10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended: November 30, 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: 0-25232

APOLLO EDUCATION GROUP, INC.

(Exact name of registrant as specified in its charter)

ARIZONA (State or other jurisdiction of incorporation or organization) 86-0419443 (I.R.S. Employer Identification No.)

4025 S. RIVERPOINT PARKWAY, PHOENIX, ARIZONA 85040

(Address of principal executive offices)

(480) 966-5394

(Registrant’s telephone number, including area code)

	Apollo Group, Inc.
(Former name, former address and former fiscal year, if changed since last report)

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

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 þ     NO o

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer o Non-accelerated filer o (Do not check if 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 o     NO þ

As of December 31, 2013, the following shares of stock were outstanding:

Apollo Education Group, Inc. Class A common stock, no par value	112,212,000 Shares
Apollo Education Group, Inc. Class B common stock, no par value	475,000 Shares

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE QUARTER ENDED NOVEMBER 30, 2013

INDEX

		Page
Special Note Regarding Forward-Looking Statements		3
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	37
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
SIGNATURES		41

2

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”), contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact may be forward-looking statements. Such forward-looking statements include, among others, those statements regarding future events and future results of Apollo Education Group, Inc. (“the Company,” “Apollo Education Group,” “Apollo,” “APOL,” “we,” “us” or “our”) that are based on current expectations, estimates, forecasts, and the beliefs and assumptions of us and our management, and speak only as of the date made and are not guarantees of future performance or results. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “could,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “predict,” “target,” “potential,” “continue,” “objectives,” or the negative of these terms or other comparable terminology. Such forward-looking statements are necessarily estimates based upon current information and involve a number of risks and uncertainties. Such statements should be viewed with caution. Actual events or results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors that could cause actual results to differ materially from those estimated by us include, but are not limited to:

• Changes in the regulation of the U.S. education industry and eligibility of schools, including in particular proprietary schools, to participate in U.S. federal student financial aid programs, including the regulatory and other requirements discussed in Item 1, Business, of our Annual Report on Form 10-K for the year ended August 31, 2013, under “Accreditation and Jurisdictional Authorizations,” “Financial Aid Programs” and “Regulatory Environment”;

• Each of the factors discussed in Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended August 31, 2013; and

• Those factors set forth in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended August 31, 2013 and Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this Form 10-Q.

The cautionary statements referred to above also should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf. We undertake no obligation to publicly update or revise any forward-looking statements for any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements.

3

Part I - FINANCIAL INFORMATION

Item 1 - Financial Statements

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	As of
($ in thousands)	November 30, 2013			August 31, 2013
ASSETS
Current assets
Cash and cash equivalents	$	788,130		$	1,414,485
Restricted cash and cash equivalents	285,612			259,174
Marketable securities	128,736			105,809
Accounts receivable, net	214,225			215,401
Prepaid taxes	3,508			30,359
Deferred tax assets	52,159			60,294
Other current assets	60,733			64,134
Total current assets	1,533,103			2,149,656
Marketable securities	108,725			43,941
Property and equipment, net	473,058			472,614
Goodwill	103,937			103,620
Intangible assets, net	132,865			132,192
Deferred tax assets	63,791			63,894
Other assets	47,551			32,030
Total assets	$	2,463,030		$	2,997,947
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings and current portion of long-term debt	$	21,214		$	628,050
Accounts payable	64,487			73,123
Income taxes payable	37,554			—
Student deposits	309,800			309,176
Deferred revenue	223,164			213,260
Accrued and other current liabilities	283,049			346,706
Total current liabilities	939,268			1,570,315
Long-term debt	54,567			64,004
Deferred tax liabilities	13,327			12,177
Other long-term liabilities	244,923			233,442
Total liabilities	1,252,085			1,879,938
Commitments and contingencies
Shareholders’ equity
Preferred stock, no par value	—			—
Apollo Education Group Class A nonvoting common stock, no par value	103			103
Apollo Education Group Class B voting common stock, no par value	1			1
Additional paid-in capital	—			—
Apollo Education Group Class A treasury stock, at cost	(3,829,960		)	(3,824,758		)
Retained earnings	5,073,968			4,978,815
Accumulated other comprehensive loss	(33,827		)	(36,563		)
Total Apollo shareholders’ equity	1,210,285			1,117,598
Noncontrolling interests	660			411
Total equity	1,210,945			1,118,009
Total liabilities and shareholders’ equity	$	2,463,030		$	2,997,947

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

4

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

CONDENSEDCONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended November 30,
(In thousands, except per share data)	2013			2012
Net revenue	$	856,335		$	1,055,183
Costs and expenses:
Instructional and student advisory	339,679			432,150
Marketing	137,844			162,873
Admissions advisory	51,509			71,308
General and administrative	75,230			73,539
Depreciation and amortization	36,338			43,695
Provision for uncollectible accounts receivable	13,978			33,406
Restructuring and other charges	31,963			24,116
Litigation credit	—			(16,850		)
Total costs and expenses	686,541			824,237
Operating income	169,794			230,946
Interest income	568			549
Interest expense	(2,086		)	(2,042		)
Other, net	807			1,799
Income before income taxes	169,083			231,252
Provision for income taxes	(70,042		)	(97,512		)
Net income	99,041			133,740
Net income attributable to noncontrolling interests	(150		)	(245		)
Net income attributable to Apollo	$	98,891		$	133,495
Basic income per share attributable to Apollo	$	0.87		$	1.19
Diluted income per share attributable to Apollo	$	0.87		$	1.18
Basic weighted average shares outstanding	113,326			112,420
Diluted weighted average shares outstanding	113,960			112,849

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

5

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

CONDENSEDCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended November 30,
($ in thousands)	2013			2012
Net income	$	99,041		$	133,740
Other comprehensive income (net of tax):
Currency translation gain(1)	2,835			759
Comprehensive income	101,876			134,499
Comprehensive income attributable to noncontrolling interests	(249		)	(272		)
Comprehensive income attributable to Apollo	$	101,627		$	134,227

⁽¹⁾ The tax effect on other comprehensive income during the three months ended November 30, 2013 and 2012 is not significant.

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

6

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended November 30,
($ in thousands)	2013			2012
Operating activities:
Net income	$	99,041		$	133,740
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation	11,973			16,889
Depreciation and amortization	36,338			43,695
Accelerated depreciation included in restructuring	2,806			9,326
Non-cash foreign currency gain, net	(1,099		)	(607		)
Provision for uncollectible accounts receivable	13,978			33,406
Litigation credit	—			(16,850		)
Deferred income taxes	4,738			6,064
Changes in assets and liabilities:
Restricted cash and cash equivalents	(26,438		)	(33,241		)
Accounts receivable	(11,148		)	(36,349		)
Other assets	(11,190		)	(6,432		)
Accounts payable	(8,835		)	(11,771		)
Income taxes	64,469			82,032
Student deposits	(805		)	18,522
Deferred revenue	8,076			8,075
Accrued and other liabilities	(53,007		)	(36,368		)
Net cash provided by operating activities	128,897			210,131
Investing activities:
Purchases of property and equipment	(34,366		)	(27,539		)
Purchases of marketable securities	(146,333		)	(14,819		)
Maturities of marketable securities	57,412			—
Net cash used in investing activities	(123,287		)	(42,358		)
Financing activities:
Payments on borrowings	(615,925		)	(625,762		)
Proceeds from borrowings	—			2,176
Purchase of noncontrolling interest	—			(42,500		)
Purchases of stock for treasury	(16,871		)	(3,472		)
Issuances of stock	796			1,113
Net cash used in financing activities	(632,000		)	(668,445		)
Exchange rate effect on cash and cash equivalents	35			306
Net decrease in cash and cash equivalents	(626,355		)	(500,366		)
Cash and cash equivalents, beginning of period	1,414,485			1,276,375
Cash and cash equivalents, end of period	$	788,130		$	776,009
Supplemental disclosure of cash flow and non-cash information:
Cash paid for income taxes, net of refunds	$	—		$	10,243
Cash paid for interest	1,891			1,906
Restricted stock units vested and released	5,113			9,496

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

7

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Nature of Operations

Apollo Education Group, Inc. and its wholly-owned subsidiaries and majority-owned subsidiaries, collectively referred to herein as “the Company,” “Apollo Education Group,” “Apollo,” “APOL,” “we,” “us,” or “our,” has been an education provider since 1973. We offer educational programs and services, online and on-campus, at the undergraduate, master’s and doctoral levels. Our learning platforms include the following:

• The University of Phoenix, Inc. (“University of Phoenix”);

• Apollo Global, Inc. (“Apollo Global”):

• BPP Holdings Limited (“BPP”) in the United Kingdom (“U.K.”);

• Open Colleges Australia Pty Ltd. (“Open Colleges”) in Australia;

• Universidad Latinoamericana (“ULA”) in Mexico;

• Universidad de Artes, Ciencias y Comunicación (“UNIACC”) in Chile; and

• Indian Education Services Private Ltd. in India;

• Western International University, Inc. (“Western International University”, or “WIU”);

• Institute for Professional Development (“IPD”);

• The College for Financial Planning Institutes Corporation (“CFFP”);

• Carnegie Learning, Inc. (“Carnegie Learning”); and

• Apollo Lightspeed.

During the first quarter of fiscal year 2014, Apollo changed its name from Apollo Group, Inc. to Apollo Education Group, Inc.

Subsequent Event

On December 20, 2013, Apollo Global acquired 70% of the outstanding shares of Open Colleges for an initial cash payment of A$110 million (equivalent to $98.1 million on the transaction date), plus a contingent obligation based on the satisfaction of certain conditions that we expect to become determinable in the second half of calendar year 2014. In addition, we have the option to buy the remaining outstanding shares, and the holders of those equity interests have the option to sell their shares to us, in early 2017. The prices for these options are principally based on a multiple of Open Colleges’ calendar year 2016 financial performance. Open Colleges is a provider of education and training to adult learners in Australia, and this acquisition supports our strategy to expand our global operations. Open Colleges’ operating results are not material to our consolidated financial statements and they will be included in our Apollo Global operating segment from date of acquisition. We have not yet completed the purchase price allocation for this acquisition principally due to the recent acquisition date.

Note 2. Significant Accounting Policies

Basis of Presentation

The unaudited interim condensed consolidated financial statements include the accounts of Apollo Education Group, Inc., its wholly-owned subsidiaries, and subsidiaries that we control. These unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission and, in the opinion of management, contain all adjustments, consisting of normal, recurring adjustments, necessary to fairly present the financial condition, results of operations and cash flows for the periods presented.

These unaudited interim condensed consolidated financial statements do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for annual financial statements. Therefore, this information should be read in conjunction with the audited consolidated financial statements and notes thereto contained in our 2013 Annual Report on Form 10-K as filed with the Securities and Exchange Commission on October 22, 2013. We consistently applied the accounting policies described in Item 8, Financial Statements and Supplementary Data, in our 2013 Annual Report on Form 10-K in preparing these unaudited interim condensed consolidated financial statements.

The preparation of financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.

8

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Our fiscal year is from September 1 to August 31. Unless otherwise noted, references to particular years or quarters refer to our fiscal years and the associated quarters of those fiscal years.

Our operations are generally subject to seasonal trends. We experience, and expect to continue to experience, fluctuations in our results of operations as a result of seasonal variations in the level of our institutions’ enrollments. Although University of Phoenix enrolls students throughout the year, its net revenue is generally lower in our second fiscal quarter (December through February) than the other quarters due to holiday breaks. Because of the seasonal nature of our business and other factors, the results of operations for the three months ended November 30, 2013 are not necessarily indicative of results to be expected for the entire fiscal year.

Reclassifications

During fiscal year 2013, we began presenting amortization of deferred gains on sale-leasebacks and amortization of lease incentives as a component of the change in accrued and other liabilities on our Condensed Consolidated Statements of Cash Flows. We also began presenting purchases of marketable securities as a separate line item within investing activities. We have reclassified the three months ended November 30, 2012 to conform to our current presentation. These reclassifications did not impact total cash provided by operating activities, or total cash used in investing or financing activities.

Note 3. Restructuring and Other Charges

The U.S. higher education industry, including the proprietary sector, is experiencing unprecedented, rapidly developing changes that challenge many of the core principles underlying the industry. We are reengineering our business processes and refining our educational delivery systems to improve the effectiveness of our services to students, and reducing the size of our services infrastructure and associated operating expenses to align with our reduced enrollment. We have incurred restructuring and other charges associated with these activities beginning in fiscal year 2011 as summarized below:

	Three Months Ended November 30,				Cumulative Costs as of November 30, 2013
($ in thousands)	2013		2012
Lease and related costs, net	$	13,760	$	10,112	$	186,071
Severance and other employee separation costs	15,254		10,943		66,280
Other restructuring related costs	2,949		3,061		39,845
Restructuring and other charges	$	31,963	$	24,116	$	292,196

The following summarizes the restructuring and other charges in our segment reporting format:

	Three Months Ended November 30,				Cumulative Costs as of November 30, 2013
($ in thousands)	2013		2012
University of Phoenix	$	25,426	$	16,896	$	227,098
Apollo Global	1,263		79		13,028
Other	5,274		7,141		52,070
Restructuring and other charges	$	31,963	$	24,116	$	292,196

9

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following details the changes in our restructuring liabilities by type of cost during the three months ended November 30, 2013:

($ in thousands)	Lease and Related Costs, Net			Severance and Other Employee Separation Costs			Other Restructuring Related Costs			Total
Balance at August 31, 2013(1)	$	104,048		$	7,623		$	8,130		$	119,801
Restructuring and other charges	13,760			15,254			2,949			31,963
Non-cash adjustments(2)	(1,490		)	(1,862		)	—			(3,352		)
Payments	(15,532		)	(10,740		)	(3,679		)	(29,951		)
Balance at November 30, 2013(1)	$	100,786		$	10,275		$	7,400		$	118,461

⁽¹⁾ The current portion of our restructuring liabilities was $57.9 million and $55.2 million as of November 30, 2013 and August 31, 2013, respectively. These balances are included in accrued and other current liabilities on our Condensed Consolidated Balance Sheets and the long-term portion is included in other long-term liabilities. The gross, undiscounted obligation associated with our restructuring liabilities as of November 30, 2013 is approximately $190 million, which principally represents non-cancelable leases that will be paid over the respective lease terms through fiscal year 2023.

⁽²⁾ Non-cash adjustments for lease and related costs, net represents $2.8 million of accelerated depreciation, partially offset by the release of certain associated liabilities such as deferred rent. Non-cash adjustments for severance and other employee separation costs represents share-based compensation.

• Lease and Related Costs, Net - Beginning in fiscal year 2011, University of Phoenix began rationalizing its administrative real estate facilities. In addition to continuing to rationalize its administrative facilities, University of Phoenix began implementing a plan during fiscal year 2013 to close 115 of its ground locations. As of November 30, 2013, University of Phoenix has closed approximately two-thirds of the locations included in these plans, which represents approximately 85% of the total square feet we are exiting. The remaining closures will continue through fiscal year 2014 and beyond as University of Phoenix obtains the necessary regulatory approvals and completes its teach-out obligations. We have recorded $133.6 million of initial aggregate charges, representing the estimated fair value of future contractual operating lease obligations, which were recorded in the periods we ceased using the respective facilities, $10.0 million of which was recorded in the three months ended November 30, 2013. The other lease and related costs in the three months ended November 30, 2013 consist of accelerated depreciation, as discussed below, and interest accretion on the lease obligations.

We measure lease obligations at fair value using a discounted cash flow approach encompassing significant unobservable inputs (Level 3). The significant unobservable inputs principally include estimated future cash flows and discount rates, which have ranged between 3%-6% for our lease obligations. The estimation of future cash flows includes non-cancelable contractual lease costs over the remaining terms of the leases, partially offset by estimated future sublease rental income, which involves significant judgment. Our estimate of the amount and timing of sublease rental income considers subleases that we have executed and subleases we expect to execute, current commercial real estate market data and conditions, comparable transaction data and qualitative factors specific to the facilities. The estimates will be subject to adjustment as market conditions change or as new information becomes available, including the execution of additional sublease agreements. As of November 30, 2013, we have recorded adjustments to our initial lease obligation liabilities for interest accretion and immaterial adjustments for changes in estimated sublease income.

Lease and related costs, net includes $2.8 million of accelerated depreciation in the three months ended November 30, 2013 associated with revising the useful lives of the fixed assets at the facilities we are closing through their expected closure dates. Prior to revising the useful lives, we perform a recoverability analysis for the facilities’ fixed assets by comparing the estimated undiscounted cash flows of the locations through their expected closure dates to the carrying amount of the locations’ fixed assets. Based on such analyses, we recorded immaterial impairment charges during fiscal year 2013 and no impairment charges in the three months ended November 30, 2013.

• Severance and Other Employee Separation Costs -Beginning in fiscal year 2011 and continuing into fiscal year 2014, we have implemented workforce reductions as we reengineer our business processes and refine our educational delivery systems. We incurred severance and other employee separation costs of $15.3 million and $10.9 million in the three months ended November 30, 2013 and November 30, 2012, respectively. These costs are included in the reportable segments in which the respective personnel were employed.

10

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

We expect to incur approximately $35 million of future restructuring charges for the initiatives announced to date. The majority of these charges represent lease related costs associated with closing University of Phoenix campuses and administrative facilities, and will generally be incurred as the University obtains the necessary regulatory approvals and completes its teach-out obligations. We expect to incur approximately half of the $35 million in the remainder of fiscal year 2014 and the rest of the expected charges in future years.

Note 4. Marketable Securities

Marketable securities consist of the following as of the respective periods:

	Current				Noncurrent
($ in thousands)	November 30, 2013		August 31, 2013		November 30, 2013		August 31, 2013
Tax-exempt municipal bonds	$	57,169	$	69,621	$	43,879	$	24,070
Commercial paper	28,109		9,828		—		—
Corporate bonds	26,480		24,503		56,206		13,925
Other(1)	16,978		1,857		2,694		—
Total held-to-maturity securities	128,736		105,809		102,779		37,995
Available-for-sale auction-rate securities	—		—		5,946		5,946
Total marketable securities	$	128,736	$	105,809	$	108,725	$	43,941

⁽¹⁾ Other principally consists of certificates of deposit.

Our marketable securities are classified as held-to-maturity as we have the intent and ability to hold them until contractual maturity, which will occur within two years. Our held-to-maturity securities are reported at amortized cost, which approximates fair value. We determine the fair value of our held-to-maturity investments using a market approach principally consisting of Level 2 inputs. These inputs include quoted prices for similar assets in active markets, or quoted prices for identical or similar assets in markets that are not active. We have not recorded gains or losses on our held-to-maturity investments.

Our auction-rate securities are classified as available-for-sale and reported at fair value. We have classified our auction-rate securities as noncurrent due to illiquidity considerations. Refer to Note 6, Fair Value Measurements.

Note 5. Accounts Receivable, Net

Accounts receivable, net consist of the following as of the respective periods:

($ in thousands)	November 30, 2013			August 31, 2013
Student accounts receivable	$	251,860		$	243,660
Less allowance for doubtful accounts	(55,895		)	(59,744		)
Net student accounts receivable	195,965			183,916
Other receivables	18,260			31,485
Total accounts receivable, net	$	214,225		$	215,401

Student accounts receivable is composed primarily of amounts due related to tuition and educational services. The following summarizes the activity in allowance for doubtful accounts for the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013			2012
Beginning allowance for doubtful accounts	$	59,744		$	107,230
Provision for uncollectible accounts receivable	13,978			33,406
Write-offs, net of recoveries	(17,827		)	(38,843		)
Ending allowance for doubtful accounts	$	55,895		$	101,793

11

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 6. Fair Value Measurements

Assets and liabilities measured at fair value on a recurring basis consist of the following as of November 30, 2013:

			Fair Value Measurements at Reporting Date Using
	November 30, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
($ in thousands)
Cash equivalents (including restricted cash equivalents):
Money market funds	$	635,109	$	635,109	$	—	$	—
Marketable securities:
Auction-rate securities	5,946		—		—		5,946
Total assets at fair value on a recurring basis	$	641,055	$	635,109	$	—	$	5,946
Other long-term liabilities:
Contingent payment	$	5,743	$	—	$	—	$	5,743
Total liabilities at fair value on a recurring basis	$	5,743	$	—	$	—	$	5,743

Assets and liabilities measured at fair value on a recurring basis consist of the following as of August 31, 2013:

			Fair Value Measurements at Reporting Date Using
	August 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
($ in thousands)
Cash equivalents (including restricted cash equivalents):
Money market funds	$	732,530	$	732,530	$	—	$	—
Marketable securities:
Auction-rate securities	5,946		—		—		5,946
Total assets at fair value on a recurring basis	$	738,476	$	732,530	$	—	$	5,946
Other long-term liabilities:
Contingent payment	$	5,277	$	—	$	—	$	5,277
Total liabilities at fair value on a recurring basis	$	5,277	$	—	$	—	$	5,277

We measure the above items on a recurring basis at fair value as follows:

• Money market funds - Classified within Level 1 and valued primarily using real-time quotes for transactions in active exchange markets involving identical assets. As of November 30, 2013 and August 31, 2013, our remaining cash and cash equivalents not disclosed in the above tables approximate fair value because of the short-term nature of the financial instruments. We determine the fair value of cash equivalents not included in the above table using a market approach principally consisting of Level 2 inputs. These inputs include quoted prices for similar assets in active markets, or quoted prices for identical or similar assets in markets that are not active.

• Auction-rate securities - Classified within Level 3 due to the illiquidity of the market and valued using a discounted cash flow model encompassing significant unobservable inputs such as estimated interest rates, credit spreads, timing and amount of cash flows, credit quality of the underlying securities and illiquidity considerations.

• Contingent payment - As a result of our purchase of the noncontrolling interest in Apollo Global during fiscal year 2013, we have a contingent payment based on a portion of Apollo Global’s operating results through the fiscal years ending August 31, 2017. This contingent payment is classified within Level 3 and valued using a discounted cash flow valuation method encompassing significant unobservable inputs. The inputs include estimated operating results scenarios for the applicable performance period, probability weightings assigned to operating results scenarios and the discount rate applied.

12

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of November 30, 2013 and August 31, 2013, the carrying value of our debt, excluding capital leases, was $33.9 million and $642.4 million, respectively. Based on the nature of our debt, including consideration of the portion that is variable-rate, the carrying value of our debt as of both dates approximates fair value.

