10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________ 

FORM 10-Q

___________________________________________ 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

OR

o 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: 001-34466

___________________________________________ 

EDUCATION MANAGEMENT CORPORATION

(Exact name of registrant as specified in its charter)

 ___________________________________________ 

Pennsylvania	25-1119571
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

210 Sixth Avenue, 33^rd Floor

Pittsburgh, PA, 15222

(412) 562-0900

(Address, including zip code and telephone number, of principal executive offices)

___________________________________________ 

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   x     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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes   x     No   ¨

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

Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o  (Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.):

Yes   ¨     No x

As of May 8, 2013, there were 124,601,524 shares of the registrant’s common stock outstanding.

Table of Contents

		PAGE
PART I — FINANCIAL INFORMATION
ITEM 1	FINANCIAL STATEMENTS	3
ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	35
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	50
ITEM 4	CONTROLS AND PROCEDURES	50
PART II — OTHER INFORMATION
ITEM 1	LEGAL PROCEEDINGS	51
ITEM 1A	RISK FACTORS	51
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	57
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	57
ITEM 4	MINE SAFETY DISCLOSURES	57
ITEM 5	OTHER INFORMATION	57
ITEM 6	EXHIBITS INDEX	58
SIGNATURES		59

PART I

ITEM 1. FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheets	4
Consolidated Statements of Operations	5
Consolidated Statements of Comprehensive Loss	6
Consolidated Statements of Cash Flows and Supplemental Cash Flow Information	7
Consolidated Statements of Shareholders’ Equity	8
Notes to Consolidated Financial Statements	9

3

EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

	March 31, 2013			June 30, 2012			March 31, 2012
	(Unaudited)						(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	183,614		$	191,008		$	287,503
Restricted cash	272,029			267,880			284,053
Total cash, cash equivalents and restricted cash	455,643			458,888			571,556
Student receivables, net of allowances of $177,802, $225,657 and $214,140	153,069			203,341			144,495
Notes, advances and other receivables	27,509			22,174			20,768
Inventories	7,000			8,382			10,035
Deferred income taxes	102,793			102,668			76,674
Prepaid income taxes	—			6,796			7,406
Other current assets	33,547			40,399			40,009
Total current assets	779,561			842,648			870,943
Property and equipment, net (Note 4)	543,731			651,797			653,888
Other long-term assets (Note 6)	55,878			51,071			47,176
Intangible assets, net (Note 5)	301,039			330,029			458,844
Goodwill (Note 5)	669,090			963,550			2,086,619
Total assets	$	2,349,299		$	2,839,095		$	4,117,470
Liabilities and shareholders’ equity
Current liabilities:
Current portion of long-term debt (Note 8)	$	12,076		$	12,076		$	12,076
Revolving credit facility (Note 8)	—			111,300			—
Accounts payable	20,955			54,834			31,735
Accrued liabilities (Note 7)	148,782			137,348			169,838
Accrued income taxes	3,174			—			—
Unearned tuition	78,473			116,277			80,046
Advance payments	222,942			102,170			261,260
Total current liabilities	486,402			534,005			554,955
Long-term debt, less current portion (Note 8)	1,283,344			1,453,468			1,456,352
Deferred income taxes	88,216			111,767			171,498
Deferred rent	206,847			197,758			195,494
Other long-term liabilities	39,250			45,533			45,766
Shareholders’ equity:
Common stock, at par	1,435			1,434			1,434
Additional paid-in capital	1,789,672			1,777,732			1,774,634
Treasury stock, at cost	(328,605		)	(328,605		)	(317,888		)
(Accumulated deficit) Retained earnings	(1,201,903		)	(935,960		)	252,746
Accumulated other comprehensive loss	(15,359		)	(18,037		)	(17,521		)
Total shareholders’ equity	245,240			496,564			1,693,405
Total liabilities and shareholders’ equity	$	2,349,299		$	2,839,095		$	4,117,470

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

4

EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)

	For the Three Months Ended March 31,						For the Nine Months Ended March 31,
	2013			2012			2013			2012
Net revenues	$	638,903		$	702,499		$	1,903,363		$	2,121,782
Costs and expenses:
Educational services	350,134			382,204			1,091,808			1,132,421
General and administrative	166,814			191,747			512,496			581,608
Depreciation and amortization	40,266			40,610			123,667			118,694
Long-lived asset impairments (Note 5)	323,690			495,380			323,690			495,380
Total costs and expenses	880,904			1,109,941			2,051,661			2,328,103
Loss before interest and income taxes	(242,001		)	(407,442		)	(148,298		)	(206,321		)
Interest expense, net	30,464			25,424			92,924			79,139
Loss on debt refinancing (Note 8)	5,232			9,474			5,232			9,474
Loss before income taxes	(277,697		)	(442,340		)	(246,454		)	(294,934		)
Income tax expense (benefit)	6,297			(25,224		)	19,489			32,101
Net loss	$	(283,994	)	$	(417,116	)	$	(265,943	)	$	(327,035	)
Loss per share: (Note 2)
Basic	$	(2.28	)	$	(3.31	)	$	(2.14	)	$	(2.57	)
Diluted	$	(2.28	)	$	(3.31	)	$	(2.14	)	$	(2.57	)
Weighted average number of shares outstanding: (Note 2)
Basic	124,602			126,005			124,546			127,224
Diluted	124,602			126,005			124,546			127,224

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

5

EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

(In thousands)

	For the Three Months Ended March 31,						For the Nine Months Ended March 31,
	2013			2012			2013			2012
Net loss	$	(283,994	)	$	(417,116	)	$	(265,943	)	$	(327,035	)
Other comprehensive income (loss)
Net change in interest rate swaps:
Periodic revaluation of interest rate swaps, net of tax benefit of $237, $309, $1,671 and $6,718 respectively	(401		)	(524		)	(2,833		)	(11,389		)
Reclassification adjustment for interest recognized in consolidated statement of operations, net of tax expense of $1,130, $1,157, $3,303 and $3,950 respectively	1,915			1,963			5,599			6,699
Net change in unrecognized loss on interest rate swaps, net of tax	1,514			1,439			2,766			(4,690		)
Foreign currency translation gain (loss)	(147		)	141			(88		)	(641		)
Other comprehensive income (loss)	1,367			1,580			2,678			(5,331		)
Comprehensive loss	$	(282,627	)	$	(415,536	)	$	(263,265	)	$	(332,366	)

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

6

EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

	For the Nine Months Ended March 31,
	2013			2012
Cash flows from operating activities:
Net loss	$	(265,943	)	$	(327,035	)
Adjustments to reconcile net loss to net cash flows from operating activities:
Depreciation and amortization of property and equipment	118,814			112,936
Amortization of intangible assets	4,853			5,758
Bad debt expense	129,659			117,695
Long-lived asset impairments	323,690			495,380
Loss on debt refinancing	5,232			9,474
Share-based compensation	11,938			10,171
Non cash adjustments related to deferred rent	(12,610		)	(9,300		)
Amortization of deferred gains on sale-leaseback transactions	(1,012		)	—
Changes in assets and liabilities:
Restricted cash	(4,149		)	(236,540		)
Receivables	(91,473		)	(105,089		)
Reimbursements for tenant improvements	7,102			14,248
Inventory	1,383			(447		)
Other assets	8,667			(9,444		)
Accounts payable	(29,792		)	(20,922		)
Accrued liabilities	(3,096		)	6,632
Unearned tuition	(37,804		)	(60,104		)
Advance payments	120,743			149,263
Total adjustments	552,145			479,711
Net cash flows provided by operating activities	286,202			152,676
Cash flows from investing activities:
Expenditures for long-lived assets	(64,586		)	(64,679		)
Proceeds from sales of long-lived assets	65,065			—
Reimbursements for tenant improvements	(7,102		)	(14,248		)
Net cash flows used in investing activities	(6,623		)	(78,927		)
Cash flows from financing activities:
Payments under revolving credit facility	(111,300		)	(79,000		)
Principal payment on senior notes due June 2014	(162,246		)	—
Issuance of common stock	3			2,618
Common stock repurchased for treasury	—			(92,756		)
Principal payments on other long-term debt	(9,117		)	(8,141		)
Debt issuance costs	(4,436		)	(11,928		)
Net cash flows used in financing activities	(287,096		)	(189,207		)
Effect of exchange rate changes on cash and cash equivalents	123			(263		)
Net change in cash and cash equivalents	(7,394		)	(115,721		)
Cash and cash equivalents, beginning of period	191,008			403,224
Cash and cash equivalents, end of period	$	183,614		$	287,503
Cash paid during the period for:
Interest (including swap settlement)	$	89,705		$	77,736
Income taxes, net of refunds	34,960			74,328
	As of March 31,
Noncash investing activities:	2013			2012
Capital expenditures in current liabilities	$	7,756		$	7,580

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

7

EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

	Common Stock at Par Value (b)		Additional Paid-in Capital		Treasury Stock (b)			(Accumulated Deficit) Retained Earnings			Accumulated Other Comprehensive Loss				Total
	(In thousands)
Balance at June 30, 2011	$	1,431	$	1,761,848	$	(226,926	)	$	579,781		$	(12,190	)		$	2,103,944
Exercise of stock options including tax benefit	3		2,594		—			—			—				2,597
Share-based compensation	—		13,290		—			—			—				13,290
Common stock repurchased for treasury	—		—		(101,679		)	—			—				(101,679		)
Net loss	—		—		—			(1,515,741		)	—				(1,515,741		)
Other comprehensive loss	—		—		—			—			(5,847		)		(5,847		)
Balance at June 30, 2012	1,434		1,777,732		(328,605		)	(935,960		)	(18,037		)	(a)	496,564
(Unaudited)
Exercise of stock options	—		3		—			—			—				3
Share-based compensation	1		11,937		—			—			—				11,938
Net loss	—		—		—			(265,943		)	—				(265,943		)
Other comprehensive income	—		—		—			—			2,678				2,678
Balance at March 31, 2013	$	1,435	$	1,789,672	$	(328,605	)	$	(1,201,903	)	$	(15,359	)	(a)	$	245,240

(a) The balance in accumulated other comprehensive loss at March 31, 2013, June 30, 2012 and March 31, 2012 was comprised of $14.9 million, $17.6 million and $17.2 million of cumulative unrealized losses on interest rate swaps, net of tax, respectively and $0.5 million, $0.4 million and $0.3 million of a cumulative foreign currency translation loss, respectively.

(b) There were 600,000,000 authorized shares of par value $0.01 common stock at March 31, 2013, June 30, 2012 and March 31, 2012. There were 125,548,403 outstanding shares of common stock, net of 17,831,544 shares in treasury, at March 31, 2012. Common stock outstanding and treasury stock balances and activity were as follows for the periods indicated.

	Treasury	Net outstanding
Balance at June 30, 2011	13,333,972	129,811,749
Repurchased for treasury	5,568,168	(5,568,168	)
Issued for stock-based compensation plans	—	234,226
Balance at June 30, 2012	18,902,140	124,477,807
Issued for stock-based compensation plans	—	123,717
Balance at March 31, 2013	18,902,140	124,601,524

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

8

EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES

CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

Basis of presentation

The accompanying unaudited consolidated financial statements of Education Management Corporation ("EDMC" and, together with its subsidiaries, the "Company") have been prepared by the Company’s management in accordance with generally accepted accounting principles for interim financial information and applicable rules and regulations of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. The unaudited consolidated financial statements included herein contain all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to present fairly the financial position of the Company as of March 31, 2013 and 2012, its consolidated statements of operations and of comprehensive loss for the three and nine months ended March 31, 2013 and 2012, its consolidated statements of cash flows for the nine months ended March 31, 2013 and 2012 and its consolidated statement of shareholders' equity for the nine months ended March 31, 2013. The consolidated statements of operations for the three and nine months ended March 31, 2013 and 2012 are not necessarily indicative of the results to be expected for future periods. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012 (the “Annual Report on Form 10-K”) as filed with the Securities and Exchange Commission (“SEC”). The accompanying consolidated balance sheet at June 30, 2012 and consolidated statement of shareholders' equity for the fiscal year ended June 30, 2012 have been derived from the consolidated audited balance sheet and statement of shareholders' equity included in the 2012 Annual Report on Form 10-K.

Description of Business

The Company is among the largest providers of post-secondary education in North America, with approximately 132,000 enrolled students as of October 2012. The Company offers campus-based education through four different education systems and through online platforms at three of its four education systems, or through a combination of both. These four education systems coincide with the Company's reportable segments, which are The Art Institutes, Argosy University, Brown Mackie Colleges and South University. Refer to Note 14, "Segment Reporting" for additional information.

The Company is committed to offering quality academic programs and strives to improve the learning experience for its students. The curriculum is designed with a strong emphasis on applied career-oriented content and is primarily taught by faculty members who possess practical and relevant professional experience in their respective fields.

Ownership

On June 1, 2006, EDMC was acquired by a consortium of private equity investment funds led by Providence Equity Partners, Goldman Sachs Capital Partners and Leeds Equity Partners (collectively, the “Sponsors”). The acquisition was accomplished through the merger of EM Acquisition Corporation into EDMC, with EDMC surviving the merger (the "Transaction") and was financed by equity invested by the Sponsors and other investors, cash on hand and secured and unsecured borrowings. Refer to Note 8, "Short-Term and Long-Term Debt" for more information.

In October 2009, EDMC completed an initial public offering of 23.0 million shares of its common stock, $0.01 par value per share ("Common Stock"), at a per share price of $18.00 (the "Initial Public Offering"). The Sponsors did not sell any of their shares in connection with the Initial Public Offering.

Seasonality

The Company's quarterly net revenues and net income fluctuate primarily as a result of the pattern of student enrollments. The Company typically recognizes less net revenue in the first quarter of its fiscal year than in other quarters due to student vacations.

Reclassifications

Certain reclassifications of prior year data have been made to conform to the March 31, 2013 presentation. These reclassifications did not materially change any of the previously reported amounts.

2. EARNINGS PER SHARE

Basic earnings per share (“EPS”) is computed using the weighted average number of shares outstanding during the period. The Company uses the treasury stock method to compute diluted EPS, which assumes that restricted stock is converted into common stock and that outstanding stock options are exercised and the resulting proceeds are used to acquire shares of common stock at its average market price during the reporting period.

Basic and diluted EPS were calculated as follows (in thousands, except per share amounts):

	For the Three Months Ended March 31,						For the Nine Months Ended March 31,
	2013			2012			2013			2012
Net loss	$	(283,994	)	$	(417,116	)	$	(265,943	)	$	(327,035	)
Weighted average number of shares outstanding:
Basic	124,602			126,005			124,546			127,224
Diluted	124,602			126,005			124,546			127,224
Loss per share:
Basic	$	(2.28	)	$	(3.31	)	$	(2.14	)	$	(2.57	)
Diluted	$	(2.28	)	$	(3.31	)	$	(2.14	)	$	(2.57	)

Outstanding time-based options to purchase approximately 9.7 million and 9.2 million shares of the Company's common stock at March 31, 2013 and 2012, respectively, which represent all outstanding time-based stock options at such dates, were excluded from the computation of diluted EPS because the effect of applying the treasury stock method would have been anti-dilutive.

In addition, and as further described in Note 3, “Share-Based Compensation,” the Company has determined that all of its outstanding performance-based stock options (approximately 2.0 million options) are contingently issuable; therefore, they were not included in the diluted EPS calculation for any period presented.

3. SHARE-BASED COMPENSATION

2012 Omnibus Long-Term Incentive Plan

Effective in September 2012, the Company adopted the Education Management Corporation 2012 Omnibus Long-Term Incentive Plan (the “2012 Omnibus Plan”), which may be used to issue stock options, stock appreciation rights, restricted stock, restricted stock units and other forms of long-term incentive compensation. In April 2013, the Company granted approximately 1.1 million time-based stock options and approximately 0.3 million restricted stock units in connection with the appointment of three key executive officers. As of April 30, 2013, approximately 2.6 million shares of Common Stock remain reserved for issuance under the 2012 Omnibus Plan.

2009 Omnibus Long-Term Incentive Plan and 2006 Stock Option Plan

In August 2006, the Company adopted the 2006 Stock Option Plan for executive management and key personnel, under which certain of the Company's employees were granted a combination of time-based and performance-based options to purchase Common Stock. In April 2009, the Company adopted the Education Management Corporation Omnibus Long-Term Incentive Plan (the "2009 Omnibus Plan"), which became effective upon the completion of the Initial Public Offering and provided for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units and other forms of long-term incentive compensation. Both the 2006 Stock Option Plan and 2009 Omnibus Plan have been frozen such that no further awards can be granted from these plans. However, stock options granted under both plans that were not surrendered in the Option Exchange described below remain subject to the terms and conditions of their respective plans.

Share-Based Compensation Activity

During the nine month period ended March 31, 2013, the Company granted approximately 3.0 million time-based stock options that vest 25% per year over a four year service period. These options have an average exercise price of $3.17 per share and a contractual life of ten years from the date of grant. Also during the nine month period ended March 31, 2013, the Company granted approximately 2.8 million restricted stock units that generally vest 25% per year over a four year service period. The restricted stock units were granted when the Company's stock price was $3.30 per share and the related compensation expense will be recognized over the service period. Additionally, on September 13, 2012, the Company granted options to purchase approximately 8.3 million shares of Common Stock under the 2012 Omnibus Plan in connection with the Option Exchange described below.

9

The Company recognized $4.3 million and $3.6 million of share-based compensation expense during the quarters ended March 31, 2013 and 2012, respectively, and $11.9 million and $10.2 million of share-based compensation expense during the nine months ended March 31, 2013 and 2012, respectively. Because the relevant performance conditions are not probable of being met at March 31, 2013, the Company continues to defer the recognition of any expense on its outstanding performance-based stock options.

Exercises of stock options and vesting of restricted stock were not significant during the nine month period ended March 31, 2013. Net of estimated forfeitures, the Company had $26.5 million of unrecognized compensation cost relating to time-based stock options, $7.3 million of unrecognized compensation cost relating to restricted stock units and $4.5 million of unrecognized compensation cost relating to performance-based stock options at March 31, 2013.

Option Exchange

In August 2012, the Company's Board of Directors authorized a program (the "Option Exchange") to allow eligible option holders the opportunity to exchange their existing EDMC stock options for replacement stock options having an exercise price of $3.59 per share, which was the closing price for a share of the Company's Common Stock on the Nasdaq Global Select Market ("NASDAQ") on September 13, 2012, the date on which the offer expired. Campus presidents and directors who participated in the Option Exchange received a new stock option grant, based on seniority, which vests in four equal annual installments beginning on the first anniversary of the grant date and expires on the tenth anniversary of the grant date. Campus presidents and directors who elected to not participate in the Option Exchange retained their existing stock options and received a new grant of stock options to purchase a smaller number of shares than they would have received had they participated in the Option Exchange with similar vesting and expiration terms as stock options received by campus presidents and directors who participated in the Option Exchange. All other employees who participated in the Option Exchange received a fixed number of new stock options, calculated on the basis of a set exchange ratio corresponding to the grant date and exercise price of the stock options that they surrendered for exchange. The vesting terms of the new stock option grants remained subject to the original vesting schedule of the corresponding options that were surrendered for exchange, provided that none of the replacement stock options vest before September 13, 2013, except under certain specific circumstances described in the 2012 Omnibus Plan and/or the Stock Option Agreements under which the replacement stock options were granted, including but not limited to a change in control of EDMC.

In connection with the Option Exchange, the Company granted approximately 6.3 million time-based and approximately 2.0 million performance-based replacement stock options in return for the cancellation of approximately 8.5 million time-based and approximately 3.1 million performance-based stock options. The Option Exchange was accounted for as a modification of the original awards. Consequently, incremental value to the option holders was calculated using a Black-Scholes-Merton pricing model by taking the value of all time-based stock options on September 13, 2012 using the original option award terms and comparing that to the value of the modified time-based stock options using the new option award terms on September 13, 2012. Because the original awards had exercise prices well in excess of the price of a share of Common Stock on the modification date, the Company used a lattice model to determine the appropriate expected term to use in the Black-Scholes-Merton model. The modification of the original awards resulted in $2.2 million of incremental compensation expense, net of expected forfeitures. This incremental compensation cost will be recognized over the applicable employee service periods, which range from one year to four years.

10

Below is a summary of the key assumptions used in determining the incremental compensation cost associated with the time-based replacement stock options granted in connection with the Option Exchange:

Replacement options:
Number of options	6,300,075
Volatility	80-87%
Expected term	2.94-6.25 yrs
Fair value per option	$1.87-$2.53
Cancelled options:
Number of options	8,525,171
Volatility	78-87%
Expected term	2.25-7.67 yrs
Fair value per option	$0.78-$1.97

Because the relevant performance conditions were not probable of being met at the time of the Option Exchange, unrecognized compensation expense for performance-based stock options was recalculated based on the new terms of the awards. Compensation expense on performance-based stock options will be recognized if the performance conditions become probable of being met.

Long-Term Incentive Compensation Plan

In fiscal 2007, EDMC adopted the Long-Term Incentive Compensation Plan (the “LTIC Plan”). The LTIC Plan consists of a bonus pool that is valued based on returns to Providence Equity Partners and Goldman Sachs Capital Partners in connection with a change in control of EDMC. Out of a total of 1,000,000 authorized units, approximately 438,000 units were outstanding under the LTIC Plan at March 31, 2013. Each unit represents the right to receive a payment based on the value of the bonus pool. Because the contingent future events that would result in value to the unit-holders are less than probable, no compensation expense has been recognized by the Company during any of the periods following the Transaction. The plan is being accounted for as an equity-based plan because the units may be settled in stock or cash at the Company’s discretion, and it is the Company’s intent to settle any future payment out of the LTIC Plan by issuing Common Stock. The total amount of unrecognized compensation cost related to LTIC Plan units, net of estimated forfeitures, is approximately $1.6 million at March 31, 2013.

4. PROPERTY AND EQUIPMENT

The Company evaluates the recoverability of property and equipment whenever events or changes in circumstances indicate the carrying amount of such assets may not be fully recoverable. During the quarter ended March 31, 2013, the Company recorded a long-lived asset impairment of $1.2 million in the consolidated statement of operations because anticipated future cash flows at one of the Company's schools could not support the carrying value of its property and equipment.

Property and equipment consisted of the following amounts (in thousands):

11

Asset Class	March 31, 2013			June 30, 2012			March 31, 2012
Land	$	5,496		$	16,712		$	16,713
Buildings and improvements	25,450			74,783			71,772
Leasehold improvements	566,142			545,646			540,319
Furniture and equipment	162,503			158,464			153,565
Technology and other equipment	320,870			307,511			301,067
Software	92,142			86,810			79,848
Library books	44,130			42,706			42,073
Construction in progress	21,941			21,725			17,135
Total	1,238,674			1,254,357			1,222,492
Less accumulated depreciation	(694,943		)	(602,560		)	(568,604		)
Property and equipment, net	$	543,731		$	651,797		$	653,888

Depreciation and amortization expense related to property and equipment was $38.6 million and $38.7 million, respectively, for the three months ended March 31, 2013 and 2012 and $118.8 million and $112.9 million, respectively, for the nine months ended March 31, 2013 and 2012.

Depreciation and amortization expense for the three months ended March 31, 2013 and 2012 included $3.9 million and $3.6 million of amortization expense on software assets, respectively. Depreciation and amortization expense for the nine months ended March 31, 2013 and 2012 include $16.1 million and $10.8 million of amortization expense on software assets, respectively. Amortization expense on software assets for the nine months ended March 31, 2013 included $4.6 million in accelerated amortization resulting from the write off of a software asset that no longer had a useful life.

During the quarter ended December 31, 2012, the Company completed five sale-leaseback transactions with unrelated third parties for net proceeds of $65.1 million. Concurrent with these sales, the Company entered into agreements to lease the properties back from the purchasers over initial lease terms ranging from three to 15 years. The Company classified these leases as operating and considers them normal leasebacks with no other continuing involvement. The Company recorded a net loss of $3.5 million related to these transactions at the time of their closing; however, a gain of approximately $17.8 million was deferred at December 31, 2012 and will be recognized over the initial terms of the new leases as a reduction to educational services expense.

5. GOODWILL AND INTANGIBLE ASSETS

Goodwill

In connection with the Transaction, property, equipment, intangible assets other than goodwill and other assets and liabilities were recorded at fair value. The excess of the amount paid to acquire the Company at the time of the Transaction over the fair values of these net assets represented the intrinsic value of the Company beyond its tangible and identifiable intangible net assets and was assigned to goodwill. In connection with the Transaction, the Company recorded approximately $2.6 billion of goodwill, which was allocated to its four reporting units: The Art Institutes, Argosy University, Brown Mackie Colleges and South University. The goodwill balance attributed to the Brown Mackie Colleges reporting unit was fully written off in connection with the impairment charge incurred in the quarter ended March 31, 2012.

On April 1 of each fiscal year, the Company formally evaluates the carrying amount of goodwill for each of its four education systems, each of which represents a reporting unit of the Company. In addition, the Company also performs an evaluation on an interim basis if it determines that recent events or prevailing conditions indicate a potential impairment of goodwill. A significant amount of judgment is involved in determining whether an indicator of impairment has occurred between annual impairment tests. These indicators include, but are not limited to, overall financial performance such as adverse changes in recent forecasts of operating results, industry and market considerations, the Company's market capitalization, updated business plans and regulatory and legal developments. A two step process is used to determine the amount to be recorded for an impairment. In the first step, the Company determines the fair value of each reporting unit and compares that value to the reporting unit's carrying value. If the results of this first step indicate the carrying amount of a reporting unit is higher than its fair value, the second step must be performed, which requires that the Company determine the implied fair value of goodwill in the same manner as if it had acquired those reporting units as of the testing date. Under the second step, an impairment is recognized if the carrying amount of a reporting unit’s goodwill is greater than its implied fair value. If an impairment charge is required to be recorded, it is presented as an operating expense in the period in which the goodwill’s carrying value exceeds its new implied fair value.

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The Company's market capitalization of its equity was approximately 18% lower than its carrying value at March 31, 2013 and was below carrying value for all but five days of the quarter then ended. Due primarily to this factor, the Company did not believe that it was more-likely-than-not that the fair values of each of its reporting units exceeded their carrying values as of March 31, 2013 and performed a step one interim goodwill impairment test for each of its reporting units. The results indicated that the Argosy University and South University reporting units each had fair values in excess of their carrying values by more than 35%. However, the test indicated that the fair value of The Art Institutes fell slightly below its carrying value as of March 31, 2013. Therefore, a step two test was required to be performed for The Art Institutes reporting unit, which yielded a goodwill impairment charge of $294.5 million in the quarter ended March 31, 2013. None of this charge was deductible for income tax purposes.

The Company estimated the fair value of its reporting units in step one using a combination of the traditional discounted cash flow approach and the guideline public company method, which takes into account the relative price and associated earnings multiples of publicly-traded peer companies. These approaches utilize a significant number of unobservable "Level Three" inputs, such as future cash flow assumptions and discount rate selection. See Note 10, "Fair Value of Financial Instruments" for a definition of Level Three inputs.

The valuation of the Company's reporting units under the traditional discounted cash flow approach requires the use of internal business plans that are based on judgments and estimates, which account for expected future economic conditions, demand and pricing for the Company's educational services, costs, inflation and discount rates, and other factors. The use of judgments and estimates involves inherent uncertainties. The Company's measurement of the fair values of its reporting units is dependent on the accuracy of the assumptions used and how the Company's estimates compare to future operating performance. The key assumptions used are, but are not limited to, the following:

• Future cash flow assumptions — The Company's projections are based on organic growth and are derived from historical experience and assumptions regarding future growth and profitability trends. These projections also take into account the current economic climate and the extent to which the regulatory environment is expected to impact future growth opportunities. The Company's analysis incorporated an assumed period of cash flows of ten years with a terminal value determined using the Gordon Growth Model.

• Discount rate — The discount rate is based on each reporting unit’s estimated weighted average cost of capital ("WACC"). The three components of WACC are the cost of equity, cost of debt and capital structure, each of which requires judgment by management to estimate. The Company develops its cost of equity estimate using the Capital Asset Pricing Model based on perceived risks and predictability of each reporting unit’s future cash flows. The cost of debt component represents a market participant’s estimated cost of borrowing, which the Company estimates using the average return on corporate bonds as of the valuation date, adjusted for taxes. At March 31, 2013, the WACC used to estimate the fair value of The Art Institutes reporting unit was 15.0%, while the Argosy University and South University reporting units used a WACC of 17.5% and 18.0%, respectively.

The Company also recorded multiple goodwill impairment charges in fiscal 2012. The Company recognized a total of $459.4 million in goodwill impairment charges at its Argosy University, South University and Brown Mackie Colleges reporting units during the quarter ended March 31, 2012, of which $379.0 million was not deductible for income tax purposes. Also, in the fourth fiscal quarter of fiscal 2012, the Company recognized a goodwill impairment charge of $1,123.1 million at The Art Institutes, none of which was deductible for income tax purposes.

A roll forward of the Company's consolidated goodwill balance from June 30, 2011 to March 31, 2013 is as follows (in thousands):

	June 30, 2011		Impairment Charge			June 30, 2012		Impairment Charge			March 31, 2013
The Art Institutes	$	1,984,688	$	(1,123,069	)	$	861,619	$	(294,460	)	$	567,159
Argosy University	219,350		(155,905		)	63,445		—			63,445
Brown Mackie Colleges	254,561		(254,561		)	—		—			—
South University	123,400		(84,914		)	38,486		—			38,486
Total goodwill	$	2,581,999	$	(1,618,449	)	$	963,550	$	(294,460	)	$	669,090

Intangible Assets

In connection with the step one and step two goodwill analyses performed as of March 31, 2013 described above, the Company performed an impairment analysis with respect to indefinite-lived intangible assets. As a result, the Company recorded a $28.0 million impairment related to the trade name of The Art Institutes in the quarter ended March 31, 2013. The

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fair value of The Art Institutes trade name was determined under the relief from royalty method (which is similar to the income approach). This approach utilized Level Three inputs, which consisted of a 2.0% royalty rate and a 15.5% discount rate.

The remaining indefinite-lived intangible assets relate to each reporting unit's licensing, accreditation and Title IV program participation assets, the fair values of which were determined under a combination of the cost and income approaches. No impairment was recorded for these assets during the quarter ended March 31, 2013 as their fair values exceeded their carrying values.

Intangible assets other than goodwill consisted of the following amounts (in thousands):

	March 31, 2013					June 30, 2012					March 31, 2012
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
The Art Institutes trade name	$	190,000	$	—		$	218,000	$	—		$	330,000	$	—
Licensing, accreditation and Title IV program participation	95,862		—			95,862		—			112,179		—
Curriculum and programs	42,434		(31,385		)	38,702		(28,541		)	37,364		(27,350		)
Student contracts, applications and relationships	39,511		(37,104		)	39,511		(36,270		)	39,511		(35,992		)
Favorable leases and other	19,424		(17,703		)	19,424		(16,659		)	19,434		(16,302		)
Total intangible assets	$	387,231	$	(86,192	)	$	411,499	$	(81,470	)	$	538,488	$	(79,644	)

Trade names are often considered to have useful lives similar to that of the overall business, which generally means such assets are assigned an indefinite life for accounting purposes.  State licenses and accreditations of the Company’s schools as well as their eligibility for Title IV program participation are periodically renewed in cycles ranging from every year to up to every 10 years depending upon government and accreditation regulations. Because the Company considers these renewal processes to be a routine aspect of the overall business, these assets are assigned indefinite lives.

Amortization of intangible assets was $1.7 million and $1.9 million for the three months ended March 31, 2013 and 2012, respectively, and $4.9 million and $5.8 million for the nine months ended March 31, 2013 and 2012, respectively.

Total estimated amortization of the Company’s intangible assets for each of the fiscal years ending June 30, 2013 through 2017 and thereafter is as follows at March 31, 2013 (in thousands):

Fiscal years	Amortization Expense
2013 (remainder)	$	1,289
2014	4,765
2015	4,149
2016	2,793
2017	2,121
Thereafter	60

6. OTHER LONG-TERM ASSETS

Other long-term assets consisted of the following (in thousands):

	March 31, 2013		June 30, 2012		March 31, 2012
Student receivables, net of allowances of $23,826, $19,532 and $15,931	$	21,983	$	15,233	$	9,672
Deferred financing fees	11,473		14,768		15,896
Deferred compensation	13,240		12,164		12,661
Other	9,182		8,906		8,947
Total other long-term assets	$	55,878	$	51,071	$	47,176

Student receivables, net of allowances, relate to the extension of credit to students for amounts due beyond one year. This extension of credit to students helps fund the difference between total tuition and fees and the amount covered by various sources of financial aid, including amounts awarded under Title IV programs, private loans and cash payments by students. Out-of-school balances are reserved for at a higher rate than in-school balances. During fiscal 2013, the Company extended the

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repayment period for financing made available to students from a maximum of 36 months beyond graduation to a maximum of 42 months beyond graduation. The Company's gross long-term student receivables were as follows (in thousands):

	March 31, 2013		June 30, 2012		March 31, 2012
In-school	$	32,844	$	24,354	$	17,794
Out-of-school	12,965		10,411		7,809
Gross long-term student receivables	$	45,809	$	34,765	$	25,603

A roll forward of the Company's total allowance for doubtful accounts and loan loss reserves from June 30, 2011 to March 31, 2013 is as follows (in thousands):

Balance June 30, 2011	$	199,357
Bad debt expense	163,926
Amounts written off	(113,001		)
Balance June 30, 2012	250,282
Bad debt expense	129,659
Amounts written off	(173,220		)
Balance March 31, 2013	$	206,721

These amounts were recorded within student receivables, net and other long-term assets on the consolidated balance sheets. When certain criteria are met, which is generally when receivables age past the due date by more than four months and internal collection measures have been taken without success, the accounts of former students are placed with a collection agency. Student accounts that have been placed with a collection agency are reserved for at higher rates than accounts for students who are in school and are written off after repeated collection attempts have been unsuccessful. During fiscal 2013, the Company reduced the number of days after which accounts in collection are written off. This change had no impact to the statement of operations or net student receivables as the applicable accounts were fully reserved.

7. ACCRUED LIABILITIES

Accrued liabilities consisted of the following amounts (in thousands):

	March 31, 2013		June 30, 2012		March 31, 2012
Payroll and related taxes	$	57,480	$	50,291	$	70,352
Capital expenditures	4,310		5,624		3,826
Advertising	25,032		24,837		23,425
Interest	3,391		3,296		11,390
Benefits	15,482		14,014		11,146
Other	43,087		39,286		49,699
Total accrued liabilities	$	148,782	$	137,348	$	169,838

During the quarter ended September 30, 2012, the Company completed a restructuring plan at several locations to improve operational efficiencies and recorded a related charge of $9.1 million. The restructuring charge consisted of $7.5 million related to employee severance costs, primarily at The Art Institutes segment, and a lease abandonment charge of $1.6 million at one of the Company's operations offices. At March 31, 2013, the remaining liability for this restructuring plan was $1.3 million, which primarily consists of net rent charges to be paid through fiscal 2019 relating to the lease abandonment.

8. SHORT-TERM AND LONG-TERM DEBT

U.S. Department of Education Letters of Credit

The Company had outstanding letters of credit of $353.0 million at March 31, 2013, the largest of which is issued to the U.S. Department of Education, which requires that the Company maintain a letter of credit due to its failure to satisfy certain regulatory financial ratios after giving effect to the Transaction. In December 2012, the U.S. Department of Education decreased the amount of the required letter of credit from $414.5 million to $348.6 million, which equals 15% of the total Title IV aid received by students attending the Company’s institutions during the fiscal year ended June 30, 2012.

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During fiscal 2012, the Company entered into two cash secured letter of credit facilities pursuant to which the lenders agreed to issue letters of credit at any time to the U.S. Department of Education in an aggregate face amount of up to $200.0 million. The Company's obligations with respect to such letters of credit are secured by liens in favor of the lenders on certain of the Company's cash deposits, which must total at least 105% of the aggregate face amount of any outstanding letters of credit. These two facilities currently mature on July 8, 2014 or earlier if the existing revolving credit facility is terminated.

As of March 31, 2013, in order to fund its current letter of credit obligation to the U.S. Department of Education, the Company utilized $148.6 million of letter of credit capacity under its revolving credit facility and all $200.0 million of capacity under the cash secured letter of credit facilities, in connection with which the Company classifies $210.0 million as restricted cash to satisfy the 105% collateralization requirement. Any future reduction in the usage of the cash secured letter of credit facilities will reduce the amount of cash that is classified as restricted cash on the consolidated balance sheet.

Short-Term Debt

There were $111.3 million of borrowings outstanding under the $328.3 million revolving credit facility at June 30, 2012. These borrowings were repaid in full on July 2, 2012. There were no borrowings outstanding under the revolving credit facility at March 31, 2013 and 2012. After adjusting for outstanding letters of credit, which decrease availability under the revolving credit facility, the Company had $175.3 million of remaining borrowing capacity under the revolving credit facility at March 31, 2013.

The interest rate on amounts outstanding under the revolving credit facility at June 30, 2012 was 6.25%, which is equal to the prime rate, as defined under the credit facility, plus a margin of 3.00%. The applicable margin for borrowings under the revolving credit facility can change depending on the Company's leverage ratios and credit ratings. The Company is obligated to pay a per annum commitment fee on undrawn amounts under the revolving credit facility, which is currently 0.375% and varies based on certain leverage ratios. The revolving credit facility is secured by certain of the Company’s assets and is subject to the Company’s satisfaction of certain covenants and financial ratios, which are described further below.

Long-Term Debt

The Company’s long-term debt consisted of the following amounts (in thousands):

	March 31, 2013			June 30, 2012			March 31, 2012
Senior secured term loan facility, due in June 2016	$738,476			$744,539			$746,560
Senior secured term loan facility, due in March 2018, net of discount of$3,050, $3,508 and $3,660	343,159			345,545			346,340
Senior cash pay/PIK notes, due in July 2018, net of discount of $29,074	203,826			—			—
Senior notes, due in June 2014	9,707			375,000			375,000
Other	252			460			528
Total long-term debt	1,295,420			1,465,544			1,468,428
Less current portion	(12,076		)	(12,076		)	(12,076		)
Total long-term debt, less current portion	$	1,283,344		$	1,453,468		$	1,456,352

Senior Cash Pay/PIK Notes

On March 5, 2013, Education Management LLC ("EM LLC"), an indirect wholly-owned subsidiary of EDMC, and Education Management Finance Corp. (a wholly-owned subsidiary of EM LLC) completed a private exchange offer (the "Exchange Offer") in which they offered to exchange their 8.75% senior notes due June 1, 2014 ("Old Notes") for (i) new Senior Cash Pay/PIK Notes due July 1, 2018 ("New Notes") and (ii) cash. In connection with the Exchange Offer and a simultaneous private exchange on the same terms, the Company issued $203.0 million of New Notes and paid down $162.3 million of Old Notes with cash on hand. The remaining Old Notes of $9.7 million not tendered in the Exchange Offer were extinguished in April 2013 at par. Included in the $365.3 million of Old Notes tendered for exchange was $4.0 million owned by an affiliate of one of the Sponsors.

The Company incurred $5.2 million of fees to third parties that were reported as a loss on debt refinancing in the consolidated statement of operations during the current period. Included in these third party fees was $2.9 million paid to affiliates of one of the Sponsors.

Cash interest on the New Notes will accrue at the rate of 15% per annum and is payable semi-annually on March 30 and September 30, commencing on September 30, 2013. For any interest period after March 30, 2014 up to and including July 1, 2018, interest in addition to the cash interest payable will be paid by increasing the principal amount of the outstanding New Notes or by issuing additional New Notes (“PIK Interest”). PIK Interest on the New Notes will accrue at a rate of (i) 1.0% per

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annum for the period from March 30, 2014 through and including March 30, 2015, (ii) 2.0% per annum for the period from March 31, 2015 through and including March 30, 2016, (iii) 3.0% per annum for the period from March 31, 2016 through and including March 30, 2017 and (iv) 4.0% per annum for the period from March 31, 2017 through and including July 1, 2018. Additionally, the New Notes are required to be paid at a premium of 13% at their contractual maturity, which is being treated as an original issuance discount for accounting purposes. Including PIK interest and the original issuance discount, the annual effective interest rate on the New Notes is 19.8%.

The indenture governing the New Notes contains a number of covenants that restrict, subject to certain exceptions, EM LLC’s ability and the ability of its restricted subsidiaries to incur additional indebtedness or issue certain preferred shares, pay dividends on or make other distributions in respect of its capital stock or make other restricted payments, make certain investments, enter into certain types of transactions with affiliates, create liens securing certain debt without securing the New Notes, sell certain assets, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets and designate its subsidiaries as unrestricted subsidiaries.    

Senior Secured Credit Facility

At March 31, 2013, the term loan under the Company's senior secured credit facilities included outstanding balances of $343.2 million due March 30, 2018 (the “Tranche C-3 Loan”) and $738.5 million due June 1, 2016 (the “Tranche C-2 Loan”).  The Tranche C-3 Loan bears interest at a rate equal to the greater of three-month LIBOR or 1.25%, plus a margin of 7.0%, or 8.25% at March 31, 2013, June 30, 2012 and March 31, 2012.  The Tranche C-2 Loan bears interest at a rate equal to three-month LIBOR plus a margin of 4.00%, or  4.31%, 4.50% and 4.50% at March 31, 2013, June 30, 2012 and March 31, 2012, respectively.  Both tranches may be prepaid at any time, subject with respect to the Tranche C-3 Loan to substantial penalties in connection with any prepayment prior to March 30, 2014. 

In connection with the amendments made in fiscal 2011 and 2012 to the Company's senior secured credit facilities giving rise to the current terms and structure of the term debt described above, the Company capitalized $4.3 million of third party costs as deferred financing fees within other long-term assets, of which $0.7 million was paid to an affiliate of one of the Sponsors.  Additionally, the Company capitalized a $3.7 million discount as a reduction to long-term debt.  These fees are being charged to interest expense over the life of the debt through the maturity date.  Included as part of these amendments were an increase to the covenant basket amount for capital expenditures and certain restricted payments and the ability to use cash to collateralize letters of credit. 

The senior secured credit facilities contain a number of covenants that, among other things, restrict, subject to certain exceptions, EM LLC’s ability to incur additional indebtedness, pay dividends and distributions on or repurchase capital stock, create liens on assets, repay subordinated indebtedness, make investments, loans or advances, make capital expenditures, engage in certain transactions with affiliates, amend certain material agreements, change its lines of business, sell assets and engage in mergers or consolidations. In addition, EM LLC is required to satisfy and maintain a maximum total leverage ratio and a minimum interest coverage ratio under the senior secured credit facilities on a quarterly basis. EM LLC met the requirements of these two financial covenants for the twelve month period ended March 31, 2013.

9. DERIVATIVE INSTRUMENTS

The Company has historically utilized interest rate swap agreements, which are contractual agreements to exchange payments based on underlying interest rates, to manage the floating rate portion of its term debt. Effective July 1, 2011, the Company entered into three interest rate swap agreements for an aggregate notional amount of $950.0 million. One swap agreement is for a notional amount of $325.0 million and effectively fixes future interest payments at a maximum rate of 9.44% through June 1, 2013. The other two swap agreements, one of which was entered into with an affiliate of one of the Sponsors, are for notional amounts of $312.5 million each and effectively fix future interest payments at a rate of 6.26% through June 1, 2015.

The fair values of the interest rate swap liabilities were $24.2 million, $30.1 million and $29.8 million at March 31, 2013, June 30, 2012 and March 31, 2012, respectively. At March 31, 2013, approximately $0.5 million was recorded in accrued liabilities as the underlying agreement matures on June 1, 2013, and $23.7 million was recorded in other long-term liabilities. The balances at June 30, 2012 and March 31, 2012 were recorded in other long-term liabilities.

On March 30, 2012, the Company replaced $348.6 million of its term loan with a new $350.0 million term loan, as described in Note 8, "Short-term and Long-term Debt." Because the interest payable on the new term loan is based on the higher of LIBOR or 1.25% (rather than strictly the prevailing LIBOR) plus a margin of 7.0%, the $325.0 million interest rate swap does not qualify for cash flow hedge accounting treatment as of the date of this refinancing. As a result, the Company recorded a fair value loss of $2.5 million that was previously reflected in other comprehensive loss as interest expense in the quarter ended March 31, 2012 with subsequent changes to the fair value of this interest rate swap being recorded as interest expense in the period incurred. The Company recorded a $0.5 million revaluation loss through interest expense during the nine months ended March 31, 2013 related to this interest rate swap.

