts Receivable
Financing Receivables [Line Items]
Net Institutional Student Loans, classified as Accounts Receivable	18,600	21,700	25,900
Other Assets
Financing Receivables [Line Items]
Net Institutional Student Loans, classified as Other Assets	$ 27,700	$ 27,300	$ 25,800

XML

DIVIDENDS AND SHARE REPURCHASE PROGRAMS (Shares Repurchased under Programs) (Detail) $ in Millions	9 Months Ended
	Mar. 31, 2017 USD ($) shares
Stock Repurchase Programs Total
Share Repurchases [Line Items]
Shares Repurchased | shares	14,833,977
Total Cost | $	$ 544.3
Authorized on November 15, 2006
Share Repurchases [Line Items]
Shares Repurchased | shares	908,399
Total Cost | $	$ 35.0
Authorized on May 13, 2008
Share Repurchases [Line Items]
Shares Repurchased | shares	1,027,417
Total Cost | $	$ 50.0
Authorized on November 11, 2009
Share Repurchases [Line Items]
Shares Repurchased | shares	972,205
Total Cost | $	$ 50.0
Authorized on August 11, 2010
Share Repurchases [Line Items]
Shares Repurchased | shares	1,103,628
Total Cost | $	$ 50.0
Authorized on November 10, 2010
Share Repurchases [Line Items]
Shares Repurchased | shares	968,105
Total Cost | $	$ 50.0
Authorized on May 20, 2011
Share Repurchases [Line Items]
Shares Repurchased | shares	2,396,143
Total Cost | $	$ 100.0
Authorized on November 2, 2011
Share Repurchases [Line Items]
Shares Repurchased | shares	3,478,299
Total Cost | $	$ 100.0
Authorized On August 29, 2012
Share Repurchases [Line Items]
Shares Repurchased | shares	2,005,317
Total Cost | $	$ 62.7
Authorized On December 15, 2015
Share Repurchases [Line Items]
Shares Repurchased | shares	1,672,250
Total Cost | $	$ 36.6
Authorized On February 16, 2017
Share Repurchases [Line Items]
Shares Repurchased | shares	302,214
Total Cost | $	$ 10.0

XML

DIVIDENDS AND SHARE REPURCHASE PROGRAMS - Additional Information (Detail) - USD ($) $ in Millions	1 Months Ended			9 Months Ended
	Dec. 22, 2016	Jun. 24, 2016	Dec. 23, 2015	Mar. 31, 2017	Feb. 16, 2017	Dec. 15, 2015
Ninth share repurchase plan [Member]
Share Repurchases [Line Items]
Treasury Stock Shares Acquired				802,948
Treasury Stock Value Acquired Cost Method				$ 20.5
Tenth share repurchase plan [Member]
Share Repurchases [Line Items]
Authorized amount for repurchase				$ 10.0
Treasury Stock Shares Acquired				302,214
Maximum | Ninth share repurchase plan [Member]
Share Repurchases [Line Items]
Authorized amount for repurchase						$ 100.0
Maximum | Tenth share repurchase plan [Member]
Share Repurchases [Line Items]
Authorized amount for repurchase					$ 300.0
DeVry Group [Member]
Share Repurchases [Line Items]
Payments of Dividends	$ 11.4	$ 11.6	$ 11.6

XML

BUSINESS COMBINATIONS (Estimated Fair Values of Assets Acquired and Liabilities Assumed) (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Jul. 02, 2016	Jun. 30, 2016	Jun. 01, 2016	Mar. 31, 2016	Dec. 15, 2015
Business Acquisition [Line Items]
Goodwill	$ 861,001		$ 588,007		$ 565,012
Association Of Certified Anti-Money Laundering Specialists [Member]
Business Acquisition [Line Items]
Current Assets		$ 24,895
Property and Equipment		432
Other Long-term Assets		3,200
Intangible Assets		88,600
Goodwill		274,620
Total Assets Acquired		391,747
Liabilities Assumed		37,619
Net Assets Acquired		$ 354,128
Faculdade de Imperatriz [Member]
Business Acquisition [Line Items]
Current Assets				$ 1,626
Property and Equipment				291
Intangible Assets				2,652
Goodwill				4,997
Total Assets Acquired				9,566
Liabilities Assumed				2,756
Net Assets Acquired				$ 6,810
Grupo Ibmec Educacional S A [Member]
Business Acquisition [Line Items]
Current Assets						$ 27,615
Property and Equipment						17,968
Other Long-term Assets						2,639
Intangible Assets						59,275
Goodwill						107,888
Total Assets Acquired						215,385
Liabilities Assumed						24,423
Net Assets Acquired						$ 190,962