We did not change our valuation techniques associated with recurring fair value measurements from prior periods. Additionally, there were no changes in the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended November 30, 2013. The following summarizes the changes in liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013		2012
Beginning balance	$	5,277	$	—
Purchase of noncontrolling interest	—		6,000
Change in fair value included in net income	466		—
Ending balance	$	5,743	$	6,000

Liabilities measured at fair value on a nonrecurring basis during the three months ended November 30, 2013, all of which are included in other liabilities on our Condensed Consolidated Balance Sheets, consist of the following:

			Fair Value Measurements at Measurement Dates Using
($ in thousands)	Fair Value at Measurement Dates		Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Losses for Three Months Ended November 30, 2013
Initial lease obligations	$	9,951	$	—	$	—	$	9,951	$	9,951

During the three months ended November 30, 2013, we recorded $10.0 million of aggregate initial lease obligations at fair value associated with closing certain leased facilities as part of our restructuring activities. We recorded the lease obligation liabilities on the dates we ceased use of the facilities, and we measured the liabilities at fair value using Level 3 inputs included in the valuation method. Refer to Note 3, Restructuring and Other Charges.

Note 7. Accrued and Other Liabilities

Accrued and other current liabilities consist of the following as of the respective periods:

($ in thousands)	November 30, 2013		August 31, 2013
Salaries, wages and benefits	$	69,102	$	135,553
Restructuring obligations	57,900		55,191
Accrued legal and other professional obligations	31,839		31,310
Accrued advertising	26,941		45,850
Student refunds, grants and scholarships	24,525		7,180
Deferred rent and other lease liabilities	13,227		14,001
Curriculum materials	11,962		10,764
Other	47,553		46,857
Total accrued and other current liabilities	$	283,049	$	346,706

13

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Other long-term liabilities consist of the following as of the respective periods:

($ in thousands)	November 30, 2013		August 31, 2013
Deferred rent and other lease liabilities	$	65,484	$	67,641
Restructuring lease obligations	60,561		64,610
Uncertain tax positions	35,727		33,637
Deferred gains on sale-leasebacks	22,223		22,894
Other	60,928		44,660
Total other long-term liabilities	$	244,923	$	233,442

Note 8. Debt

Debt and short-term borrowings consist of the following as of the respective periods:

($ in thousands)	November 30, 2013			August 31, 2013
Revolving Credit Facility, see terms below	$	—		$	605,000
Capital lease obligations	41,868			49,628
Other, see terms below	33,913			37,426
Total debt	75,781			692,054
Less short-term borrowings and current portion of long-term debt	(21,214		)	(628,050		)
Long-term debt	$	54,567		$	64,004

• Revolving Credit Facility - In fiscal year 2012, we entered into a syndicated $625 million unsecured revolving credit facility (the “Revolving Credit Facility”). The Revolving Credit Facility is used for general corporate purposes, which may include acquisitions and share repurchases. The term is five years and will expire in April 2017. The Revolving Credit Facility may be used for borrowings in certain foreign currencies and letters of credit, in each case up to specified sublimits.

We borrowed $605.0 million and had approximately $14 million of outstanding letters of credit under the Revolving Credit Facility as of August 31, 2013. We repaid the entire amount borrowed under the Revolving Credit Facility during the first quarter of fiscal year 2014. As of November 30, 2013, we have approximately $21 million of outstanding letters of credit under the Revolving Credit Facility.

The Revolving Credit Facility fees are determined based on a pricing grid that varies according to our leverage ratio. The Revolving Credit Facility fee ranges from 25 to 40 basis points. Incremental fees for borrowings under the facility generally range from LIBOR + 125 to 185 basis points. The weighted average interest rate on outstanding short-term borrowings under the Revolving Credit Facility at August 31, 2013 was 3.5%.

The Revolving Credit Facility contains various customary representations, covenants and other provisions, including a material adverse event clause and the following financial covenants: maximum leverage ratio, minimum coverage interest and rent expense ratio, and a U.S. Department of Education financial responsibility composite score. We were in compliance with all applicable covenants related to the Revolving Credit Facility at November 30, 2013 and August 31, 2013.

• Other - Other principally includes debt at subsidiaries of Apollo Global and the present value of an obligation payable over a 10-year period associated with our purchase of technology in fiscal year 2012. The weighted average interest rate on our outstanding other debt at November 30, 2013 and August 31, 2013 was 5.8% and 5.3%, respectively.

14

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 9. Income Taxes

We determine our interim income tax provision by estimating our effective income tax rate expected to be applicable for the full fiscal year. Our effective income tax rate is dependent upon several factors, such as tax rates in state and foreign jurisdictions and the relative amount of income we earn in such jurisdictions. In determining our full year estimate, we do not include the estimated impact of unusual and/or infrequent items, which may cause significant variations in the customary relationship between income tax expense and income before income taxes. We exercise significant judgment in determining our income tax provision due to transactions, credits and calculations where the ultimate tax determination is uncertain.

Our U.S. federal income tax returns for fiscal year 2012 and 2011 are currently under review by the Internal Revenue Service (“IRS”). In addition, we are participating in the IRS’s Compliance Assurance Process for fiscal year 2014, which is a voluntary program in which taxpayers seek to resolve all or most issues with the IRS prior to or soon after filing their U.S. federal income tax returns. We are also subject to numerous ongoing audits by state, local and foreign tax authorities. Although we believe our tax accruals are reasonable, the final determination of tax returns under review or returns that may be reviewed in the future and any related litigation could result in tax liabilities that materially differ from our historical income tax provisions and accruals.

Note 10. Shareholders’ Equity

The following details changes in shareholders’ equity during the respective periods:

	Common Stock				Additional Paid-in Capital									Accumulated Other Comprehensive Loss			Total Apollo Shareholders’ Equity			Non-Controlling Interests
	Class A		Class B					Treasury Stock Class A			Retained Earnings											Total Equity
	Stated Value		Stated Value
($ in thousands)								Cost
Balance as of August 31, 2013	$	103	$	1	$	—		$	(3,824,758	)	$	4,978,815		$	(36,563	)	$	1,117,598		$	411	$	1,118,009
Treasury stock purchases	—		—		—			(16,871		)	—			—			(16,871		)	—		(16,871		)
Treasury stock issued under stock purchase plans	—		—		(1,286		)	2,082			—			—			796			—		796
Treasury stock issued under stock incentive plans	—		—		(5,849		)	9,587			(3,738		)	—			—			—		—
Net tax effect for stock incentive plans	—		—		(4,838		)	—			—			—			(4,838		)	—		(4,838		)
Share-based compensation	—		—		11,973			—			—			—			11,973			—		11,973
Currency translation adjustment, net of tax	—		—		—			—			—			2,736			2,736			99		2,835
Net income	—		—		—			—			98,891			—			98,891			150		99,041
Balance as of November 30, 2013	$	103	$	1	$	—		$	(3,829,960	)	$	5,073,968		$	(33,827	)	$	1,210,285		$	660	$	1,210,945

	Common Stock				Additional Paid-in Capital			Treasury Stock Class A					Accumulated Other Comprehensive Loss			Total Apollo Shareholders’ Equity			Non-Controlling Interests (Deficit)
	Class A		Class B								Retained Earnings											Total Equity
	Stated Value		Stated Value
($ in thousands)								Cost
Balance as of August 31, 2012	$	103	$	1	$	93,770		$	(3,878,612	)	$	4,743,150	$	(30,034	)	$	928,378		$	(4,055	)	$	924,323
Treasury stock purchases	—		—		—			(3,472		)	—		—			(3,472		)	—			(3,472		)
Treasury stock issued under stock purchase plans	—		—		(936		)	2,049			—		—			1,113			—			1,113
Treasury stock issued under stock incentive plans	—		—		(15,046		)	15,046			—		—			—			—			—
Net tax effect for stock incentive plans	—		—		(4,823		)	—			—		—			(4,823		)	—			(4,823		)
Share-based compensation	—		—		16,889			—			—		—			16,889			—			16,889
Currency translation adjustment, net of tax	—		—		—			—			—		732			732			27			759
Purchase of noncontrolling interest	—		—		(48,543		)	—			—		(4,886		)	(53,429		)	4,929			(48,500		)
Net income	—		—		—			—			133,495		—			133,495			245			133,740
Balance as of November 30, 2012	$	103	$	1	$	41,311		$	(3,864,989	)	$	4,876,645	$	(34,188	)	$	1,018,883		$	1,146		$	1,020,029

15

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following details net income attributable to Apollo and transfers to noncontrolling interest during the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013		2012
Net income attributable to Apollo	$	98,891	$	133,495
Transfer to noncontrolling interest:
Decrease in equity for purchase of The Carlyle Group interest in Apollo Global(1)	—		(48,543		)
Change from net income attributable to Apollo and transfer to noncontrolling interest	$	98,891	$	84,952

⁽¹⁾ Represents the difference between the fair value of the consideration paid to purchase the noncontrolling ownership interest in Apollo Global and the carrying amount of the noncontrolling interest acquired, and an adjustment to accumulated other comprehensive loss to reflect the change in Apollo’s proportionate interest.

Share Reissuances

During the three months ended November 30, 2013 and 2012, we issued 0.3 million and 0.4 million shares, respectively, of our Apollo Education Group Class A common stock from our treasury stock. These reissuances are a result of the release of shares covered by vested restricted stock units, stock option exercises and purchases under our employee stock purchase plan.

Share Repurchases

Our Board of Directors has authorized us to repurchase outstanding shares of Apollo Education Group Class A common stock from time to time depending on market conditions and other considerations. During fiscal year 2013, our Board of Directors authorized an increase in the amount available under our share repurchase program up to an aggregate amount of $250 million. There is no expiration date on the repurchase authorizations and repurchases occur at our discretion.

During the three months ended November 30, 2013, we repurchased 0.6 million shares of our Apollo Education Group Class A common stock at a total cost of $15.0 million, representing a weighted average purchase price of $26.02 per share. We did not repurchase shares of our Apollo Education Group Class A common stock during the three months ended November 30, 2012.

As of November 30, 2013, $235 million remained available under our share repurchase authorization. The amount and timing of future share repurchase authorizations and repurchases, if any, will be made as market and business conditions warrant. Repurchases may be made on the open market through various methods including but not limited to accelerated share repurchase programs, or in privately negotiated transactions, pursuant to the applicable Securities and Exchange Commission rules, and may include repurchases pursuant to Securities and Exchange Commission Rule 10b5-1 nondiscretionary trading programs.

In connection with the release of vested shares of restricted stock, we repurchased 0.1 million shares of Class A common stock for $1.9 million and $3.5 million during the three months ended November 30, 2013 and 2012, respectively. These repurchases relate to tax withholding requirements on the restricted stock units and do not fall under the repurchase program described above.

Note 11. Earnings Per Share

Our outstanding shares consist of Apollo Education Group Class A and Class B common stock. Our Articles of Incorporation treat the declaration of dividends on the Apollo Education Group Class A and Class B common stock in an identical manner. As such, both the Apollo Education Group Class A and Class B common stock are included in the calculation of our earnings per share.

16

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Diluted weighted average shares outstanding includes the incremental effect of shares that would be issued upon the assumed exercise of stock options and the vesting and release of restricted stock units and performance share awards. The components of basic and diluted earnings per share are as follows:

	Three Months Ended November 30,
(In thousands, except per share data)	2013		2012
Net income attributable to Apollo (basic and diluted)	$	98,891	$	133,495
Basic weighted average shares outstanding	113,326		112,420
Dilutive effect of stock options	44		—
Dilutive effect of restricted stock units and performance share awards	590		429
Diluted weighted average shares outstanding	113,960		112,849
Basic income per share attributable to Apollo	$	0.87	$	1.19
Diluted income per share attributable to Apollo	$	0.87	$	1.18

During the three months ended November 30, 2013 and 2012, 3.2 million and 8.4 million, respectively, of our stock options outstanding and 1.0 million and 2.0 million, respectively, of our restricted stock units and performance share awards were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. These share-based awards could be dilutive in the future.

Note 12. Share-Based Compensation

The following details share-based compensation expense for the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013		2012
Instructional and student advisory	$	3,533	$	7,588
Marketing	1,108		2,043
Admissions advisory	102		170
General and administrative	5,368		6,023
Restructuring and other charges	1,862		1,065
Share-based compensation expense	$	11,973	$	16,889

In accordance with our Apollo Education Group, Inc. Amended and Restated 2000 Stock Incentive Plan, we granted 65,000 restricted stock units and performance share awards during the three months ended November 30, 2013. The granted awards had a weighted average grant date fair value of $26.63. As of November 30, 2013, there was $65.6 million and $2.8 million of total unrecognized share-based compensation cost, net of forfeitures, related to unvested restricted stock units and performance share awards, respectively. These costs are expected to be recognized over a weighted average period of 2.7 years.

We did not grant any stock options during the three months ended November 30, 2013. As of November 30, 2013, there was $7.7 million of total unrecognized share-based compensation cost, net of forfeitures, related to unvested stock options. These costs are expected to be recognized over a weighted average period of 1.9 years.

17

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 13. Commitments and Contingencies

Surety Bonds

As part of our normal operations, our insurers issue surety bonds for us that are required by various states where we operate. We are obligated to reimburse our insurers for any surety bonds that are paid. As of November 30, 2013, the face amount of these surety bonds was $41.6 million.

Letters of Credit

As of November 30, 2013, we had approximately $21 million of outstanding letters of credit that are required as part of our normal operations.

Litigation and Other Matters

We are subject to various claims and contingencies that arise from time to time in the ordinary course of business, including those related to regulation, litigation, business transactions, employee-related matters and taxes, among others. We do not believe any of these are material for separate disclosure.

The following is a description of pending litigation, settlements, and other proceedings that fall outside the scope of ordinary and routine litigation incidental to our business.

Securities Class Action (Apollo Institutional Investors Group)

On August 13, 2010, a securities class action complaint was filed in the U.S. District Court for the District of Arizona by Douglas N. Gaer naming us, John G. Sperling, Gregory W. Cappelli, Charles B. Edelstein, Joseph L. D’Amico, Brian L. Swartz and Gregory J. Iverson as defendants for allegedly making false and misleading statements regarding our business practices and prospects for growth. That complaint asserted a putative class period stemming from December 7, 2009 to August 3, 2010. A substantially similar complaint was also filed in the same Court by John T. Fitch on September 23, 2010 making similar allegations against the same defendants for the same purported class period. Finally, on October 4, 2010, another purported securities class action complaint was filed in the same Court by Robert Roth against the same defendants as well as Brian Mueller, Terri C. Bishop and Peter V. Sperling based upon the same general set of allegations, but with a defined class period of February 12, 2007 to August 3, 2010. The complaints allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On October 15, 2010, three additional parties filed motions to consolidate the related actions and be appointed the lead plaintiff.

On November 23, 2010, the Fitch and Roth actions were consolidated with Gaer and the Court appointed the “Apollo Institutional Investors Group” consisting of the Oregon Public Employees Retirement Fund, the Mineworkers’ Pension Scheme, and Amalgamated Bank as lead plaintiffs. The case is now entitled, In re Apollo Group, Inc. Securities Litigation, Lead Case Number CV-10-1735-PHX-JAT. On February 18, 2011, the lead plaintiffs filed a consolidated complaint naming Apollo, John G. Sperling, Peter V. Sperling, Joseph L. D’Amico, Gregory W. Cappelli, Charles B. Edelstein, Brian L. Swartz, Brian E. Mueller, Gregory J. Iverson, and William J. Pepicello as defendants. The consolidated complaint asserts a putative class period of May 21, 2007 to October 13, 2010. On April 19, 2011, we filed a motion to dismiss and oral argument on the motion was held before the Court on October 17, 2011. On October 27, 2011, the Court granted our motion to dismiss and granted plaintiffs leave to amend. On December 6, 2011, the lead plaintiffs filed an Amended Consolidated Class Action Complaint, which alleges similar claims against the same defendants. On January 9, 2012, we filed a motion to dismiss the Amended Consolidated Class Action Complaint. On June 22, 2012, the Court granted our motion to dismiss and entered a judgment in our favor. On July 20, 2012, the plaintiffs filed a Notice of Appeal with the U.S. Court of Appeals for the Ninth Circuit, and their appeal remains pending before that Court. If the plaintiffs are successful in their appeal, we anticipate they will seek substantial damages.

Because of the many questions of fact and law that may arise, the outcome of this legal proceeding is uncertain at this point. Based on the information available to us at present, we cannot reasonably estimate a range of loss for this action and, accordingly, we have not accrued any liability associated with this action.

18

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Securities Class Action (Teamsters Local 617 Pensions and Welfare Funds)

On November 2, 2006, the Teamsters Local 617 Pension and Welfare Funds filed a class action complaint purporting to represent a class of shareholders who purchased our stock between November 28, 2001 and October 18, 2006. The complaint, filed in the U.S. District Court for the District of Arizona, is entitled Teamsters Local 617 Pension & Welfare Funds v. Apollo Group, Inc. et al., Case Number 06-cv-02674-RCB, and alleges that we and certain of our current and former directors and officers violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by purportedly making misrepresentations concerning our stock option granting policies and practices and related accounting. The defendants are Apollo, J. Jorge Klor de Alva, Daniel E. Bachus, John M. Blair, Dino J. DeConcini, Kenda B. Gonzales, Hedy F. Govenar, Brian E. Mueller, Todd S. Nelson, Laura Palmer Noone, John R. Norton III, John G. Sperling and Peter V. Sperling. On September 11, 2007, the Court appointed The Pension Trust Fund for Operating Engineers as lead plaintiff. Lead plaintiff filed an amended complaint on November 23, 2007, asserting the same legal claims as the original complaint and adding claims for violations of Section 20A of the Securities Exchange Act of 1934 and allegations of breach of fiduciary duties and civil conspiracy. On April 30, 2009, plaintiffs filed their Second Amended Complaint, which alleges similar claims for alleged securities fraud against the same defendants.

On March 31, 2011, the U.S. District Court for the District of Arizona dismissed the case with prejudice and entered judgment in our favor. Plaintiffs filed a motion for reconsideration of this ruling, and the Court denied this motion on April 2, 2012. On April 27, 2012, the plaintiffs filed a Notice of Appeal with the U.S. Court of Appeals for the Ninth Circuit, and their appeal remains pending before that Court. If the plaintiffs are successful in their appeal, we anticipate they will seek substantial damages.

Because of the many questions of fact and law that may arise, the outcome of this legal proceeding is uncertain at this point. Based on the information available to us at present, we cannot reasonably estimate a range of loss for this action and, accordingly, we have not recorded a loss associated with this action.

Incentive Compensation False Claims Act Lawsuit

On May 25, 2011, we were notified that a qui tam complaint had been filed against us in the U.S. District Court, Eastern District of California, by private relators under the Federal False Claims Act and California False Claims Act, entitled USA and State of California ex rel. Hoggett and Good v. University of Phoenix, et al, Case Number 2:10-CV-02478-MCE-KJN. When the federal government declines to intervene in a qui tam action, as it has done in this case, the relators may elect to pursue the litigation on behalf of the federal government and, if successful, they are entitled to receive a portion of the federal government’s recovery.

The complaint alleges, among other things, that University of Phoenix has violated the Federal False Claims Act since December 12, 2009 and the California False Claims Act for the preceding ten years by falsely certifying to the U.S. Department of Education and the State of California that University of Phoenix was in compliance with various regulations that require compliance with federal rules regarding the payment of incentive compensation to admissions personnel, in connection with University of Phoenix’s participation in student financial aid programs. In addition to injunctive relief and fines, the relators seek significant damages on behalf of the Department of Education and the State of California, including all student financial aid disbursed by the Department to our students since December 2009 and by the State of California to our students during the preceding ten years. On July 12, 2011, we filed a motion to dismiss and on August 30, 2011, relators filed a motion for leave to file a Second Amended Complaint, which the Court granted. On November 2, 2011, we filed a motion to dismiss relators’ Second Amended Complaint, which was denied by the Court on July 6, 2012. On August 1, 2012, we filed a motion for certification of an interlocutory appeal, which was denied by the Court on March 7, 2013. Discovery in this matter has commenced, and trial is scheduled for January 2015.

Because of the many questions of fact and law that may arise, the outcome of this legal proceeding is uncertain at this point. Based on the information available to us at present, we cannot reasonably estimate a range of loss for this action and, accordingly, we have not accrued any liability associated with this action.

19

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Patent Infringement Litigation

On March 3, 2008, Digital-Vending Services International Inc. filed a complaint against University of Phoenix and Apollo, as well as Capella Education Company, Laureate Education Inc., and Walden University Inc. in the U.S. District Court for the Eastern District of Texas, since transferred on plaintiff’s motion to the Eastern District of Virginia. The case is entitled, Digital Vending Services International, LLC vs. The University of Phoenix, et al, Case Number 2:09cv555 (JBF-TEM). The complaint alleges that we and the other defendants have infringed and are infringing various patents relating to managing courseware in a shared use operating environment and seeks injunctive relief and substantial damages, including royalties as a percentage of our net revenue over a multi-year period. We filed an answer to the complaint on May 27, 2008, in which we denied that Digital-Vending Services International’s patents were duly and lawfully issued, and asserted defenses of non-infringement and patent invalidity, among others. We also asserted a counterclaim seeking a declaratory judgment that the patents are invalid, unenforceable, and not infringed by us.

On January 7, 2011, the Court granted our motion for summary judgment and dismissed the case with prejudice, citing plaintiff’s failure to point to admissible evidence that could support a finding of infringement. Plaintiff appealed the order granting summary judgment to the United States Court of Appeals for the Federal Circuit, which held oral argument on December 5, 2011. On March 7, 2012, a divided three-judge panel of the Federal Circuit issued an opinion affirming in part and reversing in part the order granting summary judgment, and it remanded a portion of the plaintiff’s claims to the district court for further proceedings. We filed a Petition for Rehearing with the Federal Circuit regarding the portion of the decision reversing the grant of summary judgment, which the Federal Circuit denied on May 25, 2012. Accordingly, the case was remanded to the U.S. District Court for the Eastern District of Virginia for further proceedings. In July 2013, we filed another motion for summary judgment based on non-infringement, and on October 4, 2013, the Court granted our motion and dismissed each of plaintiff’s remaining claims with prejudice. On November 1, 2013, plaintiff filed a Notice of Appeal of the District Court’s order. The parties subsequently entered into a settlement agreement for an immaterial amount pursuant to which plaintiff agreed to dismiss its appeal. Plaintiff’s appeal was dismissed on November 21, 2013, which resolved the litigation.