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The refinancing of the term loan did not impact the Company's other two swap agreements. At March 31, 2013, there was a cumulative unrealized loss of $14.9 million, net of tax, related to these interest rate swaps included in accumulated other comprehensive loss on the Company’s accompanying consolidated balance sheet. This loss would be immediately recognized in the consolidated statement of operations if these instruments fail to meet certain cash flow hedge requirements.

Over the next twelve months, the Company estimates that approximately $7.8 million, net of tax, will be reclassified from accumulated other comprehensive loss to the consolidated statement of operations based on current interest rates and underlying debt obligations at March 31, 2013.

The Company used Level Two inputs to value its interest rate swaps as defined in Note 10, "Fair Value of Financial Instruments," which includes obtaining quotes from counter-parties that are based on LIBOR forward curves and assessing non-performance risk based upon published market data.

10. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company determines the fair value of assets and liabilities based on 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 fair values are based on assumptions that market participants would use when pricing an asset or liability, including assumptions about risk and the risks inherent in valuation techniques and the inputs to valuations. The fair value hierarchy is based on whether the inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's own assumptions of what market participants would use. The fair value hierarchy includes three levels of inputs that may be used to measure fair value as described below.

Level One - Quoted prices for identical instruments in active markets.

Level Two - 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 for which all significant inputs are observable market data.

Level Three - Unobservable inputs significant to the fair value measurement supported by little or no market activity.

In some cases, the inputs used to measure fair value may meet the definition of more than one level of fair value hierarchy. The lowest level input that is significant to the fair value measurement in its totality determines the applicable level in the fair value hierarchy.

The following table presents the carrying amounts and fair values of the interest rate swap liabilities, which are measured at fair value on a recurring basis based on the framework described in Note 9, "Derivative Instruments," and the fair values of the Company's debt, which is recorded at carrying value (in thousands):

	March 31, 2013						June 30, 2012						March 31, 2012
	Carrying Value		Level One		Level Two		Carrying Value		Level One		Level Two		Carrying Value		Level One		Level Two
Recurring:
Interest rate swap liabilities	$	24,206	$	—	$	24,206	$	30,114	$	—	$	30,114	$	29,805	$	—	$	29,805
Disclosure only:
Variable rate debt	1,081,635		—		918,467		1,090,084		—		980,477		1,092,900		—		1,037,768
Fixed rate debt	213,785		213,785		—		375,460		341,710		—		375,528		371,778		—

The fair value of the Company’s debt was based on each instrument’s trading value at the dates presented. Cash and cash equivalents, restricted cash, student accounts receivable, notes receivable, the revolving credit facility, accounts payable and accrued expenses have fair values that approximate their carrying values.

As described in Note 5, "Goodwill and Intangible Assets," the Company recorded goodwill and indefinite-lived intangible asset impairments during fiscal 2013 and fiscal 2012. Additionally, the Company recorded a $1.2 million impairment described in Note 4, "Property and Equipment." This resulted in the following assets being measured at fair value on a non-recurring basis using Level Three inputs:

• goodwill at The Art Institutes reporting unit as of March 31, 2013 and June 30, 2012;

• the trade name for The Art Institutes as of March 31, 2013 and June 30, 2012;

• the licensing, accreditation and Title IV program participation assets at The Art Institutes and Argosy University as of June 30, 2012;

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• goodwill at Brown Mackie Colleges, South University and Argosy University as of March 31, 2012; and

• certain long-lived assets at one of the Company's schools as of March 31, 2013.

11. INCOME TAXES

The Company uses the asset and liability method to account for income taxes. Under this method, deferred tax assets and liabilities result from (i) temporary differences in the recognition of income and expense for financial and federal income tax reporting requirements, and (ii) differences between the recorded value of assets acquired in business combinations accounted for as purchases for financial reporting purposes and their corresponding tax bases. Deferred tax assets should be reduced by a valuation allowance if, based upon the weight of the available evidence, it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized. Future realization of deferred tax assets ultimately depends upon the existence of sufficient taxable income of the appropriate character in either the carry back or carry forward period under applicable tax law.

The Company assesses the realizability of its deferred tax assets on a quarterly basis by considering the relative impact of all available evidence, both positive and negative, to determine whether, based upon the weight of that evidence a valuation allowance is needed. This evaluation requires the use of considerable judgment and estimates that are subject to change. Excluding deferred tax liabilities related to indefinite-lived intangible assets, which are not scheduled to reverse, the Company is in a net deferred tax asset position at March 31, 2013.

The Company will incur cumulative losses before taxes in the three most recent fiscal years ended June 30, 2013 due to impairment charges recorded in fiscal years 2012 and 2013 as described in Note 5, "Goodwill and Intangible Assets." However, excluding the non-deductible impairment charges incurred in fiscal 2012, the Company would have had income before taxes for the three year period ended June 30, 2012. Further, the Company expects that it will have income before taxes for the three year period ended June 30, 2013, excluding non-deductible impairment charges incurred in fiscal 2013 and 2012. Additionally, the Company has consistently generated taxable income in the past and reasonably expects to generate sufficient taxable income in the future to realize the benefit of its deferred tax assets. Therefore, the Company believes it is more-likely-than-not that it will realize the benefit of its deferred tax assets and, as such, no valuation allowance is required except as disclosed in Part II, Item 8 "Financial Statements and Supplementary Data," Note 11, "Income Taxes" of the June 30, 2012 Annual Report on Form 10-K with respect to certain state deferred tax assets.

The Company's effective tax rate was (2.3)% and 5.7% for the three months ended March 31, 2013 and 2012, respectively. The Company's effective tax rate was (7.9)% and (10.9)%, respectively, for the nine months ended March 31, 2013 and 2012. The effective tax rates in all periods were significantly impacted by goodwill impairment charges, most of which were not deductible for tax purposes. Excluding the income statement impact of the impairments in both fiscal 2013 and 2012, the effective tax rates would have been 39.1% and 40.4% in the three and nine months ended March 31, 2013, respectively, and 38.0% and 38.7% in the three and nine months ended March 31, 2012, respectively. The effective tax rate differed from the combined federal and state statutory rates due to valuation allowances, expenses that are non-deductible for tax purposes, and the accounting related to uncertain tax positions.

As a result of the expiration of certain statutes of limitation with respect to the 2009 and 2008 fiscal years, the Company's liability for uncertain tax positions, excluding interest and the indirect benefits associated with state income taxes, decreased by $0.7 million and $0.9 million during the three month periods ended March 31, 2013 and 2012, respectively. The Company's effective tax rate was impacted by $0.7 million during each of the three month periods ended March 31, 2013 and 2012, related to these statutes of limitation expirations. In addition, the Company reduced tax expense by $0.7 million in the current quarter as a result of a state income tax refund.

As of March 31, 2013, the Company's accrual for uncertain tax positions was $3.9 million, excluding interest and the indirect benefits associated with state income taxes. It is reasonably possible that the total amount of unrecognized tax benefits, excluding interest and the indirect benefits associated with state income taxes, will decrease by $2.9 million within the next twelve months due to the expiration of certain statutes of limitation with respect to the 2010 fiscal year. The tax benefit of such a decrease, if recognized, would be a discrete item in the third quarter of fiscal year 2014.

The statutes of limitation for the Company's U.S. income tax returns are closed for years through fiscal 2009. The statutes of limitation for the Company's state and local income tax returns for prior periods vary by jurisdiction. However, the statutes of limitation with respect to the major jurisdictions in which the Company files state and local income tax returns are generally closed for years through fiscal 2008.

12. CONTINGENCIES

Qui Tam Matters

Washington v. Education Management Corporation. On May 3, 2011, a qui tam action captioned United States of America, and the States of California, Florida, Illinois, Indiana, Massachusetts, Minnesota, Montana, New Jersey, New

19

Mexico, New York and Tennessee, and the District of Columbia, each ex rel. Lynntoya Washington and Michael T. Mahoney v. Education Management Corporation, et al. (“Washington”) filed under the federal False Claims Act in April 2007 was unsealed due to the U.S. Department of Justice's decision to intervene in the case. Five of the states listed in the caption joined the case based on qui tam actions filed under their respective False Claims Acts. The Court granted the Company's motion to dismiss the District of Columbia from the case and denied the Commonwealth of Kentucky's motion to intervene in the case under its consumer protection laws.

The case, which is pending in U.S. District Court for the Western District of Pennsylvania, relates to whether the Company's compensation plans for admission representatives violated the Higher Education Act, as amended (“HEA”), and U.S. Department of Education regulations prohibiting an institution participating in Title IV programs from providing any commission, bonus or other incentive payment based directly or indirectly on success in securing enrollments to any person or entity engaged in any student recruitment or admissions activity during the period of July 1, 2003 through June 30, 2011. The complaint was initially filed by a former admissions representative at The Art Institute of Pittsburgh Online Division and a former director of training at EDMC Online Higher Education and asserts the relators are entitled to recover treble the amount of actual damages allegedly sustained by the federal government as a result of the alleged activity, plus civil monetary penalties. The complaint does not specify the amount of damages sought but claims that the Company and/or students attending the Company's schools received over $11 billion in funds from participation in Title IV programs and state financial aid programs during the period of alleged wrongdoing.

On May 11, 2012, the Court ruled on the Company's motion to dismiss case for failure to state a claim upon which relief can be granted, dismissing the claims that the design of the Company's compensation plan for admissions representatives violated the incentive compensation rule and allowing common law claims and the allegations that the plan as implemented violated the rule to continue to discovery.

The Company believes the case to be without merit and intends to vigorously defend itself.

Sobek v. Education Management Corporation. On March 13, 2012, a qui tam action captioned United States of America, ex rel. Jason Sobek v. Education Management Corporation, et al. filed under the federal False Claims Act on January 28, 2010 was unsealed after the U.S. Department of Justice declined to intervene in the case at this time. The case, which is pending in the U.S. District Court for the Western District of Pennsylvania, alleges that the defendants violated the U.S. Department of Education's regulation prohibiting institutions from making substantial misrepresentations to prospective students, did not adequately track student academic progress and violated the U.S. Department of Education's prohibition on the payment of incentive compensation to admissions representatives. The complaint was filed by a former project associate director of admissions at EDMC Online Higher Education who worked for South University and asserts the relator is entitled to recover treble the amount of actual damages allegedly sustained by the federal government as a result of the alleged activity, plus civil monetary penalties. The complaint does not specify the amount of damages sought but claims that the Company's institutions were ineligible to participate in Title IV programs during the period of alleged wrongdoing.

On May 29, 2012, the Company filed a motion to dismiss the case with prejudice for failure to state a claim upon which relief can be granted. On October 22, 2012, the magistrate judge assigned to the case issued a Report and Recommendation on the Company's motion to dismiss, which recommends that the Court dismiss with prejudice claims related to incentive compensation, program costs and the withholding of amounts due to the government and allow claims related to satisfactory academic progress, job placement statistics and programmatic accreditation to continue. The Report and Recommendation is not binding on the federal district judge assigned to the case. The Company believes the remaining claims in the case to be without merit and intends to vigorously defend itself.

Shareholder Derivative Lawsuits

Oklahoma Law Enforcement Retirement System v. Nelson. On May 21, 2012, a shareholder derivative class action captioned Oklahoma Law Enforcement Retirement System v. Todd S. Nelson, et al. was filed against the directors of the Company in state court located in Pittsburgh, Pennsylvania. The Company is named as a nominal defendant in the case. The complaint alleges that the defendants violated their fiduciary obligations to the Company's shareholders due to the Company's violation of the U.S. Department of Education's prohibition on paying incentive compensation to admissions representatives, engaging in improper recruiting tactics in violation of Title IV of the HEA and accrediting agency standards, falsification of job placement data for graduates of its schools and failure to satisfy the U.S. Department of Education's financial responsibility standards. The Company previously received two demand letters from the plaintiff which were investigated by a Special Litigation Committee of the Board of Directors and found to be without merit. The Company filed a motion to dismiss the case with prejudice on August 13, 2012. In response, the plaintiffs filed an amended complaint making substantially the same allegations as the initial complaint on September 27, 2012. The Company and the director defendants filed a motion to dismiss the amended complaint on October 17, 2012. The Company believes that the claims are without merit and intends to vigorously defend itself.

20

Bushansky v. Nelson. On August 3, 2012, a shareholder derivative class action captioned Stephen Bushansky v. Todd S. Nelson, et al. was filed against certain of the directors of the Company in the U.S. District Court for the Western District of Pennsylvania. The Company is named as a nominal defendant in the case. The complaint alleges that the defendants violated their fiduciary obligations to the Company's shareholders due to the Company's use of improper recruiting, enrollment admission and financial aid practices and violation of the U.S. Department of Education's prohibition on the payment of incentive compensation to admissions representatives. The Company previously received a demand letter from the plaintiff which was investigated by a Special Litigation Committee of the Board of Directors and found to be without merit. The Company and the named director defendants filed a motion to dismiss the case on October 19, 2012. The Company believes that the claims set forth in the complaint are without merit and intends to vigorously defend itself.

Buirkle APA Program Accreditation Lawsuit

The Company and Argosy University were the subject of claims brought by former students who enrolled in the Clinical Psychology program offered by the Dallas campus of Argosy University pursuant to two cases filed in the District Court for Dallas County, Texas, Buirkle et al. v. Argosy Education Group, Inc. University, Education Management LLC and Education Management Corporation and Adibian et al. v. Argosy Education Group, Inc., Education Management LLC, and Education Management Corporation. The petitions allege that, prior to the plaintiffs' enrollment and/or while the plaintiffs were enrolled in the program, the defendants made material misrepresentations regarding the importance of accreditation of the program by the Commission on Accreditation of the American Psychological Association, the status of the application of the Dallas campus for such accreditation, the availability of loan repayment options for the plaintiffs, and the quantity and quality of the plaintiffs' career options. Plaintiffs seek monetary compensatory and punitive damages.

The Company has entered into settlement agreements with 20 of the plaintiffs for the payment by the Company of an immaterial amount in settlement. The remaining three plaintiffs are pursuing common law fraud cases in state court. The Company believes the claims in the lawsuits to be without merit and intends to vigorously defend itself.

State Attorney General Investigations

In January 2013, The New England Institute of Art received a civil investigative demand from the Commonwealth of Massachusetts Attorney General requesting information for the period from January 1, 2010 to the present pursuant to an investigation of practices by the school in connection with marketing and advertising job placement and student outcomes, the recruitment of students and the financing of education. The Company previously responded to a similar request that The New England Institute of Art received in June 2007 and intends to cooperate with the Attorney General in connection with its investigation. However, the Company cannot predict the eventual scope, duration or outcome of the investigation at this time.

In September 2012, the Company received a subpoena from the State of Colorado Attorney General's office requesting documents and detailed information for the period of January 1, 2006 through the present. The subpoena is primarily focused on the programs offered by the College of Psychology and Behavioral Sciences at the Denver, Colorado campus of Argosy University. Argosy University also received in September 2012 demand letters from an attorney representing three former students in the Doctorate of Counseling Psychology program alleging that the students were unable to find internships necessary to complete the program in Denver, Colorado and that the campus claimed that the program would lead to licensure in Colorado, among other things. The Company intends to cooperate with the Attorney General's investigation. However, the Company cannot predict the eventual scope, duration or outcome of the investigation at this time.

In August 2011, the Company received a subpoena from the Attorney General of the State of New York requesting documents and detailed information for the time period of January 1, 2000 through the present. The Art Institute of New York City is the Company's only school located in New York though the subpoena also addresses fully-online students who reside in the State. The subpoena is primarily related to the Company's compensation of admissions representatives and recruiting activities. The relators in the Washington qui tam case filed the complaint under the State of New York's False Claims Act though the state has not announced an intention to intervene in the matter. The Company intends to cooperate with the investigation. However, the Company cannot predict the eventual scope, duration or outcome of the investigation at this time.

In December 2010, the Company received a subpoena from the Office of Consumer Protection of the Attorney General of the Commonwealth of Kentucky requesting documents and detailed information for the time period of January 1, 2008 through December 31, 2010. The Company has three Brown Mackie College locations in Kentucky. The Kentucky Attorney General announced an investigation of the business practices of private sector post-secondary schools and that subpoenas were issued to six private sector colleges that do business in Kentucky in connection with the investigation. The Company intends to continue to cooperate with the investigation. However, the Company cannot predict the eventual scope, duration or outcome of the investigation at this time.

In October 2010, Argosy University received a subpoena from the Florida Attorney General's office seeking a wide range of documents related to the Company's institutions, including the nine institutions located in Florida, from January 2, 2006 to the present. The Florida Attorney General has announced that it is investigating potential misrepresentations in recruitment,

21

financial aid and other areas. The Company is cooperating with the investigation, but has also filed a suit to quash or limit the subpoena and to protect information sought that constitutes proprietary or trade secret information. The Company cannot predict the eventual scope, duration or outcome of the investigation at this time.

City of San Francisco

In December 2011, the Company received a letter from the City Attorney of the City of San Francisco, California requesting information related to student recruitment and indebtedness, including recruiting practices and job placement reporting, among other issues, by The Art Institute of San Francisco and the seven other Art Institutes located in California.  The Company intends to cooperate with the investigation. However, the Company cannot predict the eventual scope, duration or outcome of the investigation at this time.

Securities and Exchange Commission Subpoena

On March 20, 2013, the Company received a subpoena from the Division of Enforcement of the Securities and Exchange Commission requesting documents and information relating to the Company's valuation of goodwill and its bad debt allowance for student receivables. The Company intends to cooperate with the SEC in its investigation. The Company cannot predict the eventual scope, duration or outcome of the investigation at this time.

Other Matters

The Company is a defendant in certain other legal proceedings arising out of the conduct of its business. In the opinion of management, based upon an investigation of these claims and discussion with legal counsel, the ultimate outcome of such other legal proceedings, individually and in the aggregate, is not expected to have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

13. GUARANTOR SUBSIDIARIES FINANCIAL INFORMATION

The New Notes described in Note 8 "Short-Term and Long-Term Debt" are fully and unconditionally guaranteed by EDMC and all of EM LLC’s existing direct and indirect domestic restricted subsidiaries, other than any subsidiary that directly owns or operates a school, or has been formed for such purposes, and subsidiaries that have no material assets (collectively, the “Guarantor Subsidiaries”). All other subsidiaries of EM LLC, either direct or indirect, (the “Non-Guarantor Subsidiaries”) do not guarantee the New Notes.

The following tables present the condensed consolidated financial position of EM LLC, the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries and EDMC as of March 31, 2013, June 30, 2012 and March 31, 2012. The results of operations and comprehensive income (loss) for the three and nine months ended March 31, 2013 and 2012 and the condensed statements

22

of cash flows for the nine months ended March 31, 2013 and 2012 are presented for EM LLC, the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries and EDMC.

23

CONDENSED CONSOLIDATED BALANCE SHEET

March 31, 2013 (In thousands)

	EM LLC		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			EM LLC Consolidated			EDMC			Eliminations			EDMC Consolidated
Assets
Current:
Cash and cash equivalents	$	176,449	$	120		$	3,825		$	—		$	180,394		$	3,220		$	—		$	183,614
Restricted cash	45,803		—			226,226			—			272,029			—			—			272,029
Student and other receivables, net	2,753		172			177,652			—			180,577			1			—			180,578
Inventories	—		154			6,846			—			7,000			—			—			7,000
Other current assets	34,681		538			101,121			—			136,340			—			—			136,340
Total current assets	259,686		984			515,670			—			776,340			3,221			—			779,561
Property and equipment, net	64,881		6,104			472,746			—			543,731			—			—			543,731
Inter-company balances	405,600		(30,868		)	(535,186		)	—			(160,454		)	160,454			—			—
Other long-term assets	25,346		—			30,532			—			55,878			—			—			55,878
Investment in subsidiaries	708,831		—			—			(708,831		)	—			81,460			(81,460		)	—
Intangible assets, net	1,513		31			299,495			—			301,039			—			—			301,039
Goodwill	7,328		—			661,762			—			669,090			—			—			669,090
Total assets	$	1,473,185	$	(23,749	)	$	1,445,019		$	(708,831	)	$	2,185,624		$	245,135		$	(81,460	)	$	2,349,299
Liabilities and shareholders’ equity (deficit)
Current:
Current portion of long-term debt	$	11,850	$	—		$	226		$	—		$	12,076		$	—		$	—		$	12,076
Other current liabilities	48,295		2,419			423,613			—			474,327			(1		)	—			474,326
Total current liabilities	60,145		2,419			423,839			—			486,403			(1		)	—			486,402
Long-term debt, less current portion	1,283,321		—			23			—			1,283,344			—			—			1,283,344
Other long-term liabilities	46,729		280			199,088			—			246,097			—			—			246,097
Deferred income taxes	1,530		515			86,275			—			88,320			(104		)	—			88,216
Total liabilities	1,391,725		3,214			709,225			—			2,104,164			(105		)	—			2,104,059
Total shareholders’ equity (deficit)	81,460		(26,963		)	735,794			(708,831		)	81,460			245,240			(81,460		)	245,240
Total liabilities and shareholders’ equity (deficit)	$	1,473,185	$	(23,749	)	$	1,445,019		$	(708,831	)	$	2,185,624		$	245,135		$	(81,460	)	$	2,349,299

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CONDENSED CONSOLIDATED BALANCE SHEET

June 30, 2012 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			EM LLC Consolidated			EDMC			Eliminations			EDMC Consolidated
Assets
Current:
Cash and cash equivalents	$	(26,249	)	$	98		$	213,960		$	—		$	187,809		$	3,199		$	—		$	191,008
Restricted cash	42,931			—			224,949			—			267,880			—			—			267,880
Student and other receivables, net	4,149			153			221,214			—			225,516			(1		)	—			225,515
Inventories	—			159			8,223			—			8,382			—			—			8,382
Other current assets	35,543			660			113,660			—			149,863			—			—			149,863
Total current assets	56,374			1,070			782,006			—			839,450			3,198			—			842,648
Property and equipment, net	72,279			7,846			571,672			—			651,797			—			—			651,797
Inter-company balances	1,059,102			(26,456		)	(1,181,164		)	—			(148,518		)	148,518			—			—
Other long-term assets	15,276			—			35,794			—			51,070			1			—			51,071
Investment in subsidiaries	826,651			—			—			(826,651		)	—			344,742			(344,742		)	—
Intangible assets, net	2,031			39			327,959			—			330,029			—			—			330,029
Goodwill	7,328			—			956,222			—			963,550			—			—			963,550
Total assets	$	2,039,041		$	(17,501	)	$	1,492,489		$	(826,651	)	$	2,687,378		$	496,459		$	(344,742	)	$	2,839,095
Liabilities and shareholders’ equity (deficit)
Current:
Current portion of long-term debt and revolving credit facility	$	123,150		$	—		$	226		$	—		$	123,376		$	—		$	—		$	123,376
Other current liabilities	63,935			8,319			338,378			—			410,632			(3		)	—			410,629
Total current liabilities	187,085			8,319			338,604			—			534,008			(3		)	—			534,005
Long-term debt, less current portion	1,453,234			—			234			—			1,453,468			—			—			1,453,468
Other long-term liabilities	52,450			374			190,465			—			243,289			2			—			243,291
Deferred income taxes	1,530			515			109,826			—			111,871			(104		)	—			111,767
Total liabilities	1,694,299			9,208			639,129			—			2,342,636			(105		)	—			2,342,531
Total shareholders’ equity (deficit)	344,742			(26,709		)	853,360			(826,651		)	344,742			496,564			(344,742		)	496,564
Total liabilities and shareholders’ equity (deficit)	$	2,039,041		$	(17,501	)	$	1,492,489		$	(826,651	)	$	2,687,378		$	496,459		$	(344,742	)	$	2,839,095

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CONDENSED CONSOLIDATED BALANCE SHEET

March 31, 2012 (In thousands)

	EM LLC		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			EM LLC Consolidated			EDMC			Eliminations			EDMC Consolidated
Assets
Current:
Cash and cash equivalents	$	227,263	$	47		$	6,997		$	—		$	234,307		$	53,196		$	—		$	287,503
Restricted cash	48,243		—			235,810			—			284,053			—			—			284,053
Student and other receivables, net	8,771		174			156,319			—			165,264			(1		)	—			165,263
Inventories	—		117			9,918			—			10,035			—			—			10,035
Other current assets	26,653		218			97,218			—			124,089			—			—			124,089
Total current assets	310,930		556			506,262			—			817,748			53,195			—			870,943
Property and equipment, net	69,445		7,657			576,786			—			653,888			—			—			653,888
Inter-company balances	665,834		(29,550		)	(742,409		)	—			(106,125		)	106,125			—			—
Other long-term assets	48,521		—			(1,345		)	—			47,176			—			—			47,176
Investment in subsidiaries	1,989,615		—			—			(1,989,615		)	—			1,533,959			(1,533,959		)	—
Intangible assets, net	1,950		42			456,852			—			458,844			—			—			458,844
Goodwill	7,328		—			2,079,291			—			2,086,619			—			—			2,086,619
Total assets	$	3,093,623	$	(21,295	)	$	2,875,437		$	(1,989,615	)	$	3,958,150		$	1,693,279		$	(1,533,959	)	$	4,117,470
Liabilities and shareholders’ equity (deficit)
Current:
Current portion of long-term debt	$	11,850	$	—		$	226		$	—		$	12,076		$	—		$	—		$	12,076
Other current liabilities	37,679		4,880			500,324			—			542,883			(4		)	—			542,879
Total current liabilities	49,529		4,880			500,550			—			554,959			(4		)	—			554,955
Long-term debt, less current portion	1,456,050		—			302			—			1,456,352			—			—			1,456,352
Other long-term liabilities	52,839		376			188,043			—			241,258			2			—			241,260
Deferred income taxes	1,246		265			170,111			—			171,622			(124		)	—			171,498
Total liabilities	1,559,664		5,521			859,006			—			2,424,191			(126		)	—			2,424,065
Total shareholders’ equity (deficit)	1,533,959		(26,816		)	2,016,431			(1,989,615		)	1,533,959			1,693,405			(1,533,959		)	1,693,405
Total liabilities and shareholders’ equity (deficit)	$	3,093,623	$	(21,295	)	$	2,875,437		$	(1,989,615	)	$	3,958,150		$	1,693,279		$	(1,533,959	)	$	4,117,470

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CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months Ended March 31, 2013 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		EM LLC Consolidated			EDMC			Eliminations			EDMC Consolidated
Net revenues	$	—		$	2,002		$	636,901		$	—	$	638,903		$	—		$	—		$	638,903
Costs and expenses:
Educational services	22,807			1,213			326,114			—		350,134			—			—			350,134
General and administrative	(42,959		)	2,863			206,910			—		166,814			—			—			166,814
Depreciation and amortization	6,762			151			33,353			—		40,266			—			—			40,266
Long-lived asset impairments	—			—			323,690					323,690									323,690
Total costs and expenses	(13,390		)	4,227			890,067			—		880,904			—			—			880,904
Income (loss) before interest and income taxes	13,390			(2,225		)	(253,166		)	—		(242,001		)	—			—			(242,001		)
Interest expense (income), net	29,869			—			600			—		30,469			(5		)	—			30,464
Loss on debt refinancing	5,232			—			—			—		5,232			—			—			5,232
Equity in loss of subsidiaries	(203,855		)	—			—			203,855		—			(283,999		)	283,999			—
Loss before income taxes	(225,566		)	(2,225		)	(253,766		)	203,855		(277,702		)	(283,994		)	283,999			(277,697		)
Income tax expense (benefit)	58,433			(822		)	(51,314		)	—		6,297			—			—			6,297
Net loss	$	(283,999	)	$	(1,403	)	$	(202,452	)	$	203,855	$	(283,999	)	$	(283,994	)	$	283,999		$	(283,994	)
Net change in unrecognized loss on interest rate swaps, net of tax	$	1,514		$	—		$	—		$	—	$	1,514		$	1,514		$	(1,514	)	$	1,514
Foreign currency translation loss	(147		)	—			(147		)	147		(147		)	(147		)	147			(147		)
Other comprehensive income (loss)	1,367			—			(147		)	147		1,367			1,367			(1,367		)	1,367
Comprehensive loss	$	(282,632	)	$	(1,403	)	$	(202,599	)	$	204,002	$	(282,632	)	$	(282,627	)	$	282,632		$	(282,627	)

27

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months Ended March 31, 2012 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			EM LLC Consolidated			EDMC			Eliminations			EDMC Consolidated
Net revenues	$	—		$	1,430		$	701,069		$	—		$	702,499		$	—		$	—		$	702,499
Costs and expenses:
Educational services	42,995			2,265			336,943			—			382,203			1			—			382,204
General and administrative	(37,258		)	338			228,611			—			191,691			56			—			191,747
Depreciation and amortization	6,626			142			33,842			—			40,610			—			—			40,610
Goodwill impairment	—			—			495,380						495,380									495,380
Total costs and expenses	12,363			2,745			1,094,776			—			1,109,884			57			—			1,109,941
Loss before interest and income taxes	(12,363		)	(1,315		)	(393,707		)	—			(407,385		)	(57		)	—			(407,442		)
Interest expense (income), net	24,826			—			599			—			25,425			(1		)	—			25,424
Loss on debt refinancing	9,474			—			—			—			9,474			—			—			9,474
Equity in loss of subsidiaries	(331,525		)	—			—			331,525			—			(417,060		)	417,060			—
Loss before income taxes	(378,188		)	(1,315		)	(394,306		)	331,525			(442,284		)	(417,116		)	417,060			(442,340		)
Income tax expense (benefit)	38,872			294			(64,390		)	—			(25,224		)	—			—			(25,224		)
Net Loss	$	(417,060	)	$	(1,609	)	$	(329,916	)	$	331,525		$	(417,060	)	$	(417,116	)	$	417,060		$	(417,116	)
Net change in unrecognized loss on interest rate swaps, net of tax	$	1,439		$	—		$	—		$	—		$	1,439		$	1,439		$	(1,439	)	$	1,439
Foreign currency translation gain	141			—			141			(141		)	141			141			(141		)	141
Other comprehensive income	1,580			—			141			(141		)	1,580			1,580			(1,580		)	1,580
Comprehensive loss	$	(415,480	)	$	(1,609	)	$	(329,775	)	$	331,384		$	(415,480	)	$	(415,536	)	$	415,480		$	(415,536	)

28

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the Nine Months Ended March 31, 2013 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		EM LLC Consolidated			EDMC			Eliminations			EDMC Consolidated
Net revenues	$	—		$	6,161		$	1,897,202		$	—	$	1,903,363		$	—		$	—		$	1,903,363
Costs and expenses:
Educational services	87,122			6,503			998,182			—		1,091,807			1			—			1,091,808
General and administrative	(74,336		)	(561		)	587,393			—		512,496			—			—			512,496
Depreciation and amortization	25,641			454			97,572			—		123,667			—			—			123,667
Long-lived asset impairments	—			—			323,690					323,690									323,690
Total costs and expenses	38,427			6,396			2,006,837			—		2,051,660			1			—			2,051,661
Loss before interest and income taxes	(38,427		)	(235		)	(109,635		)	—		(148,297		)	(1		)	—			(148,298		)
Interest expense (income), net	91,144			—			1,798			—		92,942			(18		)	—			92,924
Loss on debt refinancing	5,232						—					5,232			—			—			5,232
Equity in loss of subsidiaries	(120,498		)	—			—			120,498		—			(265,960		)	265,960			—
Loss before income taxes	(255,301		)	(235		)	(111,433		)	120,498		(246,471		)	(265,943		)	265,960			(246,454		)
Income tax expense (benefit)	10,659			19			8,811			—		19,489			—			—			19,489
Net loss	$	(265,960	)	$	(254	)	$	(120,244	)	$	120,498	$	(265,960	)	$	(265,943	)	$	265,960		$	(265,943	)
Net change in unrecognized loss on interest rate swaps, net of tax	$	2,766		$	—		$	—		$	—	$	2,766		$	2,766		$	(2,766	)	$	2,766
Foreign currency translation gain	(88		)	—			(88		)	88		(88		)	(88		)	88			(88		)
Other comprehensive income	2,678			—			(88		)	88		2,678			2,678			(2,678		)	2,678
Comprehensive loss	$	(263,282	)	$	(254	)	$	(120,332	)	$	120,586	$	(263,282	)	$	(263,265	)	$	263,282		$	(263,265	)

29

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the Nine Months Ended March 31, 2012 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		EM LLC Consolidated			EDMC			Eliminations		EDMC Consolidated
Net revenues	$	—		$	6,106		$	2,115,676		$	—	$	2,121,782		$	—		$	—	$	2,121,782
Costs and expenses:
Educational services	85,571			7,549			1,039,301			—		1,132,421			—			—		1,132,421
General and administrative	(77,327		)	(188		)	658,951			—		581,436			172			—		581,608
Depreciation and amortization	19,590			363			98,741			—		118,694			—			—		118,694
Goodwill impairment	—			—			495,380					495,380								495,380
Total costs and expenses	27,834			7,724			2,292,373			—		2,327,931			172			—		2,328,103
Loss before interest and income taxes	(27,834		)	(1,618		)	(176,697		)	—		(206,149		)	(172		)	—		(206,321		)
Interest expense (income), net	77,273			—			1,871			—		79,144			(5		)	—		79,139
Loss on debt refinancing	9,474			—			—			—		9,474			—			—		9,474
Equity in loss of subsidiaries	(199,809		)	—			—			199,809		—			(326,868		)	326,868		—
Loss before income taxes	(314,390		)	(1,618		)	(178,568		)	199,809		(294,767		)	(327,035		)	326,868		(294,934		)
Income tax expense (benefit)	12,478			176			19,447			—		32,101			—			—		32,101
Net loss	$	(326,868	)	$	(1,794	)	$	(198,015	)	$	199,809	$	(326,868	)	$	(327,035	)	$	326,868	$	(327,035	)
Net change in unrecognized loss on interest rate swaps, net of tax	$	(4,690	)	$	—		$	—		$	—	$	(4,690	)	$	(4,690	)	$	4,690	$	(4,690	)
Foreign currency translation loss	(641		)	—			(641		)	641		(641		)	(641		)	641		(641		)
Other comprehensive loss	(5,331		)	—			(641		)	641		(5,331		)	(5,331		)	5,331		(5,331		)
Comprehensive loss	$	(332,199	)	$	(1,794	)	$	(198,656	)	$	200,450	$	(332,199	)	$	(332,366	)	$	332,199	$	(332,366	)

30

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the Nine Months Ended March 31, 2013 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			EM LLC Consolidated			EDMC		EDMC Consolidated
Net cash flows provided by (used in) operations	$	(165,111	)	$	(5,647	)	$	456,939		$	286,181		$	21	$	286,202
Cash flows from investing activities:
Expenditures for long-lived assets	(7,707		)	(725		)	(56,154		)	(64,586		)	—		(64,586		)
Proceeds from sales of long-lived assets	—			—			65,065			65,065					65,065
Other investing activities	(858		)	—			(6,244		)	(7,102		)	—		(7,102		)
Net cash flows provided by (used in) investing activities	(8,565		)	(725		)	2,667			(6,623		)	—		(6,623		)
Cash flows from financing activities:
Net repayments of debt and other	(286,885		)	—			(211		)	(287,096		)			(287,096		)
Inter-company transactions	663,259			6,394			(669,653		)	—			—		—
Net cash flows provided by (used in) financing activities	376,374			6,394			(669,864		)	(287,096		)	—		(287,096		)
Effect of exchange rate changes on cash and cash equivalents	—			—			123			123			—		123
Increase (decrease) in cash and cash equivalents	202,698			22			(210,135		)	(7,415		)	21		(7,394		)
Beginning cash and cash equivalents	(26,249		)	98			213,960			187,809			3,199		191,008
Ending cash and cash equivalents	$	176,449		$	120		$	3,825		$	180,394		$	3,220	$	183,614

31

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the Nine Months Ended March 31, 2012 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			EM LLC Consolidated			EDMC			EDMC Consolidated
Net cash flows provided by (used in) operations	$	(187,444	)	$	409		$	336,648		$	149,613		$	3,063		$	152,676
Cash flows from investing activities
Expenditures for long-lived assets	(6,819		)	(752		)	(57,108		)	(64,679		)	—			(64,679		)
Other investing activities	—			—			(14,248		)	(14,248		)	—			(14,248		)
Net cash flows used in investing activities	(6,819		)	(752		)	(71,356		)	(78,927		)	—			(78,927		)
Cash flows from financing activities
Net repayments of debt	(98,874		)	—			(195		)	(99,069		)	—			(99,069		)
Common stock repurchased and stock option exercises	—			—			—			—			(90,138		)	(90,138		)
Inter-company transactions	537,216			120			(627,474		)	(90,138		)	90,138			—
Net cash flows provided by (used in) financing activities	438,342			120			(627,669		)	(189,207		)	—			(189,207		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(263		)	(263		)	—			(263		)
Increase (decrease) in cash and cash equivalents	244,079			(223		)	(362,640		)	(118,784		)	3,063			(115,721		)
Beginning cash and cash equivalents	(16,816		)	270			369,637			353,091			50,133			403,224
Ending cash and cash equivalents	$	227,263		$	47		$	6,997		$	234,307		$	53,196		$	287,503

32

14. SEGMENT REPORTING

The Company's principal business is providing post-secondary education. The Company manages its operations through four operating segments, which through March 31, 2012 were aggregated into one reportable segment, as all criteria for aggregation under applicable accounting rules were met. As of June 30, 2012, the Company began to report results for each of its four operating segments because the Company could no longer demonstrate margin convergence with respect to its operating segments with relative certainty over a reasonable period of time. The Company's four reportable segments are The Art Institutes, Argosy University, Brown Mackie Colleges and South University.

Earnings before interest, income taxes, depreciation and amortization ("EBITDA") excluding certain expenses is the measure used by the chief operating decision maker to evaluate segment performance and allocate resources. It is defined as net income before net interest expense, income taxes, depreciation and amortization and certain expenses presented below. EBITDA excluding certain expenses is not a recognized term under generally accepted accounting principles ("GAAP") and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA excluding certain expenses is not intended to be a measure of free cash flow available for management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Management believes EBITDA excluding certain expenses is helpful in highlighting trends because EBITDA excluding certain expenses excludes the results of decisions that are outside the control of operating management and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. Management compensates for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, this presentation of EBITDA excluding certain expenses may not be comparable to similarly titled measures of other companies. Adjustments to reconcile segment results to consolidated results are included under the caption “Corporate and other,” which primarily includes unallocated corporate activity. A reconciliation of EBITDA excluding certain expenses by reportable segment to consolidated loss before income taxes along with other summary financial information by reportable segment is presented below (in thousands):

33

	For the Three Months Ended March 31,						For the Nine Months Ended March 31,
	2013			2012			2013			2012
Net revenues:
The Art Institutes	$	393,560		$	442,842		$	1,185,232		$	1,341,344
Argosy University	94,430			104,781			268,663			308,995
Brown Mackie Colleges	73,876			77,949			226,122			240,617
South University	77,037			76,927			223,346			230,826
Total EDMC	$	638,903		$	702,499		$	1,903,363		$	2,121,782
EBITDA excluding certain expenses:
The Art Institutes	$	100,527		$	124,611		$	280,714		$	386,688
Argosy University	16,373			19,202			33,363			50,580
Brown Mackie Colleges	8,436			14,521			28,798			50,733
South University	15,410			(1,980		)	30,670			1,320
Corporate and other	(18,791		)	(21,898		)	(65,341		)	(68,993		)
Total EDMC	121,955			134,456			308,204			420,328
Reconciliation to consolidated loss before income taxes:
Long-lived asset impairments (A)	323,690			495,380			323,690			495,380
Loss on debt refinancing	5,232			9,474			5,232			9,474
Restructuring (B)	—			5,908			9,145			12,575
Depreciation and amortization	40,266			40,610			123,667			118,694
Net interest expense	30,464			25,424			92,924			79,139
Loss before income taxes	$	(277,697	)	$	(442,340	)	$	(246,454	)	$	(294,934	)

(A) Current period charge consists of a $294.5 million goodwill impairment at The Art Institutes, $28.0 million impairment of The Art Institutes trade name and a $1.2 million impairment of property and equipment at one of the Company's schools. Refer to Note 5, "Goodwill and Intangible Assets" for more detail.

(B) Refer to Note 7, "Accrued Liabilities" for more information on the current period charge. The prior year nine-month period includes a $10.1 million employee severance charge and a $2.5 million lease termination charge.

Assets: (C)	March 31, 2013		June 30, 2012		March 31, 2012
The Art Institutes	$	1,417,887	$	1,824,385	$	3,023,789
Argosy University	236,759		308,286		276,611
Brown Mackie Colleges	202,844		268,694		181,377
South University	188,915		272,729		210,709
Corporate and other	302,894		165,001		424,984
Total EDMC	$	2,349,299	$	2,839,095	$	4,117,470

(C) Excludes inter-company activity.

34

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

Key Trends, Developments and Challenges

The following developments and trends present opportunities, challenges and risks to our business:

• U.S. Department of Education Program Integrity Regulations have negatively impacted our financial results and will likely impact future results.

As described in greater detail in Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations - Key Trends, Developments and Challenges” in our Annual Report on Form 10-K, we believe that the U.S. Department of Education's Program Integrity Regulations have negatively impacted our business and will continue to do so in the future. These rules have required us to change certain of our business practices, incur additional costs of compliance and of developing and implementing changes in operations, and have affected student recruitment and enrollment, resulted in changes in or elimination of certain educational programs and have had other significant or material effects on our business.

With the exception of the gainful employment rule, these regulations became effective on July 1, 2011. The gainful employment regulations were scheduled to go into effect on July 1, 2012. However, on June 30, 2012 the U.S. District Court for the District of Columbia vacated the program level metrics and remanded them to the U.S. Department of Education for further action. The Court's decision is subject to appeal by the U.S. Department of Education and could be modified or reversed on appeal. Moreover, the U.S. Department of Education could take further action to address the Court's concerns regarding the regulations and obtain approval to enforce the regulations, or the U.S. Department of Education could issue new regulations regarding gainful employment. We cannot predict what steps the U.S. Department of Education will take in response to the Court's decision, how long those steps will take, or whether those steps will result in the U.S. Department of Education being able to enforce the gainful employment regulations or issuing new regulations.

We have implemented a number of initiatives to respond to the gainful employment rules, such as shorter programs and lowering the costs associated with a number of our programs and continue to do so despite the ruling in the APSCU case. However, certain of our programs will be unable to maintain eligibility to enroll students receiving Title IV funds or have restrictions placed upon program offerings as a result of not meeting prescribed metrics if the gainful employment regulations become effective in their current form. To the extent that our new programmatic offerings do not offset the loss of any of our current programs, the loss of students or restrictions on program eligibility could have a material adverse effect on our student population, business, financial condition, results of operations and cash flows.

• Changes in the availability of PLUS program loans contributed to a reduction in new student projections at The Art Institutes and are likely to adversely impact both continuing and new students in fiscal 2013 and beyond.

As described in greater detail in Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations - Key Trends, Developments and Challenges” in our Annual Report on Form 10-K, recent changes in the availability of PLUS program loans have negatively impacted our business, particularly with respect to The Art Institutes, and will continue to do so in the future. During fiscal 2012, we believe that the U.S. Department of Education implemented more stringent underwriting criteria for PLUS program loans. While PLUS program loans for most of fiscal 2012 remained fairly consistent with fiscal 2011, students attending, or interested in attending, our schools experienced a significant decrease in PLUS loans awarded in the fourth quarter of fiscal 2012, and we expect this trend to continue into the foreseeable future.  For example, The Art Institutes experienced a 28% and 41% decrease in the number of students using PLUS program loans to fund a portion of their education expense in the fourth quarter of fiscal 2012 and first nine months of fiscal 2013, respectively, as compared to their respective prior year periods.