XML

BUSINESS COMBINATIONS (Acquired Intangible Assets Subject to Amortization and Values and Estimated Useful Lives) (Detail) - USD ($) $ in Thousands	Jul. 02, 2016	Dec. 15, 2015
Association Of Certified Anti-Money Laundering Specialists [Member] | Customer Relationships [Member]
Business Acquisition [Line Items]
Amortizable intangible assets	$ 42,500
Amortizable intangible assets, estimated useful lives	10 years
Association Of Certified Anti-Money Laundering Specialists [Member] | Curriculum [Member]
Business Acquisition [Line Items]
Amortizable intangible assets	$ 5,000
Amortizable intangible assets, estimated useful lives	3 years
Association Of Certified Anti-Money Laundering Specialists [Member] | Noncompete Agreements [Member]
Business Acquisition [Line Items]
Amortizable intangible assets	$ 700
Amortizable intangible assets, estimated useful lives	1 year
Association Of Certified Anti-Money Laundering Specialists [Member] | Proprietary Technology [Member]
Business Acquisition [Line Items]
Amortizable intangible assets	$ 500
Amortizable intangible assets, estimated useful lives	4 years
Grupo Ibmec Educacional S A [Member] | Student Relationships [Member]
Business Acquisition [Line Items]
Amortizable intangible assets		$ 4,360
Amortizable intangible assets, estimated useful lives		5 years
Grupo Ibmec Educacional S A [Member] | Curriculum [Member]
Business Acquisition [Line Items]
Amortizable intangible assets		$ 1,821
Amortizable intangible assets, estimated useful lives		5 years

XML

BUSINESS COMBINATIONS - Additional Information (Detail) $ in Thousands	Jul. 02, 2016 USD ($)	Jun. 01, 2016 USD ($)	Dec. 15, 2015 USD ($)
Grupo Ibmec Educacional S A [Member]
Business Acquisition [Line Items]
Number Of Students In Degree Programs			15,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill			$ 59,275
Payments to Acquire Businesses, Gross			180,500
Business Combination, Consideration Transferred			$ 191,000
Business Acquisition, Percentage of Voting Interests Acquired			100.00%
Business Combination, Contingent Consideration			$ 10,500
Grupo Ibmec Educacional S A [Member] | Trade Name [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets			18,400
Grupo Ibmec Educacional S A [Member] | Accreditations [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill			$ 34,700
Faculdade de Imperatriz [Member]
Business Acquisition [Line Items]
Number Of Students In Degree Programs		2,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill		$ 2,652
Payments to Acquire Businesses, Gross		3,500
Business Combination, Consideration Transferred		$ 6,800
Business Acquisition, Percentage of Voting Interests Acquired		100.00%
Business Combination, Contingent Consideration		$ 3,300
Faculdade de Imperatriz [Member] | Trade Name [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets		500
Faculdade de Imperatriz [Member] | Accreditations [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill		$ 2,100
Association Of Certified Anti-Money Laundering Specialists [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill	$ 88,600
Payments to Acquire Businesses, Gross	$ 330,600
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Cash Acquired from Acquisition	$ 23,500
Association Of Certified Anti-Money Laundering Specialists [Member] | Revolving Credit Facility [Member]
Business Acquisition [Line Items]
Long-term Line of Credit	175,000
Association Of Certified Anti-Money Laundering Specialists [Member] | Trade Name [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets	$ 39,900