Himmel Derivative Action

On November 12, 2010, we received a shareholder demand to investigate, address and commence proceedings against each of our directors and certain of our officers for violation of any applicable laws, including in connection with the subject matter of the report of the Government Accountability Office prepared for the U.S. Senate in August 2010, our withdrawal of the outlook we previously provided for our fiscal year 2011, the investigation into possible unfair and deceptive trade practices associated with certain alleged practices of University of Phoenix by the State of Florida Office of the Attorney General in Fort Lauderdale, Florida, the participation by the State of Oregon Office of the Attorney General in the Securities Class Action (Apollo Institutional Investors Group), and the informal inquiry by the Enforcement Division of the Securities and Exchange Commission commenced in October 2009.

On March 24, 2011, a shareholder derivative complaint was filed in the Superior Court for the State of Arizona, Maricopa County by Daniel Himmel, the foregoing shareholder who previously made a demand for investigation. In the complaint, the plaintiff asserts a derivative claim on our behalf against certain of our current and former officers and directors for breach of fiduciary duty, waste of corporate assets, and unjust enrichment. The complaint alleges that the individual defendants made improper statements and engaged in improper business practices that caused our stock price to drop, led to securities class actions against us, and enhanced regulation and scrutiny by various government entities and regulators. The case is entitled, Himmel v. Bishop, et al, Case Number CV2011-005604. Pursuant to a stipulation between all parties, on August 31, 2011, the Court ordered this action stayed during the pendency of the underlying Securities Class Action (Apollo Institutional Investors Group) matter.

K.K. Modi Investment and Financial Services Pvt. Ltd.

On November 8, 2010, a suit was filed by K.K. Modi Investment and Financial Services Pvt. Ltd. (“Modi”) in the High Court of Delhi at New Delhi against defendants Apollo, Western International University, Inc., University of Phoenix, Inc., Apollo Global, Inc., Modi Apollo International Group Pvt. Ltd., Apollo International, Inc., John G. Sperling, Peter V. Sperling and Jorge Klor De Alva, seeking to permanently enjoin the defendants from making investments in the education industry in the Indian market in breach of an exclusivity and noncompete provision which plaintiff alleges is applicable to Apollo and its subsidiaries. The case is entitled, K.K. Modi Investment and Financial Services Pvt. Ltd. v. Apollo International, et. al. We believe that the relevant exclusivity and noncompete provision is inapplicable to us and our affiliates, we have sought to dismiss this action on those grounds, and our application for such relief remains pending before the Court. If plaintiff ultimately obtains the requested injunctive relief, our ability to conduct business in India, including through our joint venture with HT Media Limited, may be adversely affected. It is also possible that in the future K.K. Modi may seek to expand existing litigation in India or commence litigation in the U.S. in which it may assert a significant damage claim against us.

20

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Attorney General Investigations

On October 22, 2010, University of Phoenix received notice that the State of Florida Office of the Attorney General in Fort Lauderdale, Florida had commenced an investigation into possible unfair and deceptive trade practices associated with certain alleged practices of the University. The notice included a subpoena to produce documents and detailed information for the time period of January 1, 2006 to the present about a broad spectrum of the University’s business. We are cooperating with the investigation, but also filed a suit to quash or limit the subpoena and to protect information sought that constitutes propriety or trade secret information. We cannot predict the eventual scope, duration or outcome of the investigation at this time.

In May 2011 and January 2013, University of Phoenix received Civil Investigative Demands from the State of Massachusetts Office of the Attorney General. The Demands relate to an investigation of possible unfair or deceptive methods, acts, or practices by for-profit educational institutions in connection with the recruitment of students and the financing of education. The Demands seek documents, information and testimony regarding a broad spectrum of the University’s business for the time period of January 1, 2002 to the present. We are cooperating with the investigation. We cannot predict the eventual scope, duration or outcome of the investigation at this time.

UNIACC Investigations

UNIACC was advised by the National Accreditation Commission of Chile in November 2011 that its institutional accreditation would not be renewed and therefore had lapsed. Subsequently, in June 2012, a prosecutor’s office in Santiago, Chile requested that UNIACC provide documents relating to UNIACC’s relationship with a former employee and consultant who served as a member of the National Accreditation Commission until March 2012, and we have since received requests for additional information in connection with this investigation. Furthermore, in August 2012, the prosecutor’s office began requesting that UNIACC provide information about UNIACC’s business structure and operations and its relationship with other Apollo entities, in connection with an additional investigation regarding UNIACC’s compliance with applicable laws concerning the generation of profit by universities such as UNIACC. The prosecutor’s office is also requesting additional information from UNIACC regarding certain government funding received by the institution. UNIACC is cooperating with these investigations. At this time, we cannot predict the eventual scope, duration or outcome of these investigations.

In November 2012, UNIACC learned that the Ministry of Education was commencing a formal investigation into profit related issues and concerning the official recognition of UNIACC as a university under Chilean law. On November 18, 2013, we were notified by the Ministry of Education that it declined to pursue any charges against UNIACC and closed its investigation without imposing any sanction on UNIACC. In closing its investigation, the Ministry forwarded certain of its files for review by the Chilean tax authorities and the criminal prosecutor conducting the profit investigation referenced above.

Refer to Note 9, Income Taxes, for discussion of Internal Revenue Service audits.

Note 14. Regulatory Matters

Student Financial Aid

In fiscal year 2013, University of Phoenix generated 90% of our total consolidated net revenue and more than 100% of our operating income, and 83% of the University’s cash basis revenue for eligible tuition and fees was derived from Title IV financial aid program funds, as calculated under the 90/10 Rule described below.

All U.S. federal financial aid programs are established by Title IV of the Higher Education Act and regulations promulgated thereunder. The U.S. Congress must periodically reauthorize the Higher Education Act and annually determine the funding level for each Title IV program. In August 2008, the Higher Education Act was reauthorized through September 30, 2013 by the Higher Education Opportunity Act. Congress has begun Higher Education Act reauthorization hearings and there is currently an automatic one year extension that continues the current authorization through September 30, 2014. Changes to the Higher Education Act, including changes in eligibility and funding for Title IV programs, are likely to occur in connection with this reauthorization, but we cannot predict the scope and substance of any such changes.

The Higher Education Act, as reauthorized, specifies the manner in which the U.S. Department of Education reviews institutions for eligibility and certification to participate in Title IV programs. Every educational institution involved in Title IV programs must be certified to participate and is required to periodically renew this certification.

University of Phoenix was recertified in November 2009 and entered into a new Title IV Program Participation Agreement which expired on December 31, 2012. University of Phoenix has submitted necessary documentation for re-certification and its eligibility continues on a month-to-month basis until the Department issues its decision on the application. We have no reason

21

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

to believe that the University’s application will not be renewed in due course, and it is not unusual to be continued on a month-to-month basis until the Department completes its review. However, we cannot predict whether, or to what extent, the imposition of the Notice sanction by The Higher Learning Commission, as described below, might have on this process.

Western International University was recertified in May 2010 and entered into a new Title IV Program Participation Agreement which expires September 30, 2014.

Higher Learning Commission (“HLC”)

University of Phoenix and Western International University are accredited by The Higher Learning Commission of the North Central Association of Colleges and Schools (“HLC”). This accreditation provides the following:

• Recognition and acceptance by employers, other higher education institutions and governmental entities of the degrees and credits earned by students;

• Qualification to participate in Title IV programs (in combination with state higher education operating and degree granting authority); and

• Qualification for authority to operate in certain states.

During fiscal year 2013, the accreditations of University of Phoenix and Western International University were reaffirmed by HLC through the 2022-2023 academic year. At the same time, HLC placed both universities on Notice status for a two-year period. Notice status is a sanction that means that HLC has determined that an institution is on a course of action that, if continued, could lead the institution to be out of compliance with one or more of the HLC Criteria for Accreditation or Core Components. We believe the imposition of the sanction of Notice on University of Phoenix could adversely impact our business.

90/10 Rule

To remain eligible to participate in Title IV programs, proprietary institutions of higher education must comply with the so-called “90/10 Rule” under the Higher Education Act, as reauthorized, and must derive 90% or less of their cash basis revenue, as defined in the rule, from Title IV programs. The 90/10 Rule percentage for University of Phoenix was 83% for fiscal year 2013. Based on recent trends, we do not expect the 90/10 Rule percentage for University of Phoenix to exceed 90% for fiscal year 2014. However, the 90/10 Rule percentage for University of Phoenix remains high and could exceed 90% in the future depending on the degree to which its various initiatives are effective, the impact of future changes in its enrollment mix, and regulatory and other factors outside our control, including any reduction in military benefit programs or changes in the treatment of such funding for purposes of the 90/10 Rule calculation. Various members of Congress have proposed changes to the 90/10 Rule that would, if enacted, reduce the percentage to 85% and adversely change the manner in which military aid is treated for purposes of the rule calculation.

Student Loan Cohort Default Rates

To remain eligible to participate in Title IV programs, an educational institution’s student loan cohort default rates must remain below certain specified levels. Educational institutions will lose eligibility to participate in Title IV programs if their three-year cohort default rate equals or exceeds 40% for any given year or 30% for three consecutive years. The three-year cohort default rate for University of Phoenix for the 2010 federal fiscal year was 26.0%. Based on our most recent trends, we expect that our 2011 three-year cohort default rate will be lower than the 2010 three-year cohort default rate. However, if our student loan default rates approach the applicable limits, we may be required to increase efforts and resources dedicated to improving these default rates.

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APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Office of the Inspector General of the U.S. Department of Education (“OIG”)

In October 2011, the OIG notified us that it was conducting a nationwide audit of the Department’s program requirements, guidance, and monitoring of institutions of higher education offering distance education. In connection with the OIG’s audit of the Department, the OIG examined a sample of University of Phoenix students who enrolled during the period from July 1, 2010 to June 30, 2011. The OIG subsequently notified University of Phoenix that in the course of this review it identified certain conditions that the OIG believes are Title IV compliance exceptions at University of Phoenix. Although University of Phoenix is not the direct subject of the OIG’s audit of the Department, the OIG has asked University of Phoenix to respond so that it may consider University of Phoenix’s views in formulating its audit report of the Department. In September 2013, the OIG provided to University of Phoenix, among other institutions, a draft appendix to its audit report. The draft appendix again identifies compliance exceptions at University of Phoenix. University of Phoenix has responded to the appendix. These exceptions relate principally to the calculation of the amount of Title IV funds returned after student withdrawals and the process for confirming student eligibility prior to disbursement of Title IV funds. We are not the direct subject of the OIG’s audit of the Department, and we have not accrued any liability associated with this matter.

Note 15. Segment Reporting

We operate primarily in the education industry. Our reportable segments have been determined based on the method by which management evaluates performance and allocates resources. Our seven operating segments are presented in the following reportable segments:

• University of Phoenix;

• Apollo Global; and

• Other.

Apollo Global includes BPP, ULA, UNIACC and the Apollo Global corporate operations. Other includes Western International University, IPD, CFFP, Carnegie Learning, Apollo Lightspeed and corporate activities.

During the fourth quarter of fiscal year 2013, we revised our internal management reporting structure and determined Carnegie Learning and Western International University are operating segments. Accordingly, Carnegie Learning is no longer included in our University of Phoenix reportable segment, and Western International University is no longer included in our Apollo Global reportable segment. These operating segments are included in Other in our segment reporting and we have changed our presentation for all periods presented to reflect our revised segment reporting.

During the second quarter of fiscal year 2014, Apollo Global acquired 70% of the outstanding shares of Open Colleges. Open Colleges’ operating results will be included in our Apollo Global operating segment from date of acquisition. Refer to Note 1, Nature of Operations.

23

APOLLO EDUCATION GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

A summary of financial information by reportable segment is as follows:

	Three Months Ended November 30,
($ in thousands)	2013			2012
Net revenue
University of Phoenix	$	744,863		$	935,784
Apollo Global	91,159			90,514
Other	20,313			28,885
Net revenue	$	856,335		$	1,055,183
Operating income (loss)(1):
University of Phoenix	$	183,473		$	243,860
Apollo Global	2,217			(9,366		)
Other(2)	(15,896		)	(3,548		)
Operating income	169,794			230,946
Reconciling items:
Interest income	568			549
Interest expense	(2,086		)	(2,042		)
Other, net	807			1,799
Income before income taxes	$	169,083		$	231,252

⁽¹⁾ University of Phoenix, Apollo Global and Other include charges associated with our restructuring activities. Refer to Note 3, Restructuring and Other Charges.

⁽²⁾ The operating loss for Other for the three months ended November 30, 2012 is net of a $16.9 million credit associated with a legal matter.

A summary of our consolidated assets by reportable segment is as follows:

($ in thousands)	November 30, 2013		August 31, 2013
University of Phoenix	$	780,839	$	790,537
Apollo Global	393,063		359,903
Other(1)	1,289,128		1,847,507
Total assets	$	2,463,030	$	2,997,947

⁽¹⁾ The majority of assets included in Other consists of corporate cash and cash equivalents and marketable securities.

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Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help investors understand our results of operations, financial condition and present business environment. The MD&A is provided as a supplement to, and should be read in conjunction with, our unaudited condensed consolidated financial statements and related notes included elsewhere in this report.

Overview

Apollo is one of the world’s largest private education providers and has been a provider of education services since 1973. We believe that our success depends on providing high quality educational products and services to students at the right value to maximize the benefits of their educational experience. We offer educational programs and services, online and on-campus, at the undergraduate, master’s and doctoral levels. Our principal learning platforms include the following:

• The University of Phoenix, Inc. (“University of Phoenix”);

• Apollo Global, Inc. (“Apollo Global”):

• BPP Holdings Limited (“BPP”);

• Open Colleges Australia Pty Ltd. (“Open Colleges”);

• Universidad Latinoamericana (“ULA”);

• Universidad de Artes, Ciencias y Comunicación (“UNIACC”); and

• Indian Education Services Private Ltd.

• Western International University, Inc. (“Western International University” or “WIU”);

• Institute for Professional Development (“IPD”);

• The College for Financial Planning Institutes Corporation (“CFFP”);

• Carnegie Learning, Inc. (“Carnegie Learning”); and

• Apollo Lightspeed.

Substantially all of our net revenue is composed of tuition and fees for educational services. In fiscal year 2013, University of Phoenix represented 90% of our total consolidated net revenue and generated more than 100% of our operating income.

Key Trends, Developments and Challenges

The following developments and trends present opportunities, challenges and risks as we work toward our goal of providing attractive returns for all of our stakeholders:

• Rapidly Evolving and Highly Competitive Education Industry. The U.S. higher education industry, including the proprietary sector, is experiencing unprecedented, rapidly developing changes due to technological developments, evolving needs and objectives of students and employers, economic constraints affecting educational institutions and students, rising costs of education and increased focus on affordability, price competition and other factors that challenge many of the core principles underlying the industry. We believe these changes have contributed to the decline in University of Phoenix enrollment since 2010, and the 22.9% decline in New Degreed Enrollment in the first quarter of fiscal year 2014 compared to the prior year. See further discussion of enrollment in Results of Operations below.

We are adapting our business to meet these rapidly evolving developments and to stabilize University of Phoenix enrollment. We are working to accelerate the enhancement of our offerings to remain competitive and to more effectively deliver a quality student experience at the right value. In addition, we have increased our use of scholarships and discounts to improve our value proposition to prospective students. Certain of our initiatives under consideration, including some of those described below, could adversely impact our operating results, especially in the short-term.

• Education to Careers Value Proposition. We believe it is critical that we demonstrate a compelling and cost-effective relationship between our educational offerings and improvement in our graduates’ prospects for employment in their field of choice or advancement within their existing careers. This is our key value proposition to prospective students. Our goal is to provide programs that provide our students skills in high-growth industries and careers. We have launched career-oriented tools and continue to increase career connections and relationships through our Workforce Solutions team to meet student and employer needs. To ensure we offer relevant workforce skills, we are working with industry experts and employers to develop and incorporate curriculum changes. We are also redesigning our programs to allow students to earn credentials and/or certificates they can use in the workplace as they are earning their ultimate degree goal.

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• Student Retention. We are focused on improving student retention. In furtherance of this, we are implementing several initiatives, including:

• Increasing use of full-time faculty in initial University of Phoenix courses;

• Piloting a new format of University of Phoenix’s University Orientation program;

• Modified entry course structure and sequencing;

• Enhancement of our adaptive learning math tools for students;

• Targeted use of scholarships; and

• Redesigning our programs to allow students to earn credentials and/or certificates they can use in the workplace as they are earning their ultimate degree goal.

• Business Process Reengineering. We remain focused on continuing the reengineering of our business processes and refining our educational delivery systems to improve the effectiveness of our services to students, and reducing the size of our services infrastructure and associated operating expenses to align with our reduced enrollment. These activities include the following:

• University of Phoenix Campus Closures. Beginning in fiscal year 2013, University of Phoenix began implementing a plan to close 115 of its ground locations, after which the University will operate ground campus facilities in 111 locations in 36 states, the District of Columbia and the Commonwealth of Puerto Rico. As of November 30, 2013, University of Phoenix has closed approximately two-thirds of the locations included in these plans, which represents approximately 85% of the total square feet we are exiting. The remaining closures will continue through fiscal year 2014 and beyond as University of Phoenix obtains the necessary regulatory approvals and completes its teach-out obligations. Because of the rapidly evolving and transformational changes in higher education, the University continues to evaluate the extent, functionality and location of its ground facilities, and may close additional facilities in the future.

• Services. In addition to the ground facility closures, we have begun multiple initiatives to streamline, automate where appropriate, and enhance our administrative and student-facing services.

As of November 30, 2013, we have incurred $292.2 million of cumulative restructuring and other charges associated with our restructuring activities. We expect to incur approximately $35 million of future restructuring charges for the initiatives announced to date. The majority of these charges represent lease related costs associated with closing University of Phoenix campuses and administrative facilities, and will generally be incurred as the University obtains the necessary regulatory approvals and completes its teach-out obligations. We expect to incur approximately half of the $35 million in the remainder of fiscal year 2014 and the rest of the expected charges in future years.

Our costs that are more variable in nature represent approximately 14% of our net revenue and are included in instructional and student advisory on our Condensed Consolidated Statements of Income. Due principally to our cost optimization and restructuring activities in recent years, our fiscal year 2013 operating costs that have historically been more fixed in nature decreased approximately $350 million compared to fiscal year 2012. In fiscal year 2014, we expect to further reduce our fixed operating costs by a minimum of $325 million, which would result in a total decline of $675 million, or 19%, from our fiscal year 2012 cost base. Refer to Results of Operations in this MD&A for further discussion.

• Expansion into New Markets. We believe that learners worldwide can benefit from our career-focused education offerings. We are working to expand our global operations so that they become an increasingly significant portion of our consolidated operating results, and are exploring new opportunities for growth in other non-traditional higher education and service offerings. To date, we have acquired educational institutions in the United Kingdom, Australia, Mexico and Chile, and have a joint venture in India providing educational services and programs. The integration and operation of acquired businesses in foreign jurisdictions entails substantial regulatory, market and execution risks and such acquisitions may not be accretive for an extended period of time, if at all, depending on the circumstances.

• Information Technology. We are upgrading a substantial portion of our key IT systems, including our student learning system, student services platform and corporate applications, and retiring the related legacy systems. We believe that these new systems will improve the productivity, scalability, reliability and sustainability of our IT infrastructure and improve the student experience. However, the transition from our legacy systems entails risk of unanticipated disruption, including disruptions in our core business functions that could adversely impact our business.

• Regulatory Environment. The following summarizes significant regulatory matters applicable to our business. For a more detailed discussion of the regulatory environment and related risks, refer to Part I, Item 1, Business, and Item 1A, Risk Factors, in our 2013 Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 22, 2013.

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• Financial Aid Funding. In recent years, there has been increased focus by members of the U.S. Congress and federal agencies such as the Consumer Financial Protection Bureau on the role that proprietary educational institutions play in higher education. We expect this focus to increase through the 2014 mid-term elections. Congressional hearings and roundtable discussions have been held regarding various aspects of the education industry, and reports have been issued that are highly critical of proprietary institutions and include a number of recommendations to be considered by Congress in connection with the next required reauthorization of the federal Higher Education Act. The current reauthorization expired September 30, 2013, but was extended automatically to September 30, 2014. In addition, financial aid programs are a potential target for reduction as Congress addresses the historic U.S. budget deficit. Any action by Congress that significantly reduces Title IV program funding, whether through across-the-board funding reductions, sequestration or otherwise, or materially impacts the eligibility of our institutions or students to participate in Title IV programs would have a material adverse effect on our enrollment, financial condition, results of operations and cash flows. Action by Congress or federal agencies could also require us to modify our practices in ways that increase our administrative costs and reduce our operating income.

In addition to possible reductions in federal student financial aid, certain military financial aid may be reduced as military branches address decreased funding. Reductions and/or changes in military financial aid could result in increased student borrowing, decreased enrollment and adverse impacts on our 90/10 Rule percentage, as discussed below.

• Program Participation Agreement. University of Phoenix’s Title IV Program Participation Agreement expired December 31, 2012. The University has submitted necessary documentation for re-certification and its eligibility continues on a month-to-month basis until the U.S. Department of Education issues its decision on the application. We have no reason to believe that the University’s application will not be renewed in due course, and it is not unusual to be continued on a month-to-month basis until the Department completes its review. However, we cannot predict whether, or to what extent, the recent imposition of the Notice sanction by The Higher Learning Commission, discussed below, might have on this process.

• U.S. Department of Education Rulemaking Initiative. A negotiated rulemaking committee was convened by the Department in September 2013 on the topic of gainful employment. The committee held negotiated rulemaking sessions in September, October, and December 2013; however, the committee failed to reach consensus. Additional details are available at

http://www2.ed.gov/policy/highered/reg/hearulemaking/2012/gainfulemployment.html.

Additionally, the Department has announced the creation of another rulemaking committee to focus on other topics, including cash management and state authorization. This committee is expected to first convene in February 2014. These negotiated rulemaking initiatives are expected to produce new regulations in a variety of areas. The effective date of any such regulations cannot be determined at this time, but it is likely that the rules, if adopted, would be effective on or after July 1, 2015.