Recently, we have taken a number of actions to address this issue including, among other measures, expanding our scholarship programs at The Art Institutes and extending greater amounts of credit to those Art Institute students who are denied PLUS program loans but who still enroll in school. We increased the maximum length of payment plans from 36 months beyond graduation to 42 months beyond graduation effective in October 2012, and we recently announced a tuition freeze through calendar year 2015 for any student enrolled by October 2013 at The Art Institutes. In addition, during the quarter ended March 31, 2013, we commenced a new student lending program under which we will purchase loans awarded and disbursed to our students from a private lender. We do not expect activity under this program to be significant through the remainder of fiscal 2013; however, loans awarded and disbursed under this program will likely increase during fiscal 2014.

Nevertheless, this change in PLUS loan availability, along with continued economic pressures and a reluctance by parents to incur additional indebtedness, is expected to result in a significant decrease in the number of students using

35

PLUS program loans to finance their education at our Art Institute schools, which will adversely impact the number of students attending those schools in the future.  Furthermore, the increased lending activity described above will likely continue to result in comparably higher bad debt expense as a percentage of net revenues in future periods. For example, bad debt expense as a percentage of net revenues was 6.8% during the first nine months of fiscal 2013, as compared to 5.5% during the first nine months of fiscal 2012.

• Investigations of private sector education institutions, student concerns over incurring debt in the current economic climate and negative media have adversely impacted each of our reporting units.

As described in greater detail in Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations - Key Trends, Developments and Challenges” in our Annual Report on Form 10-K, although we believe that there are a number of factors that should contribute to long-term demand for post-secondary education, recently the industry as a whole has been challenged by a number of factors, including the overall negative impact of the current political and economic climate. We and other private sector post-secondary education providers have been subject to increased regulatory scrutiny and litigation in recent years. Furthermore, the current economic climate has impacted the ability of many prospective students to make cash payments to fund their education, and recently there has been a significant amount of negative publicity surrounding the debt that many students incur to pay for a post-secondary education. We believe that the negative publicity surrounding student indebtedness, together with the inability of students to pay cash for their education and the effect of the numerous investigations of the private sector post-secondary industry, has led to a reluctance on the part of some prospective students to enroll in our schools.

• Declines in enrollment in fully-online programs have adversely impacted the current financial results of The Art Institute of Pittsburgh, Argosy University and South University, and may impact our future results.

As described in greater detail in Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations - Key Trends, Developments and Challenges” in our Annual Report on Form 10-K, we believe that the non-traditional students who comprise a significant portion of our online student population have been impacted more significantly by the prolonged nature of the current economic downturn.  Additionally, we believe that competition for fully-online students has increased over the last several years and that, in general, interest in our programs has been adversely affected by the substantial negative media coverage of our business and industry. These external factors, as well as changes that we have made to our online academic programs, such as the shift to a non-term academic structure for our fully-online programs at Argosy University and South University and changes within our marketing efforts at South University, have impacted the performance of fully-online offerings. Recently, we have started to see improved financial performance for South University as a result of the changes to the marketing of its fully-online programs described above.

• Potential changes to the 90/10 Rule could impact financial results in fiscal 2013 and beyond.

As described in greater detail in Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations - Key Trends, Developments and Challenges” in our Annual Report on Form 10-K, various legislative proposals have been introduced in Congress that would heighten the requirements of the 90/10 Rule. If these proposed changes were adopted, we would have to make material changes to our business to remain eligible to participate in Title IV programs, which could materially and adversely affect our business. In addition, reductions in state-funded student financial aid programs also could adversely impact our compliance with the 90/10 Rule, because tuition revenue derived from such programs is included in the 10% portion of the rule calculation.

Due to the impact of the foregoing factors, our net revenues and average student population declined in fiscal 2012 and in the first nine months of fiscal 2013. Our average enrolled student body decreased from 147,000 during the nine months ended March 31, 2012 to 129,500 during the nine months ended March 31, 2013 and our average enrolled student body for fully-online programs decreased from 40,800 to 32,500 during the same periods. Our net revenues decreased from $2,121.8 million during the nine months ended March 31, 2012 to $1,903.4 million during the nine months ended March 31, 2013. Although we anticipate these factors will continue to impact us during the remainder of fiscal 2013, we are seeing encouraging demand trends as well as improved student retention across our colleges and universities.

Additionally, our cash flows from operations have been trending downward in past periods consistent with the declines in net revenues. In order to address future cash needs, during the second quarter of fiscal 2013 we completed five sale-leaseback transactions with unrelated third parties for net proceeds of $65.1 million, which are classified as a cash inflow from investing activities in the nine months ended March 31, 2013. These proceeds were used to help pay down $162.3 million of the outstanding balance on our $375.0 million senior notes due in June 2014, which was recorded as a cash outflow from financing activities.  Refer to Item 1, "Financial Statements", Note 4, "Property and Equipment" and Note 8, "Short-term and Long-term Debt" for more information on these transactions. In addition, through purchasing efficiencies, reprioritizing certain projects and the elimination of others, we believe that our fiscal 2013 capital spending will be approximately 3.5% of net revenues. We

36

have opened one school location during fiscal 2013 and expect to open one additional school location in calendar 2013, depending on the timing of regulatory approvals.

The trends described above also have resulted in our business becoming less predictable, which we expect to remain the case for the foreseeable future.

Results of Operations

The following table sets forth for the periods indicated the percentage relationship of certain statements of operations items to net revenues.

Amounts expressed as a percentage of net revenues

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Three Months Ended March 31,				For the Nine Months Ended March 31,
	2013		2012		2013		2012
Net revenues	100.0	%	100.0	%	100.0	%	100.0	%
Costs and expenses:
Educational services	54.8	%	54.4	%	57.4	%	53.4	%
General and administrative	26.0	%	27.3	%	26.8	%	27.3	%
Depreciation and amortization	6.3	%	5.8	%	6.5	%	5.6	%
Long-lived asset impairments	50.7	%	70.5	%	17.0	%	23.3	%
Total costs and expenses	137.8	%	158.0	%	107.7	%	109.6	%
Loss before interest and taxes	(37.8	)%	(58.0	)%	(7.7	)%	(9.6	)%
Interest expense, net	4.8	%	3.6	%	4.9	%	3.7	%
Loss on debt refinancing	0.8	%	1.3	%	0.3	%	0.4	%
Loss before income taxes	(43.4	)%	(62.9	)%	(12.9	)%	(13.7	)%
Income tax expense (benefit)	1.0	%	(3.6	)%	1.0	%	1.5	%
Net loss	(44.4	)%	(59.3	)%	(13.9	)%	(15.2	)%

Three Months Ended March 31, 2013 (current quarter) Compared with the Three Months Ended March 31, 2012 (prior year quarter)

All basis point changes are presented as a change in the percentage of net revenues in each period of comparison.

Net revenues

Net revenues consist primarily of tuition and fees, student housing fees, bookstore sales, restaurant sales in connection with culinary programs, workshop fees and sales of related study materials.  The amount of tuition revenue received from students varies based on the average tuition charge per credit hour, average credit hours taken per student, type of program, specific curriculum and average student population.  The largest component of our net revenues is tuition collected from our students, which is presented in our statements of operations after deducting refunds, scholarships and other adjustments.  Bookstore and housing revenues are largely a function of the average student population. The significant majority of our net revenues indirectly come from various government-sponsored student finance programs.  Our quarterly net revenues and net income fluctuate primarily as a result of the pattern of student enrollments.  We typically recognize less net revenue in the first quarter of our fiscal year than other quarters due to student vacations.

Net revenues decreased 9.1% to $638.9 million in the current quarter compared to $702.5 million in the prior year quarter due primarily to an 11.4% decrease in average enrolled student body to 128,300 students compared to the prior year quarter. In addition, new student enrollment in the March 31, 2013 quarter decreased by 9.5% compared to the prior year quarter, to approximately 24,500 students. The reduction in new student enrollment includes the impact of the strategic changes made in marketing efforts in the summer of 2012 related to South University's fully-online programs explained in more detail under "Analysis of Operating Results by Reportable Segment." When excluding enrollment from South University's fully-online programs, new student enrollment increased by 2.0%. Average revenue per student increased by 2.6% in the current quarter due to a greater mix of campus-based students relative to fully-online students.

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Educational services expense

Educational services expense consists primarily of costs related to the development, delivery and administration of our education programs. Major cost components are faculty compensation, salaries of administrative and student services staff, costs of educational materials, facility occupancy costs, bad debt expense and information systems costs. Educational services expense decreased by $32.1 million, or 8.4%, to $350.1 million in the current quarter. As a percentage of net revenues, educational services expense increased by 40 basis points. During the prior year quarter, we recognized $3.0 million of restructuring and lease termination expenses at two of our four education systems; after adjusting for these items, educational services expense increased by 82 basis points compared to the prior year quarter.

Within educational services expense, rent expense increased by 107 basis points in the current quarter compared to the prior year quarter primarily due to decreases in average class size and the resulting loss of operating leverage. Additionally, the new leases associated with the five sale-leaseback transactions that were completed with unrelated third parties in the second quarter of fiscal 2013 contributed to this increase.

Bad debt expense was $39.9 million, or 6.2% of net revenues, in the current quarter compared to $41.2 million, or 5.9% of net revenues, in the prior year quarter, an increase of 37 basis points. The increase in bad debt expense as a percentage of net revenues was primarily due to an increase in the extension of credit to our students largely attributable to the reduced PLUS loan availability explained above under "Key Trends, Developments and Challenges." Partially offsetting the bad debt increases from increased extension of credit to our students were lower receivable balances and better collections for students enrolled in fully-online programs at Argosy University and South University.

Partially offsetting the above items was a decrease in salaries and benefits expenses in the current quarter compared to the prior year quarter of 52 basis points. The remaining net decrease of ten basis points resulted from changes in other costs, none of which was individually significant.

General and administrative expense

General and administrative expense consists of marketing and student admissions expenses and certain central staff departmental costs such as executive management, finance and accounting, legal, corporate development and other departments that do not provide direct services to our students. General and administrative expense was $166.8 million in the current quarter, a decrease of 13.0% from $191.7 million in the prior year quarter. As a percentage of net revenues, general and administrative expense decreased by 119 basis points compared to the prior year quarter. During the prior year quarter, we recognized $2.9 million of restructuring expenses; after adjusting for this item, general and administrative expense decreased by 77 basis points compared to the prior year quarter.

Marketing and admissions costs were 22.7% of net revenues in the current quarter and 23.0% of net revenues in the prior year quarter representing a decrease of 26 basis points. This decrease is primarily due to the impact of the strategic changes made in marketing efforts in the summer of 2012 related to South University's fully-online programs explained in more detail below under "Analysis of Operating Results by Reportable Segment."

In addition, non-marketing and admissions related salaries and benefits decreased by 26 basis points and consulting and related costs, including legal costs, decreased by 27 basis points in the current quarter compared to the prior year quarter. The remaining net increase of two basis points as a percentage of net revenues in the current quarter relates to other items, none of which was individually significant.

Depreciation and amortization

Depreciation and amortization on long-lived assets was $40.3 million in the current quarter compared to $40.6 million in the prior year quarter, a decrease of 0.8%. Depreciation and amortization expense increased by 52 basis points in the current quarter as a percentage of net revenues primarily due to lower net revenues in the current quarter compared to the prior year quarter.

Loss on debt refinancing

On March 5, 2013, we completed the exchange of $365.3 million of our 8.75% senior notes due June 1, 2014 for (i) $203.0 million of New Notes and (ii) $162.3 million of cash. In connection with the exchange offer, we incurred fees of $5.2 million to third parties that were recorded as a loss on debt refinancing during the quarter ended March 31, 2013.

On March 30, 2012, we completed a refinancing of the $348.6 million portion of the $1.1 billion term loan under our senior secured credit facility that was due to expire in June 2013 by replacing it with $350.0 million of new term debt under the same credit agreement. The amendment was accounted for as an extinguishment of the original term loan, and we recorded a loss on debt refinancing of $9.5 million during the quarter ended March 31, 2012. This loss was comprised of $2.0 million of previously deferred financing fees and $7.5 million in fees paid to lending institutions to complete the refinancing.

Refer to Item 1, "Financial Statements", Note 8, "Short-Term and Long-Term Debt" for more information.

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Long-lived asset impairments

During the current quarter, we recorded long-lived asset impairments of $323.7 million which consisted of a non-cash goodwill impairment of $294.5 million and a non-cash indefinite-lived intangible asset impairment of $28.0 million at The Art Institutes reporting unit. In addition, we recorded a $1.2 million non-cash impairment charge related to fixed assets at one of our schools in the current quarter. During the prior year quarter, we recorded long-lived asset impairments of $495.4 million, which consisted of non-cash goodwill impairments of $155.9 million, $254.6 million and $84.9 million at Argosy University, Brown Mackie Colleges and South University, respectively. Refer to Item 1, "Financial Statements", Note 5, "Goodwill and Intangible Assets" for more information.

Interest expense, net

Net interest expense was $30.5 million in the current quarter, an increase of $5.0 million, or 19.8%, from the prior year quarter. The increase was primarily due to a higher variable interest rate following the amendment to our senior secured credit facility in March 2012. Refer to Item 1, "Financial Statements", Note 8, "Short-Term and Long-Term Debt" for more information.

Provision for income taxes

Our effective tax rates were (2.3)% and 5.7% for the quarters ended March 31, 2013 and 2012, respectively. The effective tax rates in each quarter were significantly impacted by goodwill impairments, the majority of which were not deductible for income tax purposes. After adjusting for these impairments, our effective tax rates would have been 39.1% and 38.0% for the quarters ended March 31, 2013 and 2012, respectively. In each of the quarters ended March 31, 2013 and 2012, we reduced tax expense by $0.7 million due to the reversal of uncertain tax liabilities upon the expiration of statutes of limitation. In the current quarter, we also reduced tax expense by $0.7 million as a result of a state income tax refund.

The effective rate increased in the current quarter as compared to the prior year quarter due to the impact that permanent tax differences have on lower earnings compared to the prior year, as well as a higher proportion of projected earnings coming from states with higher tax rates. The effective tax rates differed from the combined federal and state statutory rates due to valuation allowances, expenses that are non-deductible for tax purposes, and accounting related to uncertain tax positions.

As discussed in Item 1, "Financial Statements," Note 11, "Income Taxes," we have evaluated the realizability of our deferred tax assets based upon the weight of all available evidence, both positive and negative, and believe it is more-likely-than-not that we will realize the benefit of our deferred tax assets and, as such, no valuation allowance is required except as disclosed in Part II, Item 8 "Financial Statements and Supplementary Data," Note 11, "Income Taxes" of the Annual Report on Form 10-K with respect to certain state deferred tax assets.

Nine Months Ended March 31, 2013 (current period) Compared with the Nine Months Ended March 31, 2012 (prior year period)

All basis point changes are presented as a change in the percentage of net revenues in each period of comparison.

Net revenues

Net revenues decreased 10.3% from $2,121.8 million in the prior year period to $1,903.4 million in the current period due primarily to an 11.9% decrease in average enrolled student body to 129,500 students compared to the prior year period. In addition, new student enrollment in the March 31, 2013 year to date period decreased by 17% compared to the prior year period, to approximately 81,300 students, which was primarily due to declines in new student enrollment in fully-online programs. Average revenue per student increased by 1.8% in the current period due to a greater mix of campus-based students relative to fully-online students.

Educational services expense

Educational services expense decreased by $40.6 million, or 3.6%, from $1,132.4 million in the prior year period to $1,091.8 million in the current period. As a percentage of net revenues, educational services expense increased by 399 basis points.

Bad debt expense was $129.7 million, or 6.8% of net revenues, in the current period compared to $117.7 million, or 5.5% of net revenues, in the prior year period, which represented an increase of 127 basis points. The increase in bad debt expense as a percentage of net revenues was primarily due to an increase in the extension of credit to our students, which is largely attributable to the reduced PLUS loan availability explained above under "Key Trends, Developments and Challenges."

Salaries and benefits expenses increased 109 basis points as a percentage of net revenues and rent expense associated with school locations increased 107 basis points as a percentage of net revenues compared to the prior year period due primarily to decreases in average class size and the resulting loss of operating leverage. We also completed five sale-leaseback transactions with unrelated third parties in the second quarter of fiscal 2013 that resulted in recognizing a net loss of $3.5

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million. This loss represented an increase of 18 basis points as a percentage of net revenues compared to the prior year period. Cost of retail sales increased by 23 basis points primarily due to the Brown Mackie Colleges segment converting to iPads, which includes electronic books, and the resulting decrease in margins. The remaining net increase of 15 basis points in the current nine month period relates to other items, none of which was individually significant.

General and administrative expense

General and administrative expense was $512.5 million in the current period, a decrease of 11.9% from $581.6 million in the prior year period. As a percentage of net revenues, general and administrative expense decreased by 49 basis points compared to the prior year period.

Marketing and admissions costs were 22.6% of net revenues in the current period compared to 23.0% of net revenues in the prior year period representing a decrease of 39 basis points. The remaining net decrease of ten basis points in the current period relates to other items, none of which was individually significant.

Depreciation and amortization

Depreciation and amortization on long-lived assets was $123.7 million in the current period compared to $118.7 million in the prior year period, an increase of 4.2%. During the current period, we recorded accelerated amortization of $4.6 million primarily resulting from the write off of a software asset that no longer had a useful life. After adjusting for this charge, depreciation and amortization expense increased by 66 basis points in the current period as a percentage of net revenues primarily due to lower net revenues in the current period compared to the prior year period.

Loss on debt refinancing

On March 5, 2013, we completed the exchange of $365.3 million of our 8.75% senior notes due June 1, 2014 for (i) $203.0 million of New Notes and (ii) $162.3 million of cash. In connection with the exchange offer, we incurred fees of $5.2 million to third parties that were recorded as a loss on debt refinancing during the nine months ended March 31, 2013.

On March 30, 2012, we completed a refinancing of the $348.6 million portion of the $1.1 billion term loan under our senior secured credit facility that was due to expire in June 2013 by replacing it with $350.0 million of new term debt under the same credit agreement. The amendment was accounted for as an extinguishment of the original term loan, and we recorded a loss on debt refinancing of $9.5 million during the nine months ended March 31, 2012. This loss was comprised of $2.0 million of previously deferred financing fees and $7.5 million in fees paid to lending institutions to complete the refinancing.

Refer to Item 1, "Financial Statements", Note 8, "Short-Term and Long-Term Debt" for more information.

Long-lived asset impairments

During the nine months ended March 31, 2013, we recorded long-lived asset impairments of $323.7 million which consisted of a non-cash goodwill impairment of $294.5 million and a non-cash indefinite-lived intangible asset impairment of $28.0 million at The Art Institutes reporting unit. In addition, we recorded a $1.2 million non-cash impairment charge related to fixed assets at one of our schools in the current quarter. During the nine months ended March 31, 2013, we recorded long-lived asset impairments of $495.4 million, which consisted of non-cash goodwill impairments of $155.9 million, $254.6 million and $84.9 million at Argosy University, Brown Mackie Colleges and South University, respectively. Refer to Item 1, "Financial Statements," Note 5, "Goodwill and Intangible Assets" for more information.

Interest expense, net

Net interest expense was $92.9 million in the current period, an increase of $13.8 million, or 17.4%, from the prior year period. The increase was primarily due to a higher variable interest rate following the amendment to our senior secured credit facility in March 2012. Refer to Item 1, "Financial Statements," Note 8, "Short-Term and Long-Term Debt" for more information.

Provision for income taxes

Our effective tax rates were (7.9)% and (10.9)% for the nine months ended March 31, 2013 and 2012, respectively. The effective tax rates in each period were significantly impacted by goodwill impairments, the majority of which were not deductible for income tax purposes. After adjusting for these impairments, our effective tax rates would have been 40.4% and 38.7% for the nine month periods ended March 31, 2013 and 2012, respectively. In each of the nine months ended March 31, 2013 and 2012, we reduced tax expense by $0.7 million due to the reversal of uncertain tax liabilities upon the expiration of statutes of limitation. In the current year period, we reduced tax expense by $0.7 million as a result of a state income tax refund.

The effective rate increased in the current period as compared to the prior year period due to the impact that permanent tax differences have on lower earnings compared to the prior year, as well as a higher proportion of projected earnings coming

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from states with higher tax rates. The effective tax rates differed from the combined federal and state statutory rates due to valuation allowances, expenses that are non-deductible for tax purposes, and accounting related to uncertain tax positions.

As discussed in Item 1, "Financial Statements," Note 11, "Income Taxes," we have evaluated the realizability of our deferred tax assets based upon the weight of all available evidence, both positive and negative, and believe it is more-likely-than-not that we will realize the benefit of our deferred tax assets and, as such, no valuation allowance is required except as disclosed in Part II, Item 8 "Financial Statements and Supplementary Data," Note 11, "Income Taxes" of the Annual Report on Form 10-K with respect to certain state deferred tax assets.

Analysis of Operating Results by Reportable Segment

Each of the Company's schools provides student-centered education. Our schools are organized by education system and are aligned to specific targeted markets based on field of study, employment opportunity, type of degree offering and student demographics, and our operations are organized into four corresponding reportable segments. The Company's four reportable segments are The Art Institutes, Argosy University, Brown Mackie Colleges and South University.

Student information by segment was as follows:

	For the Three Months Ended March 31,
New student enrollment:	2013	2012	% Change
The Art Institutes	11,200	12,100	(7.3	)%
Argosy University	5,100	4,300	18.1	%
Brown Mackie Colleges	4,100	4,000	3.7	%
South University	4,100	6,700	(39.0	)%
Total EDMC	24,500	27,100	(9.5	)%
Average enrolled student body (A):
The Art Institutes	67,000	75,300	(11.1	)%
Argosy University	25,300	28,400	(10.9	)%
Brown Mackie Colleges	17,000	18,600	(8.3	)%
South University	19,000	22,500	(15.6	)%
Total EDMC	128,300	144,800	(11.4	)%

(A) Average enrolled student body is calculated as the three month average of the unique students who met attendance requirements within a month of the quarter.

	April	April
Starting student enrollment (B):	2013	2012	% Change
The Art Institutes	63,700	70,500	(9.8	)%
Argosy University	24,500	26,100	(6.2	)%
Brown Mackie Colleges	16,700	18,200	(8.1	)%
South University	17,600	20,100	(12.3	)%
Total EDMC	122,500	134,900	(9.2	)%

(B) Fully-online enrollment is measured based on the number of students meeting attendance requirements over a two-week period near the start of the fiscal quarter.

EBITDA excluding certain expenses is the measure used by the chief operating decision maker to evaluate segment performance and allocate resources. It is defined as net income before net interest expense, income taxes, depreciation and amortization and certain expenses. EBITDA excluding certain expenses is not a recognized term under GAAP and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA excluding certain expenses is not intended to be a measure of free cash flow available for management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Management believes EBITDA excluding certain expenses is helpful in highlighting trends because EBITDA excluding certain expenses excludes the results of decisions that are outside the control of operating management and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. Management compensates for the

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limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, this presentation of EBITDA excluding certain expenses may not be comparable to similarly titled measures of other companies. Adjustments to reconcile segment results to consolidated results are included under the caption “Corporate and other,” which primarily includes unallocated corporate activity. Refer to Item 1, “Financial Statements,” Note 14, “Segments” for a reconciliation of EBITDA excluding certain expenses by reportable segment to consolidated loss before income taxes.

Net revenues and EBITDA excluding certain expenses by segment were as follows (in thousands):

	For the Three Months Ended March 31,						For the Nine Months Ended March 31,
	2013			2012			2013			2012
Net revenues:
The Art Institutes	$	393,560		$	442,842		$	1,185,232		$	1,341,344
Argosy University	94,430			104,781			268,663			308,995
Brown Mackie Colleges	73,876			77,949			226,122			240,617
South University	77,037			76,927			223,346			230,826
Total EDMC	$	638,903		$	702,499		$	1,903,363		$	2,121,782
EBITDA excluding certain expenses: (A)
The Art Institutes	$	100,527		$	124,611		$	280,714		$	386,688
Argosy University	16,373			19,202			33,363			50,580
Brown Mackie Colleges	8,436			14,521			28,798			50,733
South University	15,410			(1,980		)	30,670			1,320
Corporate and other	(18,791		)	(21,898		)	(65,341		)	(68,993		)
Total EDMC	$	121,955		$	134,456		$	308,204		$	420,328

(A) EBITDA excluding certain expenses excludes the following:

• long-lived asset impairments and a loss on debt refinancing in all current year and prior year periods;

• restructuring expenses in the current nine-month period; and

• restructuring expenses in the prior year periods.

Refer to Item 1, “Financial Statements," Note 5, "Goodwill and Intangible Assets" and Note 14, “Segment Reporting" for more information.

Additionally, depreciation and amortization expense is excluded from EBITDA excluding certain expenses, which was as follows (in thousands):

	For the Three Months Ended March 31,				For the Nine Months Ended March 31,
Depreciation and Amortization:	2013		2012		2013		2012
The Art Institutes	$	20,689	$	20,700	$	59,969	$	60,136
Argosy University	4,294		4,466		12,753		13,325
Brown Mackie Colleges	5,503		6,104		17,116		17,948
South University	3,377		3,327		9,885		9,453
Corporate and other	6,403		6,013		23,944		17,832
Total EDMC	$	40,266	$	40,610	$	123,667	$	118,694

Three Months Ended March 31, 2013 (current quarter) Compared with the Three Months Ended March 31, 2012 (prior year quarter)

The Art Institutes

Net revenues decreased by $49.3 million, or 11.1%, to $393.6 million in the current quarter compared to the prior year quarter due primarily to a decrease in average enrolled student body of 11.1%, or approximately 8,300 students. In addition, new student enrollment in the current quarter decreased by 7.3% compared to the prior year quarter to approximately 11,200 students. The decreases in average and new student enrollments were primarily the result of the factors described above under "Key Trends, Developments and Challenges."

The volume of applications for prospective students at The Art Institutes decreased in the current quarter compared to the prior year quarter. Additionally, the rate at which students who completed an application and enrolled in one of our programs, which we refer to as our "start rate," declined for The Art Institutes compared to the prior year quarter. This decrease was due

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in part to the difficulty many traditional-aged students are having financing their education due to the decreased availability of PLUS program loans.

These declines in student enrollment and net revenues contributed to the $24.1 million decrease in EBITDA excluding certain expenses, which fell to $100.5 million at The Art Institutes in the current quarter. While operating expenses were higher as a percentage of net revenues compared to the prior year quarter, actual costs decreased compared to the prior year quarter primarily due to previously implemented staffing adjustments intended to align costs with enrollment levels and slightly lower advertising expense.

We determined a portion of the existing goodwill balance at The Art Institutes reporting unit was impaired at March 31, 2013. Refer to "Use of Estimates and Critical Accounting Policies" and Item 1, "Financial Statements", Note 5, "Goodwill and Intangible Assets" for more information.

Argosy University

Net revenues decreased by $10.4 million, or 9.9%, to $94.4 million in the current quarter compared to the prior year quarter due primarily to a decrease in average enrolled student body of 10.9%, or approximately 3,100 students. The decrease in average enrolled student body was primarily the result of the factors described above under "Key Trends, Developments and Challenges." However, new student enrollment increased by 18.1% to approximately 5,100 students in the current quarter as compared to the prior year quarter.

Application volume for prospective students increased significantly in the current quarter compared to the prior year quarter. In addition, new student cohort retention, which we measure 180 days after the initial start of the academic term, improved significantly during the current quarter compared to the prior year quarter.

The decline in average enrolled student body and net revenues contributed to the $2.8 million decrease in EBITDA excluding certain expenses to $16.4 million at Argosy University in the current quarter compared to the prior year quarter. While operating expenses were higher as a percentage of net revenues compared to the prior year quarter, actual costs decreased compared to the prior year quarter primarily due to previously implemented staffing adjustments intended to align costs with enrollment levels and slightly lower advertising expense.

Brown Mackie Colleges

Net revenues decreased $4.1 million, or 5.2%, to $73.9 million in the current quarter compared to the prior year quarter due primarily to a decrease in average enrolled student body of 8.3%, or approximately 1,600 students. The decrease in average enrolled student body was primarily the result of the factors described above under "Key Trends, Developments and Challenges." However, new student enrollment in the current quarter increased by 3.7% to approximately 4,100 students compared to the prior year quarter. In addition, new student cohort retention improved significantly compared to the prior year quarter.

The above decrease in average enrolled student body and net revenues contributed to a $6.1 million decrease in EBITDA excluding certain expenses to $8.4 million at Brown Mackie Colleges in the current quarter compared to the prior year quarter. Operating expenses increased 3.2% in the current quarter compared to the prior year quarter. Cost of retail sales increased due to the transition of this segment's students from traditional book sales to the use of iPads and electronic books in the current fiscal year and the resulting decrease in margins. Rent expense increased in the current quarter due to a lease termination fee received that was being amortized as a reduction to rent expense through December 2012. Additionally, advertising expense increased slightly in the current quarter compared to the prior year quarter.

South University

Net revenues were flat in the current quarter compared to the prior year quarter despite a decrease in average enrolled student body of 15.6%, or approximately 3,500 students, and a new student enrollment decline of 39.0% to approximately 4,100 students. The decreases in student enrollment was offset by an increase in average revenue per student of 18.6% in the current quarter due to a greater mix of campus-based students relative to fully-online students.

Average and new student enrollments as well as application volume increased in the current quarter for campus-based programs compared to the prior year quarter. The overall decrease in student enrollment in the current quarter was primarily the result of fewer students enrolling in South University's fully-online programs. South University substantially revised its marketing efforts for fully-online programs at the beginning of fiscal 2013 in order to more effectively attract students who it believes are more likely to apply, start and persist towards completion of their academic program. This change resulted in substantially fewer new students but better performance on quality metrics such as new student cohort retention, which improved significantly during the current quarter for both campus-based and fully-online programs.

South University's EBITDA excluding certain expenses was $15.4 million in the current quarter compared to a loss of $2.0 million in the prior year quarter. The increase of $17.4 million in EBITDA excluding certain expenses quarter over

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quarter was primarily due to the marketing changes described above, which resulted in lower marketing and admissions expenses.

Nine Months Ended March 31, 2013 (current period) Compared with the Nine Months Ended March 31, 2012 (prior year period)

The Art Institutes

Net revenues decreased by $156.1 million, or 11.6%, to $1,185.2 million in the current period compared to the prior year period due primarily to a decrease in average enrolled student body of 11.4%, or approximately 8,700 students. In addition, new student enrollment in the current period decreased by 14.6% compared to the prior year period to approximately 40,400 students.

The volume of applications for prospective students at The Art Institutes decreased in the current period compared to the prior year period. Additionally, the start rate declined for The Art Institutes compared to the prior year period. This decrease was due in part to the difficulty many traditional-aged students are having financing their education due to the decreased availability of PLUS program loans.

These declines in student enrollment and net revenues contributed to the $106.0 million decrease in EBITDA excluding certain expenses, which fell to $280.7 million at The Art Institutes in the current period. While operating expenses were higher as a percentage of net revenues compared to the prior year period, actual costs decreased primarily due to cost savings from reductions in staffing levels and slightly lower advertising expense. These decreases were partially offset by higher bad debt expense in the current period compared to the prior year period, principally from the extension of credit to students enrolled at The Art Institutes due in part to the recent changes in the availability of PLUS program loans.

We determined a portion of the existing goodwill balance at The Art Institutes reporting unit was impaired at March 31, 2013. Refer to "Use of Estimates and Critical Accounting Policies" and Item 1, "Financial Statements", Note 5, "Goodwill and Intangible Assets" for more information.

Argosy University

Net revenues decreased by $40.3 million, or 13.1%, to $268.7 million in the current period compared to the prior year period due primarily to a decrease in average enrolled student body of 13.4%, or approximately 3,900 students. In addition, new student enrollment in the current period compared to the prior year period decreased by 6.0% to approximately 14,400 students. Application volume for prospective students at Argosy University increased in the current year period compared to the prior year period while start rates were down.

These declines in student enrollment and net revenues contributed to the $17.2 million decrease in EBITDA excluding certain expenses to $33.4 million at Argosy University in the current period compared to the prior year period. While operating expenses were higher as a percentage of net revenues compared to the prior year period, actual costs decreased compared to the prior year period primarily due to cost savings from reductions in staffing levels and lower advertising expenses.

Brown Mackie Colleges

Net revenues decreased $14.5 million, or 6.0%, to $226.1 million in the current period compared to the prior year period due primarily to a decrease in average enrolled student body of 10.1%, or approximately 2,000 students. In addition, new student enrollment in the current period compared to the prior year period also decreased by 2.9% to approximately 13,000 students.

The above decreases in student enrollment and net revenues resulted in the $21.9 million decrease in EBITDA excluding certain expenses to $28.8 million at Brown Mackie Colleges in the current period compared to the prior year period. Operating expenses increased 3.9% in the current period compared to the prior year period, which was primarily due to an increase in cost of retail sales. This segment transitioned its students to the use of iPads and electronic books in the current period and the resulting decrease in traditional book sales resulted in a decrease in margins. Rent expense also increased in the current period compared to the prior year period.

South University

Net revenues decreased $7.5 million, or 3.2%, to $223.3 million in the current period compared to the prior year period due primarily to a decrease in average enrolled student body of 13.2%, or approximately 2,900 students. In addition, new student enrollment in the current period compared to the prior year period also decreased by 38.4% to approximately 13,500 students. The decreases in student enrollment was partially offset by an increase in average revenue per student of 11.3% in the current year period due to a greater mix of campus-based students relative to fully-online students.

Average and new student enrollments as well as application volume increased in the current period for campus-based programs compared to the prior year period The overall decreases in student enrollment in the current year period were

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primarily the result of fewer students enrolling in South University's fully-online programs. South University substantially revised its marketing efforts for fully-online programs at the beginning of fiscal 2013 in order to more effectively attract students who it believes are more likely to apply, start and persist towards completion of their academic program.

South University's EBITDA excluding certain expenses was $30.7 million in the current period compared to $1.3 million in the prior year period. The increase of $29.4 million in EBITDA excluding certain expenses in the current period compared to the prior year period was primarily due to the marketing changes described above, which resulted in lower marketing and admissions expenses.

Liquidity and Funds of Capital Resources

We finance our operating activities primarily from cash generated from operations, and our primary source of cash is tuition collected from our students. Most of the students at our U.S. schools rely, at least in part, on financial assistance programs to pay for their education, the most significant of which are federal student aid programs under Title IV of the HEA. We believe that cash flow from operations, supplemented from time to time with borrowings under our revolving credit facility, will provide adequate funds for ongoing operations, planned capital expenditures and debt service during the next twelve months. 

Operating cash flows

Despite lower operating performance in the current period, cash flows provided by operating activities for the nine months ended March 31, 2013 were $286.2 million compared to $152.7 million in the nine months ended March 31, 2012. Current year operating cash flows were comparatively higher primarily due to a transfer of $210.0 million to restricted cash in the prior year quarter in connection with the issuance of letters of credit under our cash secured letter of credit facilities, which reduced the prior year period's cash flow from operating activities. The cash secured letter of credit facilities are being used to help satisfy our previously disclosed letter of credit requirement with the U.S. Department of Education.

The extent to which we extend credit to our students has increased over the last several years due to decreases in the availability of PLUS program and private loans for students, and we expect this trend to continue in the future. We extend credit to students to help fund the difference between our total tuition and fees and the amount covered by other sources, including amounts awarded under Title IV programs, private loans obtained by students, and cash payments by students. Several times over the last two fiscal years, we extended the repayment period for financing made available to students beyond graduation. Most recently we extended the repayment period from a maximum of 36 months beyond graduation to a maximum of 42 months beyond graduation in October 2012. The total amount of gross receivables that extend beyond twelve months as a result of the additional extension of credit to students, which are recorded as a long-term asset, approximated $45.8 million at March 31, 2013, compared to $25.6 million at March 31, 2012. In March 2013, we commenced a new student lending program under which we will purchase loans awarded and disbursed to our students by a private lender. No aid was awarded under this program for academic terms that started prior to March 31, 2013.

The additional extension of credit has contributed to the increase in bad debt expense as a percentage of our net revenues to 6.8% during the nine months ended March 31, 2013 compared to 5.5% for the nine months ended March 31, 2012. If students continue to utilize this funding source or the new student lending program described above, our bad debt expense as a percentage of net revenues will likely continue to increase and our cash flow from operations will continue to decrease, due to delayed receipts of cash from students. Because these funding sources are not federal student loans, these plans do not directly affect our published federal student loan cohort default rates. However, these funding sources may have an indirect negative impact on the federal student loan cohort default rates because our students effectively may have more total debt upon graduation.

Our student receivables balance reaches a peak immediately after the billing of tuition and fees at the beginning of each academic period. We collect the majority of these receivables at or near the start of each academic period when we receive federal financial aid proceeds and cash payments from continuing students. Because the academic terms of our programs do not all coincide with our quarterly reporting periods, we may have quarterly fluctuations in cash receipts, reported net cash flow from operations, net accounts receivable, unearned tuition and advance payment balances. For the nine months ended March 31, 2013, there were no significant changes to the start dates of academic terms in session as compared to the prior year period.

Most of our facilities are leased under operating lease agreements. We anticipate that future commitments on existing leases will be satisfied from cash provided from operating activities. We also expect to extend the terms of leases that will expire in the near future or enter into similar long-term commitments for comparable space.

We have accrued $3.9 million as of March 31, 2013 for uncertain tax positions, excluding interest and the indirect benefits associated with state income taxes. We may be required to pay the amounts accrued in future periods if we are ultimately unsuccessful in defending these uncertain tax positions. However, we cannot reasonably predict at this time the

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future period in which these payments may occur, if at all.

Direct Loan Programs and Private Student Loans

We collected the substantial majority of our consolidated net revenues during fiscal 2012 from the receipt by students of Title IV financial aid program funds. On a consolidated basis, cash received from students attending our institutions from Title IV programs represented approximately 73% of our total cash receipts during fiscal 2012. These receipts include $515.8 million of stipends, which are receipts by students of financing that exceeds the tuition and fees paid to our institutions. Stipends are disbursed to students to use for living and other expenses incurred while attending school. Stipends are not included in our consolidated net revenues. For purposes of the 90/10 Rule, which tests receipts from Title IV programs on a cash basis and excludes certain receipts such as stipends, the percentage of revenues derived by our institutions from Title IV programs during fiscal 2012 ranged from approximately 56% to approximately 86%, with a weighted average of approximately 79%.

Our students' ability to obtain private loans has decreased substantially during the last three fiscal years due to adverse market conditions for consumer student loans. While we are taking steps to address the private loan needs of our students as described above, the consumer lending market could worsen. The inability of our students to finance their education could cause our student population to decrease, which could have a material adverse effect on our financial condition, results of operations and cash flows.

Investing cash flows

Capital expenditures were $64.6 million, or 3.4% of net revenues, in the nine months ended March 31, 2013, compared to $64.7 million, or 3.0% of net revenues, in the nine months ended March 31, 2012.

Reimbursements for tenant improvements represent cash paid for capital expenditures in which the terms of the applicable lease agreements require the lessors to reimburse the Company for leasehold improvements.

During fiscal 2013, we completed five sale-leaseback transactions with unrelated third parties for net proceeds of $65.1 million. We recorded a net loss of $3.5 million related to these transactions during the nine months ended March 31, 2013; however, a gain of approximately $17.8 million was deferred and will be recognized over the initial terms of the new leases as a reduction to educational services expense, which range from three to 15 years.

Financing cash flows

As a result of the Transaction, we are highly leveraged and our debt service requirements are significant. As of March 31, 2013, we had $1,295.4 million in aggregate indebtedness outstanding. The largest portion of our debt is a senior secured credit facility, which currently consists of a $1.1 billion term loan and a $328.3 million revolving credit facility, that we obtained in connection with the Transaction.

On March 5, 2013, we completed a private exchange offer in which we exchanged our 8.75% senior notes due June 1, 2014 for (i) new Senior Cash Pay/PIK Notes due July 1, 2018 and (ii) cash. In connection with this exchange offer, we paid down $162.3 million of the existing senior notes with cash on hand. We also incurred $5.2 million of fees to third parties of which $4.4 million was paid through March 31, 2013.

At March 31, 2013, we had issued an aggregate of $353.0 million in letters of credit, the majority of which are issued to the U.S. Department of Education, which requires us to maintain one or more letters of credit due to our failure to satisfy certain regulatory financial ratios after giving effect to the Transaction. In December 2012, the U.S. Department of Education decreased the required letter of credit from $414.5 million to $348.6 million, which equals 15% of the total Title IV aid received by students attending our institutions during the fiscal year ended June 30, 2012.

In order to fund the current letter of credit obligation to the U.S. Department of Education, we used all $200.0 million of capacity under our cash secured letter of credit facilities and $148.6 million of letter of credit capacity under the revolving credit facility. Because letters of credit reduce the amount available for borrowing under the revolving credit facility, the amount available to borrow under the revolving credit facility at March 31, 2013 was $175.3 million.

We borrowed $111.3 million under the revolving credit facility at June 30, 2012 in order to satisfy year-end regulatory financial ratios, which was repaid on July 2, 2012 from cash on hand at fiscal year-end. We did not borrow against the revolving credit facility at any other time during fiscal 2012 or fiscal 2013.

We may from time to time use cash on hand to retire or purchase our outstanding debt through open market transactions, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

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Covenant Compliance

Under its senior secured credit facilities, our subsidiary, EM LLC, is required to satisfy a maximum total leverage ratio, a minimum interest coverage ratio and other financial conditions tests. As of March 31, 2013, EM LLC was in compliance with the financial and non-financial covenants. Its continued ability to meet those financial ratios and tests can be affected by events beyond our control, and we cannot assure you that it will meet those ratios and tests in the future.

Adjusted EBITDA is a non-GAAP measure used to determine our compliance with certain covenants contained in the indenture governing the Senior Cash Pay/PIK Notes and in the credit agreement governing our senior secured credit facilities. Adjusted EBITDA is defined as EBITDA further adjusted to exclude unusual items and other adjustments permitted in calculating covenant compliance under our senior secured credit facilities and the indenture governing the Senior Cash Pay/PIK Notes. We believe that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide additional information to investors to demonstrate compliance with our financing covenants.

The breach of covenants in the credit agreement governing our senior secured credit facilities that are tied to ratios based on Adjusted EBITDA could result in a default under that agreement, in which case the lenders could elect to declare all borrowed amounts immediately due and payable. Any such acceleration also would result in a default under our indenture governing the Senior Cash Pay/PIK Notes. Additionally, under the credit agreement governing our senior secured credit facilities and the indenture governing the Senior Cash Pay/PIK Notes, our subsidiaries’ ability to engage in activities, such as incurring additional indebtedness, making investments and paying dividends or other distributions, is also tied to ratios based on Adjusted EBITDA.

Adjusted EBITDA does not represent net income or cash flows from operations as those terms are defined by GAAP and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. In addition, unlike GAAP measures such as net income and earnings per share, Adjusted EBITDA does not reflect the impact of our obligations to make interest payments on our other debt service obligations, which have increased substantially as a result of the indebtedness incurred in June 2006 to finance the Transaction and related expenses. While Adjusted EBITDA and similar measures frequently are used as measures of operations and the ability to meet debt service requirements, these terms are not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation. Adjusted EBITDA does not reflect the impact of earnings or charges resulting from matters that we may consider not to be indicative of our ongoing operations. In particular, the definition of Adjusted EBITDA in our senior credit facilities and the indenture governing the Senior Notes allows us to add back certain non-cash, extraordinary, unusual or non-recurring charges that are deducted in calculating net income. However, these are expenses that may recur, vary greatly and are difficult to predict. Further, our debt instruments require that Adjusted EBITDA be calculated for the most recent four fiscal quarters. As a result, the measure can be affected disproportionately by a particularly strong or weak quarter. Further, it may not be comparable to the measure for any subsequent twelve-month period or any complete fiscal year.

The following is a reconciliation of net income, which is a GAAP measure of operating results, to Adjusted EBITDA for Education Management LLC as defined in its debt agreements. The terms and related calculations are defined in the senior secured credit agreement (in millions).