XML

INTANGIBLE ASSETS (Schedule of Intangible Assets) (Detail) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016
Intangible Assets [Line Items]
Amortizable Intangible Assets, Gross Carrying Amount	$ 78,861	$ 32,465	$ 34,408
Amortizable Intangible Assets, Accumulated Amortization	(19,510)	(11,835)	(12,440)
Indefinite-lived Intangible Assets, Gross Carrying Amount	363,598	322,226	349,078
Student Relationships [Member]
Intangible Assets [Line Items]
Amortizable Intangible Assets, Gross Carrying Amount	13,014	14,530	13,082
Amortizable Intangible Assets, Accumulated Amortization	$ (9,149)	(7,150)	(5,430)
Amortizable Intangible Assets, Weighted Average Amortization Period	5 years
Customer Relationships [Member]
Intangible Assets [Line Items]
Amortizable Intangible Assets, Gross Carrying Amount	$ 42,900	400	400
Amortizable Intangible Assets, Accumulated Amortization	$ (3,735)	(170)	(160)
Amortizable Intangible Assets, Weighted Average Amortization Period	10 years
Test Prep Relationships [Member]
Intangible Assets [Line Items]
Amortizable Intangible Assets, Gross Carrying Amount			900
Amortizable Intangible Assets, Accumulated Amortization			(900)
Non-compete Agreements [Member]
Intangible Assets [Line Items]
Amortizable Intangible Assets, Gross Carrying Amount	$ 1,640	940	940
Amortizable Intangible Assets, Accumulated Amortization	$ (1,439)	(799)	(752)
Amortizable Intangible Assets, Weighted Average Amortization Period	3 years
Curriculum/Software [Member]
Intangible Assets [Line Items]
Amortizable Intangible Assets, Gross Carrying Amount	$ 8,113	4,038	3,881
Amortizable Intangible Assets, Accumulated Amortization	$ (2,699)	(1,914)	(1,786)
Amortizable Intangible Assets, Weighted Average Amortization Period	4 years
Outplacement Relationships [Member]
Intangible Assets [Line Items]
Amortizable Intangible Assets, Gross Carrying Amount			3,900
Amortizable Intangible Assets, Accumulated Amortization			(1,959)
Franchise Contracts [Member]
Intangible Assets [Line Items]
Amortizable Intangible Assets, Gross Carrying Amount	$ 11,087	10,968	9,875
Amortizable Intangible Assets, Accumulated Amortization	$ (1,335)	(863)	(640)
Amortizable Intangible Assets, Weighted Average Amortization Period	18 years
Proprietary Technology [Member]
Intangible Assets [Line Items]
Amortizable Intangible Assets, Gross Carrying Amount	$ 500
Amortizable Intangible Assets, Accumulated Amortization	$ (94)
Amortizable Intangible Assets, Weighted Average Amortization Period	4 years
Clinical Agreements [Member]
Intangible Assets [Line Items]
Amortizable Intangible Assets, Gross Carrying Amount	$ 411	406	366
Amortizable Intangible Assets, Accumulated Amortization	$ (102)	(81)	(67)
Amortizable Intangible Assets, Weighted Average Amortization Period	15 years
Trade Names [Member]
Intangible Assets [Line Items]
Amortizable Intangible Assets, Gross Carrying Amount	$ 1,196	1,183	1,064
Amortizable Intangible Assets, Accumulated Amortization	(957)	(858)	(746)
Indefinite-lived Intangible Assets, Gross Carrying Amount	$ 111,008	70,731	66,808
Amortizable Intangible Assets, Weighted Average Amortization Period	10 years
Trademarks [Member]
Intangible Assets [Line Items]
Indefinite-lived Intangible Assets, Gross Carrying Amount	$ 1,645	1,645	1,645
Ross Title IV Eligibility and Accreditations [Member]
Intangible Assets [Line Items]
Indefinite-lived Intangible Assets, Gross Carrying Amount	14,100	14,100	14,100
Intellectual Property [Member]
Intangible Assets [Line Items]
Indefinite-lived Intangible Assets, Gross Carrying Amount	13,940	13,940	13,940
Chamberlain Title IV Eligibility and Accreditations [Member]
Intangible Assets [Line Items]
Indefinite-lived Intangible Assets, Gross Carrying Amount	1,200	1,200	1,200
Carrington Title IV Eligibility and Accreditations [Member]
Intangible Assets [Line Items]
Indefinite-lived Intangible Assets, Gross Carrying Amount	20,200	20,200	60,700
AUC Title IV Eligibility and Accreditations [Member]
Intangible Assets [Line Items]
Indefinite-lived Intangible Assets, Gross Carrying Amount	100,000	100,000	100,000
Devry Brazil Accreditations [Member]
Intangible Assets [Line Items]
Indefinite-lived Intangible Assets, Gross Carrying Amount	$ 101,505	$ 100,410	$ 90,685