The Department has also conducted listening tours to solicit public feedback building on President Obama’s call for a national college rating system. The Secretary of the Department has publicly stated that draft ratings system are expected to be issued in early 2014, but a system is not expected to be effective for several years.

• The Higher Learning Commission Accreditation Reaffirmation. During fiscal year 2013, the accreditations of University of Phoenix and Western International University were reaffirmed by The Higher Learning Commission, their institutional accreditor (“HLC”), through the 2022-2023 academic year. At the same time, HLC placed both universities on Notice status for a two-year period. Notice status is a sanction that means that HLC has determined that an institution is on a course of action that, if continued, could lead the institution to be out of compliance with one or more of the HLC Criteria for Accreditation or Core Components. We believe the imposition of the sanction of Notice on University of Phoenix could adversely impact our business.

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• 90/10 Rule. To remain eligible to participate in Title IV programs, proprietary institutions of higher education must comply with the so-called “90/10 Rule” under the Higher Education Act, as reauthorized, and must derive 90% or less of their cash basis revenue, as defined in the rule, from Title IV programs. The 90/10 Rule percentage for University of Phoenix was 83% for fiscal year 2013. Based on recent trends, we do not expect the 90/10 Rule percentage for University of Phoenix to exceed 90% for fiscal year 2014. However, the 90/10 Rule percentage for University of Phoenix remains high and could exceed 90% in the future depending on the degree to which its various initiatives are effective, the impact of future changes in its enrollment mix, and regulatory and other factors outside our control, including any reduction in military benefit programs or changes in the treatment of such funding for purposes of the 90/10 Rule calculation. Various members of Congress have proposed changes to the 90/10 Rule that would, if enacted, reduce the percentage to 85% and adversely change the manner in which military aid is treated for purposes of the rule calculation.

• Student Loan Cohort Default Rates. To remain eligible to participate in Title IV programs, an educational institution’s student loan cohort default rates must remain below certain specified levels. Educational institutions will lose eligibility to participate in Title IV programs if their three-year cohort default rate equals or exceeds 40% for any given year or 30% for three consecutive years. The three-year cohort default rate for University of Phoenix for the 2010 federal fiscal year was 26.0%. Based on our most recent trends, we expect that our 2011 three-year cohort default rate will be lower than the 2010 three-year cohort default rate. However, if our student loan default rates approach the applicable limits, we may be required to increase efforts and resources dedicated to improving these default rates.

For a more detailed discussion of trends, risks and uncertainties, refer to our 2013 Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 22, 2013.

Fiscal Year 2014 Significant Events

In addition to the items mentioned above, we experienced the following significant events during fiscal year 2014 to date:

1. Corporate Name Change. During the first quarter of fiscal year 2014, we changed our corporate name from Apollo Group, Inc. to Apollo Education Group, Inc. to better and more clearly reflect our mission and our purpose.

2. Executive Management Changes. We experienced the following executive management changes:

• In September 2013, William J. Pepicello announced his retirement from his position as President of University of Phoenix, effective upon the naming of a successor; and

• J. Mitchell Bowling was appointed as our Chief Operating Officer effective December 2, 2013. Curtis M. Uehlein, who served as our Acting Chief Operating Officer since April 2013, will continue serving in his role as President of Apollo Global.

3. Empowering America: Reinventing Pathways to College and the Workforce Report. In November 2013, we released this report focusing on the current college and career readiness challenges facing the U.S., innovative ways to address students and their needs, and the economic impact of increasing student preparedness. A copy of this report can be found at http://www.apollo.edu/investor-relations/financial-press-releases.

4. Accreditation Updates.

• CFFP - During the first quarter of fiscal year 2014, CFFP was informed in writing by The Higher Learning Commission, their institutional accreditor (“HLC”), that CFFP had addressed HLC’s findings from its most recent accreditation reaffirmation review. The next comprehensive visit from HLC is scheduled during the 2017-2018 school year.

• ULA - During the first quarter of fiscal year 2014, ULA received the highest level of institutional accreditation from the Mexican Federation of Private Institutions of Higher Education, which is the principal accreditor of private universities in Mexico.

5. Acquisition of Open Colleges Australia. On December 20, 2013, Apollo Global acquired 70% of the outstanding shares of Open Colleges. Open Colleges is a provider of education and training to adult learners in Australia. Refer to Note 1, Nature of Operations, in Item 1, Financial Statements.

Critical Accounting Policies and Estimates

Refer to our 2013 Annual Report on Form 10-K for a detailed discussion of our critical accounting policies and estimates.

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Recent Accounting Pronouncements

Refer to our 2013 Annual Report on Form 10-K for recent accounting pronouncements.

Results of Operations

We have included below a discussion of our operating results and significant items explaining the material changes in our operating results during the three months ended November 30, 2013 compared to the three months ended November 30, 2012.

As discussed in the Overview of this MD&A, the U.S. higher education industry, including the proprietary sector, is experiencing unprecedented, rapidly developing changes. We believe University of Phoenix enrollment has been adversely impacted by these changes, and we are working to accelerate the enhancement of our offerings to remain competitive and to more effectively deliver a quality student experience at the right value. Certain of our initiatives under consideration could adversely impact our operating results, especially in the short-term.

Our operations are generally subject to seasonal trends. We experience, and expect to continue to experience, fluctuations in our results of operations as a result of seasonal variations in the level of our institutions’ enrollments. Although University of Phoenix enrolls students throughout the year, its net revenue is generally lower in our second fiscal quarter (December through February) than the other quarters due to holiday breaks.

Analysis of Condensed Consolidated Statements of Income

The following details our consolidated results of operations. For a more detailed discussion by reportable segment, refer to our Analysis of Operating Results by Reportable Segment.

	Three Months Ended November 30,
	2013			2012			% of Net Revenue
($ in thousands)							2013		2012
Net revenue	$	856,335		$	1,055,183		100.0	%	100.0	%
Costs and expenses:
Instructional and student advisory	339,679			432,150			39.7	%	40.9	%
Marketing	137,844			162,873			16.1	%	15.4	%
Admissions advisory	51,509			71,308			6.0	%	6.8	%
General and administrative	75,230			73,539			8.8	%	7.0	%
Depreciation and amortization	36,338			43,695			4.2	%	4.1	%
Provision for uncollectible accounts receivable	13,978			33,406			1.6	%	3.2	%
Restructuring and other charges	31,963			24,116			3.8	%	2.3	%
Litigation credit	—			(16,850		)	—	%	(1.6	)%
Total costs and expenses	686,541			824,237			80.2	%	78.1	%
Operating income	169,794			230,946			19.8	%	21.9	%
Interest income	568			549			—	%	—	%
Interest expense	(2,086		)	(2,042		)	(0.2	)%	(0.2	)%
Other, net	807			1,799			0.1	%	0.2	%
Income before income taxes	169,083			231,252			19.7	%	21.9	%
Provision for income taxes	(70,042		)	(97,512		)	(8.1	)%	(9.2	)%
Net income	99,041			133,740			11.6	%	12.7	%
Net income attributable to noncontrolling interests	(150		)	(245		)	(0.1	)%	—	%
Net income attributable to Apollo	$	98,891		$	133,495		11.5	%	12.7	%

Net Revenue

Our net revenue decreased$198.8 million, or 18.8%, in the first quarter of fiscal year 2014 compared to the first quarter of fiscal year 2013. The decrease was primarily attributable to a 20.4% net revenue decline at University of Phoenix principally

29

due to lower enrollment. Refer to further discussion of net revenue by reportable segment below at Analysis of Operating Results by Reportable Segment.

Instructional and Student Advisory

Instructional and student advisory decreased$92.5 million, or 21.4%, in the first quarter of fiscal year 2014 compared to the first quarter of fiscal year 2013, which represented a 120 basis point decrease as a percentage of net revenue. The decrease as a percentage of net revenue was primarily due to lower costs including rent and compensation attributable to our restructuring activities (refer to Restructuring and Other Charges below), and the assessment of approximately $11 million of foreign indirect taxes in the first quarter of fiscal year 2013 associated with certain instructional materials.

Marketing

Marketing decreased$25.0 million, or 15.4%, in the first quarter of fiscal year 2014 compared to the first quarter of fiscal year 2013, which represented a 70 basis point increase as a percentage of net revenue. The decrease in expense was principally attributable to lower advertising costs, and lower headcount due in part to our restructuring activities.

Admissions Advisory

Admissions advisory decreased$19.8 million, or 27.8%, in the first quarter of fiscal year 2014 compared to the first quarter of fiscal year 2013, which represented an 80 basis point decrease as a percentage of net revenue. The decrease in expense was principally attributable to lower headcount due in part to our restructuring activities.

General and Administrative

General and administrative increased$1.7 million, or 2.3%, in the first quarter of fiscal year 2014 compared to the first quarter of fiscal year 2013, which represented a 180 basis point increase as a percentage of net revenue. In fiscal year 2013, we entered into an agreement to outsource certain of our information technology infrastructure support, which has resulted in higher general and administrative expense in the first quarter of fiscal year 2014 compared to the prior year first quarter. Prior to outsourcing, the expense associated with such infrastructure support was principally included in depreciation and amortization because we owned the related information technology fixed assets. We expect our total general and administrative expense for fiscal year 2014 to be lower as compared to fiscal year 2013.

Depreciation and Amortization

Depreciation and amortization decreased$7.4 million, or 16.8%, in the first quarter of fiscal year 2014 compared to the first quarter of fiscal year 2013, which represented a 10 basis point increase as a percentage of net revenue. The decrease in expense was principally attributable to lower depreciation due in part to the decline in depreciable assets resulting from our restructuring activities. The decrease was also due to lower intangibles amortization.

Provision for Uncollectible Accounts Receivable

Provision for uncollectible accounts receivable decreased$19.4 million, or 58.2%, in the first quarter of fiscal year 2014 compared to the first quarter of fiscal year 2013, which represented a 160 basis point decrease as a percentage of net revenue. The decrease was primarily due to a reduction in our gross student receivables from lower enrollment, and process improvements that significantly contributed to lowering our gross student receivables associated with students no longer enrolled in our programs. Additionally, our collection rates have increased due in part to changes in the relative composition of our student receivables including a higher proportion attributable to students in higher degree level programs.

Restructuring and Other Charges

The U.S. higher education industry, including the proprietary sector, is experiencing unprecedented, rapidly developing changes that challenge many of the core principles underlying the industry. We are reengineering our business processes and refining our educational delivery systems to improve the effectiveness of our services to students, and reducing the size of our services infrastructure and associated operating expenses to align with our reduced enrollment. We have incurred restructuring and other charges associated with these activities beginning in fiscal year 2011 as summarized below:

	Three Months Ended November 30,				Cumulative Costs as of November 30, 2013
($ in thousands)	2013		2012
Lease and related costs, net	$	13,760	$	10,112	$	186,071
Severance and other employee separation costs	15,254		10,943		66,280
Other restructuring related costs	2,949		3,061		39,845
Restructuring and other charges	$	31,963	$	24,116	$	292,196

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The following summarizes the restructuring and other charges in our segment reporting format:

	Three Months Ended November 30,				Cumulative Costs as of November 30, 2013
($ in thousands)	2013		2012
University of Phoenix	$	25,426	$	16,896	$	227,098
Apollo Global	1,263		79		13,028
Other	5,274		7,141		52,070
Restructuring and other charges	$	31,963	$	24,116	$	292,196

• Lease and Related Costs, Net - Beginning in fiscal year 2011, University of Phoenix began rationalizing its administrative real estate facilities. In addition to continuing to rationalize its administrative facilities, University of Phoenix began implementing a plan during fiscal year 2013 to close 115 of its ground locations. As of November 30, 2013, University of Phoenix has closed approximately two-thirds of the locations included in these plans, which represents approximately 85% of the total square feet we are exiting. The remaining closures will continue through fiscal year 2014 and beyond as University of Phoenix obtains the necessary regulatory approvals and completes its teach-out obligations. We have recorded $133.6 million of initial aggregate charges, representing the estimated fair value of future contractual operating lease obligations, which were recorded in the periods we ceased using the respective facilities, $10.0 million of which was recorded in the three months ended November 30, 2013. The other lease and related costs in the three months ended November 30, 2013 consist of accelerated depreciation, as discussed below, and interest accretion on the lease obligations.

We measure lease obligations at fair value using a discounted cash flow approach encompassing significant unobservable inputs (Level 3). The significant unobservable inputs principally include estimated future cash flows and discount rates, which have ranged between 3%-6% for our lease obligations. The estimation of future cash flows includes non-cancelable contractual lease costs over the remaining terms of the leases, partially offset by estimated future sublease rental income, which involves significant judgment. Our estimate of the amount and timing of sublease rental income considers subleases that we have executed and subleases we expect to execute, current commercial real estate market data and conditions, comparable transaction data and qualitative factors specific to the facilities. The estimates will be subject to adjustment as market conditions change or as new information becomes available, including the execution of additional sublease agreements. As of November 30, 2013, we have recorded adjustments to our initial lease obligation liabilities for interest accretion and immaterial adjustments for changes in estimated sublease income.

Lease and related costs, net includes $2.8 million of accelerated depreciation in the three months ended November 30, 2013 associated with revising the useful lives of the fixed assets at the facilities we are closing through their expected closure dates. Prior to revising the useful lives, we perform a recoverability analysis for the facilities’ fixed assets by comparing the estimated undiscounted cash flows of the locations through their expected closure dates to the carrying amount of the locations’ fixed assets. Based on such analyses, we recorded immaterial impairment charges during fiscal year 2013 and no impairment charges in the three months ended November 30, 2013.

• Severance and Other Employee Separation Costs -Beginning in fiscal year 2011 and continuing into fiscal year 2014, we have implemented workforce reductions as we reengineer our business processes and refine our educational delivery systems. We incurred severance and other employee separation costs of $15.3 million and $10.9 million in the three months ended November 30, 2013 and November 30, 2012, respectively. These costs are included in the reportable segments in which the respective personnel were employed.

We expect to incur approximately $35 million of future restructuring charges for the initiatives announced to date. The majority of these charges represent lease related costs associated with closing University of Phoenix campuses and administrative facilities, and will generally be incurred as the University obtains the necessary regulatory approvals and completes its teach-out obligations. We expect to incur approximately half of the $35 million in the remainder of fiscal year 2014 and the rest of the expected charges in future years.

Our costs that are more variable in nature represent approximately 14% of our net revenue and are included in Instructional and student advisory on our Condensed Consolidated Statements of Income. Due principally to our cost optimization and restructuring activities in recent years, our fiscal year 2013 operating costs that have historically been more fixed in nature decreased approximately $350 million compared to fiscal year 2012. In fiscal year 2014, we expect to further reduce our fixed operating costs by a minimum of $325 million, which would result in a total decline of $675 million, or 19%, from our fiscal year 2012 cost base.

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Litigation Credit

We recorded a $16.9 million credit in the first quarter of fiscal year 2013 associated with a legal matter.

Provision for Income Taxes

Our effective income tax rate was 41.4% for the first quarter of fiscal year 2014 compared to 42.2% for the first quarter of fiscal year 2013. The decrease was principally attributable to a reduction in foreign losses for which we cannot take a tax benefit.

Analysis of Operating Results by Reportable Segment

The following details our operating results by reportable segment for the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013			2012			$  Change			%  Change
Net revenue
University of Phoenix	$	744,863		$	935,784		$	(190,921	)	(20.4	)%
Apollo Global	91,159			90,514			645			0.7	%
Other	20,313			28,885			(8,572		)	(29.7	)%
Total net revenue	$	856,335		$	1,055,183		$	(198,848	)	(18.8	)%
Operating income (loss)
University of Phoenix	$	183,473		$	243,860		$	(60,387	)	(24.8	)%
Apollo Global	2,217			(9,366		)	11,583			*
Other	(15,896		)	(3,548		)	(12,348		)	*
Total operating income	$	169,794		$	230,946		$	(61,152	)	(26.5	)%

* not meaningful

University of Phoenix

University of Phoenix’s net revenue decreased $190.9 million, or 20.4%, in the first quarter of fiscal year 2014 compared to the first quarter of fiscal year 2013. The decrease was principally attributable to lower enrollment. During fiscal year 2014, we increased our use of discounts, grants and scholarships to improve University of Phoenix’s value proposition to prospective students. These discounts, grants and scholarships also reduced net revenue compared to the prior year. Future net revenue will be impacted by tuition price and other fee changes, changes in enrollment and student mix within programs and degree levels, and discounts, grants and scholarships.

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The following details University of Phoenix enrollment for the respective periods:

	Degreed Enrollment(1)				New Degreed Enrollment(2)				Average Degreed Enrollment
(Rounded to nearest hundred)	Quarter Ended November 30,				Quarter Ended November 30,				Quarter Ended November 30,
	2013	2012	% Change		2013	2012	% Change		2013(3)	2012(4)	% Change
Associate’s	74,300	99,100	(25.0	)%	16,300	22,900	(28.8	)%	75,300	100,900	(25.4	)%
Bachelor’s	142,500	168,000	(15.2	)%	18,100	22,500	(19.6	)%	144,300	170,300	(15.3	)%
Master’s	40,500	46,000	(12.0	)%	6,800	8,000	(15.0	)%	40,600	46,200	(12.1	)%
Doctoral	5,700	6,600	(13.6	)%	500	700	(28.6	)%	5,800	6,700	(13.4	)%
Total	263,000	319,700	(17.7	)%	41,700	54,100	(22.9	)%	266,000	324,100	(17.9	)%

⁽¹⁾ Represents students enrolled in a University of Phoenix degree program who attended a credit bearing course during the quarter and had not graduated as of the end of the quarter; students who previously graduated from one degree program and started a new degree program in the quarter (e.g., a graduate of the associate’s degree program returns for a bachelor’s degree); and students participating in certain certificate programs of at least 18 credits with some course applicability into a related degree program.

⁽²⁾ Represents new students and students who have been out of attendance for more than 12 months who enroll in a University of Phoenix degree program and start a credit bearing course in the quarter; students who have previously graduated from a degree program and start a new degree program in the quarter; and students who commence participation in certain certificate programs of at least 18 credits with some course applicability into a related degree program.

⁽³⁾ Represents the average of Degreed Enrollment for the quarters ended August 31, 2013 and November 30, 2013.

⁽⁴⁾ Represents the average of Degreed Enrollment for the quarters ended August 31, 2012 and November 30, 2012.

University of Phoenix Average Degreed Enrollment decreased 17.9% in the first quarter of fiscal year 2014 compared to the first quarter of fiscal year 2013. We believe University of Phoenix enrollment has been adversely impacted by unprecedented, rapidly developing changes and increasing competition in the U.S. higher education industry as further discussed in the Overview of this MD&A. We are working to accelerate the enhancement of our offerings to remain competitive and to more effectively deliver a quality student experience at the right value. Certain of our initiatives under consideration could adversely impact our operating results, especially in the short-term.

University of Phoenix’s operating income decreased $60.4 million, or 24.8%, in the first quarter of fiscal year 2014 compared to the first quarter of fiscal year 2013. The decrease was principally attributable to lower net revenue and an increase in restructuring charges. This was partially offset by lower costs including rent and compensation attributable to our restructuring activities, a decrease in faculty and curriculum costs associated with lower enrollment, lower advertising costs, and a decrease in bad debt expense.

Apollo Global

Apollo Global net revenue was essentially flat in the first quarter of fiscal year 2014 compared to the first quarter of fiscal year 2013, and operating income increased $11.6 million. The increase in operating income was principally attributable to the assessment of approximately $11 million of foreign indirect taxes in the first quarter of fiscal year 2013 associated with certain instructional materials.

Other

Other net revenue decreased $8.6 million in the first quarter of fiscal year 2014 compared to the first quarter of fiscal year 2013. The decrease was principally attributable to declines at IPD and WIU. The IPD decline principally resulted from a decrease in the number of its Client Institutions and the WIU decline was due to lower enrollment and the launch of its new strategy at the end of fiscal year 2013. We expect WIU’s new strategy to continue to reduce its revenue in the near-term due to the new pricing structure that allows prospective WIU students to test the academic experience before they formally enroll.

The $12.3 million increased operating loss in the first quarter of fiscal year 2014 compared to the first quarter of fiscal year 2013 was principally attributable to the litigation credit discussed above and declines in WIU and IPD operating income.

Liquidity, Capital Resources and Financial Position

We believe that our cash and cash equivalents and available liquidity will be adequate to satisfy our working capital and other liquidity requirements associated with our existing operations through at least the next 12 months. We believe that the most strategic uses of our cash resources include investments in initiatives to achieve significant improvements in student retention

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and career outcomes, investments in opportunities to increase organic growth through new education offerings, expansion of our global operations through acquisitions or other initiatives, and share repurchases.

Although we currently have substantial available liquidity, our ability to access the credit markets and other sources of liquidity may be adversely affected if we experience regulatory compliance challenges, including, but not limited to, maintaining a U.S. Department of Education financial responsibility composite score of at least 1.5, reduced availability of Title IV funding, or other adverse effects on our business from regulatory or legislative changes. For a detailed discussion of the regulatory environment and related risks, refer to Part I, Item 1A, Risk Factors, in our 2013 Annual Report on Form 10-K.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents and Marketable Securities

The substantial majority of our cash and cash equivalents, including restricted cash and cash equivalents, are held by our domestic operations and placed with high-credit-quality financial institutions. The following provides a summary of our cash and cash equivalents, restricted cash and cash equivalents and current marketable securities as of the respective periods:

					% of Total Assets at
($ in thousands)	November 30, 2013		August 31, 2013		November 30, 2013		August 31, 2013		% Change
Cash and cash equivalents	$	788,130	$	1,414,485	32.0	%	47.2	%	(44.3	)%
Restricted cash and cash equivalents	285,612		259,174		11.6	%	8.7	%	10.2	%
Marketable securities(1)	128,736		105,809		5.2	%	3.5	%	21.7	%
Total	$	1,202,478	$	1,779,468	48.8	%	59.4	%	(32.4	)%

⁽¹⁾ Represents current marketable securities. We also had $108.7 million and $43.9 million of long-term marketable securities as of November 30, 2013 and August 31, 2013, respectively, which principally includes held-to-maturity securities maturing in less than two years.