	For the Twelve Month Period Ended March 31, 2013
Net loss	$	(1,454.7	)
Interest expense, net	124.1
Income tax benefit	(26.3		)
Depreciation and amortization	163.6
EBITDA	(1,193.3		)
Long-lived asset impairments (1)	1,575.1
Loss on debt refinancing (2)	5.2
Severance and relocation	14.4
Non-cash compensation (3)	15.1
Other	8.5
Adjusted EBITDA - Covenant Compliance	$	425.0

(1) We recorded long-lived asset impairments of $323.7 million in the quarter ended March 31, 2013. Additionally, we recorded impairments of goodwill and indefinite-lived intangible assets of $1,251.4 million in the quarter ended June 30, 2012. Refer to Item 1 "Financial Statements," Note 5 "Goodwill and Intangible Assets" and Note 4 "Property and Equipment" for more information.

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(2) In March 2013, we recorded a $5.2 million loss on debt refinancing in connection with the refinancing of the senior notes.

(3) Represents non-cash expense for stock options and restricted stock.

Our financial covenant requirements under the senior secured credit facilities and actual ratios for the twelve month period ended March 31, 2013 were as follows:

	Covenant Requirements	Actual Ratios
Senior secured credit facility
Adjusted EBITDA to Consolidated Interest Expense ratio	Minimum of 2.75x	3.42x
Consolidated Total Debt to Adjusted EBITDA ratio	Maximum of 3.50x	2.62x

Use of Estimates and Critical Accounting Policies

During the three months ended March 31, 2013, we recorded a non-cash goodwill impairment of $294.5 million at The Art Institutes reporting unit. Refer to Item 1, "Financial Statements," Note 5, "Goodwill and Intangible Assets" for more information. The following table illustrates the amount of goodwill allocated to each reporting unit as well as the deficit, if any, created between the fair value and the carrying value of each reporting unit that would occur given hypothetical reductions in their respective fair values at March 31, 2013:

			Step One Analysis:
			Deficit Caused By Hypothetical Reductions to Fair Value
			(in millions)
	Goodwill		5%		15%		25%			35%
The Art Institutes	$	568	$	—	$	—	$	(23	)	$	(138	)
Argosy University	63		—		—		—			—
South University	38		—		—		—			—
Total EDMC	$	669	$	—	$	—	$	(23	)	$	(138	)

Holding all other factors constant, an increase in the discount rate of 100 basis points would not have resulted in the carrying values of The Art Institutes, Argosy University and South University exceeding their estimated fair values at March 31, 2013 (after recording the current quarter goodwill impairment charge at The Art Institutes).

Regulatory Environment and Gainful Employment

In October 2010, the U.S. Department of Education issued new regulations pertaining to certain aspects of the administration of the Title IV programs, including, but not limited to state authorization; disclosure of information related to gainful employment; compensation for persons and entities engaged in certain aspects of recruiting, admissions and student financial aid; determination of attendance; and definition of credit hours. With minor exceptions, these regulations became effective July 1, 2011.

See Part I, Item 1 “Business — Student Financial Assistance — Program Integrity Regulations" of our June 30, 2012 Annual Report on Form 10-K for more information.

Contingencies

Refer to Item 1 “Financial Statements,” Note 12 “Contingencies."

Off Balance Sheet Arrangements

Most of our facilities are leased under operating lease agreements. We anticipate that future commitments on existing leases through fiscal 2028 will be satisfied from cash provided from operating activities. We also expect to extend the terms of leases that will expire in the near future or enter into similar long-term commitments for comparable space.

At March 31, 2013, we have provided $21.9 million of surety bonds primarily to state regulatory agencies through four different surety providers. We believe that these surety bonds will expire without being funded; therefore, the commitments are not expected to affect our financial condition.

New Accounting Standards Not Yet Adopted

None

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Certain Risks and Uncertainties

Certain of the matters that we discuss in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which are based on information currently available to management, typically contain words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “will,” “should,” “seeks,” “approximately” or “plans” or similar words and concern our strategy, plans or intentions. However, the absence of these or similar words does not mean that any particular statement is not forward-looking. All of the statements that we make relating to estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results are forward looking statements. In addition, from time to time, we make forward-looking public statements concerning our expected future operations and performance and other developments. These and any other forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially and unpredictably from any future results, performance or achievements expressed or implied by such forward-looking statements. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions, and we caution that it is very difficult to predict the impact of known factors, and impossible to anticipate all factors, that could affect our actual results.

Some of the factors that we believe could affect our results and that could cause actual results to differ materially from our expectations include, but are not limited to: the timing and magnitude of student enrollment and changes in student mix, including the relative proportions of on-ground and online students enrolled in our programs; changes in average registered credits taken by students; our ability to maintain eligibility to participate in Title IV programs; other changes in our students' ability to access federal and state financial aid, as well as private loans from third-party lenders; any difficulties we may face in opening new schools, growing our online academic programs and otherwise implementing our growth strategy; increased or unanticipated legal and regulatory costs; the results of program reviews and audits; changes in accreditation standards; the implementation of new operating procedures for our fully-online programs; the implementation of program initiatives in response to, or as a result of further developments in, the litigation concerning the U.S. Department of Education's new gainful employment regulation; adjustments to our programmatic offerings to comply with the 90/10 rule;     our high degree of leverage and our ability to generate sufficient cash to service all of our debt obligations and other liquidity needs; other market and credit risks associated with the post-secondary education industry, adverse media coverage of the industry and overall condition of the industry; changes in the overall U.S. or global economy; disruptions or other changes in access to the credit and equity markets in the United States and worldwide; and the effects of war, terrorism, natural disasters or other catastrophic events.

The foregoing review of factors should not be construed as exhaustive. For a more detailed discussion of certain risk factors affecting the Company's risk profile, see Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q and Part I, Item 1A, “Risk Factors,” in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2012. The Company expressly disclaims any current intention to update any forward-looking statements contained in this report.

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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In connection with the exchange offer of the Company's senior notes as described in Item 1. "Financial Statements," Note 8 "Short-term and Long-term Debt," the Company's weighted average interest rate increased from 7.4% at June 30, 2012 to 9.1% at March 31, 2013.

There have been no other significant changes to our market risk since June 30, 2012. For a discussion of our exposure to market risk, refer to Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk" of our June 30, 2012 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

The Company, under the supervision and participation of its management, which include the Company’s chief executive officer and chief financial officer, evaluated the effectiveness of its “disclosure controls and procedures,” as defined in Rule 13a-15(e) under the Exchange Act. This evaluation was conducted as of the end of the period covered by this Form 10-Q. Based on that evaluation, our chief executive officer and chief financial officer have concluded that the Company’s disclosure controls and procedures are effective. Effective controls are designed to ensure that information required to be disclosed by the Company in reports that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. These controls and procedures are designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company is involved in litigation and other legal disputes in the ordinary course of business. Refer to Part I, Item 1, "Financial Statements," Note 12, "Contingencies" of this Quarterly Report on Form 10-Q for information regarding certain legal proceedings, which is incorporated herein by reference.

ITEM 1A. RISK FACTORS

Except as set forth below, there have been no material changes to the risk factors disclosed in Item 1A, "Risk Factors" of Part I of the Annual Report on Form 10-K.

If any of our programs fail to qualify as programs leading to “gainful employment” in a recognized occupation under U.S. Department of Education regulations, students in those programs would be unable to obtain Title IV funds to finance their education and, if student demand for those programs declined significantly, we may determine to cease offering those

programs.

In 2011, the U.S. Department of Education promulgated final regulations imposing additional Title IV program eligibility requirements on educational programs, which were scheduled to become effective as of July 1, 2012 and which would have for the first time set forth standards that would be used to measure “preparation for gainful employment” and also require schools to notify the U.S. Department of Education prior to offering additional programs of study. On June 30, 2012, the U.S. District Court for the District of Columbia issued a decision in the case captioned Association of Private Sector Colleges and Universities v. Duncan that vacated most of the gainful employment regulations and remanded them to the U.S. Department of Education for further action. The Court's decision is subject to appeal by the U.S. Department of Education and could be modified or reversed on appeal. Moreover, on April 16, 2013 the U.S. Department of Education announced a new negotiated rulemaking which includes gainful employment as a topic for possible new regulations. We cannot predict whether the U.S. Department of Education will appeal the Court's decision or whether the new negotiated rulemaking will result in new or substantially similar gainful employment regulations as those previously proposed by the U.S. Department of Education. The gainful employment regulations requiring the disclosure of information to prospective students which became effective as of July 1, 2011 were not impacted by the case.

Because it is not yet clear how the U.S. Department of Education will respond to the ruling in the APSCU case or what will happen in connection with the new negotiated rulemaking process, it is not possible at this time to determine with any degree of certainty when new gainful employment regulations will go into effect, if at all, what their requirements ultimately might be or how our programs and business may be affected. However, in the event that the U.S. Department of Education appeals the APSCU case and the decision is overturned, the gainful employment regulations addressing program approvals and minimum standards for student outcomes could become effective. Additionally, the negotiated rulemaking process announced by the U.S. Department of Education could address the issues upon which the Court vacated the regulations. Based on draft data published by the U.S. Department of Education in June 2012, a number of our programs would become ineligible to participate in the Title IV programs if the gainful employment regulations were effective in their current form. Under the regulations as previously adopted, the continuing eligibility of our educational programs for Title IV funding would have been at risk due to factors not completely within our control, such as changes in the actual or deemed income level of our graduates, changes in student borrowing levels, increases in interest rates, changes in the federal poverty income level relevant for calculating discretionary income, changes in the percentage of our former students who are current in repayment of their student loans, and other factors. Further, even though deficiencies in the metrics may be correctable on a timely basis, the disclosure requirements to students following a failure to meet the standards as previously proposed may adversely impact enrollment in that program and may adversely impact the reputation of our educational institutions. We have implemented a number of initiatives to respond to the gainful employment rules, such as shorter programs and lowering the costs associated with a number of our programs. However, assuming that the regulations ultimately go into effect and depending upon their terms as ultimately adopted, certain of our programs may be unable to maintain eligibility to enroll students receiving Title IV funds or have restrictions placed upon program offerings as a result of not meeting prescribed metrics. To the extent that our new programmatic offerings do not offset the loss of any of our current programs which do not satisfy one of the three metrics under the new gainful employment regulation, the loss of students or restrictions to program eligibility could have a material adverse effect on our student population, business, financial condition, results of operations and cash flows.

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Our failure to comply with various state regulations or to maintain any national, regional or programmatic accreditation could result in actions taken by those states or accrediting agencies that would have a material adverse effect on our student enrollment, results of operations and cash flows.

Under the HEA, an institution must be authorized by each state in which it is located to participate in Title IV programs. The U.S. Department of Education historically has determined that an institution is licensed or otherwise authorized in order to be certified as eligible to participate in Title IV programs if the institution is licensed or otherwise certified in a state or, alternatively, if the institution's state does not require the institution to obtain licensure or authorization to operate in the state. The new state authorization regulations adopted by the U.S. Department of Education effective July 1, 2011 established specific new federal minimum requirements with respect to the sufficiency of a state's authorization of an educational institution for participation in Title IV programs. The U.S. Department of Education stated at the time it published the final regulation that it recognized that a state might be unable to provide appropriate state authorizations to its institutions by the July 1, 2011 effective date of the regulation and that institutions unable to obtain state authorization in that state may request a one-year extension of the effective date of the regulations to July 1, 2012 (and, if necessary, an additional one year extension of the effective date to July 1, 2013). As of March 31, 2013, we believe that all of our campuses were physically located in states that satisfied the U.S. Department of Education's final rules regarding state authorization except for our schools located in California (14 schools) and Hawaii (one school). In order to address any potential issues in California, our schools intend to apply for licenses with the California state licensing board. We anticipate that the State of Hawaii will adopt state licensing regulations which comply with the U.S. Department of Education's new regulations by June 30, 2013 and we will seek authorization in Hawaii by June 30, 2013. Recently, the U.S. Department of Education has unofficially taken positions about the application of the state authorization regulation that raise questions about whether the state licensing provisions adopted by the states of Texas, Georgia, Utah and other states comply with the new regulations. We are working with the state licensing agencies in each of these jurisdictions along with other industry groups and post-secondary institutions to obtain definitive guidance from the U.S. Department of Education by June 30, 2013 and, in the event that the U.S. Department of Education believes that these or other states are not in compliance with the new regulations, a delay in the effectiveness of the regulations beyond July 1, 2013. In the event that any states in which we have schools are found to not comply with the new state licensing regulations as of July 1, 2013, the affected schools could be deemed to have lacked state authorization and subject to sanctions, including loss of Title IV eligibility and a requirement to repay funds disbursed to students during the period in which the schools purportedly lacked state authorization. Additionally, students at our schools located in those states would be unable to access Title IV program funds, which would have a material adverse effect on our business, financial condition, results of operations and cash flows.

The state authorization regulations adopted effective as of July 1, 2011 also provided that if an institution offers post-secondary education through distance education to students in a state in which the institution is not physically located, the institution must satisfy any requirements of that state for the institution to offer post-secondary distance education to students in that state. On July 12, 2011, the U.S. District Court for the District of Columbia struck down those portions of the regulations requiring proof of state approval for online education programs on procedural grounds, and that ruling was later upheld on appeal. A federal District Court overturned the U.S. Department of Education's regulation governing state authorizations of distance education programs in July 2011. However, the courts also ruled that the U.S. Department of Education may elect to re-introduce this rule, and on April 16, 2013 the U.S. Department of Education announced its intention to revisit the state licensing requirements for post-secondary distance education in a new negotiated rulemaking process which is expected to begin in the fall of 2013. No assurance can be given with respect to whether the U.S. Department of Education will adopt new rules addressing licensing requirements for distance education or, in the event that such regulations are adopted, our ability to comply with the new regulations.

Increased scrutiny of post-secondary education providers by Congress, state Attorneys General and various governmental agencies may lead to increased regulatory burdens and costs.

We and other proprietary post-secondary education providers have been subject to increased regulatory scrutiny and litigation in recent years. State Attorneys General, the U. S. Department of Education, members and committees of Congress and other parties have increasingly focused on allegations of improper recruiter compensation practices and deceptive marketing practices, among other issues. For example, on July 30, 2012, Senator Tom Harkin, Chairman of the U.S. Senate Committee on Health, Education, Labor and Pensions (the“HELP Committee”), and the majority staff of the HELP Committee issued a report, "For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success." While stating that proprietary colleges and universities have an important role to play in higher education and should be well-equipped to meet the needs of non-traditional students who now constitute the majority of the post-secondary educational population, the majority staff report was highly critical of these institutions. The report contended that these institutions have a high cost of attendance, engage in aggressive and deceptive recruiting, have high drop-out rates, provide insufficient student support services, and are responsible for high levels of student debt and loan defaults, among other things. The report called for increased disclosure of information about student outcomes at proprietary colleges and universities, prohibiting institutions from using federal financial aid funding to market, advertise and recruit, amending the 90/10 Rule to prohibit these institutions

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from receiving more than 85% of their revenues from federal funds, prohibiting the use of mandatory binding arbitration clauses in enrollment agreements, and other measures ostensibly to protect students and taxpayers.

Additionally, a number of state Attorneys General have launched investigations into proprietary post-secondary education institutions, including some of our schools. We received subpoenas or requests for documents from the Attorneys General of Florida, Kentucky and New York in October 2010, December 2010 and August 2011, respectively, and the San Francisco, CA City Attorney in December 2011 in connection with investigations of our institutions and their business practices. We have nine schools located in Florida, three schools located in Kentucky and one school located in New York. In July 2011, the Attorney General of Kentucky announced a national bipartisan effort including 19 states to examine potential abuses by proprietary educational institutions. While the initial goal of the joint investigation is sharing information among the Attorneys General about potential violations of consumer protection laws, the Attorney General of Kentucky indicated that the Attorneys General may ultimately attempt to compel proprietary institutions located in their respective jurisdictions to revise their recruiting practices.

In September 2012, we received a subpoena from the State of Colorado Attorney General's office requesting documents and detailed information for the period of January 1, 2006 through the present. The subpoena is primarily focused on the programs offered by the College of Psychology and Behavioral Sciences at the Denver, Colorado campus of Argosy University. Argosy University also received in September 2012 demand letters from an attorney representing three former students in the Doctorate of Counseling Psychology program alleging that the students were unable to find internships necessary to complete the program in Denver, Colorado and that the campus claimed that the program would lead to licensure in Colorado, among other things. We intend to cooperate with the Attorney General's investigation. However, we cannot predict the eventual scope, duration or outcome of the investigation at this time.

On January 24, 2013, The New England Institute of Art received a civil investigative demand from the Commonwealth of Massachusetts Attorney General requesting information for the period from January 1, 2010 to the present pursuant to an investigation of practices by the school in connection with marketing and advertising job placement and student outcomes, the recruitment of students and the financing of education. We previously responded to a similar request that The New England Institute of Art received in June 2007 and intend to cooperate with the Attorney General in connection with their investigations.

We cannot predict the extent to which, or whether, these hearings and investigations will result in legislation, further rulemaking affecting our participation in Title IV programs, or litigation alleging statutory violations, regulatory infractions or common law causes of action. The adoption of any law or regulation that reduces funding for federal student financial aid programs or the ability of our schools or students to participate in these programs could have a material adverse effect on our student population and revenue. Legislative action also may increase our administrative costs and require us to modify our practices in order for our schools to comply with applicable requirements. Additionally, actions by state Attorneys General and other governmental agencies could damage our reputation and limit our ability to recruit and enroll students, which could reduce student demand for our programs and adversely impact our revenue and cash flow from operations.

If we do not meet specific financial responsibility ratios and other compliance tests established by the U.S. Department of Education, our institutions may lose eligibility to participate in federal student financial aid programs, which may result in a reduction in our student enrollment and an adverse effect on our results of operations and cash flows.

To participate in federal student financial aid programs, an institution, among other things, must either satisfy certain quantitative standards of financial responsibility on an annual basis or post a letter of credit in favor of the U.S. Department of Education and possibly accept other conditions or limitations on its participation in the federal student financial aid programs. As of June 30, 2012, we did not meet the required quantitative measures of financial responsibility on a consolidated basis due to the amount of indebtedness we incurred and goodwill we recorded in connection with the Transaction. Accordingly, we are required by the U.S. Department of Education to post a letter of credit and are subject to provisional certification and additional financial and cash monitoring of our disbursements of Title IV funds. In December 2012, the U.S. Department of Education decreased the required letter of credit from $414.5 million, 15% of the Title IV program funds received by students at our institutions during fiscal 2011, to $348.6 million, or 15% of total Title IV aid received by students attending our institutions during the fiscal year ended June 30, 2012. We expect to be required to renew the letter of credit at the 15% level for as long as our schools remain provisionally certified, although the U.S. Department of Education could increase the percentage. See “Summary-Recent Developments-Reduction in Required Amount of Department of Education Letter of Credit.” Outstanding letters of credit reduce lending availability under our revolving credit facility, except to the extent that we obtain cash secured letters of credit, which we are permitted to do under our senior credit facility. In fiscal 2012, we obtained cash secured letters of credit from two lenders in the aggregate amount of $200.0 million in order to satisfy a portion of our letter of credit obligation to the U.S. Department of Education and obtained a letter of credit under our revolving credit facility for the remainder. The cash secured letter of credit facilities expire on July 8, 2014 or if earlier, the date the existing revolving credit facility is terminated. Based on the U.S. Department of Education's current requirement, we believe that we will need to renew or replace the cash secured letters of credit to satisfy our letter of credit obligation in the future, and if we cannot do so, it would impair our liquidity. However, in the future we may not have sufficient letter of credit capacity to satisfy the letter of credit

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requirement for the U.S. Department of Education, which would limit our growth and potentially subject us to operating restrictions. In addition, in order to ensure our schools meet financial responsibility tests at the institutional level, we often contribute money to our schools at the end of each of our fiscal years. We may have less liquidity to fund such contributions in future years. We do not believe any reduction in contributions to our schools will have a material adverse impact on us, but can provide no assurances.

We expect to continue to not satisfy the U.S. Department of Education's quantitative measure of financial responsibility for the foreseeable future. As a result, we expect each of our institutions to be required to continue on provisional certification for additional three-year periods. While provisional certification does not by itself limit an institution's access to Title IV program funds, it does subject our institutions to closer review by the U.S. Department of Education and possible summary adverse action if one of our institutions commits a material violation of Title IV program requirements. Additionally, the U.S. Department of Education has placed our institutions on heightened cash monitoring Level 1 due to the provisional certification and has included a requirement in some of our program participation agreements that we obtain their approval prior to offering new programs at our institutions. We anticipate that future renewals of our institutions' provisional certifications will result in continuation of the requirement that we maintain a letter of credit, provisional certification and financial and cash monitoring in future years. Any conditions or limitations on our participation in the federal student financial aid programs in addition to the letter of credit, provisional certification and additional financial and heightened cash monitoring could adversely affect our revenues and cash flows. There can be no assurance that the U.S. Department of Education will not require further restrictions as a condition of the renewal of our certification and that such additional restrictions will not materially and adversely impact our revenues and cash flows.

In the event of a bankruptcy filing by any of our schools, the schools filing for bankruptcy would not be eligible to receive Title IV program funds, notwithstanding the automatic stay provisions of federal bankruptcy law, which would make any reorganization difficult to implement. In addition, our other schools may be held to be jointly responsible for financial aid defaults experienced at the bankrupt schools. In the event of a bankruptcy filing by us, all of our schools could lose their eligibility to receive Title IV program funds, which would have a material adverse effect on our business, financial condition and results of operations.

Our substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and expose us to interest rate risk to the extent of our variable rate debt.

The following chart shows our level of consolidated indebtedness at March 31, 2013 (in millions):

Senior secured term loan facility, due in June 2016	$	738.5
Senior secured term loan facility, due in March 2018, net of discount	343.2
Senior cash pay/PIK notes due July 2018, net of discount	203.8
Senior notes due in June 2014	9.7
Other	0.2
Total long-term debt	$	1,295.4

Our high degree of leverage could have important consequences, including:

• making it more difficult for us to make payments on our indebtedness;

• increasing our vulnerability to general economic and industry conditions;

• requiring a substantial portion of cash flows from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flows to fund our operations, capital expenditures, payment of any settlements or judgments in connection with our litigation and future business opportunities;

• increasing the likelihood of our not satisfying, on a consolidated basis, the U.S. Department of Education's annual financial responsibility requirements and subjecting us to letter of credit and provisional certification requirements for the foreseeable future;

• exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our senior secured credit facilities, will bear interest at variable rates;

• restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;

• limiting our ability to obtain additional financing for working capital, capital expenditures, program development, debt service requirements, acquisitions and general corporate or other purposes; and

54

• limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged.

In addition, we and our subsidiaries may incur additional indebtedness in the future, subject to the restrictions contained in our senior secured credit facilities and the indenture governing our Senior Notes. If new indebtedness is added to our current debt levels, the related risks that we now face could intensify.

We may not be able to generate sufficient cash to service all of our debt obligations and may be forced to take other actions in an effort to satisfy our obligations under such indebtedness, which may not be successful.

Our ability to make scheduled payments on our indebtedness, or to refinance our obligations under our debt agreements on acceptable terms, if at all, will depend on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to the financial and business risk factors described in this 10-Q and in our Fiscal 2012 Annual Report on Form 10-K, many of which are beyond our control. We cannot assure you that we will be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay the opening of new schools, acquisitions or capital expenditures, sell assets, seek to obtain additional equity capital or restructure our indebtedness.

We also cannot assure you that we will be able to refinance any of our indebtedness, including our term loan due 2016, or obtain additional financing on acceptable terms, if at all, particularly because of our high levels of debt and the debt incurrence restrictions imposed by the agreements governing our debt and, in any event, to the extent that we do refinance any portion of our debt, that refinanced debt is likely to be subject to higher interest rates and fees than our existing debt. On March 5, 2013, we completed a private exchange offer (the "Exchange Offer") in which we offered to exchange our 8.75% Senior Notes due June 1, 2014 ("Old Notes") for (i) new Senior Cash Pay/PIK Notes due July 1, 2018 ("New Notes") and (ii) cash. In connection with the Exchange Offer, we issued $203.0 million of New Notes and paid down $162.3 million of Old Notes with cash on hand. The remaining Old Notes of $9.7 million not tendered in the Exchange Offer were extinguished in April 2013 at par.

In addition, our ability to issue equity to raise additional funds may be severely constrained because of regulations of our accrediting agencies and the U.S. Department of Education relating to whether one of our institutions experiences a change of ownership or control. See “Risk Factors - Risks Related to Our Highly Regulated Industry - If regulators do not approve transactions involving a change of control or change in our corporate structure, we may lose our ability to participate in federal student financial aid programs, which would result in declines in our student enrollment, and thereby adversely affect our results of operations and cash flows” in our Fiscal 2012 Annual Report on Form 10-K.

Our debt agreements contain restrictions that limit our flexibility in operating our business, and our risk of failing to satisfy one or more of the financial covenants under our debt agreements is greater in light of recent changes to those covenants and our recent and projected results of operations.

Our senior secured credit facilities and the indenture governing our New Notes contain various covenants that limit our ability to engage in specified types of transactions. These covenants limit certain of our subsidiaries' ability to, among other things:

• incur additional indebtedness or issue certain preferred shares;

• pay dividends on, repurchase or make distributions in respect of capital stock or make other restricted payments;

• make certain investments, including capital expenditures;

• sell certain assets;

• create liens;

• consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and

• enter into certain transactions with affiliates.

In addition, under its senior secured credit facilities, our subsidiary, Education Management LLC, is required to satisfy a maximum total leverage ratio, a minimum interest coverage ratio and other financial conditions tests. As of March 31, 2013, it was in compliance with the financial and non-financial covenants. However, its continued ability to meet those financial ratios and tests can be affected by events beyond our control, and we cannot assure you that it will meet those ratios and tests in the future. Furthermore, on September 30, 2012, the Consolidated Total Debt to Adjusted EBITDA ratio decreased from 4.00x to 3.50x and the minimum interest coverage ratio increased from 2.50:1 to 2.75:1, which makes it more difficult for us to comply with these covenants in the future.

55

A breach of any of these covenants could result in a default under the senior secured credit agreement. Upon the occurrence of an event of default under the senior secured credit agreement, the lenders could elect to declare all amounts outstanding under the senior secured credit agreement immediately due and payable and terminate all commitments to extend further credit. If we were unable to repay those amounts, the lenders under the senior secured credit facilities could proceed against the collateral granted to them to secure that indebtedness. Certain of our subsidiaries have pledged a significant portion of our assets as collateral under the senior secured credit agreement. If the lenders accelerate the repayment of borrowings, we cannot assure you that we will have sufficient assets to repay our indebtedness under our senior secured credit facilities, as well as our unsecured indebtedness.

Failure to obtain additional capital in the future could adversely affect our business.

We may need additional debt or equity financing in order to finance our continued operations. The amount and timing of such additional financing will vary principally depending on the timing and size of acquisitions and new school openings, the willingness of sellers to provide financing for future acquisitions and the amount of cash flows from our operations. In December 2012, the U.S. Department of Education decreased the required letter of credit from $414.5 million, or 15% of the Title IV program funds received by students at our schools during fiscal 2011, to $348.6 million, or 15% of total Title IV aid received by students attending our institutions during the fiscal year ended June 30, 2012. Subsequent to the U.S. Department of Education's notification, we reduced the letter of credit to $388.1 million during the quarter ended December 31, 2012 and then to $348.6 million in January 2013. See “Summary-Recent Developments-Reduction in Required Amount of Department of Education Letter of Credit.” Outstanding letters of credit reduce the availability under our revolving credit facility. In the future, we may not have sufficient letter of credit capacity to satisfy the letter of credit requirement for the U.S. Department of Education, which would limit our growth and potentially subject us to operating restrictions. Further, to the extent that we require additional financing in the future and are unable to obtain such additional financing, we may not be able to grow our business.

We experience seasonal fluctuations in our results of operations which may result in similar fluctuations in the trading price of our common stock.

Historically, our quarterly revenues and income have fluctuated primarily as a result of the pattern of student enrollments at our schools. The number of students enrolled at our schools typically is greatest in the second quarter of our fiscal year, when the largest number of recent high school and college graduates typically begin post-secondary education programs. Student vacations generally cause our student enrollments to be at their lowest during our first fiscal quarter. Because a significant portion of our expenses do not vary proportionately with the fluctuations in our revenue, our results in a particular fiscal quarter may not indicate accurately the results we will achieve in a subsequent quarter or for the full fiscal year. These fluctuations in our operating results may result in corresponding volatility in the market price for our common stock.Our liquidity needs also fluctuate during the year, with our fourth fiscal quarter being our lowest point. Additionally, we have less liquidity following the use of $172.0 million of cash in connection with the (i) exchange of our Senior Notes due 2014 and the (ii) repayment of the non-exchanged Senior Notes in March 2013 and April 2013, respectively, which furthered tightened our liquidity for future periods.

The personal information that we collect and store may be vulnerable to breach, theft or loss that could adversely affect our reputation and operations.

Possession and use of personal information in our operations subjects us to risks and costs that could harm our business. Our schools collect, use and retain large amounts of personal information regarding our students and their families, including social security numbers, tax return information, personal and family financial data and credit card numbers. We also collect and maintain personal information of our employees in the ordinary course of our business. Our computer networks and the networks of certain of our vendors that hold and manage confidential information on our behalf may be vulnerable to unauthorized access, cyber computer hackers, computer viruses and other security threats. Confidential information also may become available to third parties inadvertently when we integrate or convert computer networks into our network following an acquisition of a school or in connection with upgrades from time to time.

Due to the sensitive nature of the information contained on our networks, such as students' grades, our networks may be targeted by hackers. A user who circumvents security measures could misappropriate proprietary information or cause interruptions or malfunctions in our operations. Although we use security and business controls to limit access and use of personal information, a third party may be able to circumvent those security and business controls, which could result in a breach of student or employee privacy. In addition, errors in the storage, use or transmission of personal information could result in a breach of student or employee privacy. Possession and use of personal information in our operations also subjects us to legislative and regulatory burdens that could require notification of data breaches and restrict our use of personal information. As a result, we may be required to expend significant resources to protect against the threat of these security breaches or cyber-security attacks or to alleviate problems caused by these breaches. A major breach, theft or loss of personal information regarding our students and their families or our employees

56

that is held by us or our vendors could have a material adverse effect on our reputation and results of operations and result in further regulation and oversight by federal and state authorities and increased costs of compliance.

Government laws and regulations are evolving and unfavorable changes could harm our business.

We are subject to general business regulations and laws, as well as regulations and laws specifically governing the post-secondary industry. Existing and future laws and regulations may impede our growth. These regulations and laws may cover consumer protection, taxation, privacy, data protection, pricing, content, copyrights, distribution, mobile communications, electronic device certification, electronic waste, electronic contracts and other communications and internet services. Legislation and regulation in the United States as well as international laws and regulations could result in compliance costs which may reduce our revenue and income, as well as governmental action should our compliance measures not be deemed satisfactory.

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

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS INDEX

Number	Document
10.1 *	Amendment No. 1, dated as of January 29, 2013, to the Letter of Credit Facility Agreement, dated as of November 30, 2011, among Education Management LLC, Education Management Holdings LLC, Bank of America, N.A., as Administrative Agent, Collateral Agent and Issuing Bank, and other parties.
10.2*	Amendment No. 1, dated as of February 15, 2013, to the Letter of Credit Facility Agreement, dated as of March 9, 2012, among Education Management LLC, Education Management Holdings LLC, BNP Paribas, as Administrative Agent, Collateral Agent and Issuing Bank, and other parties thereto.
10.3	Indenture, dated as of March 5, 2013, among Education Management LLC, Education Management Finance Corp., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, governing the Senior Cash Pay/PIK Notes due 2018 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Education Management Corporation filed on March 8, 2013).
10.4	Registration Rights Agreement, dated as of March 5, 2013, among the Education Management LLC, Education Management Finance Corp., the guarantors named therein and the dealer managers named therein (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Education Management Corporation filed on March 8, 2013).
31.1*	Certification of Edward H. West required by Rule 13a-14(a) or Rule 15d-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Mick J. Beekhuizen required by Rule 13a-14(a) or Rule 15d-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Edward H. West required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Mick J. Beekhuizen required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002
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

_______________

*Filed herewith.

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SIGNATURE

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 hereunto duly authorized.

EDUCATION MANAGEMENT CORPORATION

/s/    MICK J. BEEKHUIZEN

Mick J. Beekhuizen

Executive Vice President and Chief Financial Officer

Date: May 10, 2013

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EX-10.1

AMENDMENT NO. 1, dated as of January 29, 2013 (this “Amendment”), to the LETTER OF CREDIT FACILITY AGREEMENT, dated as of November 30, 2011, as amended, supplemented, amended and restated or otherwise modified from time to time (the “Facility Agreement”) among EDUCATION MANAGEMENT LLC, a Delaware limited liability company (“Borrower”), EDUCATION MANAGEMENT HOLDINGS LLC, a Delaware limited liability company (“Holdings”), the Grantor Subsidiaries, each lender from time to time party thereto (collectively, the “Lenders” and, individually, a “Lender”) and BANK OF AMERICA, N.A., as Administrative Agent, Collateral Agent and Issuing Bank. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Facility Agreement.

WHEREAS, Section 10.5 of the Facility Agreement permits the Facility Agreement to be amended from time to time;

NOW, THEREFORE, in consideration of the premises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

Section 1. Amendment.

As of the Amendment No. 1 Effective Date (as defined below), the Facility Agreement shall be amended as follows:

(a)The fifth paragraph under “Recitals” shall be replaced in its entirety with the following:

“WHEREAS, the Cash Collateral shall not be subject to withdrawal from any Cash Collateral Account for any purpose whatsoever (other than by Administrative Agent to reimburse Issuing Bank for drawings under a Letter of Credit in accordance with Section 2.4(d), to pay interest and fees payable hereunder or to satisfy other Obligations in accordance with Section 8.3(b), or by Bank of America as deposit bank to pay its customary fees and charges in respect of the Cash Collateral Accounts) and shall not otherwise be available to Holdings or any Subsidiary, except upon the payment in full of all Obligations, termination of all Commitments and the termination or expiration of all Letters of Credit and except that (i) Cash Collateral shall be transferred from the Borrower Cash Collateral Account to Subsidiary Cash Collateral Accounts in accordance with Section 2.12(c), (ii) Cash Collateral may be reallocated among the Subsidiary Cash Collateral Accounts on one occasion after the Amendment No. 1 Effective Date upon prior written notice to the Administrative Agent and (iii) upon or following permanent reduction of the Commitments in accordance with Section 2.13(a), the Cash Collateral may be reduced at the written request of the Borrower to an aggregate amount not less than 105% of the Commitments after giving effect to such reduction (such reduction to be allocated among the Subsidiary Cash Collateral Accounts as directed by the Borrower or, if the Borrower does not elect, ratably among the Subsidiary Cash Collateral Accounts, subject, in either case, to such adjustment as the Administrative Agent determines appropriate for administrative purposes).”

(b)The definition of “Maturity Date” in the Facility Agreement is hereby amended by replacing each of “the second anniversary of the Closing Date” and “such second anniversary” with “July 8, 2014”.

(c)The definition of “Subsidiary Cash Collateral Account” in the Facility Agreement is hereby amended by adding “of a Grantor Subsidiary” after “(ii) which account”.

(d)The definition of “Subsidiary Control Agreement” in the Facility Agreement is hereby amended by replacing “Borrower” with “such Grantor Subsidiary”.

(e)Section 2.4(a)(iv) shall be replaced in its entirety with the following:

“in no event shall any Letter of Credit have an expiration date later than the earlier of (1) five (5) Business Days prior to the Maturity Date and (2) unless otherwise agreed by Issuing Bank, the date which is eighteen (18) months from the date of issuance of such Letter of Credit; and”

(f)Section 2.12(e) shall be replaced in its entirety with the following:

“Each Credit Party agrees and acknowledges that Cash Collateral shall not be subject to withdrawal from any Cash Collateral Account for any purpose whatsoever (other than by Administrative Agent to reimburse Issuing Bank for drawings under a Letter of Credit in accordance with Section 2.4(d), to pay interest and fees payable hereunder or to satisfy other Obligations in accordance with Section 8.3(b), or by Bank of America as deposit bank to pay its customary fees and charges in respect of the Cash Collateral

Accounts) and shall not otherwise be available to Holdings or any Subsidiary, except upon the payment in full of all Obligations, termination of all Commitments and the termination or expiration of all Letters of Credit and except that (i) Cash Collateral shall be transferred from the Borrower Cash Collateral Account to Subsidiary Cash Collateral Accounts in accordance with Section 2.12(c), (ii) Cash Collateral may be reallocated among the Subsidiary Cash Collateral Accounts on one occasion after the Amendment No. 1 Effective Date upon prior written notice to the Administrative Agent and (iii) upon or following permanent reduction of the Commitments in accordance with Section 2.13(a), the Cash Collateral may be reduced at the written request of the Borrower to an aggregate amount not less than 105% of the Commitments after giving effect to such reduction (such reduction to be allocated among the Subsidiary Cash Collateral Accounts as directed by the Borrower or, if the Borrower does not elect, ratably among the Subsidiary Cash Collateral Accounts, subject, in either case, to such adjustment as the Administrative Agent determines appropriate for administrative purposes).”

Section 2. Representations and Warranties.

Each of Holdings and the Borrower represents and warrants to the Lenders as of the date hereof and the Amendment No. 1 Effective Date (as defined below) that:

(a)Before and after giving effect to this Amendment, the representations and warranties contained in the Facility Agreement and in the other Credit Documents are true and correct in all material respects on and as of such date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects on and as of such earlier date.

(b)At the time of and before and after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.

Section 3. Conditions to Effectiveness.

This Amendment shall become effective as of the date (the “Amendment No. 1 Effective Date”) when each of the following conditions is satisfied:

(a)The Administrative Agent (or its counsel) shall have received from (i) each Lender and (ii) each of the other parties hereto, a counterpart of this Amendment signed on their behalf.

(b)All corporate and other proceedings taken or to be taken in connection with this Amendment and all documents incidental thereto, whether or not referred to herein, shall be reasonably satisfactory in form and substance to the Administrative Agent.

(c)The Borrower shall have delivered to the Administrative Agent an Officer's Certificate, in form and substance reasonably satisfactory to the Administrative Agent, stating that the representations and warranties in Section 2 of this Amendment shall be true and correct.

(d)All fees and reasonable, documented, out-of-pocket expenses payable on or before the Amendment No. 1 Effective Date by the Borrower to Bank of America, N.A. (or its Affiliates) in connection with this Amendment shall have been paid, including the reasonable fees, charges and disbursements of counsel.

(e)The Administrative Agent shall have received for each Credit Party (i) copies of the Organization Documents of such Credit Party or, in the alternative (other than in the case of the Borrower), certifying that such Organization Documents have not been amended since the Closing Date (with respect to Holdings) or March 30, 2012 (with respect to each Grantor Subsidiary) and are in full force and effect; (ii) signature and incumbency certificates of the officers of such Credit Party executing the Credit Documents to which it is a party; (iii) resolutions of the Board of Directors or similar governing body of such Credit Party approving and authorizing the execution, delivery and performance of this Amendment, certified as of the Amendment No.1 Effective Date by its secretary or an assistant secretary as being in full force and effect without modification or amendment; and (iv) a good standing certificate from the applicable Governmental Authority of such Credit Party's jurisdiction of incorporation, organization or formation dated a recent date prior to Amendment No.1 Effective Date; and delivery of each of the items in clauses (i) through (iv) above with respect to a Credit Party shall satisfy the requirements for such Credit Party under Section 3.2(a) of the Facility Agreement for the first Credit Extension after the Amendment No. 1 Effective Date.

(f)The Administrative Agent shall have received the written opinions of (i) Simpson Thacher & Bartlett LLP, counsel for the Credit Parties, and (ii) J. Devitt Kramer, in-house counsel for the Borrower, each in form and substance reasonably satisfactory to the Administrative Agent; and delivery of each such opinion shall satisfy the requirement of each such counsel to deliver an opinion under Section 3.2(h) for the first Credit Extension after the Amendment No. 1 Effective Date (to the extent covering the Credit Parties that would be required to be covered with respect to such Credit Extension).

The Administrative Agent will confirm to the Borrower the completion of the conditions set forth in Section 3(a)(i), (b), (d), (e) and (insofar as calling for the satisfaction of the Administrative Agent) (c) and (f) of this Amendment.

Section 4. Grantor Subsidiary Joinders.

The Borrower shall deliver a Grantor Subsidiary Joinder dated as of the date hereof in accordance with the Facility Agreement pursuant to which the signatories thereto shall become Grantor Subsidiaries for all purposes of the Facility Agreement.

Section 5. Grantor Subsidiary Reaffirmation.

Each Grantor Subsidiary hereby consents to this Amendment and hereby confirms and agrees that (a) each Credit Document to which it is a party is, and shall continue to be, in full force and effect and each is hereby ratified and confirmed in all respects, and (b) the Liens granted by such Grantor Subsidiary on all Grantor Subsidiary Collateral continue to secure the payment of all of the Obligations.

Section 6. Counterparts.

This Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all of which when taken together shall constitute a single instrument. Delivery of an executed counterpart of a signature page of this Amendment by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.

Section 7. Applicable Law.

THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

Section 8. Headings.

The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

Section 9. Effect of Amendment.

Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders or the Agents under the Facility Agreement or any other Credit Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Facility Agreement or any other provision of the Facility Agreement or any other Credit Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect.

[Signature pages follow]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

EDUCATION MANAGEMENT LLC, as Account Party
By
	Name:
	Title:

EDUCATION MANAGEMENT HOLDINGS LLC, as Holdings and Guarantor
By
	Name:
	Title:

MICHIANA COLLEGE EDUCATION CORPORATION AMERICAN EDUCATION CENTERS, INC. STAUTZENBERGER COLLEGE EDUCATION CORPORATION THE ART INSTITUTE OF NEW YORK CITY, INC. SOUTH UNIVERSITY, LLC THE ART INSTITUTE OF PITTSBURGH LLC ARGOSY EDUCATION GROUP, INC. THE ART INSTITUTE OF CALIFORNIA -- LOS ANGELES, INC. TAIC -- SAN DIEGO, INC. THE NEW ENGLAND INSTITUTE OF ART, LLC TAIC -- SAN FRANCISCO, INC. THE ART INSTITUTE OF SEATTLE, INC. THE ART INSTITUTE OF COLORADO, INC. THE ART INSTITUTE OF HOUSTON, INC. THE ART INSTITUTE OF WISCONSIN LLC THE ILLINOIS INSTITUTE OF ART -- TINLEY PARK LLC BROWN MACKIE COLLEGE -- ALBUQUERQUE LLC BROWN MACKIE COLLEGE - ST. LOUIS, INC. BROWN MACKIE COLLEGE -- BIRMINGHAM LLC THE ART INSTITUTE OF PORTLAND, LLC THE ILLINOIS INSTITUTE OF ART AT SCHAUMBURG, INC. SOUTH UNIVERSITY OF CAROLINA, INC. THE ART INSTITUTE OF CALIFORNIA -- HOLLYWOOD, INC. BROWN MACKIE COLLEGE -- TUCSON, INC. BROWN MACKIE COLLEGE -- MIAMI, INC. SOUTH UNIVERSITY OF VIRGINIA, INC. THE ART INSTITUTE OF WASHINGTON -- DULLES LLC SOUTH UNIVERSITY OF MICHIGAN, LLC THE ART INSTITUTE OF VIRGINIA BEACH LLC THE ART INSTITUTE OF SAN ANTONIO, INC. THE ILLINOIS INSTITUTE OF ART, INC.
By
	Name:
	Title:

BANK OF AMERICA, N.A., as Administrative Agent and Collateral Agent
By
	Name:
	Title:
BANK OF AMERICA, N.A., as Issuing Bank
By
	Name:
	Title:
BANK OF AMERICA, N.A., as a Lender
By
	Name:
	Title:

EX-10.2

FIRST AMENDMENT TO THE LETTER OF CREDIT FACILITY AGREEMENT

This FIRST AMENDMENT TO THE LETTER OF CREDIT FACILITY AGREEMENT (this “First Amendment”), dated as of February 15, 2013, is entered into by and among Education Management LLC, a Delaware limited liability company (the “Account Party”), for purposes of Sections B and C hereof, Education Management Holdings LLC, a Delaware limited liability company (the “Guarantor”) and the Grantor Subsidiaries listed on the signature pages hereto, the Lender party hereto, and BNP Paribas, as Administrative Agent, Collateral Agent and Issuing Bank for the Lenders. Unless otherwise defined herein, all capitalized terms used herein and defined in the LC Facility Agreement referred to below are used herein as therein defined.