XML

INTANGIBLE ASSETS (Estimated Amortization Expense for Amortized Intangible Assets) (Detail) $ in Thousands	Mar. 31, 2017 USD ($)
Intangible Assets [Line Items]
2017	$ 11,203
2018	9,495
2019	8,574
2020	6,186
2021	5,389
Thereafter	27,012
Devry Brazil [Member]
Intangible Assets [Line Items]
2017	3,721
2018	2,994
2019	2,152
2020	1,515
2021	949
Thereafter	7,326
Becker [Member]
Intangible Assets [Line Items]
2017	7,482
2018	6,501
2019	6,422
2020	4,671
2021	4,440
Thereafter	$ 19,686

XML

INTANGIBLE ASSETS (Summary of Goodwill Balances by Reporting Unit) (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016
Goodwill [Line Items]
Goodwill	$ 861,001	$ 588,007	$ 565,012
Chamberlain [Member]
Goodwill [Line Items]
Goodwill	4,716	4,716	4,716
AUC [Member]
Goodwill [Line Items]
Goodwill	68,321	68,321	68,321
RUSM and RUSVM [Member]
Goodwill [Line Items]
Goodwill	237,173	237,173	237,173
Becker [Member]
Goodwill [Line Items]
Goodwill	306,444	32,043	32,386
Devry Brazil [Member]
Goodwill [Line Items]
Goodwill	222,151	223,558	194,409
DeVry University [Member]
Goodwill [Line Items]
Goodwill	22,196	22,196	22,196
Carrington [Member]
Goodwill [Line Items]
Goodwill	$ 0	$ 0	$ 5,811

XML

INTANGIBLE ASSETS (Summary of Goodwill Balances by Reporting Segment) (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016
Goodwill [Line Items]
Goodwill	$ 861,001	$ 588,007	$ 565,012
Medical And Healthcare [Member]
Goodwill [Line Items]
Goodwill	310,210	310,210	310,210
Professional Education [Member]
Goodwill [Line Items]
Goodwill	306,444	32,043	32,386
Technology and Business [Member]
Goodwill [Line Items]
Goodwill	222,151	223,558	194,409
U.S. Traditional Postsecondary [Member]
Goodwill [Line Items]
Goodwill	$ 22,196	$ 22,196	$ 28,007

XML

INTANGIBLE ASSETS (Changes in Carrying Amount of Goodwill, by Segment) (Detail) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended		12 Months Ended
	Jun. 30, 2016	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2015
Goodwill [Line Items]
Goodwill beginning balance	$ 565,012	$ 588,007	$ 552,329	$ 519,879
Purchase Accounting Adjustments		(3,122)	4,575
Acquisitions	7,761	274,620	108,246	55,915
Impairments	(5,811)		(92,973)
Foreign exchange rate changes	21,045	1,496	(7,165)	(23,465)
Goodwill ending balance	588,007	861,001	565,012	552,329
Medical And Healthcare [Member]
Goodwill [Line Items]
Goodwill beginning balance	310,210	310,210	310,210	310,210
Purchase Accounting Adjustments		0	0
Acquisitions	0	0	0	0
Impairments	0		0
Foreign exchange rate changes	0	0	0	0
Goodwill ending balance	310,210	310,210	310,210	310,210
Professional Education [Member]
Goodwill [Line Items]
Goodwill beginning balance	32,386	32,043	32,797	33,217
Purchase Accounting Adjustments		0	0
Acquisitions	0	274,620	0	0
Impairments	0		0
Foreign exchange rate changes	(343)	(219)	(411)	(420)
Goodwill ending balance	32,043	306,444	32,386	32,797
Technology And Business [Member]
Goodwill [Line Items]
Goodwill beginning balance	194,409	223,558	88,342	55,472
Purchase Accounting Adjustments		(3,122)	4,575
Acquisitions	7,761	0	108,246	55,915
Impairments	0		0
Foreign exchange rate changes	21,388	1,715	(6,754)	(23,045)
Goodwill ending balance	223,558	222,151	194,409	88,342
U.S. Traditional Postsecondary [Member]
Goodwill [Line Items]
Goodwill beginning balance	207,913	207,913	207,913	207,913
Purchase Accounting Adjustments		0	0
Acquisitions	0	0	0	0
Impairments	0		0
Foreign exchange rate changes	0	0	0	0
Goodwill ending balance	207,913	207,913	207,913	207,913
Accumulated Impairment Losses beginning balance	(179,906)	(185,717)	(86,933)	(86,933)
Purchase Accounting Adjustments		0	0
Acquisitions	0	0	0	0
Impairments	(5,811)		(92,973)
Foreign exchange rate changes	0	0	0	0
Accumulated Impairment Losses ending balance	$ (185,717)	$ (185,717)	$ (179,906)	$ (86,933)