Cash and cash equivalents (excluding restricted cash) decreased $626.4 million primarily due to $615.9 million of payments on borrowings, $88.9 million of marketable securities purchases (net of maturities), $34.4 million for capital expenditures and $16.9 million for share repurchases. These items were partially offset by $128.9 million of cash provided by operations.

We consider the unremitted earnings attributable to certain of our foreign subsidiaries to be permanently reinvested. As of November 30, 2013, the earnings from these operations are not significant.

As of November 30, 2013, we had money market funds of $635.1 million included in cash and restricted cash equivalents that we measure at fair value. The money market funds were valued primarily using real-time quotes for transactions in active exchange markets involving identical assets. Our remaining cash and cash equivalents included in the above table approximate fair value because of the short-term nature of the financial instruments. We determine the fair value of our other cash equivalents using a market approach principally consisting of Level 2 inputs. These inputs include quoted prices for similar assets in active markets, or quoted prices for identical or similar assets in markets that are not active.

As of November 30, 2013, our current marketable securities principally includes tax-exempt municipal bonds, commercial paper and corporate bonds that have original maturities to us greater than three months, but less than one year. Our current marketable securities are classified as held-to-maturity as we have the intent and ability to hold them until contractual maturity and are reported at amortized cost, which approximates fair value. We determine the fair value of our held-to-maturity investments using a market approach principally consisting of Level 2 inputs.

Debt

Revolving Credit Facility - In fiscal year 2012, we entered into a syndicated $625 million unsecured revolving credit facility (the “Revolving Credit Facility”). The Revolving Credit Facility is used for general corporate purposes, which may include acquisitions and share repurchases. The term is five years and will expire in April 2017. The Revolving Credit Facility may be used for borrowings in certain foreign currencies and letters of credit, in each case up to specified sublimits.

We borrowed $605.0 million and had approximately $14 million of outstanding letters of credit under the Revolving Credit Facility as of August 31, 2013. We repaid the entire amount borrowed under the Revolving Credit Facility during the first quarter of fiscal year 2014. As of November 30, 2013, we have approximately $21 million of outstanding letters of credit under the Revolving Credit Facility.

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The Revolving Credit Facility fees are determined based on a pricing grid that varies according to our leverage ratio. The Revolving Credit Facility fee ranges from 25 to 40 basis points. Incremental fees for borrowings under the facility generally range from LIBOR + 125 to 185 basis points. The weighted average interest rate on outstanding short-term borrowings under the Revolving Credit Facility at August 31, 2013 was 3.5%.

The Revolving Credit Facility contains various customary representations, covenants and other provisions, including a material adverse event clause and the following financial covenants: maximum leverage ratio, minimum coverage interest and rent expense ratio, and a U.S. Department of Education financial responsibility composite score. We were in compliance with all applicable covenants related to the Revolving Credit Facility at November 30, 2013 and August 31, 2013.

Other - Other debt of $33.9 million and $37.4 million as of November 30, 2013 and August 31, 2013, respectively, principally includes debt at subsidiaries of Apollo Global and the present value of an obligation payable over a 10-year period associated with our purchase of technology in fiscal year 2012. The weighted average interest rate on our outstanding other debt at November 30, 2013 and August 31, 2013 was 5.8% and 5.3%, respectively.

Cash Flows

Operating Activities

The following provides a summary of our operating cash flows during the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013			2012
Net income	$	99,041		$	133,740
Non-cash items	68,734			91,923
Changes in assets and liabilities	(38,878		)	(15,532		)
Net cash provided by operating activities	$	128,897		$	210,131

Three Months Ended November 30, 2013 - Our non-cash items primarily consisted of $36.3 million of depreciation and amortization, a $14.0 million provision for uncollectible accounts receivable, and $12.0 million of share-based compensation. The changes in assets and liabilities primarily consisted of a $53.0 million decrease in accrued and other liabilities principally attributable to the timing of our payroll cycle and accrued bonus payments, and a $26.4 million increase in restricted cash and cash equivalents. This was partially offset by a $64.5 million increase in income taxes payable principally attributable to the timing of our quarterly tax payments.

Three Months Ended November 30, 2012 - Our non-cash items primarily consisted of $43.7 million of depreciation and amortization, a $33.4 million provision for uncollectible accounts receivable, $16.9 million of share-based compensation, and $9.3 million of restructuring accelerated depreciation. These items were partially offset by a $16.9 million credit associated with a legal matter. The changes in assets and liabilities primarily consisted of the following:

• a $36.4 million decrease in accrued and other liabilities principally attributable to the timing of our payroll cycle and accrued bonus payments;

• a $36.3 million use of cash related to the change in accounts receivable, excluding the provision for uncollectible accounts receivable; and

• a $33.2 million increase in restricted cash and cash equivalents.

The above changes were partially offset by:

• an $82.0 million increase in income taxes payable principally attributable to the timing of our quarterly tax payments; and

• an $18.5 million increase in student deposits.

We monitor our accounts receivable through a variety of metrics, including days sales outstanding. We calculate our days sales outstanding by determining average daily student revenue based on a rolling twelve month analysis and divide it into the gross student accounts receivable balance as of the end of the period. As of November 30, 2013 and August 31, 2013, excluding accounts receivable and the related net revenue for Apollo Global, our days sales outstanding was essentially flat at 21 days as compared to 20 days as of November 30, 2012.

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Investing Activities

The following provides a summary of our investing cash flows during the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013			2012
Purchases of marketable securities, net	$	(88,921	)	$	(14,819	)
Capital expenditures	(34,366		)	(27,539		)
Net cash used in investing activities	$	(123,287	)	$	(42,358	)

Financing Activities

The following provides a summary of our financing cash flows during the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013			2012
Payments on borrowings, net	$	(615,925	)	$	(623,586	)
Purchases of stock for treasury	(16,871		)	(3,472		)
Purchase of noncontrolling interest	—			(42,500		)
Issuances of stock	796			1,113
Net cash used in financing activities	$	(632,000	)	$	(668,445	)

Three Months Ended November 30, 2013 - Cash used in financing activities primarily consisted of $615.9 million used for payments on borrowings, and $16.9 million used for share repurchases. Share repurchases include $15.0 million used to repurchase 0.6 million shares at a weighted average purchase price of $26.02 per share, and additional repurchases related to tax withholding requirements on the restricted stock units.

As of November 30, 2013, $235 million remained available under our share repurchase authorization. We have used approximately $10 million to repurchase shares subsequent to November 30, 2013. The amount and timing of future share repurchase authorizations and repurchases, if any, will be made as market and business conditions warrant. Repurchases may be made on the open market through various methods including but not limited to accelerated share repurchase programs, or in privately negotiated transactions, pursuant to the applicable Securities and Exchange Commission rules, and may include repurchases pursuant to Securities and Exchange Commission Rule 10b5-1 nondiscretionary trading programs.

Three Months Ended November 30, 2012 - Cash used in financing activities primarily consisted of $623.6 million used for payments on borrowings (net of proceeds from borrowings), and $42.5 million used for the purchase of the noncontrolling ownership interest in Apollo Global.

Contractual Obligations and Other Commercial Commitments

During the three months ended November 30, 2013, we repaid the entire amount borrowed on our Revolving Credit Facility of $605.0 million. There have been no other material changes in our contractual obligations and other commercial commitments other than in the ordinary course of business since the end of fiscal year 2013 through November 30, 2013. Information regarding our contractual obligations and other commercial commitments is provided in our 2013 Annual Report on Form 10-K.

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

There have been no significant changes to our market risk since August 31, 2013. For a discussion of our exposure to market risk, refer to our 2013 Annual Report on Form 10-K.

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Item 4 - Controls and Procedures

Disclosure Controls and Procedures

We intend to maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods and accumulated and communicated to our management, including our Chief Executive Officer (“Principal Executive Officer”) and our Senior Vice President and Chief Financial Officer (“Principal Financial Officer”), as appropriate, to allow timely decisions regarding required disclosure. We have established a Disclosure Committee, consisting of certain members of management, to assist in this evaluation. Our Disclosure Committee meets on a quarterly basis and more often if necessary.

Our management, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act), as of the end of the period covered by this report. Based on that evaluation, management concluded that, as of that date, our disclosure controls and procedures were effective at the reasonable assurance level.

Attached as exhibits to this Quarterly Report on Form 10-Q are certifications of our Principal Executive Officer and Principal Financial Officer, which are required in accordance with Rule 13a-14 of the Securities Exchange Act. This Disclosure Controls and Procedures section includes information concerning management’s evaluation of disclosure controls and procedures referred to in those certifications and, as such, should be read in conjunction with the certifications of our Principal Executive Officer and Principal Financial Officer.

Changes in Internal Control Over Financial Reporting

There have not been any changes in our internal control over financial reporting during the quarter ended November 30, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

Refer to Note 13, Commitments and Contingencies, in Part I, Item 1, Financial Statements, for legal proceedings, which is incorporated into this Item 1 of Part II by this reference.

Item 1A - Risk Factors

There have been no material changes to the risk factors previously disclosed in our 2013 Annual Report on Form 10-K.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

Purchase of Equity Securities

Our Board of Directors has authorized us to repurchase outstanding shares of Apollo Education Group Class A common stock, from time to time, depending on market conditions and other considerations. During the fiscal year 2013, our Board of Directors authorized an increase in the amount available under our share repurchase program up to an aggregate amount of $250 million. There is no expiration date on the repurchase authorizations and repurchases occur at our discretion.

During the three months ended November 30, 2013, we repurchased 0.6 million shares of our Class A common stock at a total cost of $15.0 million, representing a weighted average purchase price of $26.02 per share. The following details changes in our treasury stock during the three months ended November 30, 2013:

(In thousands, except per share data)	Total Number of Shares Repurchased		Average Price Paid per Share		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs		Maximum Value of Shares Available for Repurchase
Treasury stock as of August 31, 2013	75,182		$	50.87	75,182		$	250,000
New authorizations	—		—		—		—
Shares repurchased	—		—		—		—
Shares reissued	(86	)	50.87		(86	)	—
Treasury stock as of September 30, 2013	75,096		$	50.87	75,096		$	250,000
New authorizations	—		—		—		—
Shares repurchased	—		—		—		—
Shares reissued	(92	)	50.87		(92	)	—
Treasury stock as of October 31, 2013	75,004		$	50.87	75,004		$	250,000
New authorizations	—		—		—		—
Shares repurchased	577		26.02		577		(15,000		)
Shares reissued	(15	)	50.69		(15	)	—
Treasury stock as of November 30, 2013	75,566		$	50.69	75,566		$	235,000

Resales by Directors and Officers

From time to time, our directors and officers enter into written trading plans under Securities and Exchange Commission Rule 10b5-1(c) for the resale of shares of our common stock, including shares to be acquired upon the vesting of restricted stock units and performance share awards, and shares to be acquired pursuant to the exercise of stock options. These plans, which must be entered into during an open trading window and at a time when the director or officer is not in possession of material nonpublic information, provide for sales in accordance with a formula, algorithm or other instructions such that the seller cannot exercise any influence over how, when or whether to effect sales. After adopted, sales may occur in accordance with the plans regardless of whether or not the seller subsequently possesses material nonpublic information or otherwise would then be permitted to trade in our securities. Our insider trading policy permits the adoption of these types of trading plans, and we encourage our directors and officers to utilize such plans, where practical. We do not announce, via Form 8-K or otherwise, the adoption or any termination of such trading plans, if any. Sales under these plans generally must be reported within two business days on Form 4 filed with the SEC, pursuant to Section 16 of the Securities Exchange Act of 1934, as amended.

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Sales of Unregistered Securities

We did not have any sales of unregistered equity securities during the three months ended November 30, 2013.

Item 3 - Defaults Upon Senior Securities

Not applicable.

Item 4 - Mine Safety Disclosures

Not applicable.

Item 5 - Other Information

None.

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Item 6 - Exhibits

Exhibit Number	Exhibit Description
3.1	Amended and Restated Articles of Incorporation of Apollo Education Group, Inc., as amended effective November 15, 2013
3.2	Amended and Restated Bylaws of Apollo Education Group, Inc.
10.1	Apollo Education Group, Inc. Deferred Compensation Plan (effective February 1, 2012) (as amended and restated November 15, 2013)
10.2	Offer Letter dated October 18, 2013 from Apollo Group, Inc.† to J. Mitchell Bowling(1)
31.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to 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

^† References in this exhibit index to Apollo Group, Inc. shall be deemed to refer to Apollo Education Group, Inc., formerly known as Apollo Group, Inc.

⁽¹⁾ Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2013.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

APOLLO EDUCATION GROUP, INC.

An Arizona Corporation

Date: January 7, 2014

By:	/s/  Brian L. Swartz
	Brian L. Swartz Senior Vice President and Chief Financial Officer (Principal Financial Officer)

By:	/s/  Gregory J. Iverson
	Gregory J. Iverson Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer)

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EX-3.1

Exhibit 3.1

AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF APOLLO EDUCATION GROUP, INC.∗

ARTICLE INAME

The name of the corporation is Apollo Education Group, Inc. (the “Corporation”).

ARTICLE IIADDRESS OF REGISTERED OFFICE;
NAME OF REGISTERED AGENT

The name and address of the statutory agent of the corporation is CT CORPORATION SYSTEM, 3225 North Central Avenue, Phoenix, Arizona 85012. The address of the place of business of the Corporation is 4615 East Elwood Street Phoenix, Arizona 85040.

ARTICLE III

PURPOSE

The purposes for which the Corporation is organized include the transaction of any or all lawful business for which corporations may be incorporated under Chapter 1 of Title 10, Arizona Revised Statutes, at any time. The character of business that the Corporation conducts in the State of Arizona is that of holding stock or other ownership interests of corporations or other entities.

ARTICLE IVCAPITAL STOCK

1.Authorization.

The Corporation shall have the authority to issue two classes of shares of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares of Common Stock that the Corporation shall have the authority to issue is 803,000,000 shares, without par value, and the total number of shares of Preferred Stock that the Corporation shall have the authority to issue is 1,000,000 shares, without par value.

_______________________

* These Amended and Restated Articles of Incorporation have been restated to reflect a change in the Corporation’s name from Apollo Group, Inc. to Apollo Education Group, Inc., effective November 15, 2013.

As of the Effective Date, there shall be three series of Common Stock, as follows:

(a)One series of Common Stock shall be designated as “Class A Common Stock.” The total number of shares of Class A Common Stock that the Corporation shall have the authority to issue is 400,000,000;

(b)A second series of Common Stock shall be designated as “Class B Common Stock.” The total number of shares of Class B Common Stock that the Corporation shall have the authority to issue is 3,000,000; and

(c)A third series of Common Stock shall be designated as “University of Phoenix Online Common Stock.” The total number of shares of University of Phoenix Online Common Stock that the Corporation shall have the authority to issue shall be 400,000,000.

The Board of Directors is empowered to authorize shares of Preferred Stock in one or more series as may from time to time be determined by the Board of Directors by resolution or resolutions, each of said series to be distinctly designated. The powers, preferences, and relative, participating, optional, or other rights and the qualifications, limitations, and restrictions thereof, if any, of each such series may differ from those of any or all other series of Preferred Stock, and the Board of Directors is empowered to fix or alter, by resolution or resolutions, the designation, number, powers, preferences, and relative, participating, optional, or other rights, if any, and the qualifications, limitations, and restrictions thereof, if any, of each such series, and to increase or decrease the number of shares of each such series to the extent permitted by law.

Unless otherwise specified, the Class A Common Stock and the Class B Common Stock shall hereinafter, collectively, be called “Apollo Education Group Common Stock.” Unless otherwise specified, the preferred stock of the Corporation shall hereinafter collectively be called the “Preferred Stock.” Unless otherwise specified, the capitalized terms used in this Article IV shall have the meanings set forth in subsection 2.7 of this Article IV. For purposes of this Article IV, references to the “Board of Directors” shall refer to the Board of Directors of the Corporation, as established in accordance with Article V of the Articles of Incorporation of the Corporation and references to “the Articles of Incorporation of the Corporation” shall refer to these Amended and Restated Articles of Incorporation as the same may be amended from time to time.

2.Common Stock.

As of the Effective Date, (a) each share of Class A Common Stock outstanding immediately prior thereto or reserved for issuance (“Existing Class A Common Stock”) shall thereupon automatically be reclassified without any action by the holder thereof as a share of Class A Common Stock (and outstanding certificates that had theretofore represented shares of Existing Class A Common Stock shall thereupon represent an equivalent number of shares of Class A Common Stock despite the absence of any indication thereon to that effect), and (b) each share of Class B Common Stock outstanding immediately prior thereto or reserved for issuance (“Existing Class B Common Stock”) shall thereupon automatically be reclassified without any action by the holder thereof as a share of Class B Common Stock (and outstanding certificates that had theretofore

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represented shares of Existing Class B Common Stock shall thereupon represent an equivalent number of shares of Class B Common Stock despite the absence of any indication thereon to that effect).

The Board of Directors shall have the authority to designate, prior to the time of the first issuance of University of Phoenix Online Common Stock, the number which, immediately prior to such first issuance, will constitute the Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online and any other terms which are consistent with applicable law and the provisions of this Article IV.

The voting powers, preferences, and relative, participating, optional or other special rights of the Common Stock, and the qualifications and restrictions thereon, shall be as follows in this section 2 of this Article IV.

2.1Dividends.

Subject to any preferences and relative, participating, optional, or other rights of any outstanding class of Preferred Stock and any qualifications or restrictions on the Common Stock or any series thereof created thereby, dividends may be declared and paid upon any series of Common Stock, upon the terms, with respect to each such series, and subject to the limitations provided for in this subsection 2.1 of this Article IV, as the Board of Directors may determine.

2.1.1Limitation on Dividends.

Dividends on any series of Common Stock may be declared and paid only out of the lesser of (a) the funds of the Corporation legally available therefor and (b) the Available Dividend Amount for the Group to which such series of Common Stock relates. (For purposes of these articles of incorporation, Class A Common Stock and Class B Common Stock relate to the Apollo Education Group and University of Phoenix Online Common Stock relates to University of Phoenix Online).

2.1.2Discrimination in Dividends Between Classes of Common Stock.

The Board of Directors, subject to the provisions of subsection 2.1.1 of this Article IV, may at any time declare and pay dividends exclusively on a single series of Common Stock, or on one or more series of Common Stock, in equal or unequal amounts, notwithstanding the relative amounts of the Available Dividend Amount with respect to any Group, the amount of dividends previously declared on any series, the respective voting or liquidation rights of any series, or any other factor.

2.1.3Share Distributions.

Except as set forth in paragraph (a) of subsection 2.4.1 of this Article IV, the Board of Directors may declare and pay dividends or distributions of shares of any series of Common Stock (or Convertible Securities convertible into or exchangeable or exercisable for shares of Common Stock) on shares of a series of Common Stock or on shares of a series of Preferred Stock only as follows:

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(a)dividends or distributions of shares of a series of Common Stock (or Convertible Securities convertible into or exchangeable or exercisable for shares of a series of Common Stock) on shares of the same series of Common Stock;

(b)dividends or distributions of shares of Class A Common Stock (or Convertible Securities convertible into or exchangeable or exercisable for shares of Class A Common Stock) on shares of Class B Common Stock;

(c)dividends or distributions of shares of Class A Common Stock (or Convertible Securities convertible into or exchangeable or exercisable for shares of Class A Common stock) on shares of Preferred Stock attributed to Apollo Education Group;

(d)dividends or distributions of shares of University of Phoenix Online common stock (or Convertible Securities convertible into or exchangeable or exercisable for shares of University of Phoenix Online common stock) on shares of Preferred Stock attributed to University of Phoenix Online; and

(e)dividends or distributions of shares of University of Phoenix Online Common Stock (or Convertible Securities convertible into or exchangeable or exercisable for shares of University of Phoenix Online Common Stock) on shares of Class A Common Stock, or on Class B Common Stock, or on shares of Preferred Stock attributed to Apollo Education Group, but only if the sum of (1) the number of shares of University of Phoenix Online Common Stock to be so issued (or the number of such shares which would be issuable upon conversion, exchange, or exercise of any securities to be so issued) and (2) the number of shares of University of Phoenix Online Common Stock which are issuable upon conversion, exchange, or exercise of any securities then outstanding that are attributed to the Apollo Education Group is less than or equal to the Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online.

For purposes of this subsection 2.1.3, any Convertible Securities that are convertible into or exchangeable or exercisable for any other Convertible Securities that are themselves convertible into or exchangeable or exercisable for any series of Common Stock (or other securities that are so convertible, exchangeable, or exercisable) shall be deemed to have been converted, exchanged, or exercised in full for such securities.

2.2Voting Rights.

At every meeting of shareholders, the holders of Class B Common Stock shall vote on all matters as to which holders of common stock generally are entitled to vote. Holders of Class A Common Stock and holders of University of Phoenix Online Common Stock shall not be entitled to vote, unless a separate class vote shall be required by applicable law.

On all such matters for which no separate vote is required, each outstanding share of Class B Common Stock shall entitle the holder to one vote. With respect to any matter as to which the holders of University of Phoenix Online Common Stock or Apollo Education Group Common Stock are entitled to vote as a separate class, each share of that series of Common Stock shall, for purposes of such separate class vote, be entitled to one vote on such matter.

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2.3Liquidation Rights.

In the event of the voluntary or involuntary dissolution of the Corporation or the liquidation and winding-up of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation and the full preferential amounts (including any accumulated and unpaid dividends) to which the holders of Preferred Stock are entitled (regardless of the Group to which such shares of Preferred Stock were attributed in accordance with this Article IV), unless otherwise provided in respect of a class or series of Preferred Stock by the resolution of the Board of Directors fixing the liquidation rights and preferences of such class or series of Preferred Stock, the holders of the outstanding shares of Common Stock shall be entitled to receive the remaining assets of the Corporation on a per share basis in proportion to the respective liquidation units per shares of such series. Each share of Apollo Education Group Common Stock shall have one liquidation unit and each share of University of Phoenix Online Common Stock shall have a number of liquidation units (which may be a fraction of one liquidation unit) equal to the quotient of (a) the average Market Value of one share of University of Phoenix Online Common Stock during the 20 consecutive Trading Day period ending on, and including, the 5th Trading Day before the date of the first public announcement of a voluntary liquidation, dissolution, or winding-up of the Corporation or the institution of any proceeding for the involuntary liquidation, dissolution or winding-up of the Corporation, divided by (b) the average Market Value of one share of Class A Common Stock during such 20 Trading Day period. Neither the merger nor consolidation of the Corporation with any other entity, nor a sale, transfer, or lease of all or any part of the assets of the Corporation, shall, alone, be deemed a liquidation, dissolution, or winding-up for purposes of this section 2.3.