WITNESSETH :

WHEREAS, the Account Party, the Guarantor, the Grantor Subsidiaries (collectively, the “Credit Parties”), the Lenders, the Administrative Agent, the Collateral Agent and the Issuing Bank are party to that certain Letter of Credit Facility Agreement, dated as of March 9, 2012 (the “LC Facility Agreement”);

WHEREAS, the Credit Parties have requested that the Lenders agree to amend certain provisions of the LC Facility Agreement as provided for herein; and

WHEREAS, pursuant to the terms and subject to the conditions set forth below, BNP Paribas, as sole Lender is willing to agree to such amendment relating to the LC Facility Agreement.

NOW, THEREFORE, in consideration of the premises, covenants and agreements contained herein, and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto, intending to be legally bound, hereby agree as follows:

A. Amendments to LC Facility Agreement:

1.The fifth paragraph under “RECITALS” is hereby amended by adding the following text immediately prior to the period set forth therein:

“or upon or following a permanent reduction of the Commitments in accordance with Section 2.9(c), the Cash Collateral may be reduced at the written request of the Account Party to an aggregate amount not less than 105% of the Commitments after giving effect to such reduction.”

2.The definition of “Maturity Date” contained in Section 1.1 of the LC Facility Agreement is hereby amended and restated in its entirety as follows:

'“Maturity Date” means the earliest of (a) July 8, 2014, (b) the occurrence of the 2015 Revolving Commitment Termination Date (as defined in the Existing Credit Agreement as in effect on the date hereof) and (c) the date upon which the Bank of America LC Facility Agreement has matured, been accelerated or been terminated by Bank of America, N.A. or the Account Party.'

3.The following new definitions shall be added in Section 1.1 of the LC Facility Agreement in appropriate alphabetical order:

“Bank of America Commitment” as defined in the Bank of America LC Facility Agreement.

“Bank of America LC Facility Agreement” means the Letter of Credit Facility Agreement dated as of November 30, 2011 among the Account Party, the Grantors party thereto, Bank of America, N.A. and the other parties thereto, as amended by Amendment No. 1, dated as of January 29, 2013.

4.Section 2.1(a)(v) is hereby amended and restated in its entirety as follows:

“(v)    in no event shall any Letter of Credit have an expiration date later than the earlier of (1) 5 Business Days prior to the Maturity Date and (2) unless otherwise agreed by Issuing Bank, the date which is eighteen months from the date of issuance of such Letter of Credit; and”

5.Section 2.8(d) is hereby amended by adding the following text immediately prior to the period set forth therein:

“or upon or following a permanent reduction of the Commitments in accordance with Section 2.9(c), the Cash Collateral may be reduced at the written request of the Account Party to an aggregate amount not less than 105% of the Commitments after giving effect to such reduction.”

6.Section 2.9 shall be amended to add a new clause (c) as follows:

“The Account Party shall, upon not less than three Business Days prior written notice, permanently terminate in whole or permanently reduce in part the Commitments proportionately in amount to the reduction of the Bank of America Commitments in accordance with Section 2.13(a) of the Bank of America LC Facility Agreement.”

7.A new Section 5.11 shall be inserted in the LC Facility Agreement as follows:

“5.11    Five Business Days prior to the occurrence thereof, notify the Administrative Agent in writing of any contemplated permanent reduction in the Bank of America Commitments as contemplated pursuant to Section 2.13(a) of the Bank of America LC Facility Agreement.”    

B. Representations, Warranties and Miscellaneous Provisions

1.    In order to induce the Lender to enter into this First Amendment, each Credit Party hereby jointly and severally represents and warrants as follows on the date hereof that:

(a)    Each Credit Party which is party hereto has all requisite power and authority to enter into this First Amendment and to carry out the transactions contemplated by, and perform its obligations under, the LC Facility Agreement as amended by this First Amendment (the “Amended Agreement”) and the other Credit Documents;

(b)    The execution and delivery of this First Amendment and the performance of the Amended Agreement and the other Credit Documents have been duly authorized by all necessary actions on the part of each Credit Party and each of this First Amendment, the Amended Agreement and each other Credit Document constitutes a legal, valid and binding obligation of such Credit Party enforceable against such Credit Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law;

(c)    No event has occurred and is continuing or will result from the consummation of the transactions contemplated by this First Amendment that would constitute a Default or an Event of Default;

(d)    All of the representations and warranties set forth in Section 4 of the LC Facility Agreement and each other Credit Document are true and correct in all material respects on the First Amendment Effective Date (as defined below), both before and after giving effect to this First Amendment, with the same effect as though such representations and warranties had been made on and as of the First Amendment Effective Date, except to the extent such representations and warranties expressly relate to an earlier date; and

    (e)    the letter of credit issued under the Bank of America LC Facility Agreement (as defined below) remains outstanding and undrawn as of the date hereof.

2.This First Amendment is limited as specified and shall not constitute a modification, acceptance or waiver of any other provision of the LC Facility Agreement or any other Credit Document.

3.    This First Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts shall be lodged with the Account Party and the Administrative Agent.

4.THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

5.    This First Amendment shall become effective as of the date hereof (the “First Amendment Effective Date”); provided that each of the following conditions shall have been satisfied:

(a)     the Account Party, the Guarantor, each other Credit Party and the Lender shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered (including by way of facsimile or electronic transmission) the same to the Administrative Agent;

(b)     the Account Party shall have paid all fees and actual and reasonable costs and expenses of the Administrative Agent, the Collateral Agent and the Issuing Bank in connection with this First Amendment, including the reasonable fees, charges and disbursements of White & Case LLP, counsel for the Administrative Agent, the Collateral Agent and the Issuing Bank;

(c)    each of the representations and warranties set for in Section B.1 above shall be true and correct on such date; and

(d)    the Account Party shall have delivered to the Administrative Agent a fully executed First Amendment of the Bank of America LC Facility Agreement dated on or prior to the date hereof providing for an extension of the Maturity Date (as defined therein) to a date no earlier than the Maturity Date set forth in this First Amendment and otherwise in a manner reasonably satisfactory to the Administrative Agent.

6.From and after the First Amendment Effective Date, all references in the LC Facility Agreement and each of the other Credit Documents shall be deemed to be references to the LC Facility Agreement as modified hereby, and the First Amendment shall be deemed to be a Credit Document.

C.    Acknowledgement and Consent

The Guarantor and each Grantor Subsidiary hereby acknowledges that it has reviewed the terms and provisions of the LC Facility Agreement and this First Amendment and acknowledges the amendment of the LC Facility Agreement effected pursuant to this First Amendment. The Guarantor and each Grantor Subsidiary hereby confirms that each Credit Document to which it is a party or otherwise bound and all Collateral encumbered thereby will continue to guarantee or secure, as the case may be, to the fullest extent possible in accordance with the Credit Documents the payment and performance of all “Obligations” under each of the Credit Documents to which it is a party (in each case as such term is defined in the applicable Credit Document).

The Guarantor and each Grantor Subsidiary acknowledges and agrees that any of the Credit Documents to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this First Amendment. The Guarantor and each Grantor Subsidiary represents and warrants that all representations and warranties contained in the Amended Agreement and the Credit Documents to which it is a party or otherwise bound are true and correct in all material respects on and as of the First Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true and correct in all material respects on and as of such earlier date.

The Guarantor and each Grantor Subsidiary acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this First Amendment, such Person is not required by the terms of the LC Facility Agreement or any other Credit Document to consent to the amendments to the LC Facility Agreement effected pursuant to this First Amendment and (ii) nothing in the LC Facility Agreement, this First Amendment or any other Credit Document shall be deemed to require the consent of such Person to any future amendments to the LC Facility Agreement.

[Remainder of this page intentionally left blank]

IN WITNESS WHEREOF, the undersigned have caused this First Amendment to be duly executed and delivered as of the date first above written.

EDUCATION MANAGEMENT LLC, as Account Party
By
	Name:
	Title:

EDUCATION MANAGEMENT HOLDINGS LLC, as Holdings and Guarantor
By
	Name:
	Title:

GRANTOR SUBSIDIARIES:

The Art Institute of Atlanta, LLC

The Art Institute of Austin, Inc.

The Art Institute of Charleston, Inc.

The Art Institute of Charlotte, LLC

The Art Institute of Dallas, Inc.

The Art Institute of Michigan, Inc.

The Art Institute of Fort Worth, Inc.

The Art Institute of Fort Lauderdale, Inc.

The Art Institute of Houston, Inc.

The Art Institute of Jacksonville, Inc.

Miami International University of Art & Design, Inc.

The Art Institutes International Minnesota, Inc.

The Art Institute of Tennessee - Nashville, Inc.

The Art Institute of California - Orange County, Inc.

The Art Institute of Philadelphia LLC

The Art Institute of California - Sacramento, Inc.

The Art Institute of California - Sunnyvale, Inc.

The Art Institute of Tucson, Inc.

The Art Institute of Washington, Inc.

The Art Institute of York - Pennsylvania LLC

Argosy Education Group, Inc.

American Education Centers, Inc.

The Asher School of Business Education Corporation

Brown Mackie College - Boise, Inc.

Michiana College Education Corporation

Brown Mackie College - Greenville, Inc.

Brown Mackie College - Indianapolis, Inc.

Brown Mackie College - Kansas City LLC

Stautzenberger College Education Corporation

Southern Ohio College LLC

Brown Mackie College - Phoenix, Inc.

Brown Mackie College - Salina LLC

Brown Mackie College - Tulsa, Inc.

South University of Alabama, Inc.

South University of Virginia, Inc.

South University of Florida, Inc.

Western State University of Southern California

By
	Name:
	Title:

BNP PARIBAS, as Administrative Agent, Collateral Agent, AND ISSUING BANK
By
	Name:
	Title:
By
	Name:
	Title:
BNP PARIBAS, as SOLE LENDER
By
	Name:
	Title:
By
	Name:
	Title:

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Edward H. West, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2013 of Education Management Corporation;

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 of 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 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 control 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 control over financial reporting.

Date: May 10, 2013

By:	/S/ EDWARD H. WEST
	Edward H. West
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Mick J. Beekhuizen, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2013 of Education Management Corporation;

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 of 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 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 control 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 control over financial reporting.

Date: May 10, 2013

By:	/S/ MICK J. BEEKHUIZEN
	Mick J. Beekhuizen
	Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER

FURNISHED PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Education Management Corporation (the “Company”) for the fiscal quarter ended March 31, 2013 (the “Report”), I, Edward H. West, President and Chief Executive Officer of the Company, hereby certify in such capacity, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2013

By:	/S/ EDWARD H. WEST
	Edward H. West
	President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION BY THE CHIEF FINANCIAL OFFICER

FURNISHED PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Education Management Corporation (the “Company”) for the fiscal quarter ended March 31, 2013 (the “Report”), I, Mick J. Beekhuizen, Vice President and Acting Chief Financial Officer of the Company, hereby certify in such capacity, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2013

By:	/S/ MICK J. BEEKHUIZEN
	Mick J. Beekhuizen
	Executive Vice President and Chief Financial Officer

XML

Goodwill And Intangible Assets (Details) (USD $)	3 Months Ended			9 Months Ended		12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Jun. 30, 2012	Jun. 01, 2006
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Goodwill, Beginning Balance				$ 963,550,000	$ 2,581,999,000	$ 2,581,999,000	$ 2,581,999,000
Goodwill impairment			459,400,000	(294,460,000)		(1,618,449,000)
Goodwill, Impairment Loss, Tax Basis			379,000,000
Fair Value Inputs, Discount Rate		100.00%		15.50%
Goodwill, Ending Balance	669,090,000		2,086,619,000	669,090,000	2,086,619,000	963,550,000	2,581,999,000
Gross Carrying Amount - Intangible Assets, Net	387,231,000		538,488,000	387,231,000	538,488,000	411,499,000
Accumulated Amortization	(86,192,000)		(79,644,000)	(86,192,000)	(79,644,000)	(81,470,000)
Amortization of intangible assets	1,700,000		1,900,000	4,853,000	5,758,000
Licenses and accreditations cycles				10 years
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
2013	1,289,000			1,289,000
2014	4,765,000			4,765,000
2015	4,149,000			4,149,000
2016	2,793,000			2,793,000
2017	2,121,000			2,121,000
Thereafter	60,000			60,000
Fair Value Inputs, Royalty Rate				2.00%
Tradename-Art Institute [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Impairment of indefinite-lived intangible assets				28,000,000
Gross Carrying Amount - Indefinite-Lived Intangible Assets	190,000,000		330,000,000	190,000,000	330,000,000	218,000,000
Accumulated Amortization	0		0	0	0	0
Licensing, accreditation and Title IV program participation [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Gross Carrying Amount - Indefinite-Lived Intangible Assets	95,862,000		112,179,000	95,862,000	112,179,000	95,862,000
Accumulated Amortization	0		0	0	0	0
Curriculum and programs [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Gross Carrying Amount - Finite-Lived Intangible Assets	42,434,000		37,364,000	42,434,000	37,364,000	38,702,000
Accumulated Amortization	(31,385,000)		(27,350,000)	(31,385,000)	(27,350,000)	(28,541,000)
Student contracts, application and relationships [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Gross Carrying Amount - Finite-Lived Intangible Assets	39,511,000		39,511,000	39,511,000	39,511,000	39,511,000
Accumulated Amortization	(37,104,000)		(35,992,000)	(37,104,000)	(35,992,000)	(36,270,000)
Favorable leases and other [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Gross Carrying Amount - Finite-Lived Intangible Assets	19,424,000		19,434,000	19,424,000	19,434,000	19,424,000
Accumulated Amortization	(17,703,000)		(16,302,000)	(17,703,000)	(16,302,000)	(16,659,000)
The Art Institutes [Member]
Goodwill and Intangible Assets [Line Items]
Business Segments' fair value in excess of carrying value	18.00%			18.00%
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Goodwill, Beginning Balance				861,619,000	1,984,688,000	1,984,688,000
Goodwill impairment				(294,460,000)		(1,123,069,000)
Goodwill, Ending Balance	567,159,000			567,159,000		861,619,000
Argosy Univeristy and South University [Member]
Goodwill and Intangible Assets [Line Items]
Business Segments' fair value in excess of carrying value	35.00%			35.00%
Argosy University [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Goodwill, Beginning Balance				63,445,000	219,350,000	219,350,000
Goodwill impairment				0		(155,905,000)
Goodwill, Ending Balance	63,445,000			63,445,000		63,445,000
Brown Mackie Colleges [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Goodwill, Beginning Balance				0	254,561,000	254,561,000
Goodwill impairment				0		(254,561,000)
Goodwill, Ending Balance	0			0		0
South University [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Goodwill, Beginning Balance				38,486,000	123,400,000	123,400,000
Goodwill impairment				0		(84,914,000)
Goodwill, Ending Balance	$ 38,486,000			$ 38,486,000		$ 38,486,000
Minimum [Member] | The Art Institutes [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Fair Value Inputs, Discount Rate				15.00%
Minimum [Member] | Argosy University [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Fair Value Inputs, Discount Rate				17.50%
Minimum [Member] | South University [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Fair Value Inputs, Discount Rate				18.00%

XML

Segment Reporting (Details) (USD $)	1 Months Ended	3 Months Ended				9 Months Ended				12 Months Ended		3 Months Ended				9 Months Ended				12 Months Ended		3 Months Ended				9 Months Ended				12 Months Ended		3 Months Ended				9 Months Ended				12 Months Ended		3 Months Ended				9 Months Ended				12 Months Ended		3 Months Ended				9 Months Ended						6 Months Ended		9 Months Ended
	Sep. 30, 2012	Mar. 31, 2013		Mar. 31, 2012		Mar. 31, 2013		Mar. 31, 2012		Jun. 30, 2012		Mar. 31, 2013 The Art Institutes [Member]		Mar. 31, 2012 The Art Institutes [Member]		Mar. 31, 2013 The Art Institutes [Member]		Mar. 31, 2012 The Art Institutes [Member]		Jun. 30, 2012 The Art Institutes [Member]		Mar. 31, 2013 Argosy University [Member]		Mar. 31, 2012 Argosy University [Member]		Mar. 31, 2013 Argosy University [Member]		Mar. 31, 2012 Argosy University [Member]		Jun. 30, 2012 Argosy University [Member]		Mar. 31, 2013 Brown Mackie Colleges [Member]		Mar. 31, 2012 Brown Mackie Colleges [Member]		Mar. 31, 2013 Brown Mackie Colleges [Member]		Mar. 31, 2012 Brown Mackie Colleges [Member]		Jun. 30, 2012 Brown Mackie Colleges [Member]		Mar. 31, 2013 South University [Member]		Mar. 31, 2012 South University [Member]		Mar. 31, 2013 South University [Member]		Mar. 31, 2012 South University [Member]		Jun. 30, 2012 South University [Member]		Mar. 31, 2013 Corporate and Other [Member]		Mar. 31, 2012 Corporate and Other [Member]		Mar. 31, 2013 Corporate and Other [Member]		Mar. 31, 2012 Corporate and Other [Member]		Jun. 30, 2012 Corporate and Other [Member]		Dec. 31, 2012 Employee Severance [Member] The Art Institutes [Member]	Dec. 31, 2012 Lease Abandonment Charge [Member]	Mar. 31, 2013 Tradename-Art Institute [Member] The Art Institutes [Member]
Segment Reporting Information [Line Items]
Goodwill, Impairment Loss				$ (459,400,000)		$ 294,460,000				$ 1,618,449,000						$ 294,460,000				$ 1,123,069,000						$ 0				$ 155,905,000						$ 0				$ 254,561,000						$ 0				$ 84,914,000
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)																																																																28,000,000
Asset Impairment Charges		1,200,000
Net revenues		638,903,000		702,499,000		1,903,363,000		2,121,782,000				393,560,000		442,842,000		1,185,232,000		1,341,344,000				94,430,000		104,781,000		268,663,000		308,995,000				73,876,000		77,949,000		226,122,000		240,617,000				77,037,000		76,927,000		223,346,000		230,826,000
EBITDA Excluding Certain Expenses		121,955,000		134,456,000		308,204,000		420,328,000				100,527,000		124,611,000		280,714,000		386,688,000				16,373,000		19,202,000		33,363,000		50,580,000				8,436,000		14,521,000		28,798,000		50,733,000				15,410,000		(1,980,000)		30,670,000		1,320,000				(18,791,000)		(21,898,000)		(65,341,000)		(68,993,000)
Goodwill and Indefinite-lived Intangible Asset Impairments		323,690,000		495,380,000		323,690,000		495,380,000
Loss on extinguishment of debt		(5,232,000)		(9,474,000)		(5,232,000)		(9,474,000)
Restructuring charges	9,145,000	0		5,908,000		9,145,000		12,575,000																																																						10,100,000	2,500,000
Depreciation and amortization		40,266,000		40,610,000		123,667,000		118,694,000
Interest expense, net		30,464,000		25,424,000		92,924,000		79,139,000
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest		(277,697,000)		(442,340,000)		(246,454,000)		(294,934,000)
Income tax expense (benefit)		6,297,000		(25,224,000)		19,489,000		32,101,000
Expenditures for long-lived assets						64,586,000		64,679,000
Assets		$ 2,349,299,000	[1]	$ 4,117,470,000	[1]	$ 2,349,299,000	[1]	$ 4,117,470,000	[1]	$ 2,839,095,000	[1]	$ 1,417,887,000	[1]	$ 3,023,789,000	[1]	$ 1,417,887,000	[1]	$ 3,023,789,000	[1]	$ 1,824,385,000	[1]	$ 236,759,000	[1]	$ 276,611,000	[1]	$ 236,759,000	[1]	$ 276,611,000	[1]	$ 308,286,000	[1]	$ 202,844,000	[1]	$ 181,377,000	[1]	$ 202,844,000	[1]	$ 181,377,000	[1]	$ 268,694,000	[1]	$ 188,915,000	[1]	$ 210,709,000	[1]	$ 188,915,000	[1]	$ 210,709,000	[1]	$ 272,729,000	[1]	$ 302,894,000	[1],[2]	$ 424,984,000	[1],[2]	$ 302,894,000	[1],[2]	$ 424,984,000	[1],[2]	$ 165,001,000	[1],[2]

[1] Excludes inter-company activity.

[2] .

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Contingencies (Details) (USD $) In Billions, unless otherwise specified	9 Months Ended	1 Months Ended					6 Months Ended	1 Months Ended
	Mar. 31, 2013 Pending Litigation [Member] Qui Tam Matters [Member] States	May 31, 2010 Pending Litigation [Member] Buirkle APA Program Accreditation Lawsuit [Member] arbitration	Mar. 31, 2010 Pending Litigation [Member] Buirkle APA Program Accreditation Lawsuit [Member] Plantiffs	Sep. 30, 2012 Pending Litigation [Member] State of Colorado Attorney General [Member] Plantiffs	Mar. 31, 2010 Threatened Litigation [Member] Buirkle APA Program Accreditation Lawsuit [Member] Plantiffs	Dec. 31, 2010 Threatened Litigation [Member] Attorney General of the Commonwealth of Kentucky [Member] Education_Systems Subpoenas	Dec. 31, 2012 Threatened Litigation [Member] Florida Attorney General [Member] Education_Systems	Dec. 31, 2011 Threatened Litigation [Member] City Attorney of the City of San Francisco, California [Member] Education_Systems
Loss Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss	$ 11
Number of plaintiffs	5		3
Loss Contingency, Number of Locations Impacted						3	9	7
Loss Contingency Trial, Arbitratioin Or Alternative Dispute Resolution		2		3
Loss Contingency, Claims Settled and Dismissed, Number					20
Loss Contingency, Number of Subpoenas Received						6

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Guarantor Subsidiaries Financial Information (Tables)

9 Months Ended

Mar. 31, 2013

Mar. 31, 2012

Gurantor Subsidiaries Financial Information [Abstract]

Schedule of Condensed Balance Sheet [Table Text Block]

The following tables present the condensed consolidated financial position of EM LLC, the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries and EDMC as of March 31, 2013, June 30, 2012 and March 31, 2012. The resu

Schedule of Income Statement [Table Text Block]

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months Ended March 31, 2013 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		EM LLC Consolidated			EDMC			Eliminations			EDMC Consolidated
Net revenues	$	—		$	2,002		$	636,901		$	—	$	638,903		$	—		$	—		$	638,903
Costs and expenses:
Educational services	22,807			1,213			326,114			—		350,134			—			—			350,134
General and administrative	(42,959		)	2,863			206,910			—		166,814			—			—			166,814
Depreciation and amortization	6,762			151			33,353			—		40,266			—			—			40,266
Long-lived asset impairments	—			—			323,690					323,690									323,690
Total costs and expenses	(13,390		)	4,227			890,067			—		880,904			—			—			880,904
Income (loss) before interest and income taxes	13,390			(2,225		)	(253,166		)	—		(242,001		)	—			—			(242,001		)
Interest expense (income), net	29,869			—			600			—		30,469			(5		)	—			30,464
Loss on debt refinancing	5,232			—			—			—		5,232			—			—			5,232
Equity in loss of subsidiaries	(203,855		)	—			—			203,855		—			(283,999		)	283,999			—
Loss before income taxes	(225,566		)	(2,225		)	(253,766		)	203,855		(277,702		)	(283,994		)	283,999			(277,697		)
Income tax expense (benefit)	58,433			(822		)	(51,314		)	—		6,297			—			—			6,297
Net loss	$	(283,999	)	$	(1,403	)	$	(202,452	)	$	203,855	$	(283,999	)	$	(283,994	)	$	283,999		$	(283,994	)
Net change in unrecognized loss on interest rate swaps, net of tax	$	1,514		$	—		$	—		$	—	$	1,514		$	1,514		$	(1,514	)	$	1,514
Foreign currency translation loss	(147		)	—			(147		)	147		(147		)	(147		)	147			(147		)
Other comprehensive income (loss)	1,367			—			(147		)	147		1,367			1,367			(1,367		)	1,367
Comprehensive loss	$	(282,632	)	$	(1,403	)	$	(202,599	)	$	204,002	$	(282,632	)	$	(282,627	)	$	282,632		$	(282,627	)

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months Ended March 31, 2012 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			EM LLC Consolidated			EDMC			Eliminations			EDMC Consolidated
Net revenues	$	—		$	1,430		$	701,069		$	—		$	702,499		$	—		$	—		$	702,499
Costs and expenses:
Educational services	42,995			2,265			336,943			—			382,203			1			—			382,204
General and administrative	(37,258		)	338			228,611			—			191,691			56			—			191,747
Depreciation and amortization	6,626			142			33,842			—			40,610			—			—			40,610
Goodwill impairment	—			—			495,380						495,380									495,380
Total costs and expenses	12,363			2,745			1,094,776			—			1,109,884			57			—			1,109,941
Loss before interest and income taxes	(12,363		)	(1,315		)	(393,707		)	—			(407,385		)	(57		)	—			(407,442		)
Interest expense (income), net	24,826			—			599			—			25,425			(1		)	—			25,424
Loss on debt refinancing	9,474			—			—			—			9,474			—			—			9,474
Equity in loss of subsidiaries	(331,525		)	—			—			331,525			—			(417,060		)	417,060			—
Loss before income taxes	(378,188		)	(1,315		)	(394,306		)	331,525			(442,284		)	(417,116		)	417,060			(442,340		)
Income tax expense (benefit)	38,872			294			(64,390		)	—			(25,224		)	—			—			(25,224		)
Net Loss	$	(417,060	)	$	(1,609	)	$	(329,916	)	$	331,525		$	(417,060	)	$	(417,116	)	$	417,060		$	(417,116	)
Net change in unrecognized loss on interest rate swaps, net of tax	$	1,439		$	—		$	—		$	—		$	1,439		$	1,439		$	(1,439	)	$	1,439
Foreign currency translation gain	141			—			141			(141		)	141			141			(141		)	141
Other comprehensive income	1,580			—			141			(141		)	1,580			1,580			(1,580		)	1,580
Comprehensive loss	$	(415,480	)	$	(1,609	)	$	(329,775	)	$	331,384		$	(415,480	)	$	(415,536	)	$	415,480		$	(415,536	)

Schedule of Condensed Cash Flow Statement [Table Text Block]

NDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the Nine Months Ended March 31, 2013 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			EM LLC Consolidated			EDMC		EDMC Consolidated
Net cash flows provided by (used in) operations	$	(165,111	)	$	(5,647	)	$	456,939		$	286,181		$	21	$	286,202
Cash flows from investing activities:
Expenditures for long-lived assets	(7,707		)	(725		)	(56,154		)	(64,586		)	—		(64,586		)
Proceeds from sales of long-lived assets	—			—			65,065			65,065					65,065
Other investing activities	(858		)	—			(6,244		)	(7,102		)	—		(7,102		)
Net cash flows provided by (used in) investing activities	(8,565		)	(725		)	2,667			(6,623		)	—		(6,623		)
Cash flows from financing activities:
Net repayments of debt and other	(286,885		)	—			(211		)	(287,096		)			(287,096		)
Inter-company transactions	663,259			6,394			(669,653		)	—			—		—
Net cash flows provided by (used in) financing activities	376,374			6,394			(669,864		)	(287,096		)	—		(287,096		)
Effect of exchange rate changes on cash and cash equivalents	—			—			123			123			—		123
Increase (decrease) in cash and cash equivalents	202,698			22			(210,135		)	(7,415		)	21		(7,394		)
Beginning cash and cash equivalents	(26,249		)	98			213,960			187,809			3,199		191,008
Ending cash and cash equivalents	$	176,449		$	120		$	3,825		$	180,394		$	3,220	$	183,614

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the Nine Months Ended March 31, 2012 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			EM LLC Consolidated			EDMC			EDMC Consolidated
Net cash flows provided by (used in) operations	$	(187,444	)	$	409		$	336,648		$	149,613		$	3,063		$	152,676
Cash flows from investing activities
Expenditures for long-lived assets	(6,819		)	(752		)	(57,108		)	(64,679		)	—			(64,679		)
Other investing activities	—			—			(14,248		)	(14,248		)	—			(14,248		)
Net cash flows used in investing activities	(6,819		)	(752		)	(71,356		)	(78,927		)	—			(78,927		)
Cash flows from financing activities
Net repayments of debt	(98,874		)	—			(195		)	(99,069		)	—			(99,069		)
Common stock repurchased and stock option exercises	—			—			—			—			(90,138		)	(90,138		)
Inter-company transactions	537,216			120			(627,474		)	(90,138		)	90,138			—
Net cash flows provided by (used in) financing activities	438,342			120			(627,669		)	(189,207		)	—			(189,207		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(263		)	(263		)	—			(263		)
Increase (decrease) in cash and cash equivalents	244,079			(223		)	(362,640		)	(118,784		)	3,063			(115,721		)
Beginning cash and cash equivalents	(16,816		)	270			369,637			353,091			50,133			403,224
Ending cash and cash equivalents	$	227,263		$	47		$	6,997		$	234,307		$	53,196		$	287,503

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Earnings Per Share (Tables)

9 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

Basic and diluted EPS were calculated as follows (in thousands, except per share amounts):

	For the Three Months Ended March 31,						For the Nine Months Ended March 31,
	2013			2012			2013			2012
Net loss	$	(283,994	)	$	(417,116	)	$	(265,943	)	$	(327,035	)
Weighted average number of shares outstanding:
Basic	124,602			126,005			124,546			127,224
Diluted	124,602			126,005			124,546			127,224
Loss per share:
Basic	$	(2.28	)	$	(3.31	)	$	(2.14	)	$	(2.57	)
Diluted	$	(2.28	)	$	(3.31	)	$	(2.14	)	$	(2.57	)

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Short-Term And Long-Term Debt (Details) (USD $)	3 Months Ended		9 Months Ended			9 Months Ended		3 Months Ended											0 Months Ended				0 Months Ended																		9 Months Ended				1 Months Ended	0 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Jun. 30, 2012	Mar. 31, 2013 Revolving Credit Facility [Member]	Jun. 30, 2012 Revolving Credit Facility [Member]	Mar. 31, 2013 Term Loan [Member]	Mar. 31, 2013 Letter of Credit [Member]	Dec. 31, 2012 U.S. Department of Education [Member]	Mar. 31, 2013 U.S. Department of Education [Member] Revolving Credit Facility [Member]	Dec. 31, 2012 Revolving Credit Facility [Member] U.S. Department of Education [Member]	Mar. 30, 2012 Cedit Agreement [Member] Term Loan [Member]	Mar. 31, 2013 Senior Secured Notes Due 2018 [Member]	Mar. 31, 2013 Senior Secured Term Loan Facility Due 2016 [Member]	Jun. 30, 2012 Senior Secured Term Loan Facility Due 2016 [Member]	Mar. 31, 2012 Senior Secured Term Loan Facility Due 2016 [Member]	Mar. 30, 2012 Senior Secured Term Loan Facility, Due in March 2018 [Member] Term Loan [Member]	Mar. 05, 2013 Senior Notes Due 2014 [Member]	Jun. 30, 2012 Revolving Credit Facility Due 2015 [Member] Revolving Credit Facility [Member]	Mar. 05, 2013 Payment in Kind (PIK) Note [Member] New Notes [Member]	Mar. 05, 2013 Senior Cash Pay/PIK [Member] New Notes [Member]	Mar. 05, 2013 Senior Notes [Member] Senior Notes Due 2014 [Member]	Mar. 31, 2013 Senior Notes [Member] Senior Notes Due 2014 [Member]	Jun. 30, 2012 Senior Notes [Member] Senior Notes Due 2014 [Member]	Mar. 31, 2012 Senior Notes [Member] Senior Notes Due 2014 [Member]	Mar. 31, 2013 Term Loan [Member] Senior Secured Term Loan Facility Due 2016 [Member]	Jun. 30, 2012 Term Loan [Member] Senior Secured Term Loan Facility Due 2016 [Member]	Mar. 31, 2012 Term Loan [Member] Senior Secured Term Loan Facility Due 2016 [Member]	Mar. 31, 2013 Term Loan [Member] Senior Secured Term Loan Facility, Due in March 2018 [Member]	Jun. 30, 2012 Term Loan [Member] Senior Secured Term Loan Facility, Due in March 2018 [Member]	Mar. 31, 2012 Term Loan [Member] Senior Secured Term Loan Facility, Due in March 2018 [Member]	Mar. 31, 2013 Term Loan [Member] Senior cash pay/PIK notes [Domain]	Jun. 30, 2012 Term Loan [Member] Senior cash pay/PIK notes [Domain]	Mar. 31, 2012 Term Loan [Member] Senior cash pay/PIK notes [Domain]	Mar. 31, 2013 Other Long-term Debt [Member]	Jun. 30, 2012 Other Long-term Debt [Member]	Mar. 31, 2012 Other Long-term Debt [Member]	Mar. 31, 2013 Minimum [Member]	Mar. 31, 2013 Maximum [Member] Letter of Credit [Member]	Mar. 31, 2013 Maximum [Member] Cedit Agreement [Member] Term Loan [Member]	Mar. 30, 2012 Maximum [Member] Cedit Agreement [Member] Term Loan [Member]	Mar. 31, 2013 Prime Rate [Member] Revolving Credit Facility Due 2015 [Member] Revolving Credit Facility [Member]	Jan. 31, 2013 Subsequent Event [Member] U.S. Department of Education [Member]	Apr. 30, 2013 Subsequent Event [Member] Senior Notes [Member] Senior Notes Due 2014 [Member]	Mar. 05, 2013 Affilitate of Sponsor, Goldman Sachs Capital Partners [Member] Payment in Kind (PIK) Note [Member] New Notes [Member]	Mar. 05, 2013 Affilitate of Sponsor, Leeds Equity Partners [Member] Senior Notes [Member] Senior Notes Due 2014 [Member]
Line of Credit Facility [Line Items]
Letters of Credit Outstanding, Amount	$ 353,000,000		$ 353,000,000									$ 414,500,000																																$ 348,600,000
Letters of Credit Oustanding, Percentage of Total Title IV Aid Received by Students										15.00%
Letter of Credit, Collateralized, Number			2
Line of Credit Facility, Cash Secured									210,000,000																															200,000,000
Cash Collateral for Borrowed Securities, Required Percentage of Aggregate																																							105.00%
Line of Credit Facility, Maximum Borrowing Capacity							328,300,000				148,600,000
Line of Credit Facility, Remaining Borrowing Capacity						175,300,000
Cash Collateral for Borrowed Securities	200,000,000		200,000,000
Debt Instrument, Description of Variable Rate Basis			LIBOR																																						LIBOR
Debt Instrument, Interest Rate, Stated Percentage																			8.75%			15.00%																			1.25%	1.25%
Debt Instrument, Face Amount													350,000,000								203,000,000
Paid in Kind Interest, Percent, Next Rolling Twelve Months																						1.00%
Paid in Kind Interest, Percent, Rolling Year Two																						2.00%
Paid in Kind Interest, Percent, Rolling Year Three																						3.00%
Paid in Kind Interest, Percent, Rolling Year Four and Thereafter																						4.00%
Original Issue Discount																						13.00%
Effective Percentage																						19.80%
Basis Spread on Variable Rate															4.00%																										7.00%	7.00%	3.00%
Debt Issuance Cost								4,300,000																																						2,900,000
Refinancing costs, payments to sponsors								700,000
Capitalized discount	3,050,000	3,660,000	3,050,000	3,660,000	3,508,000																												29,074,000
Short-term Debt							111,300,000
Line of Credit Facility, Interest Rate at Period End																				6.25%
Line of Credit Facility, Commitment Fee Percentage						0.375%
Interest Rate at Period End														8.25%	4.31%	4.50%	4.50%
Long-term Debt, Excluding Current Maturities [Abstract]
Long-term Debt																		348,600,000						9,707,000	375,000,000	375,000,000	738,476,000	744,539,000	746,560,000	343,159,000	345,545,000	346,340,000	203,826,000	0	0	252,000	460,000	528,000
Interest (including swap settlement)			89,705,000	77,736,000
Repayments of Subordinated Debt																			162,300,000
Extinguishment of Debt, Amount																							365,300,000																						9,700,000		4,000,000
Loss on debt refinancing			4,436,000	11,928,000
Long-term Debt, Net of Discount	1,295,420,000	1,468,428,000	1,295,420,000	1,468,428,000	1,465,544,000
Less current portion	(12,076,000)	(12,076,000)	(12,076,000)	(12,076,000)	(12,076,000)
Total long-term debt, less current portion	1,283,344,000	1,456,352,000	1,283,344,000	1,456,352,000	1,453,468,000
Loss on debt refinancing	$ 5,232,000	$ 9,474,000	$ 5,232,000	$ 9,474,000

XML

Share-Based Compensation (Details) (USD $)	0 Months Ended	3 Months Ended		9 Months Ended				0 Months Ended	1 Months Ended	9 Months Ended	1 Months Ended	9 Months Ended	0 Months Ended		1 Months Ended	9 Months Ended		0 Months Ended										12 Months Ended
	Aug. 14, 2012	Mar. 31, 2013 installments	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Apr. 30, 2013	Aug. 14, 2012 Performance-based options [Member]	Aug. 14, 2012 Time-based shares [Member]	Apr. 30, 2013 Time-based shares [Member]	Mar. 31, 2013 Time-based shares [Member]	Apr. 30, 2013 Restricted Stock Units (RSUs) [Member]	Mar. 31, 2013 Restricted Stock Units (RSUs) [Member]	Sep. 13, 2012 2012 Omnibus Plan [Member] Common Stock [Member]	Sep. 13, 2012 Option Exchange [Member]	Aug. 31, 2012 Option Exchange [Member] Time-based shares [Member]	Mar. 31, 2013 Option Exchange [Member] Minimum [Member]	Mar. 31, 2013 Option Exchange [Member] Maximum [Member]	Sep. 13, 2012 Replacement options [Member] Performance-based options [Member]	Sep. 13, 2012 Replacement options [Member] Time-based shares [Member]	Sep. 13, 2012 Replacement options [Member] Time-based shares [Member] Common Stock [Member]	Sep. 13, 2012 Replacement options [Member] Minimum [Member] Time-based shares [Member] Common Stock [Member]	Sep. 13, 2012 Replacement options [Member] Maximum [Member] Time-based shares [Member] Common Stock [Member]	Sep. 13, 2012 Cancelled options [Member] Performance-based options [Member]	Sep. 13, 2012 Cancelled options [Member] Time-based shares [Member]	Sep. 13, 2012 Cancelled options [Member] Time-based shares [Member] Common Stock [Member]	Sep. 13, 2012 Cancelled options [Member] Minimum [Member] Time-based shares [Member] Common Stock [Member]	Sep. 13, 2012 Cancelled options [Member] Maximum [Member] Time-based shares [Member] Common Stock [Member]	Jun. 30, 2007 Long-Term Incentive Compensation Plan [Member] Common Stock [Member]	Mar. 31, 2013 Long-Term Incentive Compensation Plan [Member] Common Stock [Member]	Aug. 14, 2012 Long-Term Incentive Compensation Plan [Member] Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, options granted													8,300,000					2,000,000	6,300,075
Share-based compensation arrangement by share based payment aware, award vesting percentage	25.00%
Grant price restricted stock		$ 3.30		$ 3.30
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price		$ 3.17		$ 3.17
Common Stock shares reserved for issuance						2,600,000
Options, Grants in Period, Weighted Average Exercise Price															$ 3.59
Share-based Compensation Arrangement by Share-based Payment Award, Vesting, Number of Installments		4
Common stock exchange, options cancelled																							3,100,000	8,525,171
Incremental compensation expense, net of forfeitures														$ 2,200,000
Volatility minimum																				80.00%					78.00%
Volatility maximum																				87.00%					87.00%
Expected term																					2 years 11 months 9 days	6 years 3 months				2 years 3 months	7 years 8 months 1 day
Fair value per option																					$ 1.87	$ 2.53				$ 0.78	$ 1.97
Vesting periods																1 year	4 years
Share-based Compensation		4,300,000	3,600,000	11,938,000	10,171,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross									1,100,000	3,000,000
Options, Exercisable, Weighted Average Remaining Contractual Term								10 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options										26,500,000		7,300,000
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures											300,000	2,800,000
Unrecognized Compensation Costs, Net of Forfeitures							$ 4,500,000																							$ 1,600,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period																												1,000,000
Long-Term Incentive Compensation Plan [Abstract]
LTIC Plan, Options Oustanding																													438,000