XML

INTANGIBLE ASSETS (Summary of Indefinite-Lived Intangible Assets Balances by Reporting Unit) (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets balances	$ 363,598	$ 322,226	$ 349,078
Medical and Healthcare
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets balances	137,500	137,500	137,500
Professional Education
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets balances	67,812	27,912	27,912
Technology And Business
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets balances	136,441	134,969	121,321
U.S. Traditional Postsecondary
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets balances	$ 21,845	$ 21,845	$ 62,345

XML

INTANGIBLE ASSETS - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended			9 Months Ended		12 Months Ended
	May 31, 2016	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2015
Intangible Assets [Line Items]
Amortization of Intangible Assets		$ 2,792		$ 1,412	$ 8,487	$ 3,962
Indefinite-lived Intangible Assets, Period Increase (Decrease)					41,400
Goodwill		861,001	$ 588,007	565,012	861,001	565,012
Intangible Assets, Net (Excluding Goodwill), Total		$ 422,949	342,856	371,046	$ 422,949	371,046
Percentage Of Intangible Assets Including Goodwill		55.00%			55.00%
Goodwill, Acquired During Period			7,761		$ 274,620	108,246	$ 55,915
Devry University [Member]
Intangible Assets [Line Items]
Fair Value In Excess Of Carrying Value Percentage	6.00%
Goodwill		$ 22,196	22,196	22,196	22,196	22,196
Potential Impairment Of Goodwill And Intangible Assets					23,800
Percentage Of Cost Savings On Revenue Decline	90.00%
Carrington [Member]
Intangible Assets [Line Items]
Goodwill		0	0	$ 5,811	0	$ 5,811
Potential Impairment Of Intangible Assets		$ 20,200			20,200
Carrington [Member] | Title Four Eligibility And Accreditations [Member]
Intangible Assets [Line Items]
Goodwill and Intangible Asset Impairment, Total			$ 48,200
Association Of Certified Anti-Money Laundering Specialists [Member]
Intangible Assets [Line Items]
Indefinite-lived Intangible Assets Acquired					39,900
Goodwill, Acquired During Period					$ 274,600

XML

RESTRUCTURING CHARGES (Pre-tax Restructuring Charges) (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ 7,771	$ 2,873	$ 17,868	$ 39,870
Medical and Healthcare
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	667		667
Professional Education
Restructuring Cost and Reserve [Line Items]
Restructuring Charges		300		300
U.S. Traditional Postsecondary
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	5,692	2,573	13,180	39,570
Home Office and Other
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	1,412		4,021
Termination Benefits
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	5,509	1,844	6,190	7,669
Termination Benefits | Medical and Healthcare
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	530		530
Termination Benefits | Professional Education
Restructuring Cost and Reserve [Line Items]
Restructuring Charges		0		0
Termination Benefits | U.S. Traditional Postsecondary
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	3,345	1,844	3,345	7,669
Termination Benefits | Home Office and Other
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	1,634		2,315
Real Estate
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	2,262	1,029	11,678	32,201
Real Estate | Medical and Healthcare
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	137		137
Real Estate | Professional Education
Restructuring Cost and Reserve [Line Items]
Restructuring Charges		300		300
Real Estate | U.S. Traditional Postsecondary
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	2,347	$ 729	9,835	$ 31,901
Real Estate | Home Office and Other
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ (222)		$ 1,706

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RESTRUCTURING CHARGES (Separation and Restructuring Plan Activity) (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Mar. 31, 2017	Jun. 30, 2016
Restructuring Cost and Reserve [Line Items]
Liability beginning balance	$ 48,223	$ 26,992
Increase in liability (separation and other charges)	14,889	67,495
Reduction in liability (payments and adjustments)	(23,074)	(46,264)
Liability ending balance	$ 40,038	$ 48,223

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RESTRUCTURING CHARGES - Additional Information (Detail) $ in Millions	9 Months Ended
	Mar. 31, 2017 USD ($)	Mar. 31, 2016
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Number of Positions Eliminated	207	303
DeVry Group
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve, Noncurrent	$ 22.3
Restructuring Reserve, Current	$ 17.7