If the Corporation shall in any manner subdivide (by stock split, reclassification, or otherwise) or combine (by reverse stock split, reclassification, or otherwise) the outstanding shares of any series of Common Stock, or declare a dividend in shares of such outstanding series to holders of such series, the per share liquidation units of such series of Common Stock specified in the preceding paragraph of this section 2.3, as adjusted from time to time, shall be appropriately adjusted as determined by the Board of Directors (if necessary) so as to avoid dilution in the aggregate of the relative liquidation rights of the shares of any series of Common Stock.

2.4Redemptions and Conversions of Stock; Related Matters.

2.4.1Mandatory Dividend, Redemption, or Conversion on Disposition of All or Substantially All of the Assets of a Group.

In the event of a Disposition (other than an Exempt Disposition), the Corporation shall, on or prior to the 85th Trading Day after the Disposition Date, provided that the assets of the Corporation are legally available therefor, either:

(1)if the Disposition relates to assets of Apollo Education Group:

(a)declare and pay a dividend to holders of Apollo Education Group Common Stock (in cash, securities (other than Common Stock), or other property, or a combination thereof), subject to the limitations on dividends set forth under subsection 2.1 of this

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Article IV, in an aggregate amount having a Fair Value (determined as of the Disposition Date) equal to the Net Proceeds of such Disposition; or

(b)redeem from holders of Class A Common Stock, in exchange for cash, securities (other than Common Stock), or other property (or a combination thereof), for an aggregate amount equal to the product of (i) a fraction the numerator of which is the number of shares of Class A Common Stock outstanding on the date of the redemption and the denominator of which is the number of shares of Apollo Education Group Common Stock outstanding on the date of the redemption, multiplied by (ii) the Fair Value (determined as of the Disposition Date) of the Net Proceeds of such Disposition (collectively, the “Apollo Education Group Redemption Proceeds Amount”), all of the outstanding shares of Class A Common Stock (unless such Disposition involves substantially all (but not all) of the assets attributed to Apollo Education Group, in which case, a number of shares of Class A Common Stock (rounded, if necessary, to the nearest whole number) having an aggregate average Market Value, during the 20 consecutive Trading Day period beginning on (and including) the 16th Trading Day immediately following the Disposition Date, equal to the Apollo Education Group Redemption Proceeds Amount); or

(c)convert each outstanding share of Class A Common Stock into a number of shares (or fractional shares) of University of Phoenix Online Common Stock (calculated to the nearest five decimal places) having an aggregate value equal to the product of (i) the Applicable Mandatory Conversion Percentage multiplied by (ii) the value of a share of Class A Common Stock (where in each case value is based on the average Market Value of a share of the relevant series of Common Stock during the 20 consecutive Trading Day period beginning on (and including) the 16th Trading Day immediately following the Disposition Date); and

(2)If the Disposition relates to assets of University of Phoenix Online:

(a)declare and pay a dividend to holders of University of Phoenix Online Common Stock (in cash, securities (other than Common Stock), or other property, or a combination thereof), subject to the limitations on dividends set forth under subsection 2.1 of this Article IV, in an aggregate amount having a Fair Value (determined as of the Disposition Date) equal to the product of (i) the Outstanding Interest Fraction with respect to University of Phoenix Online (determined as of the record date for such dividend) multiplied by (ii) the Fair Value (determined as of the Disposition Date) of the Net Proceeds of such Disposition; or

(b)redeem from holders of University of Phoenix Online Common Stock, in exchange for cash, securities (other than Common Stock), or other property (or a combination thereof), for an aggregate amount equal to the product of (i) the Outstanding Interest Fraction with respect to University of Phoenix Online (determined as of the date of the redemption) multiplied by (ii) the Fair Value (determined as of the Disposition Date) of the Net Proceeds of such Disposition (collectively, the “University of Phoenix Online Redemption Proceeds Amount”), all of the outstanding shares of University of Phoenix Online Common Stock (unless such Disposition involves substantially all (but not all) of the assets attributed to University of Phoenix Online, in which case, a number of shares of University of Phoenix Online Common Stock (rounded, if necessary, to the nearest whole number) having an aggregate average Market Value, during the 20

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consecutive Trading Day period beginning on (and including) the 16th Trading Day immediately following the Disposition Date, equal to the University of Phoenix Online Redemption Proceeds Amount); or

(c)convert each outstanding share of University of Phoenix Online Common Stock into a number of shares (or fractional shares) of Class A Common Stock (calculated to the nearest five decimal places) having an aggregate value equal to the product of (i) the Applicable Mandatory Conversion Percentage multiplied by (ii) the value of a share of University of Phoenix Online Common Stock (where in each case value is based on the average Market Value of a share of the relevant series of Common Stock during the 20 consecutive Trading Day period beginning on (and including) the 16th Trading Day immediately following the Disposition Date).

For purposes of this subsection 2.4.1, if a Group consummates a Disposition in a series of related transactions, such Disposition shall not be deemed to have been completed until consummation of the last of such transactions.

At any time within one year after effecting a dividend or partial redemption pursuant to paragraphs (1)(a) or (b) of this subsection 2.4.1, the Corporation may convert each outstanding share of Class A Common Stock into a number of shares (or fractional shares) of University of Phoenix Online Common Stock (calculated to the nearest five decimal places) having an aggregate value equal to the product of (i) the Applicable Mandatory Conversion Percentage, multiplied by (ii) the value of a share of Class A Common Stock (where in each case value is based on the average Market Value of a share of the relevant series of Common Stock during the 20 consecutive Trading Day period ending on (and including) the 5th Trading Day preceding the date on which the Corporation mails the notice of conversion described in subsection 2.4.6 of this Article IV to holders of Class A Common Stock). Further, at any time within one year after effecting a dividend or partial redemption pursuant to paragraphs (2) (a) or (b) of this subsection 2.4.1, the Corporation may convert each outstanding share of University of Phoenix Online Common Stock into a number of shares (or fractional shares) of Class A Common Stock (calculated to the nearest five decimal places) having an aggregate value equal to the product of (i) the Applicable Mandatory Conversion Percentage, multiplied by (ii) the value of a share of University of Phoenix Online Common Stock (where in each case value is based on the average Market Value of a share of the relevant series of Common Stock during the 20 consecutive Trading Day period ending on (and including) the 5th Trading Day preceding the date on which the Corporation mails the notice of conversion described in subsection 2.4.6 of this Article IV to holders of Common Stock that relates to the Group that consummated the Disposition).

2.4.2Optional Conversion of Stock to Apollo Education Group Common Stock.

The Board of Directors may, provided that there are assets available therefor, at any time, convert each outstanding share of University of Phoenix Online Common Stock as of the Conversion Date into the number of shares (or fractional shares) of Class A Common Stock having an aggregate value (calculated to the nearest five decimal places) equal to the product of (a) the Applicable Optional Conversion Percentage as of the Conversion Date multiplied by (b) the value

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of a share of University of Phoenix Online Common Stock (where in each case value is based on the average Market Value of a share of the relevant series of Common Stock during the 20 consecutive Trading Day period ending on (and including) the 5th Trading Day preceding the date on which the Corporation mails the notice of conversion described in subsection 2.4.6 of this Article IV to holders of University of Phoenix Online Common Stock being converted).

2.4.3Optional Conversion of Stock to Stock of a Subsidiary.

At any time at which all of the assets and liabilities of a Group (and no other assets or liabilities of the Corporation or any subsidiary thereof) are held directly or indirectly by one or more Group Subsidiaries, and each of such Group Subsidiaries has a capital structure consisting of Class A non-voting common stock (“Subsidiary Class A Common Stock”) and Class B voting common stock (“Subsidiary Class B Common Stock”), the Board of Directors may, provided that there are assets legally available therefor, either:

(1)if the assets held by one or more Group Subsidiaries represent assets previously allocated to University of Phoenix Online, declare that all of the outstanding shares of University of Phoenix Online Common Stock shall be converted, as of the Conversion Date, to the number of shares (or fractional shares) of Subsidiary Class A Common Stock of each of such Group Subsidiaries as is equal to the product of (a) the Outstanding Interest Fraction with respect to University of Phoenix Online (determined as of the Conversion Date) multiplied by (b) the number of shares of Subsidiary Class A Common Stock of each such Group Subsidiary as shall be outstanding immediately following such conversion. Such shares of common stock of such Group Subsidiaries may be delivered directly or indirectly through the delivery of shares of one or more of such Group Subsidiaries that own directly or indirectly all of the other shares that are deliverable pursuant to the preceding sentence or through the Corporation. The remaining shares of stock of such Group Subsidiaries shall be either retained by Apollo Education Group or one or more other Group Subsidiaries, or distributed to holders of Apollo Education Group Common Stock, or a combination of the foregoing. If the remaining shares of the Group Subsidiary are distributed to holders of Apollo Education Group common stock, the holders of Class A Common Stock shall receive shares of Subsidiary Class A Common Stock and holders of Class B Common Stock shall receive shares of Subsidiary Class B Common Stock; or

(2)If the assets held by one or more Group Subsidiaries represent assets previously allocated to Apollo Education Group, declare that all of the outstanding shares of Class A Common Stock shall be converted, as of the Conversion Date, to the number of shares (or fractional shares) of Subsidiary Class A Common Stock of each of such Group Subsidiaries and that all of the outstanding shares of Class B Common Stock, as of the Conversion Date, shall be converted, as of the Conversion Date, to the number of shares (or fractional shares) of Subsidiary Class B Common stock of each of the Group Subsidiaries. Such shares of common stock of such Group Subsidiaries may be delivered directly or indirectly through the delivery of shares of one or more Group Subsidiaries that own directly all of the other shares that are deliverable pursuant to the preceding sentence or through the Corporation.

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If the series of Common Stock being converted pursuant to this subsection 2.4.3 is Apollo Education Group Common Stock and the Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online Common Stock on the Conversion Date is greater than zero, the Corporation shall also issue a number of shares of University of Phoenix Online Common Stock on the Conversion Date equal to the then current Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online and deliver those shares to the holders of Apollo Education Group Common Stock or to one of the Group Subsidiaries, at the option of the Corporation. Anything in this Section 2.4.3 to the contrary notwithstanding, if shares of any Group Subsidiary are not transferred to any holder of University of Phoenix Online Common Stock or Apollo Education Group Common Stock (including for example if such Group Subsidiary holds assets and liabilities of a Group but another Group Subsidiary owns all of the stock of such Group Subsidiary), then such Group Subsidiary shall not be required to maintain a capital structure consisting of Subsidiary Class A Common Stock and Subsidiary Class B Common Stock as a condition to implementation of a conversion of stock otherwise contemplated by this Section 2.4.3.

2.4.4Apollo Education Group Common Stock.

(a)Conversion. No Class A Common Stock shall be converted into Class B Common Stock. Each share of Class B Common Stock shall be convertible into Class A Common Stock at any time at the option of the holder thereof. Such conversion shall be on a share-for-share basis, one fully paid and non-assessable share of Class A Common Stock for each share of Class B Common Stock so converted.

At the time of a conversion, the record holders of Class B Common Stock shall deliver to the office of the Corporation or any transfer agent for the Class B Common Stock (i) the certificate or certificates representing the Class B Common Stock to be converted, duly endorsed in blank or accompanied by proper instruments of transfer and (ii) written notice to the Corporation stating that such record holder elects to convert such share or shares. Conversion shall be deemed to have been effected at the close of business on the date when such delivery is made to the corporation of the shares to be converted, and the person exercising such voluntary conversion shall be deemed to be the holder of record of the number of shares of Class A Common Stock issuable upon such conversion at such time. The Corporation shall promptly deliver certificates evidencing the appropriate number of shares of Class A Common Stock to such person.

In the event of the conversion of less than all of the shares of Class B Common Stock evidenced by a certificate surrendered to the corporation in accordance with the procedures of this Article IV, the Corporation shall execute and deliver to the holder of such certificate, without charge to such holder, a new certificate evidencing the number of shares of Class B Common Stock not converted. Shares of Class B Common Stock that are converted into Class A Common Stock as provided herein shall be retired and canceled and shall not be reissued.

(b)Reservation. The corporation hereby reserves and shall at all times reserve and keep available, out of its authorized and unissued shares of Class A Common Stock, for the purposes of effecting conversions, such number of duly authorized shares of Class A Common

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Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class B Common Stock. All the shares of Class A Common Stock so issuable shall, when so issued, be duly and validly issued, fully paid and non-assessable.

(c)Consideration on Merger, Consolidation, etc. In any merger, consolidation, or business combination of the Corporation, the consideration to be received per share by the holders of Class A Common Stock and Class B Common Stock must be identical for each series of stock, except that in any such transaction in which shares of Common Stock are to be distributed, such shares may differ as to voting rights to the extent that voting rights differ among the Class A Common Stock and the Class B Common Stock as of the Effective Date.

(d)Limitation on Issuances of Class B Common Stock. As of September 18, 1997, there were 575,769 shares of Class B Common Stock issued and outstanding. No additional shares of Class B Common Stock shall be issued, except pursuant to any recapitalization or stock split where such recapitalization or stock split results in a proportionate change in the shares of Class A Common Stock.

(e)Automatic Conversion of Class B Common Stock. If at any time the total number of shares of Class B Common Stock outstanding is less than 115,154 (20% of the total number of shares of Existing Class B Common Stock issued and outstanding as of September 18, 1997) (subject to adjustment for any recapitalization or stock split), then each share of Class B Common Stock shall be automatically converted into one fully paid and non-assessable share of Class A Common Stock at such time (the “Class B Conversion Date”). Thereafter, each share of Class A Common Stock shall be entitled to one vote.

At the time of a conversion, the record holders of Class B Common Stock shall deliver to the office of the corporation or any transfer agent for the Class A Common Stock the certificate or certificates representing the Class B Common Stock, duly endorsed in blank or accompanied by proper instruments of transfer. Conversion shall be deemed to have been effected at the close of business on the Class B Conversion Date. The corporation shall promptly deliver certificates evidencing the appropriate number of shares of Class A Common Stock to each record holder of Class B Common Stock.

(f)No Amendment or Modification. The two immediately preceding sections entitled “Limitations on Issuance of Class B Common Stock” and “Automatic Conversion of Class B Common Stock” shall be amended or modified only upon: (1) a separate majority vote of the holders of the Class A Common Stock voting as a class; (2) a separate majority vote of the holders of the Class B Common Stock voting as a class; and (3) a separate majority vote of the holders of the Class A Common Stock who do not possess beneficial ownership of any shares of Class B Common Stock.

2.4.5Treatment of Convertible Securities.

After any Conversion Date on which all outstanding shares of any series of Common Stock were converted, any share of such series of Common Stock that is to be issued on conversion, exchange, or exercise of any Convertible Securities shall, immediately upon such conversion,

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exchange, or exercise and without any notice from or to, or any other action on the part of, the Corporation or its Board of Directors or the holder of such Convertible Security, in the event the shares of any series of Common Stock outstanding on such Conversion Date were converted into shares of another series of Common Stock (or any other series of common stock of the Corporation) pursuant to subsections 2.4.1 or 2.4.2 of this Article IV, be converted into the amount of cash and/or the number of shares of the kind of capital stock and/or other securities or property of the Corporation that the number of shares of such series of Common Stock that were to be issued upon such conversion, exchange, or exercise would have received had such shares been outstanding on such Conversion Date.

The provisions of the immediately preceding sentence shall not apply to the extent that other adjustments in respect of such conversion or exchange of a series of Common Stock are otherwise made pursuant to the provisions of such Convertible Securities.

2.4.6Notice and Other Provisions.

(a)If the Corporation consummates a Disposition (other than an Exempt Disposition), the Corporation shall, not later than the tenth Trading Day after the applicable Disposition Date, issue a press release specifying (w) the Net Proceeds of such Disposition, (x) the number of shares of the series of Common Stock related to such Group then outstanding, (y) the number of shares of such series of Common Stock issuable upon conversion, exchange, or exercise of any convertible or exchangeable securities, options, or warrants and the range of conversion, exchange, or exercise prices thereof, and (z) if the Group is University of Phoenix Online, the Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online. The Corporation shall, not more than 40 Trading Days after such consummation, announce by press release which of the actions specified in subsection 2.4.1 of this Article IV it has determined to take, and upon making that announcement, that determination shall be irrevocable. In addition, the Corporation shall, not more than 40 Trading Days after such consummation and not less than 10 Trading Days before the applicable payment date, redemption date, or Conversion Date, send a notice by first-class mail, postage prepaid, to holders of the relevant series of Common Stock at their addresses as they appear on the transfer books of the Corporation, specifying:

(1)if the Corporation has determined to pay a special dividend, (1) the record date for such dividend, (2) the payment date of such dividend (which cannot be more than 85 Trading Days after such Disposition Date), (3) the Net Proceeds of such Disposition, and (4) the type of property to be paid in such dividend and the approximate per share amount thereof;

(2)if the Corporation has determined to undertake a redemption, the date of redemption (which cannot be more than 85 Trading Days after such Disposition Date), the Net Proceeds of such Disposition, the type of property to be paid as a redemption price and the approximate per share amount thereof, if less than all shares of the relevant series of Common Stock are to be redeemed, the approximate number of shares to be redeemed and the place or places where certificates for shares of such series of Common Stock, properly endorsed or assigned for transfer

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(unless the Corporation waives such requirement), should be surrendered in return for delivery of the cash, securities, or other property to be paid by the Corporation in such redemption; and

(3)if the Corporation has determined to undertake a conversion, the Conversion Date (which cannot be more than 85 Trading Days after such Disposition Date), the number of shares of the other series of Common Stock to be issued in exchange for each outstanding share of such series of Common Stock, and the place or places where certificates for shares of such

series of Common Stock, properly endorsed or assigned for transfer (unless the Corporation waives such requirement), should be surrendered in return for delivery of the other series of Common Stock to be issued by the Corporation in such conversion.

(b)If the Corporation has determined to complete any conversion described in any subsection other than subsection 2.4.1 of this Article IV, except as otherwise provided by subsection 2.4.4 of this Article IV, the Corporation shall, not less than 10 Trading Days and not more than 30 Trading Days before the Conversion Date, send a notice by first-class mail, postage prepaid, to holders of the relevant series of Common Stock at their addresses as they appear on the transfer books of the Corporation, specifying (i) the Conversion Date and the other terms of the conversion and (ii) the place or places where certificates for shares of such series of Common Stock, properly endorsed or assigned for transfer (unless the Corporation waives such requirement), should be surrendered for delivery of the stock to be issued or delivered by the Corporation in such conversion.

(c)Neither the failure to mail any notice required by this subsection 2.4.6 or any other provision of this Article IV to any particular holder nor any defect therein would affect the sufficiency thereof with respect to any other holder or the validity of any dividend, redemption or exchange contemplated hereby.

(d)If the Corporation is redeeming less than all of the outstanding shares of a series of Common Stock pursuant to paragraphs 1(b) and 2(b) of subsection 2.4.1 of this Article IV, the Corporation shall redeem such shares pro rata or by lot or by such other method as the Board of Directors determines to be equitable.

(e)Except as otherwise provided by subsection 2.4.4 of this Article IV, no holder of shares of a series of Common Stock being redeemed or converted shall be entitled to receive any cash, securities, or other property to be distributed in such redemption or conversion until such holder surrenders certificates for such shares, properly endorsed or assigned for transfer, at such place as the Corporation shall specify (unless the Corporation waives such requirement). As soon as practicable after the Corporation’s receipt of certificates for such shares, the Corporation shall deliver to the person for whose account such shares were so surrendered, or to the nominee or nominees of such person, the cash, securities, or other property to which such person shall be entitled, together with any fractional payment referred to below, in each case without interest. If less than all of the shares of Common Stock represented by any one certificate is exchanged or redeemed, the Corporation shall also issue and deliver a new certificate for the shares of such Common Stock not exchanged or redeemed.

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(f)The Corporation shall not be required to issue or deliver fractional shares of any capital stock or any other fractional securities to any holder of Common Stock upon any redemption, dividend, conversion, or other distribution described above. If more than one share of Common Stock shall be held at the same time by the same holder, the Corporation may aggregate the number of shares of any capital stock that would be issuable or any other securities that would be distributable to such holder upon any such redemption, dividend, conversion, or other distribution. If there are fractional shares of any capital stock or any other fractional securities remaining to be issued or distributed to any holder, the Corporation shall, if such fractional shares or securities are not issued or distributed to such holder, pay cash in respect of such fractional shares or securities in an amount equal to the Fair Value thereof (without interest).

(g)From and after the date set for any redemption or conversion contemplated by this section 2.4, all rights of a holder of shares of Common Stock being redeemed or converted shall cease except for the right, upon surrender of the certificates theretofore representing such shares, to receive the cash, securities, or other property for which such shares were redeemed or converted, together with any fractional payment as provided above, in each case without interest (and, if such holder was a holder of record as of the close of business on the record date for a dividend not yet paid, the right to receive such dividend). A holder of shares of Common Stock being converted shall not be entitled to receive any dividend or other distribution with respect to shares of the other series of Common Stock until after certificates theretofore representing the shares being exchanged are surrendered as contemplated above. Upon such surrender, the Corporation shall pay to the holder the amount of any dividends or other distributions (without interest) which theretofore became payable with respect to a record date occurring after the exchange, but which were not paid by reason of the foregoing, with respect to the number of whole shares of the other series of Common Stock represented by the certificate or certificates issued upon such surrender. From and after the date set for any exchange, the Corporation shall, however, be entitled to treat the certificates for shares of a series of Common Stock being converted that were not yet surrendered for conversion as evidencing the ownership of the number of whole shares of the other series of Common Stock for which the shares of such Common Stock should have been converted, notwithstanding the failure to surrender such certificates.

(h)The Corporation shall pay any and all documentary, stamp, or similar issue or transfer taxes that might be payable in respect of the issue or delivery of any shares of capital stock and/or other securities on any redemption or conversion contemplated by this section 2.4; provided, however, that the Corporation shall not be required to pay any tax that might be payable in respect of any transfer involved in the issue or delivery of any shares of capital stock and/ or other securities in a name other than that in which the shares so exchanged or redeemed were registered, and no such issue or delivery will be made unless and until the person requesting such issue pays to the Corporation the amount of any such tax, or establishes to the satisfaction of the Corporation that such tax has been paid.