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Guarantor Subsidiaries Financial Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended				12 Months Ended
	Mar. 31, 2013		Mar. 31, 2012		Mar. 31, 2013		Mar. 31, 2012		Jun. 30, 2012		Jun. 30, 2011	Jun. 01, 2006
Balance Sheet
Cash and cash equivalents	$ 183,614		$ 287,503		$ 183,614		$ 287,503		$ 191,008		$ 403,224
Restricted cash	272,029		284,053		272,029		284,053		267,880
Student and other receivables, net	153,069		144,495		153,069		144,495		203,341
Inventories	7,000		10,035		7,000		10,035		8,382
Other current assets	33,547		40,009		33,547		40,009		40,399
Total current assets	779,561		870,943		779,561		870,943		842,648
Property and equipment, net	543,731		653,888		543,731		653,888		651,797
Other long-term assets	55,878		47,176		55,878		47,176		51,071
Intangible assets, net (Note 5)	301,039		458,844		301,039		458,844		330,029
Goodwill	669,090		2,086,619		669,090		2,086,619		963,550		2,581,999	2,581,999
Total assets	2,349,299	[1]	4,117,470	[1]	2,349,299	[1]	4,117,470	[1]	2,839,095	[1]
Current portion of long-term debt (Note 8)	12,076		12,076		12,076		12,076		12,076
Total current liabilities	486,402		554,955		486,402		554,955		534,005
Long-term debt, less current portion (Note 8)	1,283,344		1,456,352		1,283,344		1,456,352		1,453,468
Other long-term liabilities	39,250		45,766		39,250		45,766		45,533
Total shareholders' equity	245,240		1,693,405		245,240		1,693,405		496,564		2,103,944
Total liabilities and shareholders' equity	2,349,299		4,117,470		2,349,299		4,117,470		2,839,095
Income Statement
Net revenues	638,903		702,499		1,903,363		2,121,782
Educational services	(350,134)		(382,204)		(1,091,808)		(1,132,421)
General and administrative	(166,814)		(191,747)		(512,496)		(581,608)
Depreciation and amortization	40,266		40,610		123,667		118,694
Goodwill, Impairment Loss			(459,400)		294,460				1,618,449
Total costs and expenses	880,904		1,109,941		2,051,661		2,328,103
(Loss) Income before interest, loss on extinguishment of debt and income taxes	(242,001)		(407,442)		(148,298)		(206,321)
Interest expense, net	30,464		25,424		92,924		79,139
Gains (Losses) on Extinguishment of Debt	(5,232)		(9,474)		(5,232)		(9,474)
Loss before income taxes	(277,697)		(442,340)		(246,454)		(294,934)
(Benefit from) provision for income taxes	6,297		(25,224)		19,489		32,101
Net loss	(283,994)		(417,116)		(265,943)		(327,035)		(1,515,741)
Net change in unrecognized loss on interest rate swaps, net of tax	(401)		(524)		(2,833)		(11,389)
Foreign currency translation gain (loss)	(147)		141		(88)		(641)
Other comprehensive income (loss)	1,367		1,580		2,678		(5,331)		(5,847)
Comprehensive income	(282,627)		(415,536)		(263,265)		(332,366)
Statement of Cash Flows [Abstract]
Net cash provided by (used in) operations					286,202		152,676
Expenditures for long-lived assets					(64,586)		(64,679)
Proceeds from sales of long-lived assets					65,065		0
Other investing activities					(7,102)		(14,248)
Net cash flows used in investing activities					(6,623)		(78,927)
Issuance of common stock net of repurchases for treasury					3		2,618
Net cash flows used in financing activities					(287,096)		(189,207)
Effect of exchange rate changes on cash and cash equivalents					123		(263)
Net change in cash and cash equivalents					(7,394)		(115,721)
EM LLC [Member]
Balance Sheet
Cash and cash equivalents	176,449		227,263		176,449		227,263		(26,249)		(16,816)
Restricted cash	45,803		48,243		45,803		48,243		42,931
Student and other receivables, net	2,753		8,771		2,753		8,771		4,149
Inventories	0		0		0		0		0
Other current assets	34,681		26,653		34,681		26,653		35,543
Total current assets	259,686		310,930		259,686		310,930		56,374
Property and equipment, net	64,881		69,445		64,881		69,445		72,279
Intercompany balances	405,600		665,834		405,600		665,834		1,059,102
Other long-term assets	25,346		48,521		25,346		48,521		15,276
Investments in subsidiaries	708,831		1,989,615		708,831		1,989,615		826,651
Intangible assets, net (Note 5)	1,513		1,950		1,513		1,950		2,031
Goodwill	7,328		7,328		7,328		7,328		7,328
Total assets	1,473,185		3,093,623		1,473,185		3,093,623		2,039,041
Current portion of long-term debt (Note 8)	11,850		11,850		11,850		11,850		123,150
Other current liabilities	48,295		37,679		48,295		37,679		63,935
Total current liabilities	60,145		49,529		60,145		49,529		187,085
Long-term debt, less current portion (Note 8)	1,283,321		1,456,050		1,283,321		1,456,050		1,453,234
Other long-term liabilities	46,729		52,839		46,729		52,839		52,450
Deferred income taxes	1,530		1,246		1,530		1,246		1,530
Total liabilities	1,391,725		1,559,664		1,391,725		1,559,664		1,694,299
Total shareholders' equity	81,460		1,533,959		81,460		1,533,959		344,742
Total liabilities and shareholders' equity	1,473,185		3,093,623		1,473,185		3,093,623		2,039,041
Income Statement
Net revenues	0		0		0		0
Educational services	(22,807)		42,995		(87,122)		85,571
General and administrative	42,959		(37,258)		74,336		(77,327)
Depreciation and amortization	6,762		6,626		25,641		19,590
Goodwill, Impairment Loss	0		0		0		0
Total costs and expenses	(13,390)		12,363		38,427		27,834
(Loss) Income before interest, loss on extinguishment of debt and income taxes	13,390		(12,363)		(38,427)		(27,834)
Interest expense, net	29,869		24,826		91,144		77,273
Gains (Losses) on Extinguishment of Debt	5,232		9,474		5,232		9,474
Equity in earnings of subsidiaries	(203,855)		(331,525)		(120,498)		(199,809)
Loss before income taxes	(225,566)		(378,188)		(255,301)		(314,390)
(Benefit from) provision for income taxes	58,433		38,872		10,659		12,478
Net loss	(283,999)		(417,060)		(265,960)		(326,868)
Net change in unrecognized loss on interest rate swaps, net of tax	1,514		1,439		2,766		(4,690)
Foreign currency translation gain (loss)	(147)		141		(88)		(641)
Other comprehensive income (loss)	1,367		1,580		2,678		(5,331)
Comprehensive income	(282,632)		(415,480)		(263,282)		(332,199)
Statement of Cash Flows [Abstract]
Net cash provided by (used in) operations					(165,111)		(187,444)
Expenditures for long-lived assets					(7,707)		(6,819)
Proceeds from sales of long-lived assets					0
Other investing activities					(858)		0
Net cash flows used in investing activities					(8,565)		(6,819)
Net borrowings of debt and other					(286,885)		(98,874)
Issuance of common stock net of repurchases for treasury							0
Intercompany transactions					663,259		537,216
Net cash flows used in financing activities					376,374		438,342
Effect of exchange rate changes on cash and cash equivalents					0		0
Net change in cash and cash equivalents					202,698		244,079
Guarantor Subsidiaries [Member]
Balance Sheet
Cash and cash equivalents	120		47		120		47		98		270
Restricted cash	0		0		0		0		0
Student and other receivables, net	172		174		172		174		153
Inventories	154		117		154		117		159
Other current assets	538		218		538		218		660
Total current assets	984		556		984		556		1,070
Property and equipment, net	6,104		7,657		6,104		7,657		7,846
Intercompany balances	(30,868)		(29,550)		(30,868)		(29,550)		(26,456)
Other long-term assets	0		0		0		0		0
Investments in subsidiaries	0		0		0		0		0
Intangible assets, net (Note 5)	31		42		31		42		39
Goodwill	0		0		0		0		0
Total assets	(23,749)		(21,295)		(23,749)		(21,295)		(17,501)
Current portion of long-term debt (Note 8)	0		0		0		0		0
Other current liabilities	2,419		4,880		2,419		4,880		8,319
Total current liabilities	2,419		4,880		2,419		4,880		8,319
Long-term debt, less current portion (Note 8)	0		0		0		0		0
Other long-term liabilities	280		376		280		376		374
Deferred income taxes	515		265		515		265		515
Total liabilities	3,214		5,521		3,214		5,521		9,208
Total shareholders' equity	(26,963)		(26,816)		(26,963)		(26,816)		(26,709)
Total liabilities and shareholders' equity	(23,749)		(21,295)		(23,749)		(21,295)		(17,501)
Income Statement
Net revenues	2,002		1,430		6,161		6,106
Educational services	(1,213)		2,265		(6,503)		7,549
General and administrative	(2,863)		338		561		(188)
Depreciation and amortization	151		142		454		363
Goodwill, Impairment Loss	0		0		0		0
Total costs and expenses	4,227		2,745		6,396		7,724
(Loss) Income before interest, loss on extinguishment of debt and income taxes	(2,225)		(1,315)		(235)		(1,618)
Interest expense, net	0		0		0		0
Gains (Losses) on Extinguishment of Debt	0		0				0
Equity in earnings of subsidiaries	0		0		0		0
Loss before income taxes	(2,225)		(1,315)		(235)		(1,618)
(Benefit from) provision for income taxes	(822)		294		19		176
Net loss	(1,403)		(1,609)		(254)		(1,794)
Net change in unrecognized loss on interest rate swaps, net of tax	0		0		0		0
Foreign currency translation gain (loss)	0		0		0		0
Other comprehensive income (loss)	0		0		0		0
Comprehensive income	(1,403)		(1,609)		(254)		(1,794)
Statement of Cash Flows [Abstract]
Net cash provided by (used in) operations					(5,647)		409
Expenditures for long-lived assets					(725)		(752)
Proceeds from sales of long-lived assets					0
Other investing activities					0		0
Net cash flows used in investing activities					(725)		(752)
Net borrowings of debt and other					0		0
Issuance of common stock net of repurchases for treasury							0
Intercompany transactions					6,394		120
Net cash flows used in financing activities					6,394		120
Effect of exchange rate changes on cash and cash equivalents					0		0
Net change in cash and cash equivalents					22		(223)
Non-Guarantor Subsidiaries [Member]
Balance Sheet
Cash and cash equivalents	3,825		6,997		3,825		6,997		213,960		369,637
Restricted cash	226,226		235,810		226,226		235,810		224,949
Student and other receivables, net	177,652		156,319		177,652		156,319		221,214
Inventories	6,846		9,918		6,846		9,918		8,223
Other current assets	101,121		97,218		101,121		97,218		113,660
Total current assets	515,670		506,262		515,670		506,262		782,006
Property and equipment, net	472,746		576,786		472,746		576,786		571,672
Intercompany balances	(535,186)		(742,409)		(535,186)		(742,409)		(1,181,164)
Other long-term assets	30,532		(1,345)		30,532		(1,345)		35,794
Investments in subsidiaries	0		0		0		0		0
Intangible assets, net (Note 5)	299,495		456,852		299,495		456,852		327,959
Goodwill	661,762		2,079,291		661,762		2,079,291		956,222
Total assets	1,445,019		2,875,437		1,445,019		2,875,437		1,492,489
Current portion of long-term debt (Note 8)	226		226		226		226		226
Other current liabilities	423,613		500,324		423,613		500,324		338,378
Total current liabilities	423,839		500,550		423,839		500,550		338,604
Long-term debt, less current portion (Note 8)	23		302		23		302		234
Other long-term liabilities	199,088		188,043		199,088		188,043		190,465
Deferred income taxes	86,275		170,111		86,275		170,111		109,826
Total liabilities	709,225		859,006		709,225		859,006		639,129
Total shareholders' equity	735,794		2,016,431		735,794		2,016,431		853,360
Total liabilities and shareholders' equity	1,445,019		2,875,437		1,445,019		2,875,437		1,492,489
Income Statement
Net revenues	636,901		701,069		1,897,202		2,115,676
Educational services	(326,114)		336,943		(998,182)		1,039,301
General and administrative	(206,910)		228,611		(587,393)		658,951
Depreciation and amortization	33,353		33,842		97,572		98,741
Goodwill, Impairment Loss	323,690		495,380		323,690		495,380
Total costs and expenses	890,067		1,094,776		2,006,837		2,292,373
(Loss) Income before interest, loss on extinguishment of debt and income taxes	(253,166)		(393,707)		(109,635)		(176,697)
Interest expense, net	600		599		1,798		1,871
Gains (Losses) on Extinguishment of Debt	0		0		0		0
Equity in earnings of subsidiaries	0		0		0		0
Loss before income taxes	(253,766)		(394,306)		(111,433)		(178,568)
(Benefit from) provision for income taxes	(51,314)		(64,390)		8,811		19,447
Net loss	(202,452)		(329,916)		(120,244)		(198,015)
Net change in unrecognized loss on interest rate swaps, net of tax	0		0		0		0
Foreign currency translation gain (loss)	(147)		141		(88)		(641)
Other comprehensive income (loss)	(147)		141		(88)		(641)
Comprehensive income	(202,599)		(329,775)		(120,332)		(198,656)
Statement of Cash Flows [Abstract]
Net cash provided by (used in) operations					456,939		336,648
Expenditures for long-lived assets					(56,154)		(57,108)
Proceeds from sales of long-lived assets					(65,065)
Other investing activities					(6,244)		(14,248)
Net cash flows used in investing activities					2,667		(71,356)
Net borrowings of debt and other					(211)		(195)
Issuance of common stock net of repurchases for treasury							0
Intercompany transactions					(669,653)		(627,474)
Net cash flows used in financing activities					(669,864)		(627,669)
Effect of exchange rate changes on cash and cash equivalents					123		(263)
Net change in cash and cash equivalents					(210,135)		(362,640)
Eliminations [Member]
Balance Sheet
Cash and cash equivalents	0		0		0		0		0
Restricted cash	0		0		0		0		0
Student and other receivables, net	0		0		0		0		0
Inventories	0		0		0		0		0
Other current assets	0		0		0		0		0
Total current assets	0		0		0		0		0
Property and equipment, net	0		0		0		0		0
Intercompany balances	0		0		0		0		0
Other long-term assets	0		0		0		0		0
Investments in subsidiaries	(708,831)		(1,989,615)		(708,831)		(1,989,615)		(826,651)
Intangible assets, net (Note 5)	0		0		0		0		0
Goodwill	0		0		0		0		0
Total assets	(708,831)		(1,989,615)		(708,831)		(1,989,615)		(826,651)
Current portion of long-term debt (Note 8)	0		0		0		0		0
Other current liabilities	0		0		0		0		0
Total current liabilities	0		0		0		0		0
Long-term debt, less current portion (Note 8)	0		0		0		0		0
Other long-term liabilities	0		0		0		0		0
Deferred income taxes	0		0		0		0		0
Total liabilities	0		0		0		0		0
Total shareholders' equity	(708,831)		(1,989,615)		(708,831)		(1,989,615)		(826,651)
Total liabilities and shareholders' equity	(708,831)		(1,989,615)		(708,831)		(1,989,615)		(826,651)
Income Statement
Net revenues	0		0		0		0
Educational services	0		0		0		0
General and administrative	0		0		0		0
Depreciation and amortization	0		0		0		0
Total costs and expenses	0		0		0		0
(Loss) Income before interest, loss on extinguishment of debt and income taxes	0		0		0		0
Interest expense, net	0		0		0		0
Gains (Losses) on Extinguishment of Debt	0		0				0
Equity in earnings of subsidiaries	203,855		331,525		120,498		199,809
Loss before income taxes	203,855		331,525		120,498		199,809
(Benefit from) provision for income taxes	0		0		0		0
Net loss	203,855		331,525		120,498		199,809
Net change in unrecognized loss on interest rate swaps, net of tax	0		0		0		0
Foreign currency translation gain (loss)	147		(141)		88		641
Other comprehensive income (loss)	147		(141)		88		641
Comprehensive income	204,002		331,384		120,586		200,450
EM LLC Consolidated [Member]
Balance Sheet
Cash and cash equivalents	180,394		234,307		180,394		234,307		187,809		353,091
Restricted cash	272,029		284,053		272,029		284,053		267,880
Student and other receivables, net	180,577		165,264		180,577		165,264		225,516
Inventories	7,000		10,035		7,000		10,035		8,382
Other current assets	136,340		124,089		136,340		124,089		149,863
Total current assets	776,340		817,748		776,340		817,748		839,450
Property and equipment, net	543,731		653,888		543,731		653,888		651,797
Intercompany balances	(160,454)		(106,125)		(160,454)		(106,125)		(148,518)
Other long-term assets	55,878		47,176		55,878		47,176		51,070
Investments in subsidiaries	0		0		0		0		0
Intangible assets, net (Note 5)	301,039		458,844		301,039		458,844		330,029
Goodwill	669,090		2,086,619		669,090		2,086,619		963,550
Total assets	2,185,624		3,958,150		2,185,624		3,958,150		2,687,378
Current portion of long-term debt (Note 8)	12,076		12,076		12,076		12,076		123,376
Other current liabilities	474,327		542,883		474,327		542,883		410,632
Total current liabilities	486,403		554,959		486,403		554,959		534,008
Long-term debt, less current portion (Note 8)	1,283,344		1,456,352		1,283,344		1,456,352		1,453,468
Other long-term liabilities	246,097		241,258		246,097		241,258		243,289
Deferred income taxes	88,320		171,622		88,320		171,622		111,871
Total liabilities	2,104,164		2,424,191		2,104,164		2,424,191		2,342,636
Total shareholders' equity	81,460		1,533,959		81,460		1,533,959		344,742
Total liabilities and shareholders' equity	2,185,624		3,958,150		2,185,624		3,958,150		2,687,378
Income Statement
Net revenues	638,903		702,499		1,903,363		2,121,782
Educational services	(350,134)		382,203		(1,091,807)		1,132,421
General and administrative	(166,814)		191,691		(512,496)		581,436
Depreciation and amortization	40,266		40,610		123,667		118,694
Goodwill, Impairment Loss	323,690		495,380		323,690		495,380
Total costs and expenses	880,904		1,109,884		2,051,660		2,327,931
(Loss) Income before interest, loss on extinguishment of debt and income taxes	(242,001)		(407,385)		(148,297)		(206,149)
Interest expense, net	30,469		25,425		92,942		79,144
Gains (Losses) on Extinguishment of Debt	5,232		9,474		5,232		9,474
Equity in earnings of subsidiaries	0		0		0		0
Loss before income taxes	(277,702)		(442,284)		(246,471)		(294,767)
(Benefit from) provision for income taxes	6,297		(25,224)		19,489		32,101
Net loss	(283,999)		(417,060)		(265,960)		(326,868)
Net change in unrecognized loss on interest rate swaps, net of tax	1,514		1,439		2,766		(4,690)
Foreign currency translation gain (loss)	(147)		141		(88)		(641)
Other comprehensive income (loss)	1,367		1,580		2,678		(5,331)
Comprehensive income	(282,632)		(415,480)		(263,282)		(332,199)
Statement of Cash Flows [Abstract]
Net cash provided by (used in) operations					286,181		149,613
Expenditures for long-lived assets					(64,586)		(64,679)
Proceeds from sales of long-lived assets					(65,065)
Other investing activities					(7,102)		(14,248)
Net cash flows used in investing activities					(6,623)		(78,927)
Net borrowings of debt and other					(287,096)		(99,069)
Issuance of common stock net of repurchases for treasury							0
Intercompany transactions					0		(90,138)
Net cash flows used in financing activities					(287,096)		(189,207)
Effect of exchange rate changes on cash and cash equivalents					123		(263)
Net change in cash and cash equivalents					(7,415)		(118,784)
EDMC [Member]
Balance Sheet
Cash and cash equivalents	3,220		53,196		3,220		53,196		3,199		50,133
Restricted cash	0		0		0		0		0
Student and other receivables, net	1		(1)		1		(1)		(1)
Inventories	0		0		0		0		0
Other current assets	0		0		0		0		0
Total current assets	3,221		53,195		3,221		53,195		3,198
Property and equipment, net	0		0		0		0		0
Intercompany balances	160,454		106,125		160,454		106,125		148,518
Other long-term assets	0		0		0		0		1
Investments in subsidiaries	81,460		1,533,959		81,460		1,533,959		344,742
Intangible assets, net (Note 5)	0		0		0		0		0
Goodwill	0		0		0		0		0
Total assets	245,135		1,693,279		245,135		1,693,279		496,459
Current portion of long-term debt (Note 8)	0		0		0		0		0
Other current liabilities	(1)		(4)		(1)		(4)		(3)
Total current liabilities	(1)		(4)		(1)		(4)		(3)
Long-term debt, less current portion (Note 8)	0		0		0		0		0
Other long-term liabilities	0		2		0		2		2
Deferred income taxes	(104)		(124)		(104)		(124)		(104)
Total liabilities	(105)		(126)		(105)		(126)		(105)
Total shareholders' equity	245,240		1,693,405		245,240		1,693,405		496,564
Total liabilities and shareholders' equity	245,135		1,693,279		245,135		1,693,279		496,459
Income Statement
Net revenues	0		0		0		0
Educational services	0		1		(1)		0
General and administrative	0		56		0		172
Depreciation and amortization	0		0		0		0
Total costs and expenses	0		57		1		172
(Loss) Income before interest, loss on extinguishment of debt and income taxes	0		(57)		(1)		(172)
Interest expense, net	(5)		(1)		(18)		(5)
Gains (Losses) on Extinguishment of Debt	0		0		0		0
Equity in earnings of subsidiaries	(283,999)		(417,060)		(265,960)		(326,868)
Loss before income taxes	(283,994)		(417,116)		(265,943)		(327,035)
(Benefit from) provision for income taxes	0		0		0		0
Net loss	(283,994)		(417,116)		(265,943)		(327,035)
Net change in unrecognized loss on interest rate swaps, net of tax	1,514		1,439		2,766		(4,690)
Foreign currency translation gain (loss)	(147)		141		(88)		(641)
Other comprehensive income (loss)	1,367		1,580		2,678		(5,331)
Comprehensive income	(282,627)		(415,536)		(263,265)		(332,366)
Statement of Cash Flows [Abstract]
Net cash provided by (used in) operations					21		3,063
Expenditures for long-lived assets					0		0
Other investing activities					0		0
Net cash flows used in investing activities					0		0
Net borrowings of debt and other							0
Issuance of common stock net of repurchases for treasury							(90,138)
Intercompany transactions					0		90,138
Net cash flows used in financing activities					0		0
Effect of exchange rate changes on cash and cash equivalents					0		0
Net change in cash and cash equivalents					21		3,063
Eliminations [Member]
Balance Sheet
Cash and cash equivalents	0		0		0		0		0
Restricted cash	0		0		0		0		0
Student and other receivables, net	0		0		0		0		0
Inventories	0		0		0		0		0
Other current assets	0		0		0		0		0
Total current assets	0		0		0		0		0
Property and equipment, net	0		0		0		0		0
Intercompany balances	0		0		0		0		0
Other long-term assets	0		0		0		0		0
Investments in subsidiaries	(81,460)		(1,533,959)		(81,460)		(1,533,959)		(344,742)
Intangible assets, net (Note 5)	0		0		0		0		0
Goodwill	0		0		0		0		0
Total assets	(81,460)		(1,533,959)		(81,460)		(1,533,959)		(344,742)
Current portion of long-term debt (Note 8)	0		0		0		0		0
Other current liabilities	0		0		0		0		0
Total current liabilities	0		0		0		0		0
Long-term debt, less current portion (Note 8)	0		0		0		0		0
Other long-term liabilities	0		0		0		0		0
Deferred income taxes	0		0		0		0		0
Total liabilities	0		0		0		0		0
Total shareholders' equity	(81,460)		(1,533,959)		(81,460)		(1,533,959)		(344,742)
Total liabilities and shareholders' equity	(81,460)		(1,533,959)		(81,460)		(1,533,959)		(344,742)
Income Statement
Net revenues	0		0		0		0
Educational services	0		0		0		0
General and administrative	0		0		0		0
Depreciation and amortization	0		0		0		0
Total costs and expenses	0		0		0		0
(Loss) Income before interest, loss on extinguishment of debt and income taxes	0		0		0		0
Interest expense, net	0		0		0		0
Gains (Losses) on Extinguishment of Debt	0		0		0		0
Equity in earnings of subsidiaries	283,999		417,060		265,960		326,868
Loss before income taxes	283,999		417,060		265,960		326,868
(Benefit from) provision for income taxes	0		0		0		0
Net loss	283,999		417,060		265,960		326,868
Net change in unrecognized loss on interest rate swaps, net of tax	(1,514)		(1,439)		(2,766)		4,690
Foreign currency translation gain (loss)	147		(141)		88		641
Other comprehensive income (loss)	(1,367)		(1,580)		(2,678)		5,331
Comprehensive income	282,632		415,480		263,282		332,199
Consolidated Entities [Member]
Balance Sheet
Cash and cash equivalents	183,614		287,503		183,614		287,503		191,008		403,224
Restricted cash	272,029		284,053		272,029		284,053		267,880
Student and other receivables, net	180,578		165,263		180,578		165,263		225,515
Inventories	7,000		10,035		7,000		10,035		8,382
Other current assets	136,340		124,089		136,340		124,089		149,863
Total current assets	779,561		870,943		779,561		870,943		842,648
Property and equipment, net	543,731		653,888		543,731		653,888		651,797
Intercompany balances	0		0		0		0		0
Other long-term assets	55,878		47,176		55,878		47,176		51,071
Investments in subsidiaries	0		0		0		0		0
Intangible assets, net (Note 5)	301,039		458,844		301,039		458,844		330,029
Goodwill	669,090		2,086,619		669,090		2,086,619		963,550
Total assets	2,349,299		4,117,470		2,349,299		4,117,470		2,839,095
Current portion of long-term debt (Note 8)	12,076		12,076		12,076		12,076		123,376
Other current liabilities	474,326		542,879		474,326		542,879		410,629
Total current liabilities	486,402		554,955		486,402		554,955		534,005
Long-term debt, less current portion (Note 8)	1,283,344		1,456,352		1,283,344		1,456,352		1,453,468
Other long-term liabilities	246,097		241,260		246,097		241,260		243,291
Deferred income taxes	88,216		171,498		88,216		171,498		111,767
Total liabilities	2,104,059		2,424,065		2,104,059		2,424,065		2,342,531
Total shareholders' equity	245,240		1,693,405		245,240		1,693,405		496,564
Total liabilities and shareholders' equity	2,349,299		4,117,470		2,349,299		4,117,470		2,839,095
Income Statement
Net revenues	638,903		702,499		1,903,363		2,121,782
Educational services	(350,134)		382,204		(1,091,808)		1,132,421
General and administrative	(166,814)		191,747		(512,496)		581,608
Depreciation and amortization	40,266		40,610		123,667		118,694
Goodwill, Impairment Loss	323,690		495,380		323,690		495,380
Total costs and expenses	880,904		1,109,941		2,051,661		2,328,103
(Loss) Income before interest, loss on extinguishment of debt and income taxes	(242,001)		(407,442)		(148,298)		(206,321)
Interest expense, net	30,464		25,424		92,924		79,139
Gains (Losses) on Extinguishment of Debt	5,232		9,474		5,232		9,474
Equity in earnings of subsidiaries	0		0		0		0
Loss before income taxes	(277,697)		(442,340)		(246,454)		(294,934)
(Benefit from) provision for income taxes	6,297		(25,224)		19,489		32,101
Net loss	(283,994)		(417,116)		(265,943)		(327,035)
Net change in unrecognized loss on interest rate swaps, net of tax	1,514		1,439		2,766		(4,690)
Foreign currency translation gain (loss)	(147)		141		(88)		(641)
Other comprehensive income (loss)	1,367		1,580		2,678		(5,331)
Comprehensive income	(282,627)		(415,536)		(263,265)		(332,366)
Statement of Cash Flows [Abstract]
Net cash provided by (used in) operations					286,202		152,676
Expenditures for long-lived assets					(64,586)		(64,679)
Proceeds from sales of long-lived assets					(65,065)
Other investing activities					(7,102)		(14,248)
Net cash flows used in investing activities					(6,623)		(78,927)
Net borrowings of debt and other					(287,096)		(99,069)
Issuance of common stock net of repurchases for treasury							(90,138)
Intercompany transactions					0		0
Net cash flows used in financing activities					(287,096)		(189,207)
Effect of exchange rate changes on cash and cash equivalents					123		(263)
Net change in cash and cash equivalents					$ (7,394)		$ (115,721)

[1] Excludes inter-company activity.

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Consolidated Statements Of Shareholders' Equity (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	9 Months Ended		12 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Jun. 30, 2012	Jun. 30, 2011	Oct. 31, 2009
Cumulative loss on interest rate swaps, tax benefit	$ 14.9	$ 17.2	$ 17.6
Foreign currency translation gain	$ (0.5)	$ (0.3)	$ (0.4)
Common stock and Treasury stock
Common stock, par value	$ 0.01	$ 0.01	$ 0.01		$ 0.01
Common stock, shares authorized	600,000,000	600,000,000	600,000,000
Common stock outstanding, Beginning Balance	124,477,807	129,811,749	129,811,749
Repurchased, Common Stock	0	(3,472,433)	(5,568,168)
Repurchased for treasury	0	3,472,433	5,568,168
Issued for stock-based compensation plans	123,717	215,232	234,226
Common stock outstanding, Ending Balance	124,601,524	126,554,548	124,477,807
Treasury stock, Ending Balance	18,902,140	16,806,405	18,902,140	13,333,972

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Derivative Instruments (Details) (USD $)	3 Months Ended		9 Months Ended		3 Months Ended			9 Months Ended		9 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2012 Term Loan [Member]	Mar. 30, 2012 Senior Secured Term Loan Facility, Due in March 2018 [Member] Term Loan [Member]	Mar. 30, 2012 Cedit Agreement [Member] Term Loan [Member]	Mar. 31, 2013 Cedit Agreement [Member] Term Loan [Member] Maximum [Member]	Mar. 30, 2012 Cedit Agreement [Member] Term Loan [Member] Maximum [Member]	Mar. 31, 2013 Interest Rate Swap [Member]	Apr. 30, 2011 Interest Rate Swap [Member] Derivatives	Mar. 31, 2013 Interest Rate Swap [Member] Accrued Liabilities [Member]	Mar. 31, 2013 Interest Rate Swap [Member] Other Long-term Liabilities [Member]	Jun. 30, 2012 Interest Rate Swap [Member] Other Long-term Liabilities [Member]	Mar. 31, 2012 Interest Rate Swap [Member] Other Long-term Liabilities [Member]	Mar. 31, 2013 Interest Rate Swap [Member] Swap, Interest Rate Swaps, Maturity Fiscal 2013 [Member]	Mar. 31, 2012 Interest Rate Swap [Member] Swap, Interest Rate Swaps, Maturity Fiscal 2013 [Member]	Mar. 31, 2013 Interest Rate Swap [Member] Swap, Interest Rate Swaps, Maturity Fiscal 2015 [Member] Derivatives
Derivative [Line Items]
Number of Interest Rate Derivatives Held											3							2
Derivative, Notional Amount										$ 950,000,000						$ 325,000,000		$ 312,500,000
Loss on Derivative Instruments, Pretax					2,500,000
Effective Percentage																	9.44%	6.26%
Fair value of interest rate swap liabilities										24,200,000			23,700,000	30,100,000	29,800,000
Interest rate swap liabilities maturing within one year												500,000
Long-term Debt						348,600,000
Term loan due March 2018							350,000,000
Debt Instrument, Description of Variable Rate Basis			LIBOR					LIBOR
Stated percentage								1.25%	1.25%
Basis Spread on Variable Rate								7.00%	7.00%
Revaluation Loss			500,000
Net change in unrecognized loss on interest rate swaps, net of tax	(401,000)	(524,000)	(2,833,000)	(11,389,000)						14,900,000
Estimated Net Transfer, Current			$ 7,800,000

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Other Long-Term Assets (Tables)

9 Months Ended

Mar. 31, 2013

Other Assets, Noncurrent Disclosure [Abstract]

Schedule of Other Assets, Noncurrent [Table Text Block]

Other long-term assets consisted of the following (in thousands):

	March 31, 2013		June 30, 2012		March 31, 2012
Student receivables, net of allowances of $23,826, $19,532 and $15,931	$	21,983	$	15,233	$	9,672
Deferred financing fees	11,473		14,768		15,896
Deferred compensation	13,240		12,164		12,661
Other	9,182		8,906		8,947
Total other long-term assets	$	55,878	$	51,071	$	47,176

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

Company's total allowance for doubtful accounts and loan loss reserves from June 30, 2011 to March 31, 2013 is as follows (in thousands):

Balance June 30, 2011	$	199,357
Bad debt expense	163,926
Amounts written off	(113,001		)
Balance June 30, 2012	250,282
Bad debt expense	129,659
Amounts written off	(173,220		)
Balance March 31, 2013	$	206,721

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Goodwill And Intangible Assets (Tables)

9 Months Ended

Mar. 31, 2013

Goodwill And Intangible Assets [Abstract]

Schedule of Goodwill [Table Text Block]

	June 30, 2011		Impairment Charge			June 30, 2012		Impairment Charge			March 31, 2013
The Art Institutes	$	1,984,688	$	(1,123,069	)	$	861,619	$	(294,460	)	$	567,159
Argosy University	219,350		(155,905		)	63,445		—			63,445
Brown Mackie Colleges	254,561		(254,561		)	—		—			—
South University	123,400		(84,914		)	38,486		—			38,486
Total goodwill	$	2,581,999	$	(1,618,449	)	$	963,550	$	(294,460	)	$	669,090

Schedule of Intangible Assets [Table Text Block]

Intangible assets other than goodwill consisted of the following amounts (in thousands):

	March 31, 2013					June 30, 2012					March 31, 2012
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
The Art Institutes trade name	$	190,000	$	—		$	218,000	$	—		$	330,000	$	—
Licensing, accreditation and Title IV program participation	95,862		—			95,862		—			112,179		—
Curriculum and programs	42,434		(31,385		)	38,702		(28,541		)	37,364		(27,350		)
Student contracts, applications and relationships	39,511		(37,104		)	39,511		(36,270		)	39,511		(35,992		)
Favorable leases and other	19,424		(17,703		)	19,424		(16,659		)	19,434		(16,302		)
Total intangible assets	$	387,231	$	(86,192	)	$	411,499	$	(81,470	)	$	538,488	$	(79,644	)

Schedule of Expected Amortization Expense [Table Text Block]

Total estimated amortization of the Company’s intangible assets for each of the fiscal years ending June 30, 2013 through 2017 and thereafter is as follows at March 31, 2013 (in thousands):

Fiscal years	Amortization Expense
2013 (remainder)	$	1,289
2014	4,765
2015	4,149
2016	2,793
2017	2,121
Thereafter	60

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Fair Value Of Financial Instruments (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2013 Carrying Value [Member]	Jun. 30, 2012 Carrying Value [Member]	Mar. 31, 2012 Carrying Value [Member]	Mar. 31, 2013 Fair Value Measurement, Level 1 [Member]	Jun. 30, 2012 Fair Value Measurement, Level 1 [Member]	Mar. 31, 2012 Fair Value Measurement, Level 1 [Member]	Mar. 31, 2013 Fair Value Measurement, Level 2 [Member]	Jun. 30, 2012 Fair Value Measurement, Level 2 [Member]	Mar. 31, 2012 Fair Value Measurement, Level 2 [Member]	Mar. 31, 2013 Fair Value, Measurements, Recurring [Member] Carrying Value [Member]	Jun. 30, 2012 Fair Value, Measurements, Recurring [Member] Carrying Value [Member]	Mar. 31, 2012 Fair Value, Measurements, Recurring [Member] Carrying Value [Member]	Mar. 31, 2013 Fair Value, Measurements, Recurring [Member] Fair Value Measurement, Level 1 [Member]	Jun. 30, 2012 Fair Value, Measurements, Recurring [Member] Fair Value Measurement, Level 1 [Member]	Mar. 31, 2012 Fair Value, Measurements, Recurring [Member] Fair Value Measurement, Level 1 [Member]	Mar. 31, 2013 Fair Value, Measurements, Recurring [Member] Fair Value Measurement, Level 2 [Member]	Jun. 30, 2012 Fair Value, Measurements, Recurring [Member] Fair Value Measurement, Level 2 [Member]	Mar. 31, 2012 Fair Value, Measurements, Recurring [Member] Fair Value Measurement, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate swap liability											$ 24,206,000	$ 30,114,000	$ 29,805,000	$ 0	$ 0	$ 0	$ 24,206,000	$ 30,114,000	$ 29,805,000
Variable rate debt		1,081,635,000	1,090,084,000	1,092,900,000	0	0	0	918,467,000	980,477,000	1,037,768,000
Fixed rate debt		213,785,000	375,460,000	375,528,000	213,785,000	341,710,000	371,778,000	0	0	0
Asset Impairment Charges	$ 1,200,000

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Accrued Liabilities (Tables)

9 Months Ended

Mar. 31, 2013

Accrued Liabilities, Current [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following amounts (in thousands):

	March 31, 2013		June 30, 2012		March 31, 2012
Payroll and related taxes	$	57,480	$	50,291	$	70,352
Capital expenditures	4,310		5,624		3,826
Advertising	25,032		24,837		23,425
Interest	3,391		3,296		11,390
Benefits	15,482		14,014		11,146
Other	43,087		39,286		49,699
Total accrued liabilities	$	148,782	$	137,348	$	169,838

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Short-Term And Long-Term Debt (Tables)

9 Months Ended

Mar. 31, 2013

Short-Term And Long-Term Debt [Abstract]

Long-Term Debt

The Company’s long-term debt consisted of the following amounts (in thousands):

	March 31, 2013			June 30, 2012			March 31, 2012
Senior secured term loan facility, due in June 2016	$738,476			$744,539			$746,560
Senior secured term loan facility, due in March 2018, net of discount of$3,050, $3,508 and $3,660	343,159			345,545			346,340
Senior cash pay/PIK notes, due in July 2018, net of discount of $29,074	203,826			—			—
Senior notes, due in June 2014	9,707			375,000			375,000
Other	252			460			528
Total long-term debt	1,295,420			1,465,544			1,468,428
Less current portion	(12,076		)	(12,076		)	(12,076		)
Total long-term debt, less current portion	$	1,283,344		$	1,453,468		$	1,456,352

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Consolidated Statements Of Shareholders' Equity (USD $)	Total USD ($)	Common Stock at Par Value (b) [Member] USD ($)	Additional Paid-In Capital [Member] USD ($)	Treasury Stock (b) [Member] USD ($)	(Accumulated Deficit) Retained Earnings [Member] USD ($)	Accumulated Other Comprehensive Loss [Member] USD ($)	Common Stock [Member]
Balance at Jun. 30, 2011	$ 2,103,944,000	$ 1,431,000	$ 1,761,848,000	$ (226,926,000)	$ 579,781,000	$ (12,190,000)
Treasury Stock, Shares, Acquired	5,568,168
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures	234,226
Stock Repurchased During Period, Shares	(5,568,168)
Treasury Stock, Number of Shares Held	18,902,140
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax	(17,600,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options including tax benefit	2,597,000	3,000	2,594,000	0	0	0
Share-based compensation	13,290,000	0	13,290,000	0	0	0
Common stock repurchased for treasury	(101,679,000)	0	0	(101,679,000)	0	0
Net loss	(1,515,741,000)	0	0	0	(1,515,741,000)	0
Other comprehensive income	(5,847,000)	0	0	0	0	(5,847,000)
Foreign currency translation gain	(400,000)
Common Stock, Shares Authorized	600,000,000
Common stock, par value	$ 0.01
Common Stock, Shares, Outstanding	124,477,807
Balance at Jun. 30, 2012	496,564,000	1,434,000	1,777,732,000	(328,605,000)	(935,960,000)	(18,037,000)
Treasury Stock, Shares, Acquired	0
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures	123,717
Stock Repurchased During Period, Shares	0
Treasury Stock, Number of Shares Held	18,902,140
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax	(14,900,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options including tax benefit	3,000	0	3,000	0	0	0
Share-based compensation	11,938,000	1,000	11,937,000	0	0	0
Net loss	(265,943,000)	0	0	0	(265,943,000)	0
Other comprehensive income	2,678,000	0	0	0	0	2,678,000
Foreign currency translation gain	(500,000)
Common Stock, Shares Authorized	600,000,000
Common stock, par value	$ 0.01
Common Stock, Shares, Outstanding	124,601,524						125,548,403
Treasury Stock, Shares				17,831,544
Balance at Mar. 31, 2013	$ 245,240,000	$ 1,435,000	$ 1,789,672,000	$ (328,605,000)	$ (1,201,903,000)	$ (15,359,000)

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Fair Value Of Financial Instruments (Tables)

9 Months Ended

Mar. 31, 2013

Financial Instruments, Owned, at Fair Value [Abstract]

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

The following table presents the carrying amounts and fair values of the interest rate swap liabilities, which are measured at fair value on a recurring basis based on the framework described in Note 9, "Derivative Instruments," and the fair values of the Company's debt, which is recorded at carrying value (in thousands):

	March 31, 2013						June 30, 2012						March 31, 2012
	Carrying Value		Level One		Level Two		Carrying Value		Level One		Level Two		Carrying Value		Level One		Level Two
Recurring:
Interest rate swap liabilities	$	24,206	$	—	$	24,206	$	30,114	$	—	$	30,114	$	29,805	$	—	$	29,805
Disclosure only:
Variable rate debt	1,081,635		—		918,467		1,090,084		—		980,477		1,092,900		—		1,037,768
Fixed rate debt	213,785		213,785		—		375,460		341,710		—		375,528		371,778		—

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Other Long-Term Assets (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended		12 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Jun. 30, 2012
Other Assets, Noncurrent [Abstract]
Student receivables, net of allowances	$ 21,983	$ 9,672	$ 15,233
Net allowances	19,167	9,435	14,602
Deferred financing fees	11,473	15,896	14,768
Deferred compensation	13,240	12,661	12,164
Other	9,182	8,947	8,906
Total other long-term assets	55,878	47,176	51,071
Student Receivables, Gross	45,809	25,603	34,765
Allowance for Doubtful Accounts Receivable [Roll Forward]
Beginning Balance	250,282	199,357	199,357
Bad debt expense	(129,659)	(117,695)	(163,926)
Amounts written off		(173,220)	(113,001)
Ending Balance	206,721		250,282
In-School Students [Member]
Other Assets, Noncurrent [Abstract]
Student receivables collection period	36 months
Student Receivables, Gross	32,844	17,794	24,354
Out-of-School Students [Member]
Other Assets, Noncurrent [Abstract]
Student receivables collection period	42 months
Student Receivables, Gross	$ 12,965	$ 7,809	$ 10,411
Allowance for Doubtful Accounts Receivable [Roll Forward]
Past due receivables, collection agency	4 months

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Jun. 30, 2012		Mar. 31, 2012
Current assets:
Cash and cash equivalents	$ 183,614		$ 191,008		$ 287,503
Restricted cash	272,029		267,880		284,053
Total cash, cash equivalents and restricted cash	455,643		458,888		571,556
Student receivables, net of allowances of $177,802, $225,657 and $214,140	153,069		203,341		144,495
Notes, advances and other receivables	27,509		22,174		20,768
Inventories	7,000		8,382		10,035
Deferred income taxes	102,793		102,668		76,674
Prepaid income taxes	0		6,796		7,406
Other current assets	33,547		40,399		40,009
Total current assets	779,561		842,648		870,943
Property and equipment, net (Note 4)	543,731		651,797		653,888
Other long-term assets (Note 6)	55,878		51,071		47,176
Intangible assets, net (Note 5)	301,039		330,029		458,844
Goodwill (Note 5)	669,090		963,550		2,086,619
Total assets	2,349,299	[1]	2,839,095	[1]	4,117,470	[1]
Current liabilities:
Current portion of long-term debt (Note 8)	12,076		12,076		12,076
Revolving credit facility (Note 8)	0		111,300		0
Accounts payable	20,955		54,834		31,735
Accrued liabilities (Note 7)	148,782		137,348		169,838
Accrued income taxes	3,174		0		0
Unearned tuition	78,473		116,277		80,046
Advance payments	222,942		102,170		261,260
Total current liabilities	486,402		534,005		554,955
Long-term debt, less current portion (Note 8)	1,283,344		1,453,468		1,456,352
Deferred income taxes	88,216		111,767		171,498
Deferred rent	206,847		197,758		195,494
Other long-term liabilities	39,250		45,533		45,766
Shareholders’ equity:
Common stock, at par	1,435		1,434		1,434
Additional paid-in capital	1,789,672		1,777,732		1,774,634
Treasury stock, at cost	(328,605)		(328,605)		(317,888)
(Accumulated deficit) Retained earnings	(1,201,903)		(935,960)		252,746
Accumulated other comprehensive loss	(15,359)		(18,037)		(17,521)
Total shareholders’ equity	245,240		496,564		1,693,405
Total liabilities and shareholders’ equity	$ 2,349,299		$ 2,839,095		$ 4,117,470

[1] Excludes inter-company activity.

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Income Tax [Line Items]
U.S Federal statutory income tax rate	39.10%	38.00%	40.40%	38.70%
Liability for Uncertain Tax Positions, Noncurrent	$ 0.7	$ 0.9
Proceeds from Income Tax Refunds	0.7
Unrecognized Tax Benefits	3.9		3.9
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit	$ 2.9		$ 2.9
Internal Revenue Service (IRS) [Member]
Income Tax [Line Items]
U.S Federal statutory income tax rate	(2.30%)	5.70%	(7.90%)	(10.90%)

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Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Consolidated Statements of Comprehensive Income [Abstract]
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax	$ (237)	$ (309)	$ (1,671)	$ (6,718)
Other Comprehensive Income (Loss), Reclassification Adjustment for Derivative Interest Included in Net Income, Tax	$ 1,130	$ 1,157	$ 3,303	$ 3,950

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Basis of Presentation (Details) (USD $)	1 Months Ended	9 Months Ended		12 Months Ended
	Oct. 31, 2009	Mar. 31, 2013 Education_Systems	Mar. 31, 2012	Jun. 30, 2012	Oct. 31, 2012 Students
Number of students					132,000
Online platforms		3
Number of education systems		4
Common Stock, Shares, Issued	23,000,000
Common stock, par value	$ 0.01	$ 0.01	$ 0.01	$ 0.01
Price Per Share	$ 18.00
Stock Repurchased During Period, Shares		0	(3,472,433)	(5,568,168)

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Guarantor Subsidiaries Financial Information

9 Months Ended

Mar. 31, 2013

Guarantor Subsidiaries Financial Information [Abstract]

Guarantor Subsidiaries Financial Information

GUARANTOR SUBSIDIARIES FINANCIAL INFORMATION

The New Notes described in Note 8 "Short-Term and Long-Term Debt" are fully and unconditionally guaranteed by EDMC and all of EM LLC’s existing direct and indirect domestic restricted subsidiaries, other than any subsidiary that directly owns or operates a school, or has been formed for such purposes, and subsidiaries that have no material assets (collectively, the “Guarantor Subsidiaries”). All other subsidiaries of EM LLC, either direct or indirect, (the “Non-Guarantor Subsidiaries”) do not guarantee the New Notes.

The following tables present the condensed consolidated financial position of EM LLC, the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries and EDMC as of March 31, 2013, June 30, 2012 and March 31, 2012. The results of operations and comprehensive income (loss) for the three and nine months ended March 31, 2013 and 2012 and the condensed statements of cash flows for the nine months ended March 31, 2013 and 2012 are presented for EM LLC, the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries and EDMC.