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INCOME TAXES - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2016
Income Tax Contingency [Line Items]
Undistributed Earnings of Foreign Subsidiaries	$ 994.0	$ 861.0	$ 994.0	$ 861.0	$ 891.0
Effective Income Tax Rate Reconciliation, Percent, Total	14.80%	12.70%	3.20%	9.10%
Income Tax Expense Benefit Special Items			$ 22.1	$ 13.4
Effective Income Tax Rate Excluding Special Items			17.80%	13.20%

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DEBT - Additional Information (Detail) - USD ($) $ in Millions	9 Months Ended
	Mar. 31, 2017	Oct. 04, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016
Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 550.0
Letters of Credit Outstanding, Amount	$ 68.5			$ 0.1	$ 0.1
Line Of Credit Facility Unused Capacity Commitment Fee Percentage	0.40%
Line of Credit Facility, Current Borrowing Capacity	$ 400.0
Letter of Credit Annual Fee Percentage	2.50%
Line of Credit Facility, Expiration Date	Mar. 31, 2020
Foreign Currency Borrowing Capacity	$ 200.0
Line of Credit Facility, Initiation Date	Mar. 31, 2015
Long-term Line of Credit	$ 120.0
Debt, Weighted Average Interest Rate	3.45%
Revolving Credit Facility | Minimum [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Interest Rate During Period	1.00%
Revolving Credit Facility | Maximum [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Interest Rate During Period	2.00%
Revolving Credit Facility | Prime Rate | Minimum [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Interest Rate During Period	2.00%
Revolving Credit Facility | Prime Rate | Maximum [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Interest Rate During Period	3.00%
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		$ 100.0	$ 50.0
Letter Of Credit Title IV Disbursement, Amount	$ 68.4

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COMMITMENTS AND CONTINGENCIES - Additional Information (Detail) $ in Thousands	9 Months Ended
	Mar. 31, 2017 USD ($)
Inquiry Settlement	$ 2,250
Inquiry Settlement Penalties	500
Permanent Injunction And Monetary Judgment Agreement [Member]
Forgivable Of Loan	30,400
Forgiveable Of Account Receivable	20,200
Settlement Payment	$ 49,400
Letter of Credit [Member]
Letter Of Credit Title IV Percentage	10.00%
Letter Of Credit Title IV Disbursement, Amount	$ 68,400
Letter Of Credit Provisional Certification Term	5 years

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SEGMENT INFORMATION (Tabulation of Business Segment Information Based on Current Segmentation) (Detail) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2016
Segment Reporting Information [Line Items]
Total Consolidated Revenue		$ 452,089	$ 474,221	$ 1,358,331	$ 1,371,836
Total Consolidated Operating Income		47,293	60,847	85,246	12,715
Total Consolidated Assets		2,317,809	2,097,059	2,317,809	2,097,059	$ 2,096,996
Total Consolidated Additions to Long-Lived Assets		12,123	13,600	396,181	235,346
Total Consolidated Depreciation Expense		18,361	19,979	53,928	59,349
Total Consolidated Amortization Expense		2,792	1,412	8,487	3,962
Reconciliation to Consolidated Financial Statements [Member]
Segment Reporting Information [Line Items]
Capital Expenditures		12,123	9,956	32,529	51,004
Increase in Capital Assets from Acquisitions		0	0	4,913	13,487
Increase in Intangible Assets and Goodwill		0	3,644	358,739	170,855
Total Consolidated Additions to Long-Lived Assets		12,123	13,600	396,181	235,346
Medical and Healthcare [Member]
Segment Reporting Information [Line Items]
Total Consolidated Revenue		208,153	210,215	609,331	590,616
Total Consolidated Operating Income		50,150	57,450	146,166	140,920
Total Consolidated Assets		888,413	830,493	888,413	830,493
Total Consolidated Additions to Long-Lived Assets		3,574	2,798	10,418	16,571
Total Consolidated Depreciation Expense		6,652	7,526	19,850	21,057
Professional Education [Member]
Segment Reporting Information [Line Items]
Total Consolidated Revenue		29,810	23,683	91,906	71,417
Total Consolidated Operating Income		2,619	5,905	8,810	15,638
Total Consolidated Assets		450,769	109,478	450,769	109,478
Total Consolidated Additions to Long-Lived Assets		66	220	363,724	815
Total Consolidated Depreciation Expense		119	66	466	549
Total Consolidated Amortization Expense		1,893	147	5,679	447
Technology And Business [Member]
Segment Reporting Information [Line Items]
Total Consolidated Revenue		61,810	48,062	193,437	121,405
Total Consolidated Operating Income		5,358	(1,583)	16,864	(1,447)
Total Consolidated Assets		609,624	504,640	609,624	504,640
Total Consolidated Additions to Long-Lived Assets		4,882	5,557	12,495	194,111
Total Consolidated Depreciation Expense		2,881	1,272	6,991	3,535
Total Consolidated Amortization Expense		899	1,200	2,808	3,325
U.S. Traditional Postsecondary [Member]
Segment Reporting Information [Line Items]
Total Consolidated Revenue		152,951	193,008	465,666	590,643
Total Consolidated Operating Income	[1]	(5,724)	2,942	(21,411)	(132,827)
Total Consolidated Assets		258,810	570,976	258,810	570,976
Total Consolidated Additions to Long-Lived Assets		1,679	2,945	5,080	14,182
Total Consolidated Depreciation Expense		5,773	7,805	17,689	24,719
Total Consolidated Amortization Expense		0	65	0	190
Intersegment Elimination and Other [Member]
Segment Reporting Information [Line Items]
Total Consolidated Revenue		(635)	(747)	(2,009)	(2,245)
Home Office And Other
Segment Reporting Information [Line Items]
Total Consolidated Operating Income	[1]	(5,110)	(3,867)	(65,183)	(9,569)
Total Consolidated Assets	[2]	110,193	81,472	110,193	81,472
Total Consolidated Additions to Long-Lived Assets		1,922	2,080	4,464	9,667
Total Consolidated Depreciation Expense		$ 2,936	$ 3,310	$ 8,932	$ 9,489