(i)The Corporation may, subject to applicable law, establish such other rules, requirements and procedures to facilitate any dividend, redemption, or conversion contemplated by this section 2.4 as the Board of Directors may determine to be appropriate under the circumstances.

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2.5Certain Determinations by the Board Of Directors.

In addition to the determinations to be made by the Board of Directors as provided by sections 1 and 3 of this Article IV, the Board of Directors shall, subject to subsections 2.7.2, 2.7.13 and 2.7.27 of this Article IV, make such determinations with respect to the assets and liabilities to be attributed to the Groups and the items of income and expense to be attributed to the Groups. Additionally, the Board of Directors shall devise cash management and other allocation policies pertaining to the administration of the Groups and policies relating to the allocation of business opportunities among the Groups. Any such determinations and policies may at any time, at the sole discretion of the Board of Directors, be modified, rescinded, or supplemented. A record of any such determination shall be filed with the records of the actions of the Board of Directors, provided that the failure to so file such record shall not invalidate any such determination made by the Board of Directors.

Subject to applicable law, any determinations made in good faith by the Board of Directors of the Corporation under any provision of this subsection 2.5 or otherwise in furtherance of the application of this section 2 of Article IV shall be final and binding on all shareholders.

2.6Adjustments to Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online.

The Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online, as in effect from time to time, shall, automatically without action by the Board of Directors or any other person, be:

(a)adjusted in proportion to any changes in the number of outstanding shares of University of Phoenix Online Common Stock caused by subdivisions (by stock split, reclassification, or otherwise) or combinations (by reverse stock split, reclassification, or otherwise) of shares of University of Phoenix Online Common Stock, or by dividends or other distributions of shares of University of Phoenix Online Common Stock on shares of University of Phoenix Online Common Stock (and, in each such case, rounded, if necessary, to the nearest whole number);

(b)decreased by, if the Corporation issues any shares of University of Phoenix Online Common Stock and the Board of Directors attributes that issuance (and the proceeds thereof) to Apollo Education Group, the number of shares of University of Phoenix Online Common Stock so issued, and if the Board of Directors re-allocates to Apollo Education Group any cash or other assets theretofore allocated to University of Phoenix Online in connection with a redemption of shares of University of Phoenix Online Common Stock (as required pursuant to clause (ii) of the proviso to the definition of Apollo Education Group in paragraph (c) of subsection 2.7.2 of this Article IV) or in return for a decrease in the Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online, the number (rounded, if necessary, to the nearest whole number) equal to (x) the aggregate Fair Value of such cash or other assets divided by (y) the Market Value of one share of University of Phoenix Online Common Stock, in each case, as of the date of such re-allocation; and

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(c)increased by, if the Corporation repurchases any shares of University of Phoenix Online Common Stock and the Board of Directors attributes that repurchase (and the consideration therefor) to Apollo Education Group, the number of shares of University of Phoenix Online Common Stock so repurchased and if the Board of Directors re-allocates to University of Phoenix Online any cash or other assets theretofore allocated to Apollo Education Group in return for an increase in the Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online the number (rounded, if necessary, to the nearest whole number) equal to (x) the Fair Value of such cash or other assets, divided by (y) the Market Value of one share of the University of Phoenix Online Common Stock, in each case, as of the date of such re-allocation.

Neither the Corporation nor the Board of Directors shall take any action that would, as a result of any of the foregoing adjustments, reduce the Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online to below zero. Subject to the preceding sentence, the Board of Directors may attribute the issuance of any shares of any series of Common Stock (and the proceeds therefrom) or the repurchase of any series of Common Stock (and the consideration therefor) to Apollo Education Group or to University of Phoenix Online, as the Board of Directors determines in its sole discretion; provided, however, that the Board of Directors must attribute to Apollo Education Group the issuance of any shares of any series of Common Stock that are issued (1) as a dividend or other distribution on, or as consideration for the repurchase of, shares of Apollo Education Group Common Stock or (2) as consideration to acquire any assets or satisfy any liabilities attributed to Apollo Education Group.

2.7Certain Definitions.

As used in this section 2 of this Article IV, the following terms shall have the following meanings (with terms defined in the singular having comparable meaning when used in the plural and vice versa), unless the context otherwise requires. As used in this subsection 2.7, a “contribution” or “transfer” of assets or properties from one Group to another shall refer to the reattribution of such assets or properties from the contributing or transferring Group to the other Group (as opposed to an actual transfer, assignment, contribution, or comparable transaction) and correlative phrases shall have correlative meanings.

2.7.1All or Substantially All of the Assets means, with respect to any Disposition by a Group, a portion of assets that represents at least 80% of the Fair Value (determined as of the Disposition Date ) of the assets of such Group. For this purpose, in the case of Apollo Education Group, the assets of Apollo Education Group shall be deemed to include any proportionate interest in University of Phoenix Online owned by Apollo Education Group.

2.7.2Apollo Education Group means:

(a)all of the businesses, assets, and liabilities of the Corporation and its subsidiaries, other than the businesses, assets and liabilities that are part of University of Phoenix Online;

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(b)the rights and obligations of Apollo Education Group under any inter-Group debt deemed to be owed to or by Apollo Education Group (as such rights and obligations are defined in accordance with policies established from time to time by the Board of Directors); and

(c)a proportionate interest in University of Phoenix Online (after giving effect to any options, Preferred Stock, other securities, or debt issued or incurred by the Corporation and attributed to University of Phoenix Online) equal to the Retained Interest Fraction; provided, however, that: (i) the Corporation may re-allocate assets from one Group to another Group in return for other assets or services rendered by that other Group in the ordinary course of business or in accordance with policies established by the Board of Directors from time to time, and (ii) if the Corporation transfers cash, other assets, or securities to holders of University of Phoenix Online Common Stock as a dividend or other distribution on shares of University of Phoenix Online Common Stock (other than a dividend or distribution payable in shares of University of Phoenix Online Common Stock), or as payment in a redemption required by subsection 2.4.1 of this Article IV, then the Board of Directors shall re-allocate from University of Phoenix Online to Apollo Education Group assets having a Fair Value equal to the aggregate Fair Value of the cash, other assets, or securities so transferred, multiplied by the Retained Interest Amount with respect to University of Phoenix Online as of the record date for such dividend or distribution, or on the date of such redemption, as the case may be.

2.7.3Applicable Mandatory Conversion Percentage means in the context of a conversion of shares pursuant to subsection 2.4.1 of this Article IV, 110%; provided, however, that if either (a) the Disposition Date is on or after the second anniversary of the Issuance Date or (b) the Conversion Date follows a Tax Event, the Applicable Mandatory Conversion Percentage shall be 100%.

2.7.4Applicable Optional Conversion Percentage means, in the context of a conversion of shares of University of Phoenix Online Common Stock pursuant to subsection 2.4.2 of this Article IV, the percentage set forth in the table below:

If the Conversion Date Falls During the Period Indicated Below	Applicable Optional Conversion Percentage Specified for such Period
First Year	125%
Second Year	120%
Third Year	115%
Fourth Year and Thereafter	110%

For purposes of the foregoing chart, (i) the first “Year” is the period from and including the Issuance Date to but excluding the first anniversary of the Issuance Date and (ii) each subsequent “Year” is the period from and including the day after the end of the prior Year to but excluding the anniversary of such day.

However, if for any consecutive 20 Trading Day period, the Market Capitalization of University of Phoenix Online Common Stock equals or exceeds 60% of the Market Capitalization of Class A

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Common Stock, the Applicable Optional Conversion Percentage in the context of a conversion of University of Phoenix Online Common Stock pursuant to subsection 2.4.2 of this Article IV shall be 100%. Additionally if a Tax Event occurs prior to the Conversion Date, the Applicable Optional Conversion Percentage in the context of a conversion of University of Phoenix Online Common Stock pursuant to subsection 2.4.2 of this Article IV, shall be 100% irrespective of the Conversion Date.

2.7.5Available Dividend Amount

(a)means for Apollo Education Group, on any day on which dividends are paid on shares of Apollo Education Group Common Stock, the amount that would, immediately prior to the payment of such dividends, be legally available for the payment of dividends on shares of Apollo Education Group Common Stock under Arizona law if on such day (i) Apollo Education Group and University of Phoenix Online were each a single, separate Arizona corporation, (ii) Apollo Education Group had outstanding (A) a number of shares of common stock equal to the number of shares of Apollo Education Group Common Stock that are then outstanding, and (B) a number of shares of Preferred Stock equal to the number of shares of Preferred Stock that have been attributed to Apollo Education Group and are then outstanding, (iii) the assumptions about University of Phoenix Online set forth in the next paragraph were true, and (iv) Apollo Education Group owned a number of shares of University of Phoenix Online Common Stock equal to the Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online; and

(b)means for University of Phoenix Online, on any day on which dividends are paid on shares of University of Phoenix Online Common Stock, the amount that would, immediately prior to the payment of such dividends, be legally available for the payment of dividends on shares of University of Phoenix Online Common Stock under Arizona law if University of Phoenix Online on such day were a single, separate Arizona corporation having outstanding (i) a number of shares of common stock equal to the number of shares of University of Phoenix Online Common Stock that are then outstanding plus the Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online and (ii) a number of shares of Preferred Stock equal to the number of shares of Preferred Stock that have been attributed to such University of Phoenix Online Group and are then outstanding.

2.7.6Conversion Date means the date fixed by the Board of Directors as the effective date for the conversion of shares of Common Stock into other shares of Common Stock in accordance with these Articles of Incorporation, as shall be set forth in the notice to holders of the shares of Common Stock that is being converted, and to holders of any Convertible Securities that are convertible into or exchangeable or exercisable for shares, required pursuant to subsection 2.4.5 of this Article IV.

2.7.7Convertible Securities means any securities of the Corporation or of any subsidiary thereof, including warrants and options, outstanding at such time that by their terms are convertible into or exchangeable or exercisable for or evidence the right to acquire any shares of any series of Common Stock, whether convertible, exchangeable, or exercisable at such time or a later time or only upon the occurrence of certain events, but in respect of antidilution provisions of such securities only upon the effectiveness thereof.

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2.7.8Disposition means a sale, transfer, assignment, or other disposition (whether by merger, consolidation, sale, contribution of assets or stock, or otherwise) of All or Substantially All of the Assets of a Group to one or more persons or entities in one transaction or a series of related transactions.

2.7.9Disposition Date means, with respect to any Disposition, the date of consummation of such Disposition.

2.7.10Effective Date means the date on which these Amended and Restated Articles of Incorporation are first filed with the Arizona Corporation Commission.

2.7.11Exempt Disposition means any of the following:

(a)a Disposition in connection with the liquidation, dissolution, or winding-up of the Corporation and the distribution of assets to shareholders;

(b)a Disposition to any person or entity controlled by the Corporation, as determined by the Board of Directors;

(c)a Disposition in connection with a Related Business Transaction;

(d)a dividend, out of University of Phoenix Online’s assets, to holders of University of Phoenix Online Common Stock (and a re-allocation of a corresponding amount of University of Phoenix Online’s assets to Apollo Education Group as required pursuant to clause (ii) of the proviso to the definition of Apollo Education Group in paragraph (c) of subsection 2.7.2);

(e)a dividend, out of Apollo Education Group’s assets, to holders of Apollo Education Group Common Stock; and

(f)any other Disposition if at the time of the Disposition there are no shares of Apollo Education Group Class A Common Stock or University of Phoenix Online Common Stock outstanding.

2.7.12Fair Value means:

(a)in the case of cash, the amount thereof;

(b)in the case of securities of a class that is publicly traded, the Market Value thereof (if such value can be determined); and

(c)in the case of a security that is not publicly traded (or for which such value cannot be determined) or in the case of property other than cash and securities, an amount determined in good faith by the Board of Directors.

2.7.13Group means either Apollo Education Group or University of Phoenix Online.

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2.7.14Group Subsidiaries means one or more wholly-owned subsidiaries of the Corporation.

2.7.15Issuance Date means the date of the first issuance of shares of University of Phoenix Online Common Stock.

2.7.16Market Capitalization means with respect to any series of Common Stock on any Trading Day the product of (a) the Market Value of one share of such series on such day multiplied by (b) the aggregate number of shares of such series outstanding on such day.

2.7.17Market Value means, with respect to a share of any class or series of capital stock of the Corporation on any day, the average of the high and low reported sales prices of such share of such class or series on such Trading Day or, in case no such reported sale takes place on such Trading Day, the average of the reported closing bid and asked prices regular way of a share of such class or series on such Trading Day, in either case, as reported on the New York Stock Exchange Composite Tape or, if the shares of such class or series are not listed or admitted to trading on such Exchange on such Trading Day, on the principal national securities exchange in the United States on which the shares of such class or series are listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange on such Trading Day, on the Nasdaq National Market or, if the shares of such class or series are not listed or admitted to trading on any national securities exchange or quoted on the Nasdaq National Market on such Trading Day, the average of the closing bid and asked prices of a share of such class or series in the over-the-counter market on such Trading Day as furnished by any New York Stock Exchange member firm selected from time to time by the Corporation or, if such closing bid and asked prices are not made available by any such New York Stock Exchange member firm on such Trading Day, the Fair Value of a share of such class or series; provided that, for purposes of determining the market value of a share of any class or series of capital stock for any period, (i) the “Market Value” of a share of capital stock on any day prior to any “ex-dividend” date or any similar date occurring during such period for any dividend or distribution (other than any dividend or distribution contemplated by clause (ii)(b) of this sentence) paid or to be paid with respect to such capital stock shall be reduced by the Fair Value of the per share amount of such dividend or distribution and (ii) the “Market Value” of any share of capital stock on any day prior to (a) the effective date of any subdivision (by stock split or otherwise) or combination (by reverse stock split or otherwise) of outstanding shares of such class or series of capital stock occurring during such period or (b) any “ex-dividend” date or any similar date occurring during such period for any dividend or distribution with respect to such capital stock to be made in shares of such class or series of capital stock or Convertible Securities that are convertible, exchangeable or exercisable for such class or series of capital stock shall be appropriately adjusted, as determined by the Board of Directors, to reflect such subdivision, combination, dividend or distribution.

2.7.18Net Proceeds means, with respect to a Disposition of All or Substantially All of the Assets of a Group, the positive amount, if any, remaining from the gross proceeds of such Disposition after any payment of, or reasonable provision (as determined in good faith by the Board of Directors, which determination will be conclusive and binding on all shareholders) for, (a) any taxes payable by the Corporation or any subsidiary or affiliate thereof in

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respect of such Disposition or which would have been payable but for the utilization of tax benefits attributable to the Group not the subject of the Disposition, (b) any taxes payable by the Corporation in respect of any resulting dividend, redemption, or conversion, (c) any transaction costs, including, without limitation, any legal, investment banking, and accounting fees and expenses and (d) any liabilities (contingent or otherwise) of, attributed to or related to, such Group, including, without limitation, any liabilities for deferred taxes or any indemnity or guarantee obligations that are outstanding or incurred in connection with the Disposition or otherwise, any liabilities for future purchase price adjustments, and any obligations with respect to outstanding securities (other than Common Stock) attributed to such Group as determined in good faith by the Board of Directors.

2.7.19Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online means, initially, the number the Board of Directors designates prior to the time the Corporation first issues shares of University of Phoenix Online Common Stock for the account of Apollo Education Group in respect of its retained interest in University of Phoenix Online, as authorized by section 2; provided, however, that such number as in effect from time to time shall automatically be adjusted as required by subsection 2.6 of this Article IV.

2.7.20Outstanding Interest Fraction means (a) with respect to Apollo Education Group at any time of determination, 1, and (b) with respect to University of Phoenix Online, at any time of determination, a fraction, expressed as a percentage, the numerator of which shall be the number of shares of University of Phoenix Online Common Stock outstanding on such date and the denominator of which shall be the sum of the number of shares of University of Phoenix Online Common Stock outstanding on such date and the Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online.

2.7.21Publicly Traded means, with respect to any security, a security (a) registered under Section 12 of the Securities Exchange Act of 1934, as amended (or any successor provision of law) and (b) listed for trading on the New York Stock Exchange or any national securities exchange registered under Section 7 of the Securities Exchange Act of 1934, as amended (or any successor provision of law) that is the successor to such exchange or quoted in the National Association of Securities Dealers Automation Quotation System (or any successor system).

2.7.22Related Business Transaction means any Disposition of All or Substantially All of the Assets of a Group that results in the receipt, in exchange therefor, of primarily equity securities (including, without limitation, capital stock, debt securities convertible into or exchangeable for equity securities, or interests in a general or limited partnership or limited liability company, without regard to the voting power or other management or governance rights associated therewith) of any entity that (a) acquires such properties, assets, or stock or securities or succeeds (by merger, formation of a joint venture, or otherwise) to the business conducted with such assets or controls such acquiror or successor and (b) is primarily engaged or proposes to engage primarily in one or more businesses similar or complementary to the businesses conducted by such Group prior to such Disposition, as determined by the Board of Directors.

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2.7.23Retained Interest Amount means:

(a)with respect to Apollo Education Group, at any time of determination, 1; and

(b)with respect to University of Phoenix Online, at any time of determination, a fraction the numerator of which shall be the Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online and the denominator of which shall be the number of shares of University of Phoenix Online Common Stock outstanding at such time.

2.7.24Retained Interest Fraction means:

(a)with respect to Apollo Education Group, at any time of determination, 1; and

(b)with respect to University of Phoenix Online, at any time of determination, a fraction, expressed as a percentage, the numerator of which shall be the Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online and the denominator of which shall be the sum of the number of shares of University of Phoenix Online Common Stock outstanding and the Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest in University of Phoenix Online at such time.

2.7.25Tax Event means receipt by the Corporation of an opinion of the tax advisor of the Corporation’s choice experienced in such matters, who shall not be an officer or employee of the Corporation or any of its affiliates, to the effect that, as a result of any amendment to, clarification of, or change in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein (including any announced proposed change by an administrative agency in such regulations), or as a result of any official or administrative pronouncement or action or judicial decision interpreting or applying such laws or regulations, there is more than an insubstantial risk that for United States federal income tax purposes (i) any issuance of University of Phoenix Online Common Stock would be treated as a sale or other taxable disposition by the Corporation or any of its Subsidiaries of any of the assets or operations to which the University of Phoenix Online Common Stock relates, (ii) the Corporation, its subsidiaries or affiliates, or any of its successors or its shareholders is or, at any time in the future, will be subject to tax by reason of the existence of shares of University of Phoenix Online Common Stock, or (iii) University of Phoenix Online Common Stock, Class A Common Stock, or Class B Common Stock is not or, at any time in the future, will not be treated solely as stock of the Corporation. For purposes of rendering such opinion, the tax advisor shall assume that any administrative proposals will be adopted as proposed. However, in the event a change in law is proposed, the tax advisor shall render an opinion only in the event of enactment.

2.7.26Trading Day means each weekday other than any day on which the relevant series of Common Stock of the Corporation is not traded on any national securities exchange or quoted in the Nasdaq National Market or in the over-the-counter market.

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2.7.27University of Phoenix Online means:

(a)all of the businesses, assets, and liabilities of the Corporation and its subsidiaries that the Board of Directors has, at any time, attributed to University of Phoenix Online in accordance with policies established by the Board of Directors; and

(b)the rights and obligations of University of Phoenix Online under any inter-Group debt deemed to be owed to or by University of Phoenix Online (as such rights and obligations are defined in accordance with policies established from time to time by the Board of Directors);

provided, however, that: (i) the Corporation may re-allocate assets from one Group to another Group in return for other assets or services rendered by that other Group in the ordinary course of business or in accordance with policies established by the Board of Directors from time to time, and (ii) if the Corporation transfers cash, other assets, or securities to holders of shares of University of Phoenix Online Common Stock as a dividend or other distribution on shares of University of Phoenix Online Common Stock (other than a dividend or distribution payable in shares of University of Phoenix Online Common Stock), or as payment in a redemption required by section 2.4 of this Article IV, then the Board of Directors shall re-allocate from University of Phoenix Online to Apollo Education Group assets having a Fair Value equal to the aggregate Fair Value of the cash, other assets, or securities so transferred, multiplied by the Retained Interest Amount with respect to such Group as of the record date for such dividend or distribution, or on the date of such redemption, as the case may be.

2.8Effectiveness of Sections.

The provisions of subsections 2.1.1, 2.1.2, 2.1.3 (c) through (e), 2.4.1, 2.4.2, 2.4.3, and 2.4.5 and sections 2.3, 2.5, and 2.6 of this Article IV shall apply only when there are shares of Common Stock outstanding in addition to Apollo Education Group Common Stock.

2.9Preemptive and Subscription Rights.

Holders of Common Stock are not entitled to any preemptive or subscription rights with respect to their shares of Common Stock.

3.Preferred Stock.

Upon any issuance of any shares of Preferred Stock of any class or series after the Effective Date, the Board of Directors shall attribute for purposes of this Article IV the shares so issued entirely to one Group or partly to two or more Groups in such proportion as the Board of Directors shall determine and, further, in the case of the issuance of shares of Preferred Stock that are convertible into or exchangeable or exercisable for Common Stock other than Apollo Education Group Common Stock, if at the time such shares of Preferred Stock are issued the Number of Shares Issuable with Respect to Apollo Education Group’s Retained Interest shall be greater than zero, then the Board of Directors shall also determine what portion (which may be some, all, or none) of such shares of Preferred Stock shall reduce the Number of Shares Issuable with Respect to Apollo

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Education Group’s Retained Interest, taking into consideration the use of the proceeds of such issuance of shares of Preferred Stock in the business of each relevant Group and any other relevant factors. Upon any redemption or repurchase of shares of Preferred Stock, the Board of Directors shall determine the proper attribution thereof. Notwithstanding any such attribution of shares of Preferred Stock to any Group, any dividends or distributions or other payments which may be made by the Corporation on such shares of Preferred Stock may be made, and as required by the preferences and relative, participating, optional, or other rights thereof shall be made, out of any of the properties or assets of the Corporation, regardless of the Group to which such properties or assets are attributed in accordance with subsections 2.7.2, 2.7.13, or 2.7.27 of this Article IV, except as otherwise provided by the resolution of the Board of Directors fixing the preferences and relative, participating, optional, or other rights of a class or series of Preferred Stock. No class or series of Preferred Stock shall be entitled to vote on any matter unless also authorized by the holders of at least 80% of the issued and outstanding Apollo Education Group Class B Common Stock.