CONDENSED CONSOLIDATED BALANCE SHEET

March 31, 2013 (In thousands)

	EM LLC		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			EM LLC Consolidated			EDMC			Eliminations			EDMC Consolidated
Assets
Current:
Cash and cash equivalents	$	176,449	$	120		$	3,825		$	—		$	180,394		$	3,220		$	—		$	183,614
Restricted cash	45,803		—			226,226			—			272,029			—			—			272,029
Student and other receivables, net	2,753		172			177,652			—			180,577			1			—			180,578
Inventories	—		154			6,846			—			7,000			—			—			7,000
Other current assets	34,681		538			101,121			—			136,340			—			—			136,340
Total current assets	259,686		984			515,670			—			776,340			3,221			—			779,561
Property and equipment, net	64,881		6,104			472,746			—			543,731			—			—			543,731
Inter-company balances	405,600		(30,868		)	(535,186		)	—			(160,454		)	160,454			—			—
Other long-term assets	25,346		—			30,532			—			55,878			—			—			55,878
Investment in subsidiaries	708,831		—			—			(708,831		)	—			81,460			(81,460		)	—
Intangible assets, net	1,513		31			299,495			—			301,039			—			—			301,039
Goodwill	7,328		—			661,762			—			669,090			—			—			669,090
Total assets	$	1,473,185	$	(23,749	)	$	1,445,019		$	(708,831	)	$	2,185,624		$	245,135		$	(81,460	)	$	2,349,299
Liabilities and shareholders’ equity (deficit)
Current:
Current portion of long-term debt	$	11,850	$	—		$	226		$	—		$	12,076		$	—		$	—		$	12,076
Other current liabilities	48,295		2,419			423,613			—			474,327			(1		)	—			474,326
Total current liabilities	60,145		2,419			423,839			—			486,403			(1		)	—			486,402
Long-term debt, less current portion	1,283,321		—			23			—			1,283,344			—			—			1,283,344
Other long-term liabilities	46,729		280			199,088			—			246,097			—			—			246,097
Deferred income taxes	1,530		515			86,275			—			88,320			(104		)	—			88,216
Total liabilities	1,391,725		3,214			709,225			—			2,104,164			(105		)	—			2,104,059
Total shareholders’ equity (deficit)	81,460		(26,963		)	735,794			(708,831		)	81,460			245,240			(81,460		)	245,240
Total liabilities and shareholders’ equity (deficit)	$	1,473,185	$	(23,749	)	$	1,445,019		$	(708,831	)	$	2,185,624		$	245,135		$	(81,460	)	$	2,349,299

CONDENSED CONSOLIDATED BALANCE SHEET

June 30, 2012 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			EM LLC Consolidated			EDMC			Eliminations			EDMC Consolidated
Assets
Current:
Cash and cash equivalents	$	(26,249	)	$	98		$	213,960		$	—		$	187,809		$	3,199		$	—		$	191,008
Restricted cash	42,931			—			224,949			—			267,880			—			—			267,880
Student and other receivables, net	4,149			153			221,214			—			225,516			(1		)	—			225,515
Inventories	—			159			8,223			—			8,382			—			—			8,382
Other current assets	35,543			660			113,660			—			149,863			—			—			149,863
Total current assets	56,374			1,070			782,006			—			839,450			3,198			—			842,648
Property and equipment, net	72,279			7,846			571,672			—			651,797			—			—			651,797
Inter-company balances	1,059,102			(26,456		)	(1,181,164		)	—			(148,518		)	148,518			—			—
Other long-term assets	15,276			—			35,794			—			51,070			1			—			51,071
Investment in subsidiaries	826,651			—			—			(826,651		)	—			344,742			(344,742		)	—
Intangible assets, net	2,031			39			327,959			—			330,029			—			—			330,029
Goodwill	7,328			—			956,222			—			963,550			—			—			963,550
Total assets	$	2,039,041		$	(17,501	)	$	1,492,489		$	(826,651	)	$	2,687,378		$	496,459		$	(344,742	)	$	2,839,095
Liabilities and shareholders’ equity (deficit)
Current:
Current portion of long-term debt and revolving credit facility	$	123,150		$	—		$	226		$	—		$	123,376		$	—		$	—		$	123,376
Other current liabilities	63,935			8,319			338,378			—			410,632			(3		)	—			410,629
Total current liabilities	187,085			8,319			338,604			—			534,008			(3		)	—			534,005
Long-term debt, less current portion	1,453,234			—			234			—			1,453,468			—			—			1,453,468
Other long-term liabilities	52,450			374			190,465			—			243,289			2			—			243,291
Deferred income taxes	1,530			515			109,826			—			111,871			(104		)	—			111,767
Total liabilities	1,694,299			9,208			639,129			—			2,342,636			(105		)	—			2,342,531
Total shareholders’ equity (deficit)	344,742			(26,709		)	853,360			(826,651		)	344,742			496,564			(344,742		)	496,564
Total liabilities and shareholders’ equity (deficit)	$	2,039,041		$	(17,501	)	$	1,492,489		$	(826,651	)	$	2,687,378		$	496,459		$	(344,742	)	$	2,839,095

CONDENSED CONSOLIDATED BALANCE SHEET

March 31, 2012 (In thousands)

	EM LLC		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			EM LLC Consolidated			EDMC			Eliminations			EDMC Consolidated
Assets
Current:
Cash and cash equivalents	$	227,263	$	47		$	6,997		$	—		$	234,307		$	53,196		$	—		$	287,503
Restricted cash	48,243		—			235,810			—			284,053			—			—			284,053
Student and other receivables, net	8,771		174			156,319			—			165,264			(1		)	—			165,263
Inventories	—		117			9,918			—			10,035			—			—			10,035
Other current assets	26,653		218			97,218			—			124,089			—			—			124,089
Total current assets	310,930		556			506,262			—			817,748			53,195			—			870,943
Property and equipment, net	69,445		7,657			576,786			—			653,888			—			—			653,888
Inter-company balances	665,834		(29,550		)	(742,409		)	—			(106,125		)	106,125			—			—
Other long-term assets	48,521		—			(1,345		)	—			47,176			—			—			47,176
Investment in subsidiaries	1,989,615		—			—			(1,989,615		)	—			1,533,959			(1,533,959		)	—
Intangible assets, net	1,950		42			456,852			—			458,844			—			—			458,844
Goodwill	7,328		—			2,079,291			—			2,086,619			—			—			2,086,619
Total assets	$	3,093,623	$	(21,295	)	$	2,875,437		$	(1,989,615	)	$	3,958,150		$	1,693,279		$	(1,533,959	)	$	4,117,470
Liabilities and shareholders’ equity (deficit)
Current:
Current portion of long-term debt	$	11,850	$	—		$	226		$	—		$	12,076		$	—		$	—		$	12,076
Other current liabilities	37,679		4,880			500,324			—			542,883			(4		)	—			542,879
Total current liabilities	49,529		4,880			500,550			—			554,959			(4		)	—			554,955
Long-term debt, less current portion	1,456,050		—			302			—			1,456,352			—			—			1,456,352
Other long-term liabilities	52,839		376			188,043			—			241,258			2			—			241,260
Deferred income taxes	1,246		265			170,111			—			171,622			(124		)	—			171,498
Total liabilities	1,559,664		5,521			859,006			—			2,424,191			(126		)	—			2,424,065
Total shareholders’ equity (deficit)	1,533,959		(26,816		)	2,016,431			(1,989,615		)	1,533,959			1,693,405			(1,533,959		)	1,693,405
Total liabilities and shareholders’ equity (deficit)	$	3,093,623	$	(21,295	)	$	2,875,437		$	(1,989,615	)	$	3,958,150		$	1,693,279		$	(1,533,959	)	$	4,117,470

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months Ended March 31, 2013 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		EM LLC Consolidated			EDMC			Eliminations			EDMC Consolidated
Net revenues	$	—		$	2,002		$	636,901		$	—	$	638,903		$	—		$	—		$	638,903
Costs and expenses:
Educational services	22,807			1,213			326,114			—		350,134			—			—			350,134
General and administrative	(42,959		)	2,863			206,910			—		166,814			—			—			166,814
Depreciation and amortization	6,762			151			33,353			—		40,266			—			—			40,266
Long-lived asset impairments	—			—			323,690					323,690									323,690
Total costs and expenses	(13,390		)	4,227			890,067			—		880,904			—			—			880,904
Income (loss) before interest and income taxes	13,390			(2,225		)	(253,166		)	—		(242,001		)	—			—			(242,001		)
Interest expense (income), net	29,869			—			600			—		30,469			(5		)	—			30,464
Loss on debt refinancing	5,232			—			—			—		5,232			—			—			5,232
Equity in loss of subsidiaries	(203,855		)	—			—			203,855		—			(283,999		)	283,999			—
Loss before income taxes	(225,566		)	(2,225		)	(253,766		)	203,855		(277,702		)	(283,994		)	283,999			(277,697		)
Income tax expense (benefit)	58,433			(822		)	(51,314		)	—		6,297			—			—			6,297
Net loss	$	(283,999	)	$	(1,403	)	$	(202,452	)	$	203,855	$	(283,999	)	$	(283,994	)	$	283,999		$	(283,994	)
Net change in unrecognized loss on interest rate swaps, net of tax	$	1,514		$	—		$	—		$	—	$	1,514		$	1,514		$	(1,514	)	$	1,514
Foreign currency translation loss	(147		)	—			(147		)	147		(147		)	(147		)	147			(147		)
Other comprehensive income (loss)	1,367			—			(147		)	147		1,367			1,367			(1,367		)	1,367
Comprehensive loss	$	(282,632	)	$	(1,403	)	$	(202,599	)	$	204,002	$	(282,632	)	$	(282,627	)	$	282,632		$	(282,627	)

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months Ended March 31, 2012 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			EM LLC Consolidated			EDMC			Eliminations			EDMC Consolidated
Net revenues	$	—		$	1,430		$	701,069		$	—		$	702,499		$	—		$	—		$	702,499
Costs and expenses:
Educational services	42,995			2,265			336,943			—			382,203			1			—			382,204
General and administrative	(37,258		)	338			228,611			—			191,691			56			—			191,747
Depreciation and amortization	6,626			142			33,842			—			40,610			—			—			40,610
Goodwill impairment	—			—			495,380						495,380									495,380
Total costs and expenses	12,363			2,745			1,094,776			—			1,109,884			57			—			1,109,941
Loss before interest and income taxes	(12,363		)	(1,315		)	(393,707		)	—			(407,385		)	(57		)	—			(407,442		)
Interest expense (income), net	24,826			—			599			—			25,425			(1		)	—			25,424
Loss on debt refinancing	9,474			—			—			—			9,474			—			—			9,474
Equity in loss of subsidiaries	(331,525		)	—			—			331,525			—			(417,060		)	417,060			—
Loss before income taxes	(378,188		)	(1,315		)	(394,306		)	331,525			(442,284		)	(417,116		)	417,060			(442,340		)
Income tax expense (benefit)	38,872			294			(64,390		)	—			(25,224		)	—			—			(25,224		)
Net Loss	$	(417,060	)	$	(1,609	)	$	(329,916	)	$	331,525		$	(417,060	)	$	(417,116	)	$	417,060		$	(417,116	)
Net change in unrecognized loss on interest rate swaps, net of tax	$	1,439		$	—		$	—		$	—		$	1,439		$	1,439		$	(1,439	)	$	1,439
Foreign currency translation gain	141			—			141			(141		)	141			141			(141		)	141
Other comprehensive income	1,580			—			141			(141		)	1,580			1,580			(1,580		)	1,580
Comprehensive loss	$	(415,480	)	$	(1,609	)	$	(329,775	)	$	331,384		$	(415,480	)	$	(415,536	)	$	415,480		$	(415,536	)

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the Nine Months Ended March 31, 2013 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		EM LLC Consolidated			EDMC			Eliminations			EDMC Consolidated
Net revenues	$	—		$	6,161		$	1,897,202		$	—	$	1,903,363		$	—		$	—		$	1,903,363
Costs and expenses:
Educational services	87,122			6,503			998,182			—		1,091,807			1			—			1,091,808
General and administrative	(74,336		)	(561		)	587,393			—		512,496			—			—			512,496
Depreciation and amortization	25,641			454			97,572			—		123,667			—			—			123,667
Long-lived asset impairments	—			—			323,690					323,690									323,690
Total costs and expenses	38,427			6,396			2,006,837			—		2,051,660			1			—			2,051,661
Loss before interest and income taxes	(38,427		)	(235		)	(109,635		)	—		(148,297		)	(1		)	—			(148,298		)
Interest expense (income), net	91,144			—			1,798			—		92,942			(18		)	—			92,924
Loss on debt refinancing	5,232						—					5,232			—			—			5,232
Equity in loss of subsidiaries	(120,498		)	—			—			120,498		—			(265,960		)	265,960			—
Loss before income taxes	(255,301		)	(235		)	(111,433		)	120,498		(246,471		)	(265,943		)	265,960			(246,454		)
Income tax expense (benefit)	10,659			19			8,811			—		19,489			—			—			19,489
Net loss	$	(265,960	)	$	(254	)	$	(120,244	)	$	120,498	$	(265,960	)	$	(265,943	)	$	265,960		$	(265,943	)
Net change in unrecognized loss on interest rate swaps, net of tax	$	2,766		$	—		$	—		$	—	$	2,766		$	2,766		$	(2,766	)	$	2,766
Foreign currency translation gain	(88		)	—			(88		)	88		(88		)	(88		)	88			(88		)
Other comprehensive income	2,678			—			(88		)	88		2,678			2,678			(2,678		)	2,678
Comprehensive loss	$	(263,282	)	$	(254	)	$	(120,332	)	$	120,586	$	(263,282	)	$	(263,265	)	$	263,282		$	(263,265	)

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the Nine Months Ended March 31, 2012 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		EM LLC Consolidated			EDMC			Eliminations		EDMC Consolidated
Net revenues	$	—		$	6,106		$	2,115,676		$	—	$	2,121,782		$	—		$	—	$	2,121,782
Costs and expenses:
Educational services	85,571			7,549			1,039,301			—		1,132,421			—			—		1,132,421
General and administrative	(77,327		)	(188		)	658,951			—		581,436			172			—		581,608
Depreciation and amortization	19,590			363			98,741			—		118,694			—			—		118,694
Goodwill impairment	—			—			495,380					495,380								495,380
Total costs and expenses	27,834			7,724			2,292,373			—		2,327,931			172			—		2,328,103
Loss before interest and income taxes	(27,834		)	(1,618		)	(176,697		)	—		(206,149		)	(172		)	—		(206,321		)
Interest expense (income), net	77,273			—			1,871			—		79,144			(5		)	—		79,139
Loss on debt refinancing	9,474			—			—			—		9,474			—			—		9,474
Equity in loss of subsidiaries	(199,809		)	—			—			199,809		—			(326,868		)	326,868		—
Loss before income taxes	(314,390		)	(1,618		)	(178,568		)	199,809		(294,767		)	(327,035		)	326,868		(294,934		)
Income tax expense (benefit)	12,478			176			19,447			—		32,101			—			—		32,101
Net loss	$	(326,868	)	$	(1,794	)	$	(198,015	)	$	199,809	$	(326,868	)	$	(327,035	)	$	326,868	$	(327,035	)
Net change in unrecognized loss on interest rate swaps, net of tax	$	(4,690	)	$	—		$	—		$	—	$	(4,690	)	$	(4,690	)	$	4,690	$	(4,690	)
Foreign currency translation loss	(641		)	—			(641		)	641		(641		)	(641		)	641		(641		)
Other comprehensive loss	(5,331		)	—			(641		)	641		(5,331		)	(5,331		)	5,331		(5,331		)
Comprehensive loss	$	(332,199	)	$	(1,794	)	$	(198,656	)	$	200,450	$	(332,199	)	$	(332,366	)	$	332,199	$	(332,366	)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the Nine Months Ended March 31, 2013 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			EM LLC Consolidated			EDMC		EDMC Consolidated
Net cash flows provided by (used in) operations	$	(165,111	)	$	(5,647	)	$	456,939		$	286,181		$	21	$	286,202
Cash flows from investing activities:
Expenditures for long-lived assets	(7,707		)	(725		)	(56,154		)	(64,586		)	—		(64,586		)
Proceeds from sales of long-lived assets	—			—			65,065			65,065					65,065
Other investing activities	(858		)	—			(6,244		)	(7,102		)	—		(7,102		)
Net cash flows provided by (used in) investing activities	(8,565		)	(725		)	2,667			(6,623		)	—		(6,623		)
Cash flows from financing activities:
Net repayments of debt and other	(286,885		)	—			(211		)	(287,096		)			(287,096		)
Inter-company transactions	663,259			6,394			(669,653		)	—			—		—
Net cash flows provided by (used in) financing activities	376,374			6,394			(669,864		)	(287,096		)	—		(287,096		)
Effect of exchange rate changes on cash and cash equivalents	—			—			123			123			—		123
Increase (decrease) in cash and cash equivalents	202,698			22			(210,135		)	(7,415		)	21		(7,394		)
Beginning cash and cash equivalents	(26,249		)	98			213,960			187,809			3,199		191,008
Ending cash and cash equivalents	$	176,449		$	120		$	3,825		$	180,394		$	3,220	$	183,614

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the Nine Months Ended March 31, 2012 (In thousands)

	EM LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			EM LLC Consolidated			EDMC			EDMC Consolidated
Net cash flows provided by (used in) operations	$	(187,444	)	$	409		$	336,648		$	149,613		$	3,063		$	152,676
Cash flows from investing activities
Expenditures for long-lived assets	(6,819		)	(752		)	(57,108		)	(64,679		)	—			(64,679		)
Other investing activities	—			—			(14,248		)	(14,248		)	—			(14,248		)
Net cash flows used in investing activities	(6,819		)	(752		)	(71,356		)	(78,927		)	—			(78,927		)
Cash flows from financing activities
Net repayments of debt	(98,874		)	—			(195		)	(99,069		)	—			(99,069		)
Common stock repurchased and stock option exercises	—			—			—			—			(90,138		)	(90,138		)
Inter-company transactions	537,216			120			(627,474		)	(90,138		)	90,138			—
Net cash flows provided by (used in) financing activities	438,342			120			(627,669		)	(189,207		)	—			(189,207		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(263		)	(263		)	—			(263		)
Increase (decrease) in cash and cash equivalents	244,079			(223		)	(362,640		)	(118,784		)	3,063			(115,721		)
Beginning cash and cash equivalents	(16,816		)	270			369,637			353,091			50,133			403,224
Ending cash and cash equivalents	$	227,263		$	47		$	6,997		$	234,307		$	53,196		$	287,503

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Jun. 30, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net loss	$ (283,994)	$ (417,116)	$ (265,943)	$ (327,035)	$ (1,515,741)
Weighted Average Number of Shares Outstanding, Basic	124,602,000	126,005,000	124,546,000	127,224,000
Weighted Average Number of Shares Outstanding, Diluted	124,602,000	126,005,000	124,546,000	127,224,000
Basic	$ (2.28)	$ (3.31)	$ (2.14)	$ (2.57)
Diluted	$ (2.28)	$ (3.31)	$ (2.14)	$ (2.57)
Time-Based Options [Member] | Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			9,700,000	9,200,000
Performance-based options [Member] | Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Contingently issuable options excluded from Computation of Earnings Per Share, Shares	2,000,000		2,000,000

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Basis of Presentation (Policies)

9 Months Ended

Mar. 31, 2013

DESCRIPTION OF BUSINESS AND CHANGE IN OWNERSHIP [Abstract]

Comparability of Prior Year Financial Data, Policy [Policy Text Block]

Reclassifications

Certain reclassifications of prior year data have been made to conform to the March 31, 2013 presentation. These reclassifications did not materially change any of the previously reported amounts.

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net loss	$ (265,943)	$ (327,035)
Adjustments to reconcile net loss to net cash flows from operating activities:
Depreciation and amortization of property and equipment	118,814	112,936
Amortization of intangible assets	4,853	5,758
Bad debt expense	129,659	117,695
Goodwill and Intangible Asset Impairment	323,690	495,380
Loss on debt refinancing	5,232	9,474
Share-based compensation	11,938	10,171
Non cash adjustments related to deferred rent	(12,610)	(9,300)
Sale Leaseback Transaction, Current Period Gain Recognized	(1,012)	0
Changes in assets and liabilities:
Restricted cash	(4,149)	(236,540)
Receivables	(91,473)	(105,089)
Reimbursements for tenant improvements	7,102	14,248
Inventory	1,383	(447)
Other assets	8,667	(9,444)
Accounts payable	(29,792)	(20,922)
Accrued liabilities	(3,096)	6,632
Unearned tuition	(37,804)	(60,104)
Advance payments	120,743	149,263
Total adjustments	552,145	479,711
Net cash flows provided by operating activities	286,202	152,676
Cash flows from investing activities:
Expenditures for long-lived assets	(64,586)	(64,679)
Proceeds from sales of long-lived assets	65,065	0
Reimbursements for tenant improvements	(7,102)	(14,248)
Net cash flows used in investing activities	(6,623)	(78,927)
Cash flows from financing activities:
Payments under revolving credit facility	(111,300)	(79,000)
Repayments of Subordinated Debt	(162,246)	0
Issuance of common stock	(3)	(2,618)
Common stock repurchased for treasury	0	(92,756)
Principal payments on other long-term debt	(9,117)	(8,141)
Payments of Debt Issuance Costs	(4,436)	(11,928)
Net cash flows used in financing activities	(287,096)	(189,207)
Effect of exchange rate changes on cash and cash equivalents	123	(263)
Net change in cash and cash equivalents	(7,394)	(115,721)
Cash and cash equivalents, beginning of period	191,008	403,224
Cash and cash equivalents, end of period	183,614	287,503
Cash paid during the period for:
Interest (including swap settlement)	89,705	77,736
Income taxes, net of refunds	34,960	74,328
Noncash investing activities:
Capital expenditures in current liabilities	7,756	7,580
Sale Leaseback Transaction, Current Period Gain Recognized	$ (1,012)	$ 0

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Jun. 30, 2012	Mar. 31, 2012
Current assets:
Allowances for student receivables	$ 177,802	$ 225,657	$ 214,140

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Short-Term And Long-Term Debt

9 Months Ended

Mar. 31, 2013

Debt Disclosure [Abstract]

Short-Term And Long-Term Debt

SHORT-TERM AND LONG-TERM DEBT

U.S. Department of Education Letters of Credit

The Company had outstanding letters of credit of $353.0 million at March 31, 2013, the largest of which is issued to the U.S. Department of Education, which requires that the Company maintain a letter of credit due to its failure to satisfy certain regulatory financial ratios after giving effect to the Transaction. In December 2012, the U.S. Department of Education decreased the amount of the required letter of credit from $414.5 million to $348.6 million, which equals 15% of the total Title IV aid received by students attending the Company’s institutions during the fiscal year ended June 30, 2012.

During fiscal 2012, the Company entered into two cash secured letter of credit facilities pursuant to which the lenders agreed to issue letters of credit at any time to the U.S. Department of Education in an aggregate face amount of up to $200.0 million. The Company's obligations with respect to such letters of credit are secured by liens in favor of the lenders on certain of the Company's cash deposits, which must total at least 105% of the aggregate face amount of any outstanding letters of credit. These two facilities currently mature on July 8, 2014 or earlier if the existing revolving credit facility is terminated.

As of March 31, 2013, in order to fund its current letter of credit obligation to the U.S. Department of Education, the Company utilized $148.6 million of letter of credit capacity under its revolving credit facility and all $200.0 million of capacity under the cash secured letter of credit facilities, in connection with which the Company classifies $210.0 million as restricted cash to satisfy the 105% collateralization requirement. Any future reduction in the usage of the cash secured letter of credit facilities will reduce the amount of cash that is classified as restricted cash on the consolidated balance sheet.

Short-Term Debt

There were $111.3 million of borrowings outstanding under the $328.3 million revolving credit facility at June 30, 2012. These borrowings were repaid in full on July 2, 2012. There were no borrowings outstanding under the revolving credit facility at March 31, 2013 and 2012. After adjusting for outstanding letters of credit, which decrease availability under the revolving credit facility, the Company had $175.3 million of remaining borrowing capacity under the revolving credit facility at March 31, 2013.

The interest rate on amounts outstanding under the revolving credit facility at June 30, 2012 was 6.25%, which is equal to the prime rate, as defined under the credit facility, plus a margin of 3.00%. The applicable margin for borrowings under the revolving credit facility can change depending on the Company's leverage ratios and credit ratings. The Company is obligated to pay a per annum commitment fee on undrawn amounts under the revolving credit facility, which is currently 0.375% and varies based on certain leverage ratios. The revolving credit facility is secured by certain of the Company’s assets and is subject to the Company’s satisfaction of certain covenants and financial ratios, which are described further below.

Long-Term Debt

The Company’s long-term debt consisted of the following amounts (in thousands):

	March 31, 2013			June 30, 2012			March 31, 2012
Senior secured term loan facility, due in June 2016	$738,476			$744,539			$746,560
Senior secured term loan facility, due in March 2018, net of discount of$3,050, $3,508 and $3,660	343,159			345,545			346,340
Senior cash pay/PIK notes, due in July 2018, net of discount of $29,074	203,826			—			—
Senior notes, due in June 2014	9,707			375,000			375,000
Other	252			460			528
Total long-term debt	1,295,420			1,465,544			1,468,428
Less current portion	(12,076		)	(12,076		)	(12,076		)
Total long-term debt, less current portion	$	1,283,344		$	1,453,468		$	1,456,352

Senior Cash Pay/PIK Notes

On March 5, 2013, Education Management LLC ("EM LLC"), an indirect wholly-owned subsidiary of EDMC, and Education Management Finance Corp. (a wholly-owned subsidiary of EM LLC) completed a private exchange offer (the "Exchange Offer") in which they offered to exchange their 8.75% senior notes due June 1, 2014 ("Old Notes") for (i) new Senior Cash Pay/PIK Notes due July 1, 2018 ("New Notes") and (ii) cash. In connection with the Exchange Offer and a simultaneous private exchange on the same terms, the Company issued $203.0 million of New Notes and paid down $162.3 million of Old Notes with cash on hand. The remaining Old Notes of $9.7 million not tendered in the Exchange Offer were extinguished in April 2013 at par. Included in the $365.3 million of Old Notes tendered for exchange was $4.0 million owned by an affiliate of one of the Sponsors.

The Company incurred $5.2 million of fees to third parties that were reported as a loss on debt refinancing in the consolidated statement of operations during the current period. Included in these third party fees was $2.9 million paid to affiliates of one of the Sponsors.

Cash interest on the New Notes will accrue at the rate of 15% per annum and is payable semi-annually on March 30 and September 30, commencing on September 30, 2013. For any interest period after March 30, 2014 up to and including July 1, 2018, interest in addition to the cash interest payable will be paid by increasing the principal amount of the outstanding New Notes or by issuing additional New Notes (“PIK Interest”). PIK Interest on the New Notes will accrue at a rate of (i) 1.0% per annum for the period from March 30, 2014 through and including March 30, 2015, (ii) 2.0% per annum for the period from March 31, 2015 through and including March 30, 2016, (iii) 3.0% per annum for the period from March 31, 2016 through and including March 30, 2017 and (iv) 4.0% per annum for the period from March 31, 2017 through and including July 1, 2018. Additionally, the New Notes are required to be paid at a premium of 13% at their contractual maturity, which is being treated as an original issuance discount for accounting purposes. Including PIK interest and the original issuance discount, the annual effective interest rate on the New Notes is 19.8%.

The indenture governing the New Notes contains a number of covenants that restrict, subject to certain exceptions, EM LLC’s ability and the ability of its restricted subsidiaries to incur additional indebtedness or issue certain preferred shares, pay dividends on or make other distributions in respect of its capital stock or make other restricted payments, make certain investments, enter into certain types of transactions with affiliates, create liens securing certain debt without securing the New Notes, sell certain assets, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets and designate its subsidiaries as unrestricted subsidiaries.    

Senior Secured Credit Facility

At March 31, 2013, the term loan under the Company's senior secured credit facilities included outstanding balances of $343.2 million due March 30, 2018 (the “Tranche C-3 Loan”) and $738.5 million due June 1, 2016 (the “Tranche C-2 Loan”).  The Tranche C-3 Loan bears interest at a rate equal to the greater of three-month LIBOR or 1.25%, plus a margin of 7.0%, or 8.25% at March 31, 2013, June 30, 2012 and March 31, 2012.  The Tranche C-2 Loan bears interest at a rate equal to three-month LIBOR plus a margin of 4.00%, or  4.31%, 4.50% and 4.50% at March 31, 2013, June 30, 2012 and March 31, 2012, respectively.  Both tranches may be prepaid at any time, subject with respect to the Tranche C-3 Loan to substantial penalties in connection with any prepayment prior to March 30, 2014. 

In connection with the amendments made in fiscal 2011 and 2012 to the Company's senior secured credit facilities giving rise to the current terms and structure of the term debt described above, the Company capitalized $4.3 million of third party costs as deferred financing fees within other long-term assets, of which $0.7 million was paid to an affiliate of one of the Sponsors.  Additionally, the Company capitalized a $3.7 million discount as a reduction to long-term debt.  These fees are being charged to interest expense over the life of the debt through the maturity date.  Included as part of these amendments were an increase to the covenant basket amount for capital expenditures and certain restricted payments and the ability to use cash to collateralize letters of credit. 

The senior secured credit facilities contain a number of covenants that, among other things, restrict, subject to certain exceptions, EM LLC’s ability to incur additional indebtedness, pay dividends and distributions on or repurchase capital stock, create liens on assets, repay subordinated indebtedness, make investments, loans or advances, make capital expenditures, engage in certain transactions with affiliates, amend certain material agreements, change its lines of business, sell assets and engage in mergers or consolidations. In addition, EM LLC is required to satisfy and maintain a maximum total leverage ratio and a minimum interest coverage ratio under the senior secured credit facilities on a quarterly basis. EM LLC met the requirements of these two financial covenants for the twelve month period ended March 31, 2013.

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Document And Entity Information (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended
	Dec. 31, 2012	May 08, 2013	Dec. 31, 2011
Entity Information [Line Items]
Entity Registrant Name	Education Management Corporation
Entity Central Index Key	0000880059
Current Fiscal Year End Date	--06-30
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		124,601,524
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 559.1

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Derivative Instruments

9 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedges, Assets [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

The Company has historically utilized interest rate swap agreements, which are contractual agreements to exchange payments based on underlying interest rates, to manage the floating rate portion of its term debt. Effective July 1, 2011, the Company entered into three interest rate swap agreements for an aggregate notional amount of $950.0 million. One swap agreement is for a notional amount of $325.0 million and effectively fixes future interest payments at a maximum rate of 9.44% through June 1, 2013. The other two swap agreements, one of which was entered into with an affiliate of one of the Sponsors, are for notional amounts of $312.5 million each and effectively fix future interest payments at a rate of 6.26% through June 1, 2015.

The fair values of the interest rate swap liabilities were $24.2 million, $30.1 million and $29.8 million at March 31, 2013, June 30, 2012 and March 31, 2012, respectively. At March 31, 2013, approximately $0.5 million was recorded in accrued liabilities as the underlying agreement matures on June 1, 2013, and $23.7 million was recorded in other long-term liabilities. The balances at June 30, 2012 and March 31, 2012 were recorded in other long-term liabilities.

On March 30, 2012, the Company replaced $348.6 million of its term loan with a new $350.0 million term loan, as described in Note 8, "Short-term and Long-term Debt." Because the interest payable on the new term loan is based on the higher of LIBOR or 1.25% (rather than strictly the prevailing LIBOR) plus a margin of 7.0%, the $325.0 million interest rate swap does not qualify for cash flow hedge accounting treatment as of the date of this refinancing. As a result, the Company recorded a fair value loss of $2.5 million that was previously reflected in other comprehensive loss as interest expense in the quarter ended March 31, 2012 with subsequent changes to the fair value of this interest rate swap being recorded as interest expense in the period incurred. The Company recorded a $0.5 million revaluation loss through interest expense during the nine months ended March 31, 2013 related to this interest rate swap.

The refinancing of the term loan did not impact the Company's other two swap agreements. At March 31, 2013, there was a cumulative unrealized loss of $14.9 million, net of tax, related to these interest rate swaps included in accumulated other comprehensive loss on the Company’s accompanying consolidated balance sheet. This loss would be immediately recognized in the consolidated statement of operations if these instruments fail to meet certain cash flow hedge requirements.

Over the next twelve months, the Company estimates that approximately $7.8 million, net of tax, will be reclassified from accumulated other comprehensive loss to the consolidated statement of operations based on current interest rates and underlying debt obligations at March 31, 2013.

The Company used Level Two inputs to value its interest rate swaps as defined in Note 10, "Fair Value of Financial Instruments," which includes obtaining quotes from counter-parties that are based on LIBOR forward curves and assessing non-performance risk based upon published market data.

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Consolidated Statements Of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Jun. 30, 2012
Income Statement [Abstract]
Net revenues	$ 638,903	$ 702,499	$ 1,903,363	$ 2,121,782
Costs and expenses:
Educational services	350,134	382,204	1,091,808	1,132,421
General and administrative	166,814	191,747	512,496	581,608
Depreciation and amortization	40,266	40,610	123,667	118,694
Loss on debt refinancing	5,232	9,474	5,232	9,474
Goodwill and Intangible Asset Impairment	323,690	495,380	323,690	495,380
Total costs and expenses	880,904	1,109,941	2,051,661	2,328,103
Loss before interest and income taxes	(242,001)	(407,442)	(148,298)	(206,321)
Interest expense, net	30,464	25,424	92,924	79,139
Loss before income taxes	(277,697)	(442,340)	(246,454)	(294,934)
Income tax expense (benefit)	6,297	(25,224)	19,489	32,101
Net loss	$ (283,994)	$ (417,116)	$ (265,943)	$ (327,035)	$ (1,515,741)
Loss per share: (Note 2)
Basic	$ (2.28)	$ (3.31)	$ (2.14)	$ (2.57)
Diluted	$ (2.28)	$ (3.31)	$ (2.14)	$ (2.57)
Weighted average number of shares outstanding: (Note 2)
Basic	124,602	126,005	124,546	127,224
Diluted	124,602	126,005	124,546	127,224

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Share-Based Compensation

9 Months Ended

Mar. 31, 2013

Share-based Compensation [Abstract]

Share-Based Compensation

SHARE-BASED COMPENSATION

2012 Omnibus Long-Term Incentive Plan

Effective in September 2012, the Company adopted the Education Management Corporation 2012 Omnibus Long-Term Incentive Plan (the “2012 Omnibus Plan”), which may be used to issue stock options, stock appreciation rights, restricted stock, restricted stock units and other forms of long-term incentive compensation. In April 2013, the Company granted approximately 1.1 million time-based stock options and approximately 0.3 million restricted stock units in connection with the appointment of three key executive officers. As of April 30, 2013, approximately 2.6 million shares of Common Stock remain reserved for issuance under the 2012 Omnibus Plan.

2009 Omnibus Long-Term Incentive Plan and 2006 Stock Option Plan

In August 2006, the Company adopted the 2006 Stock Option Plan for executive management and key personnel, under which certain of the Company's employees were granted a combination of time-based and performance-based options to purchase Common Stock. In April 2009, the Company adopted the Education Management Corporation Omnibus Long-Term Incentive Plan (the "2009 Omnibus Plan"), which became effective upon the completion of the Initial Public Offering and provided for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units and other forms of long-term incentive compensation. Both the 2006 Stock Option Plan and 2009 Omnibus Plan have been frozen such that no further awards can be granted from these plans. However, stock options granted under both plans that were not surrendered in the Option Exchange described below remain subject to the terms and conditions of their respective plans.

Share-Based Compensation Activity

During the nine month period ended March 31, 2013, the Company granted approximately 3.0 million time-based stock options that vest 25% per year over a four year service period. These options have an average exercise price of $3.17 per share and a contractual life of ten years from the date of grant. Also during the nine month period ended March 31, 2013, the Company granted approximately 2.8 million restricted stock units that generally vest 25% per year over a four year service period. The restricted stock units were granted when the Company's stock price was $3.30 per share and the related compensation expense will be recognized over the service period. Additionally, on September 13, 2012, the Company granted options to purchase approximately 8.3 million shares of Common Stock under the 2012 Omnibus Plan in connection with the Option Exchange described below.

The Company recognized $4.3 million and $3.6 million of share-based compensation expense during the quarters ended March 31, 2013 and 2012, respectively, and $11.9 million and $10.2 million of share-based compensation expense during the nine months ended March 31, 2013 and 2012, respectively. Because the relevant performance conditions are not probable of being met at March 31, 2013, the Company continues to defer the recognition of any expense on its outstanding performance-based stock options.

Exercises of stock options and vesting of restricted stock were not significant during the nine month period ended March 31, 2013. Net of estimated forfeitures, the Company had $26.5 million of unrecognized compensation cost relating to time-based stock options, $7.3 million of unrecognized compensation cost relating to restricted stock units and $4.5 million of unrecognized compensation cost relating to performance-based stock options at March 31, 2013.

Option Exchange

In August 2012, the Company's Board of Directors authorized a program (the "Option Exchange") to allow eligible option holders the opportunity to exchange their existing EDMC stock options for replacement stock options having an exercise price of $3.59 per share, which was the closing price for a share of the Company's Common Stock on the Nasdaq Global Select Market ("NASDAQ") on September 13, 2012, the date on which the offer expired. Campus presidents and directors who participated in the Option Exchange received a new stock option grant, based on seniority, which vests in four equal annual installments beginning on the first anniversary of the grant date and expires on the tenth anniversary of the grant date. Campus presidents and directors who elected to not participate in the Option Exchange retained their existing stock options and received a new grant of stock options to purchase a smaller number of shares than they would have received had they participated in the Option Exchange with similar vesting and expiration terms as stock options received by campus presidents and directors who participated in the Option Exchange. All other employees who participated in the Option Exchange received a fixed number of new stock options, calculated on the basis of a set exchange ratio corresponding to the grant date and exercise price of the stock options that they surrendered for exchange. The vesting terms of the new stock option grants remained subject to the original vesting schedule of the corresponding options that were surrendered for exchange, provided that none of the replacement stock options vest before September 13, 2013, except under certain specific circumstances described in the 2012 Omnibus Plan and/or the Stock Option Agreements under which the replacement stock options were granted, including but not limited to a change in control of EDMC.

In connection with the Option Exchange, the Company granted approximately 6.3 million time-based and approximately 2.0 million performance-based replacement stock options in return for the cancellation of approximately 8.5 million time-based and approximately 3.1 million performance-based stock options. The Option Exchange was accounted for as a modification of the original awards. Consequently, incremental value to the option holders was calculated using a Black-Scholes-Merton pricing model by taking the value of all time-based stock options on September 13, 2012 using the original option award terms and comparing that to the value of the modified time-based stock options using the new option award terms on September 13, 2012. Because the original awards had exercise prices well in excess of the price of a share of Common Stock on the modification date, the Company used a lattice model to determine the appropriate expected term to use in the Black-Scholes-Merton model. The modification of the original awards resulted in $2.2 million of incremental compensation expense, net of expected forfeitures. This incremental compensation cost will be recognized over the applicable employee service periods, which range from one year to four years.

Below is a summary of the key assumptions used in determining the incremental compensation cost associated with the time-based replacement stock options granted in connection with the Option Exchange:

Replacement options:
Number of options	6,300,075
Volatility	80-87%
Expected term	2.94-6.25 yrs
Fair value per option	$1.87-$2.53
Cancelled options:
Number of options	8,525,171
Volatility	78-87%
Expected term	2.25-7.67 yrs
Fair value per option	$0.78-$1.97

Because the relevant performance conditions were not probable of being met at the time of the Option Exchange, unrecognized compensation expense for performance-based stock options was recalculated based on the new terms of the awards. Compensation expense on performance-based stock options will be recognized if the performance conditions become probable of being met.

Long-Term Incentive Compensation Plan

In fiscal 2007, EDMC adopted the Long-Term Incentive Compensation Plan (the “LTIC Plan”). The LTIC Plan consists of a bonus pool that is valued based on returns to Providence Equity Partners and Goldman Sachs Capital Partners in connection with a change in control of EDMC. Out of a total of 1,000,000 authorized units, approximately 438,000 units were outstanding under the LTIC Plan at March 31, 2013. Each unit represents the right to receive a payment based on the value of the bonus pool. Because the contingent future events that would result in value to the unit-holders are less than probable, no compensation expense has been recognized by the Company during any of the periods following the Transaction. The plan is being accounted for as an equity-based plan because the units may be settled in stock or cash at the Company’s discretion, and it is the Company’s intent to settle any future payment out of the LTIC Plan by issuing Common Stock. The total amount of unrecognized compensation cost related to LTIC Plan units, net of estimated forfeitures, is approximately $1.6 million at March 31, 2013.

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Earnings Per Share

9 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

Basic earnings per share (“EPS”) is computed using the weighted average number of shares outstanding during the period. The Company uses the treasury stock method to compute diluted EPS, which assumes that restricted stock is converted into common stock and that outstanding stock options are exercised and the resulting proceeds are used to acquire shares of common stock at its average market price during the reporting period.

Basic and diluted EPS were calculated as follows (in thousands, except per share amounts):

	For the Three Months Ended March 31,						For the Nine Months Ended March 31,
	2013			2012			2013			2012
Net loss	$	(283,994	)	$	(417,116	)	$	(265,943	)	$	(327,035	)
Weighted average number of shares outstanding:
Basic	124,602			126,005			124,546			127,224
Diluted	124,602			126,005			124,546			127,224
Loss per share:
Basic	$	(2.28	)	$	(3.31	)	$	(2.14	)	$	(2.57	)
Diluted	$	(2.28	)	$	(3.31	)	$	(2.14	)	$	(2.57	)

Outstanding time-based options to purchase approximately 9.7 million and 9.2 million shares of the Company's common stock at March 31, 2013 and 2012, respectively, which represent all outstanding time-based stock options at such dates, were excluded from the computation of diluted EPS because the effect of applying the treasury stock method would have been anti-dilutive.

In addition, and as further described in Note 3, “Share-Based Compensation,” the Company has determined that all of its outstanding performance-based stock options (approximately 2.0 million options) are contingently issuable; therefore, they were not included in the diluted EPS calculation for any period presented.

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Segment Reporting

9 Months Ended

Mar. 31, 2013

Segments [Abstract]

Segment Reporting Disclosure [Text Block]

SEGMENT REPORTING

The Company's principal business is providing post-secondary education. The Company manages its operations through four operating segments, which through March 31, 2012 were aggregated into one reportable segment, as all criteria for aggregation under applicable accounting rules were met. As of June 30, 2012, the Company began to report results for each of its four operating segments because the Company could no longer demonstrate margin convergence with respect to its operating segments with relative certainty over a reasonable period of time. The Company's four reportable segments are The Art Institutes, Argosy University, Brown Mackie Colleges and South University.

Earnings before interest, income taxes, depreciation and amortization ("EBITDA") excluding certain expenses is the measure used by the chief operating decision maker to evaluate segment performance and allocate resources. It is defined as net income before net interest expense, income taxes, depreciation and amortization and certain expenses presented below. EBITDA excluding certain expenses is not a recognized term under generally accepted accounting principles ("GAAP") and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA excluding certain expenses is not intended to be a measure of free cash flow available for management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Management believes EBITDA excluding certain expenses is helpful in highlighting trends because EBITDA excluding certain expenses excludes the results of decisions that are outside the control of operating management and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. Management compensates for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, this presentation of EBITDA excluding certain expenses may not be comparable to similarly titled measures of other companies. Adjustments to reconcile segment results to consolidated results are included under the caption “Corporate and other,” which primarily includes unallocated corporate activity. A reconciliation of EBITDA excluding certain expenses by reportable segment to consolidated loss before income taxes along with other summary financial information by reportable segment is presented below (in thousands):

	For the Three Months Ended March 31,						For the Nine Months Ended March 31,
	2013			2012			2013			2012
Net revenues:
The Art Institutes	$	393,560		$	442,842		$	1,185,232		$	1,341,344
Argosy University	94,430			104,781			268,663			308,995
Brown Mackie Colleges	73,876			77,949			226,122			240,617
South University	77,037			76,927			223,346			230,826
Total EDMC	$	638,903		$	702,499		$	1,903,363		$	2,121,782
EBITDA excluding certain expenses:
The Art Institutes	$	100,527		$	124,611		$	280,714		$	386,688
Argosy University	16,373			19,202			33,363			50,580
Brown Mackie Colleges	8,436			14,521			28,798			50,733
South University	15,410			(1,980		)	30,670			1,320
Corporate and other	(18,791		)	(21,898		)	(65,341		)	(68,993		)
Total EDMC	121,955			134,456			308,204			420,328
Reconciliation to consolidated loss before income taxes:
Long-lived asset impairments (A)	323,690			495,380			323,690			495,380
Loss on debt refinancing	5,232			9,474			5,232			9,474
Restructuring (B)	—			5,908			9,145			12,575
Depreciation and amortization	40,266			40,610			123,667			118,694
Net interest expense	30,464			25,424			92,924			79,139
Loss before income taxes	$	(277,697	)	$	(442,340	)	$	(246,454	)	$	(294,934	)

(A) Current period charge consists of a $294.5 million goodwill impairment at The Art Institutes, $28.0 million impairment of The Art Institutes trade name and a $1.2 million impairment of property and equipment at one of the Company's schools. Refer to Note 5, "Goodwill and Intangible Assets" for more detail.