[1] U.S. Traditional Postsecondary and Home Office and Other Operating Income includes $4.1 million and $52.2 million in charges, respectively, in the nine months ended March 31, 2017 for regulatory settlements as described in "Note 3: Regulatory Settlements."

[2] In addition to the change in reportable segments, Home Office and Other Segment Assets and Total Consolidated Assets in fiscal year 2016 have been revised to reflect the reclassification of deferred tax assets and liabilities related to adoption of ASU No. 2015-17 "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes."

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SEGMENT INFORMATION (Revenues and Long-Lived Assets by Geographic Area) (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Segment Reporting Information [Line Items]
Total Consolidated Revenue from Unaffiliated Customers	$ 452,089	$ 474,221	$ 1,358,331	$ 1,371,836
Total Consolidated Long-lived Assets	569,770	585,233	569,770	585,233
Domestic Operations [Member]
Segment Reporting Information [Line Items]
Total Consolidated Revenue from Unaffiliated Customers	305,639	336,927	901,261	982,656
Total Consolidated Long-lived Assets	260,101	309,281	260,101	309,281
Dominica, St. Kitts and St. Maarten [Member]
Segment Reporting Information [Line Items]
Total Consolidated Revenue from Unaffiliated Customers	83,237	88,263	260,083	262,963
Total Consolidated Long-lived Assets	188,511	183,146	188,511	183,146
Brazil [Member]
Segment Reporting Information [Line Items]
Total Consolidated Revenue from Unaffiliated Customers	61,810	48,063	193,437	121,405
Total Consolidated Long-lived Assets	117,412	92,779	117,412	92,779
Other [Member]
Segment Reporting Information [Line Items]
Total Consolidated Revenue from Unaffiliated Customers	1,403	968	3,550	4,812
Total Consolidated Long-lived Assets	3,746	27	3,746	27
Total International [Member]
Segment Reporting Information [Line Items]
Total Consolidated Revenue from Unaffiliated Customers	146,450	137,294	457,070	389,180
Total Consolidated Long-lived Assets	$ 309,669	$ 275,952	$ 309,669	$ 275,952

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SEGMENT INFORMATION - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
U.S. Traditional Postsecondary [Member]
Segment Reporting Information [Line Items]
Regulatory Settlement Charge			$ 4.1
Home Office And Other [Member]
Segment Reporting Information [Line Items]
Regulatory Settlement Charge			$ 52.2
Sales Revenue, Net [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	10.00%	10.00%	10.00%	10.00%
Concentration Risk, Benchmark Description	less than 5%	less than 5%	less than 5%	less than 5%