(B) Refer to Note 7, "Accrued Liabilities" for more information on the current period charge. The prior year nine-month period includes a $10.1 million employee severance charge and a $2.5 million lease termination charge.

Assets: (C)	March 31, 2013		June 30, 2012		March 31, 2012
The Art Institutes	$	1,417,887	$	1,824,385	$	3,023,789
Argosy University	236,759		308,286		276,611
Brown Mackie Colleges	202,844		268,694		181,377
South University	188,915		272,729		210,709
Corporate and other	302,894		165,001		424,984
Total EDMC	$	2,349,299	$	2,839,095	$	4,117,470

(C) Excludes inter-company activity.

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Fair Value Of Financial Instruments

9 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Of Financial Instruments

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company determines the fair value of assets and liabilities based on 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 fair values are based on assumptions that market participants would use when pricing an asset or liability, including assumptions about risk and the risks inherent in valuation techniques and the inputs to valuations. The fair value hierarchy is based on whether the inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's own assumptions of what market participants would use. The fair value hierarchy includes three levels of inputs that may be used to measure fair value as described below.

Level One - Quoted prices for identical instruments in active markets.

Level Two - 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 for which all significant inputs are observable market data.

Level Three - Unobservable inputs significant to the fair value measurement supported by little or no market activity.

In some cases, the inputs used to measure fair value may meet the definition of more than one level of fair value hierarchy. The lowest level input that is significant to the fair value measurement in its totality determines the applicable level in the fair value hierarchy.

The following table presents the carrying amounts and fair values of the interest rate swap liabilities, which are measured at fair value on a recurring basis based on the framework described in Note 9, "Derivative Instruments," and the fair values of the Company's debt, which is recorded at carrying value (in thousands):

	March 31, 2013						June 30, 2012						March 31, 2012
	Carrying Value		Level One		Level Two		Carrying Value		Level One		Level Two		Carrying Value		Level One		Level Two
Recurring:
Interest rate swap liabilities	$	24,206	$	—	$	24,206	$	30,114	$	—	$	30,114	$	29,805	$	—	$	29,805
Disclosure only:
Variable rate debt	1,081,635		—		918,467		1,090,084		—		980,477		1,092,900		—		1,037,768
Fixed rate debt	213,785		213,785		—		375,460		341,710		—		375,528		371,778		—

The fair value of the Company’s debt was based on each instrument’s trading value at the dates presented. Cash and cash equivalents, restricted cash, student accounts receivable, notes receivable, the revolving credit facility, accounts payable and accrued expenses have fair values that approximate their carrying values.

As described in Note 5, "Goodwill and Intangible Assets," the Company recorded goodwill and indefinite-lived intangible asset impairments during fiscal 2013 and fiscal 2012. Additionally, the Company recorded a $1.2 million impairment described in Note 4, "Property and Equipment." This resulted in the following assets being measured at fair value on a non-recurring basis using Level Three inputs:

• goodwill at The Art Institutes reporting unit as of March 31, 2013 and June 30, 2012;

• the trade name for The Art Institutes as of March 31, 2013 and June 30, 2012;

• the licensing, accreditation and Title IV program participation assets at The Art Institutes and Argosy University as of June 30, 2012;

• goodwill at Brown Mackie Colleges, South University and Argosy University as of March 31, 2012; and

• certain long-lived assets at one of the Company's schools as of March 31, 2013.

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Other Long-Term Assets

9 Months Ended

Mar. 31, 2013

Other Assets, Noncurrent Disclosure [Abstract]

Other Long-Term Assets

OTHER LONG-TERM ASSETS

Other long-term assets consisted of the following (in thousands):

	March 31, 2013		June 30, 2012		March 31, 2012
Student receivables, net of allowances of $23,826, $19,532 and $15,931	$	21,983	$	15,233	$	9,672
Deferred financing fees	11,473		14,768		15,896
Deferred compensation	13,240		12,164		12,661
Other	9,182		8,906		8,947
Total other long-term assets	$	55,878	$	51,071	$	47,176

Student receivables, net of allowances, relate to the extension of credit to students for amounts due beyond one year. This extension of credit to students helps fund the difference between total tuition and fees and the amount covered by various sources of financial aid, including amounts awarded under Title IV programs, private loans and cash payments by students. Out-of-school balances are reserved for at a higher rate than in-school balances. During fiscal 2013, the Company extended the repayment period for financing made available to students from a maximum of 36 months beyond graduation to a maximum of 42 months beyond graduation. The Company's gross long-term student receivables were as follows (in thousands):

	March 31, 2013		June 30, 2012		March 31, 2012
In-school	$	32,844	$	24,354	$	17,794
Out-of-school	12,965		10,411		7,809
Gross long-term student receivables	$	45,809	$	34,765	$	25,603

A roll forward of the Company's total allowance for doubtful accounts and loan loss reserves from June 30, 2011 to March 31, 2013 is as follows (in thousands):

Balance June 30, 2011	$	199,357
Bad debt expense	163,926
Amounts written off	(113,001		)
Balance June 30, 2012	250,282
Bad debt expense	129,659
Amounts written off	(173,220		)
Balance March 31, 2013	$	206,721

These amounts were recorded within student receivables, net and other long-term assets on the consolidated balance sheets. When certain criteria are met, which is generally when receivables age past the due date by more than four months and internal collection measures have been taken without success, the accounts of former students are placed with a collection agency. Student accounts that have been placed with a collection agency are reserved for at higher rates than accounts for students who are in school and are written off after repeated collection attempts have been unsuccessful. During fiscal 2013, the Company reduced the number of days after which accounts in collection are written off. This change had no impact to the statement of operations or net student receivables as the applicable accounts were fully reserved.

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Property And Equipment

9 Months Ended

Mar. 31, 2013

Property, Plant and Equipment [Abstract]

Property And Equipment

PROPERTY AND EQUIPMENT

The Company evaluates the recoverability of property and equipment whenever events or changes in circumstances indicate the carrying amount of such assets may not be fully recoverable. During the quarter ended March 31, 2013, the Company recorded a long-lived asset impairment of $1.2 million in the consolidated statement of operations because anticipated future cash flows at one of the Company's schools could not support the carrying value of its property and equipment.

Property and equipment consisted of the following amounts (in thousands):

Asset Class	March 31, 2013			June 30, 2012			March 31, 2012
Land	$	5,496		$	16,712		$	16,713
Buildings and improvements	25,450			74,783			71,772
Leasehold improvements	566,142			545,646			540,319
Furniture and equipment	162,503			158,464			153,565
Technology and other equipment	320,870			307,511			301,067
Software	92,142			86,810			79,848
Library books	44,130			42,706			42,073
Construction in progress	21,941			21,725			17,135
Total	1,238,674			1,254,357			1,222,492
Less accumulated depreciation	(694,943		)	(602,560		)	(568,604		)
Property and equipment, net	$	543,731		$	651,797		$	653,888

Depreciation and amortization expense related to property and equipment was $38.6 million and $38.7 million, respectively, for the three months ended March 31, 2013 and 2012 and $118.8 million and $112.9 million, respectively, for the nine months ended March 31, 2013 and 2012.

Depreciation and amortization expense for the three months ended March 31, 2013 and 2012 included $3.9 million and $3.6 million of amortization expense on software assets, respectively. Depreciation and amortization expense for the nine months ended March 31, 2013 and 2012 include $16.1 million and $10.8 million of amortization expense on software assets, respectively. Amortization expense on software assets for the nine months ended March 31, 2013 included $4.6 million in accelerated amortization resulting from the write off of a software asset that no longer had a useful life.

During the quarter ended December 31, 2012, the Company completed five sale-leaseback transactions with unrelated third parties for net proceeds of $65.1 million. Concurrent with these sales, the Company entered into agreements to lease the properties back from the purchasers over initial lease terms ranging from three to 15 years. The Company classified these leases as operating and considers them normal leasebacks with no other continuing involvement. The Company recorded a net loss of $3.5 million related to these transactions at the time of their closing; however, a gain of approximately $17.8 million was deferred at December 31, 2012 and will be recognized over the initial terms of the new leases as a reduction to educational services expense.

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Goodwill And Intangible Assets

9 Months Ended

Mar. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill And Intangible Assets

GOODWILL AND INTANGIBLE ASSETS

Goodwill

In connection with the Transaction, property, equipment, intangible assets other than goodwill and other assets and liabilities were recorded at fair value. The excess of the amount paid to acquire the Company at the time of the Transaction over the fair values of these net assets represented the intrinsic value of the Company beyond its tangible and identifiable intangible net assets and was assigned to goodwill. In connection with the Transaction, the Company recorded approximately $2.6 billion of goodwill, which was allocated to its four reporting units: The Art Institutes, Argosy University, Brown Mackie Colleges and South University. The goodwill balance attributed to the Brown Mackie Colleges reporting unit was fully written off in connection with the impairment charge incurred in the quarter ended March 31, 2012.

On April 1 of each fiscal year, the Company formally evaluates the carrying amount of goodwill for each of its four education systems, each of which represents a reporting unit of the Company. In addition, the Company also performs an evaluation on an interim basis if it determines that recent events or prevailing conditions indicate a potential impairment of goodwill. A significant amount of judgment is involved in determining whether an indicator of impairment has occurred between annual impairment tests. These indicators include, but are not limited to, overall financial performance such as adverse changes in recent forecasts of operating results, industry and market considerations, the Company's market capitalization, updated business plans and regulatory and legal developments. A two step process is used to determine the amount to be recorded for an impairment. In the first step, the Company determines the fair value of each reporting unit and compares that value to the reporting unit's carrying value. If the results of this first step indicate the carrying amount of a reporting unit is higher than its fair value, the second step must be performed, which requires that the Company determine the implied fair value of goodwill in the same manner as if it had acquired those reporting units as of the testing date. Under the second step, an impairment is recognized if the carrying amount of a reporting unit’s goodwill is greater than its implied fair value. If an impairment charge is required to be recorded, it is presented as an operating expense in the period in which the goodwill’s carrying value exceeds its new implied fair value.

The Company's market capitalization of its equity was approximately 18% lower than its carrying value at March 31, 2013 and was below carrying value for all but five days of the quarter then ended. Due primarily to this factor, the Company did not believe that it was more-likely-than-not that the fair values of each of its reporting units exceeded their carrying values as of March 31, 2013 and performed a step one interim goodwill impairment test for each of its reporting units. The results indicated that the Argosy University and South University reporting units each had fair values in excess of their carrying values by more than 35%. However, the test indicated that the fair value of The Art Institutes fell slightly below its carrying value as of March 31, 2013. Therefore, a step two test was required to be performed for The Art Institutes reporting unit, which yielded a goodwill impairment charge of $294.5 million in the quarter ended March 31, 2013. None of this charge was deductible for income tax purposes.

The Company estimated the fair value of its reporting units in step one using a combination of the traditional discounted cash flow approach and the guideline public company method, which takes into account the relative price and associated earnings multiples of publicly-traded peer companies. These approaches utilize a significant number of unobservable "Level Three" inputs, such as future cash flow assumptions and discount rate selection. See Note 10, "Fair Value of Financial Instruments" for a definition of Level Three inputs.

The valuation of the Company's reporting units under the traditional discounted cash flow approach requires the use of internal business plans that are based on judgments and estimates, which account for expected future economic conditions, demand and pricing for the Company's educational services, costs, inflation and discount rates, and other factors. The use of judgments and estimates involves inherent uncertainties. The Company's measurement of the fair values of its reporting units is dependent on the accuracy of the assumptions used and how the Company's estimates compare to future operating performance. The key assumptions used are, but are not limited to, the following:

• Future cash flow assumptions — The Company's projections are based on organic growth and are derived from historical experience and assumptions regarding future growth and profitability trends. These projections also take into account the current economic climate and the extent to which the regulatory environment is expected to impact future growth opportunities. The Company's analysis incorporated an assumed period of cash flows of ten years with a terminal value determined using the Gordon Growth Model.

• Discount rate — The discount rate is based on each reporting unit’s estimated weighted average cost of capital ("WACC"). The three components of WACC are the cost of equity, cost of debt and capital structure, each of which requires judgment by management to estimate. The Company develops its cost of equity estimate using the Capital Asset Pricing Model based on perceived risks and predictability of each reporting unit’s future cash flows. The cost of debt component represents a market participant’s estimated cost of borrowing, which the Company estimates using the average return on corporate bonds as of the valuation date, adjusted for taxes. At March 31, 2013, the WACC used to estimate the fair value of The Art Institutes reporting unit was 15.0%, while the Argosy University and South University reporting units used a WACC of 17.5% and 18.0%, respectively.

The Company also recorded multiple goodwill impairment charges in fiscal 2012. The Company recognized a total of $459.4 million in goodwill impairment charges at its Argosy University, South University and Brown Mackie Colleges reporting units during the quarter ended March 31, 2012, of which $379.0 million was not deductible for income tax purposes. Also, in the fourth fiscal quarter of fiscal 2012, the Company recognized a goodwill impairment charge of $1,123.1 million at The Art Institutes, none of which was deductible for income tax purposes.

A roll forward of the Company's consolidated goodwill balance from June 30, 2011 to March 31, 2013 is as follows (in thousands):

	June 30, 2011		Impairment Charge			June 30, 2012		Impairment Charge			March 31, 2013
The Art Institutes	$	1,984,688	$	(1,123,069	)	$	861,619	$	(294,460	)	$	567,159
Argosy University	219,350		(155,905		)	63,445		—			63,445
Brown Mackie Colleges	254,561		(254,561		)	—		—			—
South University	123,400		(84,914		)	38,486		—			38,486
Total goodwill	$	2,581,999	$	(1,618,449	)	$	963,550	$	(294,460	)	$	669,090

Intangible Assets

In connection with the step one and step two goodwill analyses performed as of March 31, 2013 described above, the Company performed an impairment analysis with respect to indefinite-lived intangible assets. As a result, the Company recorded a $28.0 million impairment related to the trade name of The Art Institutes in the quarter ended March 31, 2013. The fair value of The Art Institutes trade name was determined under the relief from royalty method (which is similar to the income approach). This approach utilized Level Three inputs, which consisted of a 2.0% royalty rate and a 15.5% discount rate.

The remaining indefinite-lived intangible assets relate to each reporting unit's licensing, accreditation and Title IV program participation assets, the fair values of which were determined under a combination of the cost and income approaches. No impairment was recorded for these assets during the quarter ended March 31, 2013 as their fair values exceeded their carrying values.

Intangible assets other than goodwill consisted of the following amounts (in thousands):

	March 31, 2013					June 30, 2012					March 31, 2012
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
The Art Institutes trade name	$	190,000	$	—		$	218,000	$	—		$	330,000	$	—
Licensing, accreditation and Title IV program participation	95,862		—			95,862		—			112,179		—
Curriculum and programs	42,434		(31,385		)	38,702		(28,541		)	37,364		(27,350		)
Student contracts, applications and relationships	39,511		(37,104		)	39,511		(36,270		)	39,511		(35,992		)
Favorable leases and other	19,424		(17,703		)	19,424		(16,659		)	19,434		(16,302		)
Total intangible assets	$	387,231	$	(86,192	)	$	411,499	$	(81,470	)	$	538,488	$	(79,644	)

Trade names are often considered to have useful lives similar to that of the overall business, which generally means such assets are assigned an indefinite life for accounting purposes.  State licenses and accreditations of the Company’s schools as well as their eligibility for Title IV program participation are periodically renewed in cycles ranging from every year to up to every 10 years depending upon government and accreditation regulations. Because the Company considers these renewal processes to be a routine aspect of the overall business, these assets are assigned indefinite lives.

Amortization of intangible assets was $1.7 million and $1.9 million for the three months ended March 31, 2013 and 2012, respectively, and $4.9 million and $5.8 million for the nine months ended March 31, 2013 and 2012, respectively.

Total estimated amortization of the Company’s intangible assets for each of the fiscal years ending June 30, 2013 through 2017 and thereafter is as follows at March 31, 2013 (in thousands):

Fiscal years	Amortization Expense
2013 (remainder)	$	1,289
2014	4,765
2015	4,149
2016	2,793
2017	2,121
Thereafter	60

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Accrued Liabilities

9 Months Ended

Mar. 31, 2013

Accrued Liabilities, Current [Abstract]

Accrued Liabilities

ACCRUED LIABILITIES

Accrued liabilities consisted of the following amounts (in thousands):

	March 31, 2013		June 30, 2012		March 31, 2012
Payroll and related taxes	$	57,480	$	50,291	$	70,352
Capital expenditures	4,310		5,624		3,826
Advertising	25,032		24,837		23,425
Interest	3,391		3,296		11,390
Benefits	15,482		14,014		11,146
Other	43,087		39,286		49,699
Total accrued liabilities	$	148,782	$	137,348	$	169,838

During the quarter ended September 30, 2012, the Company completed a restructuring plan at several locations to improve operational efficiencies and recorded a related charge of $9.1 million. The restructuring charge consisted of $7.5 million related to employee severance costs, primarily at The Art Institutes segment, and a lease abandonment charge of $1.6 million at one of the Company's operations offices. At March 31, 2013, the remaining liability for this restructuring plan was $1.3 million, which primarily consists of net rent charges to be paid through fiscal 2019 relating to the lease abandonment.

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Segment Reporting (Tables)

9 Months Ended

Mar. 31, 2013

Segments [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	For the Three Months Ended March 31,						For the Nine Months Ended March 31,
	2013			2012			2013			2012
Net revenues:
The Art Institutes	$	393,560		$	442,842		$	1,185,232		$	1,341,344
Argosy University	94,430			104,781			268,663			308,995
Brown Mackie Colleges	73,876			77,949			226,122			240,617
South University	77,037			76,927			223,346			230,826
Total EDMC	$	638,903		$	702,499		$	1,903,363		$	2,121,782
EBITDA excluding certain expenses:
The Art Institutes	$	100,527		$	124,611		$	280,714		$	386,688
Argosy University	16,373			19,202			33,363			50,580
Brown Mackie Colleges	8,436			14,521			28,798			50,733
South University	15,410			(1,980		)	30,670			1,320
Corporate and other	(18,791		)	(21,898		)	(65,341		)	(68,993		)
Total EDMC	121,955			134,456			308,204			420,328
Reconciliation to consolidated loss before income taxes:
Long-lived asset impairments (A)	323,690			495,380			323,690			495,380
Loss on debt refinancing	5,232			9,474			5,232			9,474
Restructuring (B)	—			5,908			9,145			12,575
Depreciation and amortization	40,266			40,610			123,667			118,694
Net interest expense	30,464			25,424			92,924			79,139
Loss before income taxes	$	(277,697	)	$	(442,340	)	$	(246,454	)	$	(294,934	)

(A) Current period charge consists of a $294.5 million goodwill impairment at The Art Institutes, $28.0 million impairment of The Art Institutes trade name and a $1.2 million impairment of property and equipment at one of the Company's schools. Refer to Note 5, "Goodwill and Intangible Assets" for more detail.

(B) Refer to Note 7, "Accrued Liabilities" for more information on the current period charge. The prior year nine-month period includes a $10.1 million employee severance charge and a $2.5 million lease termination charge.

Assets: (C)	March 31, 2013		June 30, 2012		March 31, 2012
The Art Institutes	$	1,417,887	$	1,824,385	$	3,023,789
Argosy University	236,759		308,286		276,611
Brown Mackie Colleges	202,844		268,694		181,377
South University	188,915		272,729		210,709
Corporate and other	302,894		165,001		424,984
Total EDMC	$	2,349,299	$	2,839,095	$	4,117,470

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Contingencies

9 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

CONTINGENCIES

Qui Tam Matters

Washington v. Education Management Corporation. On May 3, 2011, a qui tam action captioned United States of America, and the States of California, Florida, Illinois, Indiana, Massachusetts, Minnesota, Montana, New Jersey, New Mexico, New York and Tennessee, and the District of Columbia, each ex rel. Lynntoya Washington and Michael T. Mahoney v. Education Management Corporation, et al. (“Washington”) filed under the federal False Claims Act in April 2007 was unsealed due to the U.S. Department of Justice's decision to intervene in the case. Five of the states listed in the caption joined the case based on qui tam actions filed under their respective False Claims Acts. The Court granted the Company's motion to dismiss the District of Columbia from the case and denied the Commonwealth of Kentucky's motion to intervene in the case under its consumer protection laws.

The case, which is pending in U.S. District Court for the Western District of Pennsylvania, relates to whether the Company's compensation plans for admission representatives violated the Higher Education Act, as amended (“HEA”), and U.S. Department of Education regulations prohibiting an institution participating in Title IV programs from providing any commission, bonus or other incentive payment based directly or indirectly on success in securing enrollments to any person or entity engaged in any student recruitment or admissions activity during the period of July 1, 2003 through June 30, 2011. The complaint was initially filed by a former admissions representative at The Art Institute of Pittsburgh Online Division and a former director of training at EDMC Online Higher Education and asserts the relators are entitled to recover treble the amount of actual damages allegedly sustained by the federal government as a result of the alleged activity, plus civil monetary penalties. The complaint does not specify the amount of damages sought but claims that the Company and/or students attending the Company's schools received over $11 billion in funds from participation in Title IV programs and state financial aid programs during the period of alleged wrongdoing.

On May 11, 2012, the Court ruled on the Company's motion to dismiss case for failure to state a claim upon which relief can be granted, dismissing the claims that the design of the Company's compensation plan for admissions representatives violated the incentive compensation rule and allowing common law claims and the allegations that the plan as implemented violated the rule to continue to discovery.

The Company believes the case to be without merit and intends to vigorously defend itself.

Sobek v. Education Management Corporation. On March 13, 2012, a qui tam action captioned United States of America, ex rel. Jason Sobek v. Education Management Corporation, et al. filed under the federal False Claims Act on January 28, 2010 was unsealed after the U.S. Department of Justice declined to intervene in the case at this time. The case, which is pending in the U.S. District Court for the Western District of Pennsylvania, alleges that the defendants violated the U.S. Department of Education's regulation prohibiting institutions from making substantial misrepresentations to prospective students, did not adequately track student academic progress and violated the U.S. Department of Education's prohibition on the payment of incentive compensation to admissions representatives. The complaint was filed by a former project associate director of admissions at EDMC Online Higher Education who worked for South University and asserts the relator is entitled to recover treble the amount of actual damages allegedly sustained by the federal government as a result of the alleged activity, plus civil monetary penalties. The complaint does not specify the amount of damages sought but claims that the Company's institutions were ineligible to participate in Title IV programs during the period of alleged wrongdoing.

On May 29, 2012, the Company filed a motion to dismiss the case with prejudice for failure to state a claim upon which relief can be granted. On October 22, 2012, the magistrate judge assigned to the case issued a Report and Recommendation on the Company's motion to dismiss, which recommends that the Court dismiss with prejudice claims related to incentive compensation, program costs and the withholding of amounts due to the government and allow claims related to satisfactory academic progress, job placement statistics and programmatic accreditation to continue. The Report and Recommendation is not binding on the federal district judge assigned to the case. The Company believes the remaining claims in the case to be without merit and intends to vigorously defend itself.

Shareholder Derivative Lawsuits

Oklahoma Law Enforcement Retirement System v. Nelson. On May 21, 2012, a shareholder derivative class action captioned Oklahoma Law Enforcement Retirement System v. Todd S. Nelson, et al. was filed against the directors of the Company in state court located in Pittsburgh, Pennsylvania. The Company is named as a nominal defendant in the case. The complaint alleges that the defendants violated their fiduciary obligations to the Company's shareholders due to the Company's violation of the U.S. Department of Education's prohibition on paying incentive compensation to admissions representatives, engaging in improper recruiting tactics in violation of Title IV of the HEA and accrediting agency standards, falsification of job placement data for graduates of its schools and failure to satisfy the U.S. Department of Education's financial responsibility standards. The Company previously received two demand letters from the plaintiff which were investigated by a Special Litigation Committee of the Board of Directors and found to be without merit. The Company filed a motion to dismiss the case with prejudice on August 13, 2012. In response, the plaintiffs filed an amended complaint making substantially the same allegations as the initial complaint on September 27, 2012. The Company and the director defendants filed a motion to dismiss the amended complaint on October 17, 2012. The Company believes that the claims are without merit and intends to vigorously defend itself.

Bushansky v. Nelson. On August 3, 2012, a shareholder derivative class action captioned Stephen Bushansky v. Todd S. Nelson, et al. was filed against certain of the directors of the Company in the U.S. District Court for the Western District of Pennsylvania. The Company is named as a nominal defendant in the case. The complaint alleges that the defendants violated their fiduciary obligations to the Company's shareholders due to the Company's use of improper recruiting, enrollment admission and financial aid practices and violation of the U.S. Department of Education's prohibition on the payment of incentive compensation to admissions representatives. The Company previously received a demand letter from the plaintiff which was investigated by a Special Litigation Committee of the Board of Directors and found to be without merit. The Company and the named director defendants filed a motion to dismiss the case on October 19, 2012. The Company believes that the claims set forth in the complaint are without merit and intends to vigorously defend itself.

Buirkle APA Program Accreditation Lawsuit

The Company and Argosy University were the subject of claims brought by former students who enrolled in the Clinical Psychology program offered by the Dallas campus of Argosy University pursuant to two cases filed in the District Court for Dallas County, Texas, Buirkle et al. v. Argosy Education Group, Inc. University, Education Management LLC and Education Management Corporation and Adibian et al. v. Argosy Education Group, Inc., Education Management LLC, and Education Management Corporation. The petitions allege that, prior to the plaintiffs' enrollment and/or while the plaintiffs were enrolled in the program, the defendants made material misrepresentations regarding the importance of accreditation of the program by the Commission on Accreditation of the American Psychological Association, the status of the application of the Dallas campus for such accreditation, the availability of loan repayment options for the plaintiffs, and the quantity and quality of the plaintiffs' career options. Plaintiffs seek monetary compensatory and punitive damages.

The Company has entered into settlement agreements with 20 of the plaintiffs for the payment by the Company of an immaterial amount in settlement. The remaining three plaintiffs are pursuing common law fraud cases in state court. The Company believes the claims in the lawsuits to be without merit and intends to vigorously defend itself.

State Attorney General Investigations

In January 2013, The New England Institute of Art received a civil investigative demand from the Commonwealth of Massachusetts Attorney General requesting information for the period from January 1, 2010 to the present pursuant to an investigation of practices by the school in connection with marketing and advertising job placement and student outcomes, the recruitment of students and the financing of education. The Company previously responded to a similar request that The New England Institute of Art received in June 2007 and intends to cooperate with the Attorney General in connection with its investigation. However, the Company cannot predict the eventual scope, duration or outcome of the investigation at this time.

In September 2012, the Company received a subpoena from the State of Colorado Attorney General's office requesting documents and detailed information for the period of January 1, 2006 through the present. The subpoena is primarily focused on the programs offered by the College of Psychology and Behavioral Sciences at the Denver, Colorado campus of Argosy University. Argosy University also received in September 2012 demand letters from an attorney representing three former students in the Doctorate of Counseling Psychology program alleging that the students were unable to find internships necessary to complete the program in Denver, Colorado and that the campus claimed that the program would lead to licensure in Colorado, among other things. The Company intends to cooperate with the Attorney General's investigation. However, the Company cannot predict the eventual scope, duration or outcome of the investigation at this time.

In August 2011, the Company received a subpoena from the Attorney General of the State of New York requesting documents and detailed information for the time period of January 1, 2000 through the present. The Art Institute of New York City is the Company's only school located in New York though the subpoena also addresses fully-online students who reside in the State. The subpoena is primarily related to the Company's compensation of admissions representatives and recruiting activities. The relators in the Washington qui tam case filed the complaint under the State of New York's False Claims Act though the state has not announced an intention to intervene in the matter. The Company intends to cooperate with the investigation. However, the Company cannot predict the eventual scope, duration or outcome of the investigation at this time.

In December 2010, the Company received a subpoena from the Office of Consumer Protection of the Attorney General of the Commonwealth of Kentucky requesting documents and detailed information for the time period of January 1, 2008 through December 31, 2010. The Company has three Brown Mackie College locations in Kentucky. The Kentucky Attorney General announced an investigation of the business practices of private sector post-secondary schools and that subpoenas were issued to six private sector colleges that do business in Kentucky in connection with the investigation. The Company intends to continue to cooperate with the investigation. However, the Company cannot predict the eventual scope, duration or outcome of the investigation at this time.

In October 2010, Argosy University received a subpoena from the Florida Attorney General's office seeking a wide range of documents related to the Company's institutions, including the nine institutions located in Florida, from January 2, 2006 to the present. The Florida Attorney General has announced that it is investigating potential misrepresentations in recruitment, financial aid and other areas. The Company is cooperating with the investigation, but has also filed a suit to quash or limit the subpoena and to protect information sought that constitutes proprietary or trade secret information. The Company cannot predict the eventual scope, duration or outcome of the investigation at this time.

City of San Francisco

In December 2011, the Company received a letter from the City Attorney of the City of San Francisco, California requesting information related to student recruitment and indebtedness, including recruiting practices and job placement reporting, among other issues, by The Art Institute of San Francisco and the seven other Art Institutes located in California.  The Company intends to cooperate with the investigation. However, the Company cannot predict the eventual scope, duration or outcome of the investigation at this time.

Securities and Exchange Commission Subpoena

On March 20, 2013, the Company received a subpoena from the Division of Enforcement of the Securities and Exchange Commission requesting documents and information relating to the Company's valuation of goodwill and its bad debt allowance for student receivables. The Company intends to cooperate with the SEC in its investigation. The Company cannot predict the eventual scope, duration or outcome of the investigation at this time.

Other Matters

The Company is a defendant in certain other legal proceedings arising out of the conduct of its business. In the opinion of management, based upon an investigation of these claims and discussion with legal counsel, the ultimate outcome of such other legal proceedings, individually and in the aggregate, is not expected to have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

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Share-Based Compensation (Tables)

9 Months Ended

Mar. 31, 2013

Share-based Compensation [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

Below is a summary of the key assumptions used in determining the incremental compensation cost associated with the time-based replacement stock options granted in connection with the Option Exchange:

Replacement options:
Number of options	6,300,075
Volatility	80-87%
Expected term	2.94-6.25 yrs
Fair value per option	$1.87-$2.53
Cancelled options:
Number of options	8,525,171
Volatility	78-87%
Expected term	2.25-7.67 yrs
Fair value per option	$0.78-$1.97

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Accrued Liabilities (Details) (USD $)	1 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Jun. 30, 2012
Accrued liabilities, current [Line Items]
Payroll and related taxes		$ 57,480,000	$ 70,352,000	$ 57,480,000	$ 70,352,000	$ 50,291,000
Capital expenditures		4,310,000	3,826,000	4,310,000	3,826,000	5,624,000
Advertising		25,032,000	23,425,000	25,032,000	23,425,000	24,837,000
Interest		3,391,000	11,390,000	3,391,000	11,390,000	3,296,000
Benefits		15,482,000	11,146,000	15,482,000	11,146,000	14,014,000
Other		43,087,000	49,699,000	43,087,000	49,699,000	39,286,000
Total accrued liabilities		148,782,000	169,838,000	148,782,000	169,838,000	137,348,000
Restructuring charges	9,145,000	0	5,908,000	9,145,000	12,575,000
The Art Institutes [Member] | Employee Severance [Member]
Accrued liabilities, current [Line Items]
Restructuring charges	7,500,000
Accrued Liabilities		1,300,000		1,300,000
The Art Institutes [Member] | Lease Abandonment [Member]
Accrued liabilities, current [Line Items]
Restructuring charges	$ 1,600,000

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Consolidated Statements of Comphrensive Income [Abstract]
Net loss	$ (283,994)	$ (417,116)	$ (265,943)	$ (327,035)
Other comprehensive income (loss)
Periodic revaluation of interest rate swaps, net of tax benefit of $237, $309, $1,671 and $6,718 respectively	(401)	(524)	(2,833)	(11,389)
Reclassification adjustment for interest recognized in consolidated statement of operations, net of tax expense of $1,130, $1,157, $3,303 and $3,950 respectively	1,915	1,963	5,599	6,699
Net change in unrecognized loss on interest rate swaps, net of tax	1,514	1,439	2,766	(4,690)
Foreign currency translation gain (loss)	(147)	141	(88)	(641)
Other comprehensive income (loss)	1,367	1,580	2,678	(5,331)
Comprehensive loss	$ (282,627)	$ (415,536)	$ (263,265)	$ (332,366)

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Basis of Presentation

9 Months Ended

Mar. 31, 2013

DESCRIPTION OF BUSINESS AND CHANGE IN OWNERSHIP [Abstract]

DESCRIPTION OF BUSINESS AND CHANGE IN OWNERSHIP

Basis of presentation

The accompanying unaudited consolidated financial statements of Education Management Corporation ("EDMC" and, together with its subsidiaries, the "Company") have been prepared by the Company’s management in accordance with generally accepted accounting principles for interim financial information and applicable rules and regulations of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. The unaudited consolidated financial statements included herein contain all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to present fairly the financial position of the Company as of March 31, 2013 and 2012, its consolidated statements of operations and of comprehensive loss for the three and nine months ended March 31, 2013 and 2012, its consolidated statements of cash flows for the nine months ended March 31, 2013 and 2012 and its consolidated statement of shareholders' equity for the nine months ended March 31, 2013. The consolidated statements of operations for the three and nine months ended March 31, 2013 and 2012 are not necessarily indicative of the results to be expected for future periods. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012 (the “Annual Report on Form 10-K”) as filed with the Securities and Exchange Commission (“SEC”). The accompanying consolidated balance sheet at June 30, 2012 and consolidated statement of shareholders' equity for the fiscal year ended June 30, 2012 have been derived from the consolidated audited balance sheet and statement of shareholders' equity included in the 2012 Annual Report on Form 10-K.

Description of Business

The Company is among the largest providers of post-secondary education in North America, with approximately 132,000 enrolled students as of October 2012. The Company offers campus-based education through four different education systems and through online platforms at three of its four education systems, or through a combination of both. These four education systems coincide with the Company's reportable segments, which are The Art Institutes, Argosy University, Brown Mackie Colleges and South University. Refer to Note 14, "Segment Reporting" for additional information.

The Company is committed to offering quality academic programs and strives to improve the learning experience for its students. The curriculum is designed with a strong emphasis on applied career-oriented content and is primarily taught by faculty members who possess practical and relevant professional experience in their respective fields.

Ownership

On June 1, 2006, EDMC was acquired by a consortium of private equity investment funds led by Providence Equity Partners, Goldman Sachs Capital Partners and Leeds Equity Partners (collectively, the “Sponsors”). The acquisition was accomplished through the merger of EM Acquisition Corporation into EDMC, with EDMC surviving the merger (the "Transaction") and was financed by equity invested by the Sponsors and other investors, cash on hand and secured and unsecured borrowings. Refer to Note 8, "Short-Term and Long-Term Debt" for more information.

In October 2009, EDMC completed an initial public offering of 23.0 million shares of its common stock, $0.01 par value per share ("Common Stock"), at a per share price of $18.00 (the "Initial Public Offering"). The Sponsors did not sell any of their shares in connection with the Initial Public Offering.

Seasonality

The Company's quarterly net revenues and net income fluctuate primarily as a result of the pattern of student enrollments. The Company typically recognizes less net revenue in the first quarter of its fiscal year than in other quarters due to student vacations.

Reclassifications

Certain reclassifications of prior year data have been made to conform to the March 31, 2013 presentation. These reclassifications did not materially change any of the previously reported amounts.

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Property And Equipment (Tables)

9 Months Ended

Mar. 31, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Property and equipment consisted of the following amounts (in thousands):

Asset Class	March 31, 2013			June 30, 2012			March 31, 2012
Land	$	5,496		$	16,712		$	16,713
Buildings and improvements	25,450			74,783			71,772
Leasehold improvements	566,142			545,646			540,319
Furniture and equipment	162,503			158,464			153,565
Technology and other equipment	320,870			307,511			301,067
Software	92,142			86,810			79,848
Library books	44,130			42,706			42,073
Construction in progress	21,941			21,725			17,135
Total	1,238,674			1,254,357			1,222,492
Less accumulated depreciation	(694,943		)	(602,560		)	(568,604		)
Property and equipment, net	$	543,731		$	651,797		$	653,888

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Property And Equipment (Details) (USD $)	3 Months Ended	9 Months Ended																			3 Months Ended		9 Months Ended									3 Months Ended		9 Months Ended		3 Months Ended
	Mar. 31, 2013	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012	Jun. 30, 2012	Mar. 31, 2013 Land [Member]	Jun. 30, 2012 Land [Member]	Mar. 31, 2012 Land [Member]	Mar. 31, 2013 Building and improvements [Member]	Jun. 30, 2012 Building and improvements [Member]	Mar. 31, 2012 Building and improvements [Member]	Mar. 31, 2013 Leasehold improvements and capitalized lease costs [Member]	Jun. 30, 2012 Leasehold improvements and capitalized lease costs [Member]	Mar. 31, 2012 Leasehold improvements and capitalized lease costs [Member]	Mar. 31, 2013 Furniture and equipment [Member]	Jun. 30, 2012 Furniture and equipment [Member]	Mar. 31, 2012 Furniture and equipment [Member]	Mar. 31, 2013 Technology and other equipment [Member]	Jun. 30, 2012 Technology and other equipment [Member]	Mar. 31, 2012 Technology and other equipment [Member]	Mar. 31, 2013 Software [Member]	Mar. 31, 2012 Software [Member]	Mar. 31, 2013 Software [Member]	Mar. 31, 2012 Software [Member]	Jun. 30, 2012 Software [Member]	Mar. 31, 2013 Library books [Member]	Jun. 30, 2012 Library books [Member]	Mar. 31, 2012 Library books [Member]	Mar. 31, 2013 Construction in progress [Member]	Jun. 30, 2012 Construction in progress [Member]	Mar. 31, 2012 Construction in progress [Member]	Mar. 31, 2013 Property and Equipment [Member]	Mar. 31, 2012 Property and Equipment [Member]	Mar. 31, 2013 Property and Equipment [Member]	Mar. 31, 2012 Property and Equipment [Member]	Dec. 31, 2012 Minimum [Member]	Dec. 31, 2012 Maximum [Member]
Property, Plant and Equipment [Line Items]
Asset Impairment Charges	$ 1,200,000
Proceeds from sales of long-lived assets		65,065,000	0
Gain (Loss) on Sale of Property Plant Equipment		3,500,000
Deferred Gain on Sale of Property				17,800,000
Lease Agreements, Term																																				3 years	15 years
Depreciation and amortization of property and equipment		118,814,000	112,936,000																													38,600,000	38,700,000	118,800,000	112,900,000
Property and equipment, gross	1,238,674,000	1,238,674,000	1,222,492,000		1,254,357,000	5,496,000	16,712,000	16,713,000	25,450,000	74,783,000	71,772,000	566,142,000	545,646,000	540,319,000	162,503,000	158,464,000	153,565,000	320,870,000	307,511,000	301,067,000	92,142,000	79,848,000	92,142,000	79,848,000	86,810,000	44,130,000	42,706,000	42,073,000	21,941,000	21,725,000	17,135,000
Less accumulated depreciation	(694,943,000)	(694,943,000)	(568,604,000)		(602,560,000)
Property and equipment, net	543,731,000	543,731,000	653,888,000		651,797,000
Depreciation and amortization of property and equipment																					3,900,000	3,600,000	16,100,000	10,800,000
Accelerated Depreciation		$ 4,600,000

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Income Taxes

9 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The Company uses the asset and liability method to account for income taxes. Under this method, deferred tax assets and liabilities result from (i) temporary differences in the recognition of income and expense for financial and federal income tax reporting requirements, and (ii) differences between the recorded value of assets acquired in business combinations accounted for as purchases for financial reporting purposes and their corresponding tax bases. Deferred tax assets should be reduced by a valuation allowance if, based upon the weight of the available evidence, it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized. Future realization of deferred tax assets ultimately depends upon the existence of sufficient taxable income of the appropriate character in either the carry back or carry forward period under applicable tax law.

The Company assesses the realizability of its deferred tax assets on a quarterly basis by considering the relative impact of all available evidence, both positive and negative, to determine whether, based upon the weight of that evidence a valuation allowance is needed. This evaluation requires the use of considerable judgment and estimates that are subject to change. Excluding deferred tax liabilities related to indefinite-lived intangible assets, which are not scheduled to reverse, the Company is in a net deferred tax asset position at March 31, 2013.

The Company will incur cumulative losses before taxes in the three most recent fiscal years ended June 30, 2013 due to impairment charges recorded in fiscal years 2012 and 2013 as described in Note 5, "Goodwill and Intangible Assets." However, excluding the non-deductible impairment charges incurred in fiscal 2012, the Company would have had income before taxes for the three year period ended June 30, 2012. Further, the Company expects that it will have income before taxes for the three year period ended June 30, 2013, excluding non-deductible impairment charges incurred in fiscal 2013 and 2012. Additionally, the Company has consistently generated taxable income in the past and reasonably expects to generate sufficient taxable income in the future to realize the benefit of its deferred tax assets. Therefore, the Company believes it is more-likely-than-not that it will realize the benefit of its deferred tax assets and, as such, no valuation allowance is required except as disclosed in Part II, Item 8 "Financial Statements and Supplementary Data," Note 11, "Income Taxes" of the June 30, 2012 Annual Report on Form 10-K with respect to certain state deferred tax assets.

The Company's effective tax rate was (2.3)% and 5.7% for the three months ended March 31, 2013 and 2012, respectively. The Company's effective tax rate was (7.9)% and (10.9)%, respectively, for the nine months ended March 31, 2013 and 2012. The effective tax rates in all periods were significantly impacted by goodwill impairment charges, most of which were not deductible for tax purposes. Excluding the income statement impact of the impairments in both fiscal 2013 and 2012, the effective tax rates would have been 39.1% and 40.4% in the three and nine months ended March 31, 2013, respectively, and 38.0% and 38.7% in the three and nine months ended March 31, 2012, respectively. The effective tax rate differed from the combined federal and state statutory rates due to valuation allowances, expenses that are non-deductible for tax purposes, and the accounting related to uncertain tax positions.

As a result of the expiration of certain statutes of limitation with respect to the 2009 and 2008 fiscal years, the Company's liability for uncertain tax positions, excluding interest and the indirect benefits associated with state income taxes, decreased by $0.7 million and $0.9 million during the three month periods ended March 31, 2013 and 2012, respectively. The Company's effective tax rate was impacted by $0.7 million during each of the three month periods ended March 31, 2013 and 2012, related to these statutes of limitation expirations. In addition, the Company reduced tax expense by $0.7 million in the current quarter as a result of a state income tax refund.

As of March 31, 2013, the Company's accrual for uncertain tax positions was $3.9 million, excluding interest and the indirect benefits associated with state income taxes. It is reasonably possible that the total amount of unrecognized tax benefits, excluding interest and the indirect benefits associated with state income taxes, will decrease by $2.9 million within the next twelve months due to the expiration of certain statutes of limitation with respect to the 2010 fiscal year. The tax benefit of such a decrease, if recognized, would be a discrete item in the third quarter of fiscal year 2014.

The statutes of limitation for the Company's U.S. income tax returns are closed for years through fiscal 2009. The statutes of limitation for the Company's state and local income tax returns for prior periods vary by jurisdiction. However, the statutes of limitation with respect to the major jurisdictions in which the Company files state and local income tax returns are generally closed for years through fiscal 2008.