ARTICLE VBOARD OF DIRECTORS

The business and affairs of the Corporation shall be conducted by a Board of Directors.

1.Number Of Directors.

                  The number of directors of the Corporation shall be not less than seven (7) nor more than fifteen (15) members, as established from time to time by the Board of Directors. The term of each director holding office at the time of the effective date of this amendment to ARTICLE V, Section 1 shall terminate as of the next Annual Meeting of shareholders entitled to vote on the election of directors, notwithstanding that any of such directors may have been elected to a term that would have extended beyond such date, and the directors elected at such Annual Meeting shall hold such office until the following Annual Meeting of shareholders entitled to vote on the election of directors or until his or her earlier death, resignation, or removal. The foregoing notwithstanding, each director shall serve until his or her successor is duly elected.

2.Vacancies.

Vacancies on the Board of Directors, whether created by an increase in the number of directors, or by death, disability, resignation, or removal, shall be filled by a vote of a majority of directors then remaining in office at a regular meeting, or a special meeting called for such purpose. Each director so chosen shall hold office until the next Annual Meeting and until his or her successor shall be duly elected and qualified, or until his or her earlier death, resignation, or removal.

3.Removal.

Except as provided in Section 1 of this ARTICLE V, a director may be removed by the shareholders only for cause at a special meeting of such shareholders, called for such purpose in conformity with the Corporation’s Bylaws, and only by an affirmative vote of the holders of two-thirds (2/3) of the voting power of all the shares entitled to vote at such meeting.

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4.Nomination Of Directors.

Any shareholder entitled to vote for the election of directors at a meeting may nominate persons for election as Directors only if written notice of such shareholder’s intent to make such nomination is given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the Corporation not later than 90 and not more than 120 days in advance of the scheduled annual meeting, regardless of postponements, adjournments or deferrals of that meeting to a later date; provided, however, that if less than 70 days notice or public disclosure of the date of the scheduled annual meeting is given or made, the shareholder’s notice, to be timely, must be so delivered or received not later than the close of business on the tenth (10th) day following the earlier of the day on which such notice of the date of the scheduled annual meeting was mailed or the day on which such public disclosure was made. Notice from any shareholder shall set forth: (i) the name and address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (ii) a representation that the shareholder is a holder of record of stock of the corporation entitled to vote at such meeting (including the number of shares of stock of the corporation owned beneficially or of record by such shareholder and the nominee or nominees) and that such shareholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (iii) a description of all arrangements or understandings between the shareholder and each nominee; (iv) such other information regarding each nominee proposed by such shareholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had each nominee been nominated, or intended to be nominated, by the Board of Directors; and (v) the consent of each nominee to serve as a director of the corporation if so elected. The chairman of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure and no person shall be elected as a Director pursuant to a nomination by a shareholder unless nominated in accordance with the procedures set forth herein.

A majority of the Board of Directors may reject any nomination by a shareholder not timely made in accordance with the terms of this Article V. If a majority of the Board of Directors determines that the information provided in a shareholder’s notice does not satisfy the informational requirements of this Article V in any material respect, the Secretary of the Corporation shall promptly notify such shareholder of the deficiency in the notice. The shareholder shall have an opportunity to cure the deficiency by providing additional information to the Secretary within such period of time as a majority of the Board of Directors shall reasonably determine. If the deficiency is not cured within such period, or if a majority of the Board of Directors reasonably determines that the additional information provided by the shareholder, together with the information previously provided, does not satisfy the requirements of this Article V in any material respect, then a majority of the Board of Directors may reject such shareholder’s nomination. The Secretary of the Corporation shall notify a shareholder in writing whether his, her, or its nomination has been made in accordance with the time and information requirements of this Article V. Notwithstanding the procedures set forth in this paragraph, if a majority of the Board of Directors does not make a determination as to the validity of any nomination by a shareholder, the presiding officer of the annual meeting shall determine and declare at the annual meeting whether a nomination was made in accordance with the terms of this Article V. If such presiding officer shall so declare at the annual meeting that any such nomination is defective, the defective nomination shall be disregarded.

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ARTICLE VI

QUORUM

A quorum for the transaction of business at any meeting or adjourned meeting of the Board of Directors shall consist of one-third (1/3) of those then in office.

ARTICLE VIILIMITATION ON LIABILITY OF DIRECTORS

A director or former director of the Corporation shall not be liable to the Corporation or its shareholders for money damages for any action taken or any failure to take any action as a director, except liability for any of the following:

(a)the amount of a financial benefit received by a director to which the director is not entitled;

(b)an intentional infliction of harm on the Corporation or the shareholders;

(c)a violation of Arizona Revised Statutes § 10-833; or

(d)an intentional violation of criminal law.

The Corporation may indemnify a director or former director for any liability (as defined in Arizona Revised Statutes § 10-850) to any person for any action taken, or any failure to take any action, except liability for any of the following:

(a)the amount of a financial benefit received by a director to which the director is not entitled;

(b)an intentional infliction of harm on the Corporation or the shareholders;

(c)a violation of Arizona Revised Statutes § 10-833; or

(d)an intentional violation of criminal law.

The Corporation may advance expenses with respect to any liability for which it may so indemnify, on such terms and conditions as may be determined by the Corporation. The authority of the Corporation to so indemnify and advance expenses shall be in addition to the provisions of Arizona Revised Statutes §§ 10-850 to 10-858 and shall apply whether or not the Corporation would have power to indemnify or advance expenses to the individual against the same liability under the provisions of Arizona Revised Statutes §§ 10-850 to 10-858 in the absence of the above authority. The authority of the Corporation to so indemnify and advance expenses shall be in addition to the provisions of any contract or Corporation bylaw dealing with indemnification

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or advancement of expenses, provided, however, that any contract or bylaw purporting to make indemnification or advancement of expenses mandatory shall not apply to the indemnification authority pursuant to this ARTICLE VII, which shall remain discretionary. Any determination to indemnify or advance expenses pursuant to this ARTICLE VII shall be made by the Board of Directors of the Corporation by a majority vote. Any director who is a party to any proceeding, or otherwise considered to be interested in such proceeding, shall not be disqualified from voting with respect to any such determination if the director discloses his interest to the other directors; In addition, any determination to indemnify or advance expenses pursuant to this ARTICLE VII may be made by any other authorizing method permitted by law.

ARTICLE VIIIAMENDMENT OF ARTICLES OF INCORPORATION

The Corporation reserves the right to alter or repeal any provision contained in these Articles of Incorporation in the manner prescribed by the laws of the State of Arizona and all rights conferred upon shareholders are granted subject to this reservation; provided, however, that notwithstanding any other provision of these Articles of Incorporation or any provision of law which might otherwise permit a lesser vote, but in addition to any vote of the holders of any class or series of the stock of this Corporation required by law or by these Articles of Incorporation, the affirmative vote of the holders of at least two-thirds (2/3) of the voting power of all the shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter or repeal, or adopt any provision inconsistent with Articles V and VI or this Article VIII of these Articles of Incorporation.

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EX-3.2

Exhibit 3.2

AMENDED AND RESTATED BYLAWS
OF
APOLLO EDUCATION GROUP, INC.∗

(As amended through March 2006)

I. REFERENCES TO CERTAIN TERMS AND CONSTRUCTION

1.01. Certain References. Any reference herein made to law will be deemed to refer to the law of the State of Arizona, including any applicable provision of Chapters 1 through 17 of Title 10 of the Arizona Revised Statutes, or any successor statute, as from time to time amended and in effect (sometimes referred to herein as the “Arizona Business Corporation Act”). Any reference herein made to the corporation’s Articles will be deemed to refer to its Articles of Incorporation and all amendments thereto as at any given time on file with the Arizona Corporation Commission. Except as otherwise required by law and subject to any procedures established by the corporation pursuant to Arizona Revised Statutes Section 723, the term “shareholder” as used herein shall mean one who is a holder of record of shares of the corporation. References to specific sections of law herein made shall be deemed to refer to such sections, or any comparable successor provisions, as from time to time amended and in effect.

1.02. Seniority. The law and the Articles (in that order of precedence) will in all respects be considered senior and superior to these Bylaws, with any inconsistency to be resolved in favor of the law and such Articles (in that order of precedence), and with these Bylaws to be deemed automatically amended from time to time to eliminate any such inconsistency which may then exist.

1.03. Computation of Time. The time during which an act is required to be done, including the time for the giving of any required notice herein, shall be computed by excluding the first day or hour, as the case may be, and including the last day or hour.

II. OFFICES

2.01. Principal Office. The principal office of the corporation shall be located at any place either within or outside the State of Arizona as designated in the corporation’s most current Annual Report filed with the Arizona Corporation Commission or in any other document executed and delivered to the Arizona Corporation Commission for filing. If a principal office is not so designated, the principal office of the corporation shall mean the known place of business of the corporation. The corporation may have such other offices, either within or without the State of Arizona, as the Board of Directors may designate or as the business of the corporation may require from time to time.

________________________

* These Amended and Restated Bylaws have been restated to reflect a change in the corporation’s name from Apollo Group, Inc. to Apollo Education Group, Inc., effective November 15, 2013.

2.02. Known Place of Business. A known place of business of the corporation shall be located within the State of Arizona and may be, but need not be, the address of the statutory agent of the corporation. The corporation may change its known place of business from time to time in accordance with the relevant provisions of the Arizona Business Corporation Act.

III. SHAREHOLDERS

3.01. Annual Meetings of Class A Shareholders. Each annual meeting of the Class A shareholders is to be held on the third Wednesday in the month of January of each year (unless that day be a legal holiday, in which event the annual meeting will be held on the next succeeding business day) at a time and place as determined by the Board of Directors or, in the absence of action by the Board, as set forth in the notice given, or waiver signed, with respect to such meeting pursuant to Section 3.03 below. At the annual meeting, the Board of Directors shall report on the corporation’s financial results for the past year and other matters. If any annual meeting is for any reason not held on the date determined as aforesaid, a deferred annual meeting may thereafter be called and held in lieu thereof, at which the same proceedings may be conducted.

3.02. Annual Meetings of Class B Shareholders. Each annual meeting of the Class B shareholders is to be held on the first Wednesday in the month of December of each year (unless that day be a legal holiday, in which event the annual meeting will be held on the next succeeding business day) at a time and place as determined by the Board of Directors or, in the absence of action by the Board, as set forth in the notice given, or waiver signed, with respect to such meeting pursuant to Section 3.03 below. At the annual meeting, the Class B shareholders shall elect a Board of Directors and transact such other business as may be properly brought before the meeting. If any annual meeting is for any reason not held on the date determined as aforesaid, a deferred annual meeting may thereafter be called and held in lieu thereof, at which the same proceedings may be conducted. Any Director elected at any annual meeting, deferred annual meeting, or special meeting will continue in office until the election of his or her successor, subject to his or her earlier resignation pursuant to Section 7.01 below.

3.03. Special Shareholder Meetings. Special meetings of the shareholders may be held whenever and wherever, either within or without the State of Arizona, called for by or at the direction of the Chairman of the Board, the President, or the Board of Directors. A special meeting of shareholders shall also be called by the President or the Secretary at the written request of the holder or holders of not less than 50% of all outstanding votes entitled to be cast on any matter to be voted on at the meeting. Any such written request by shareholders shall state the purpose or purposes of the proposed meeting, and business to be transacted at any such meeting shall be confined to the purposes stated in the notice thereof and to such additional matters as the chairman of the meeting may rule to be germane to such purposes.

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3.04. Notice of Shareholders Meetings.

(a)    Required Notice. Notice stating the place, day and hour of any annual or special shareholders meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting by or at the direction of the person or persons calling the meeting, to each shareholder entitled to vote at such meeting and to any other shareholder entitled to receive notice of the meeting by law or the Articles. Notices to shareholders shall be given in accordance with, and shall be deemed to be effective at the time and in the manner described in, Arizona Revised Statutes Section 10-141. If no designation is made of the place at which an annual or special meeting will be held in the notice for such meeting, the place of the meeting will be at the principal place of business of the corporation.

(b)    Adjourned Meeting. If any shareholders meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time, and place, if the new date, time, and place are announced at the meeting before adjournment. But if a new record date for the adjourned meeting is fixed or must be fixed in accordance with law or these Bylaws, then notice of the adjourned meeting shall be given to those persons who are shareholders as of the new record date and who are entitled to such notice pursuant to Section 3.03(a) above.

(c)    Waiver of Notice. Any shareholder may waive notice of a meeting (or any notice of any other action required to be given by the Arizona Business Corporation Act, the corporation’s Articles, or these Bylaws), at any time before, during, or after the meeting or other action, by a writing signed by the shareholder entitled to the notice. Each such waiver shall be delivered to the corporation for inclusion in the minutes or filing with the corporate records. Under certain circumstances, a shareholder’s attendance at a meeting may constitute a waiver of notice, unless the shareholder takes certain actions to preserve his/her objections as described in the Arizona Business Corporation Act.

(d)    Contents of Notice. The notice of each special shareholders meeting shall include a description of the purpose or purposes for which the meeting is called. Except as required by law or the corporation’s Articles, the notice of an annual shareholders meeting need not include a description of the purpose or purposes for which the meeting is called.

3.05. Fixing of Record Date. For the purpose of determining shareholders of any voting group entitled to notice of or to vote at any meeting of shareholders, or shareholders entitled to receive any distribution or dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may fix in advance a date as the record date. Such record date shall not be more than seventy (70) days prior to the date on which the particular action requiring such determination of shareholders is to be taken. If no record date is so fixed by the Board of Directors, the record date for the determination of shareholders shall be as provided in the Arizona Business Corporation Act. When a

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determination of shareholders entitled to notice of or to vote at any meeting of shareholders has been made as provided in this Section, such determination shall apply to any adjournment thereof, unless the Board of Directors fixes a new record date, which it must do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting.

3.06. Shareholder List. The corporation shall make a complete record of the shareholders entitled to notice of each meeting of shareholders thereof, arranged in alphabetical order, listing the address and the number of shares held by each. The list shall be arranged by voting group and within each voting group by class or series of shares. The shareholder list shall be available for inspection by any shareholder, beginning two (2) business days after notice of the meeting is given for which the list was prepared and continuing through the meeting. The list shall be available at the corporation’s principal office or at another place identified in the meeting notice in the city where the meeting is to be held. Failure to comply with this section shall not affect the validity of any action taken at the meeting.

3.07. Shareholder Quorum and Voting Requirements.

(a)    If the Articles or the Arizona Business Corporation Act provide for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group.

(b)    If the Articles or the Arizona Business Corporation Act provide for voting by two (2) or more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately.

(c)    Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the Articles or the Arizona Business Corporation Act provide otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter.

(d)    Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting, unless a new record date is or must be set for that adjourned meeting.

(e)    If a quorum exists, action on a matter (other than the election of directors) by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless the Articles or the Arizona Business Corporation Act require a greater number of affirmative votes.

(f)    Voting will be by ballot on any question as to which a ballot vote is demanded prior to the time the voting begins by any person entitled to vote on such question; otherwise, a voice vote will suffice. No ballot or change of vote will be accepted

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after the polls have been declared closed following the ending of the announced time for voting.

3.08. Proxies. At all meetings of shareholders, a shareholder may vote in person or by proxy duly executed in writing by the shareholder or the shareholder’s duly authorized attorney-in-fact. Such proxy shall comply with law and shall be filed with the Secretary of the corporation or other person authorized to tabulate votes before or at the time of the meeting. No proxy shall be valid after eleven (11) months from the date of its execution unless otherwise provided in the proxy. The burden of proving the validity of any undated, irrevocable, or otherwise contested proxy at a meeting of the shareholders will rest with the person seeking to exercise the same. A facsimile appearing to have been transmitted by a shareholder or by such shareholder’s duly authorized attorney-in-fact may be accepted as a sufficiently written and executed proxy.

3.09. Voting of Shares. Unless otherwise provided in the Articles or the Arizona Business Corporation Act, each outstanding share entitled to vote shall be entitled to one (1) vote upon each matter submitted to a vote at a meeting of shareholders.

3.10. Voting for Directors. Unless otherwise provided in the Articles, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present at the time of such vote. As provided by law, shareholders shall be entitled to cumulative voting in the election of directors.

3.11. Election Inspectors. The Board of Directors, in advance of any meeting of the shareholders, may appoint an election inspector or inspectors to act at such meeting (and at any adjournment thereof). If an election inspector or inspectors are not so appointed, the chairman of the meeting may, or upon request of any person entitled to vote at the meeting will, make such appointment. If any person appointed as an inspector fails to appear or to act, a substitute may be appointed by the chairman of the meeting. If appointed, the election inspector or inspectors (acting through a majority of them if there be more than one) will determine the number of shares outstanding, the authenticity, validity, and effect of proxies, the credentials of persons purporting to be shareholders or persons named or referred to in proxies, and the number of shares represented at the meeting in person and by proxy; will receive and count votes, ballots, and consents and announce the results thereof; will hear and determine all challenges and questions pertaining to proxies and voting; and, in general, will perform such acts as may be proper to conduct elections and voting with complete fairness to all shareholders. No such election inspector need be a shareholder of the corporation.

3.12. Organization and Conduct of Meetings. Each meeting of the shareholders will be called to order and thereafter chaired by the Chairman of the Board of Directors if there is one, or, if not, or if the Chairman of the Board is absent or so requests, then by the President, or if both the Chairman of the Board and the President are unavailable, then by such other officer of the corporation or such shareholder as may be appointed by the Board of Directors. The corporation’s Secretary or in his or her absence, an Assistant Secretary will act as secretary of each meeting of the shareholders. If neither the Secretary nor an Assistant Secretary is

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in attendance, the chairman of the meeting may appoint any person (whether a shareholder or not) to act as secretary for the meeting. After calling a meeting to order, the chairman thereof may require the registration of all shareholders intending to vote in person and the filing of all proxies with the election inspector or inspectors, if one or more have been appointed (or, if not, with the secretary of the meeting). After the announced time for such filing of proxies has ended, no further proxies or changes, substitutions, or revocations of proxies will be accepted. If directors are to be elected, a tabulation of the proxies so filed will, if any person entitled to vote in such election so requests, be announced at the meeting (or adjournment thereof) prior to the closing of the election polls. Absent a showing of bad faith on his or her part, the chairman of a meeting will, among other things, have absolute authority to fix the period of time allowed for the registration of shareholders and the filing of proxies, to determine the order of business to be conducted at such meeting, and to establish reasonable rules for expediting the business of the meeting and preserving the orderly conduct thereof (including any informal, or question and answer portions thereof).

3.13. Shareholder Approval or Ratification. The Board of Directors may submit any contract or act for approval or ratification of the shareholders at a duly constituted meeting of the shareholders. Except as otherwise required by law, if any contract or act so submitted is approved or ratified by a majority of the votes cast thereon at such meeting, the same will be valid and as binding upon the corporation and all of its shareholders as it would be if it were the act of its shareholders.

3.14. Informalities and Irregularities. All informalities or irregularities in any call or notice of a meeting of the shareholders or in the areas of credentials, proxies, quorums, voting, and similar matters, will be deemed waived if no objection is made at the meeting.

3.15. Shareholder Action by Written Consent. Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting if one (1) or more consents in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof. The consents shall be delivered to the corporation for inclusion in the minutes or filing with the corporate record. Action taken by consent is effective when the last shareholder signs the consent, unless the consent specifies a different effective date, except that if, by law, the action to be taken requires that notice be given to shareholders who are not entitled to vote on the matter, the effective date shall not be prior to ten (10) days after the corporation shall give such shareholders written notice of the proposed action, which notice shall contain or be accompanied by the same material that would have been required if a formal meeting had been called to consider the action. A consent signed under this section has the effect of a meeting vote and may be described as such in any document.

IV. BOARD OF DIRECTORS

4.01. General Powers. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, the Board of Directors.

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4.02. Number, Tenure, and Qualification of Directors. Unless otherwise provided in the Articles of Incorporation, the authorized number of directors shall be not less than one nor more than fifteen. The number of directors in office from time to time shall be within the limits specified above, as prescribed from time to time by resolution adopted by either the shareholders or the Board of Directors. The directors will regularly be elected at each annual meeting of the Class B shareholders, but directors may be elected at any other meeting of the shareholders. Each director shall hold office until the annual meeting of Class B shareholders following his/her election, subject to his/her earlier resignation or removal. However, if a director’s term expires, he/she shall continue to serve until his/her successor shall have been elected and qualified, until his/her resignation or removal, or until there is a decrease in the number of directors. Unless required by the Articles, directors do not need to be residents of the State of Arizona or shareholders of the corporation.

4.03. Regular Meetings of the Board of Directors. A regular annual meeting of the Board of Directors is to be held as soon as practicable after the adjournment of each annual meeting of the Class B shareholders, either at the place of the Class B shareholders meeting or at such other place as the directors elected at the shareholders meeting may have been informed of at or prior to the time of their election. Additional regular meetings may be held at regular intervals at such places and at such times as the Board of Directors may determine.

4.04. Special Meetings of the Board of Directors. Special meetings of the Board of Directors may be held whenever and wherever called for by the Chairman of the Board, the President, or the number of directors that would be required to constitute a quorum.

4.05. Notice of, and Waiver of Notice for, Directors Meetings. No notice need be given of regular meetings of the Board of Directors. Notice of the time and place of any special directors meeting shall be given at least 48 hours prior thereto. Notice shall be given in accordance with and shall be deemed to be effective at the time and in the manner described in Arizona Revised Statutes Section 10-141. Any director may waive notice of any meeting and any adjournment thereof at any time before, during, or after it is held. Except as provided in the next sentence below, the waiver must be in writing, signed by the director entitled to the notice, and filed with the minutes or corporate records. The attendance of a director at or participation of a director in a meeting shall constitute a waiver of notice of such meeting, unless the director at the beginning of the meeting (or promptly upon his/her arrival) objects to holding the meeting or transacting business at the meeting, and does not thereafter vote for or assent to action taken at the meeting.

4.06. Director Quorum. A majority of the number of directors prescribed according to Section 4.02 above, or if no number is so prescribed, the number in office immediately before the meeting begins, shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, unless the Articles require a greater number.

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4.07. Directors, Manner of Acting.

(a)    If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present shall be the act of the Board of Directors unless the Articles require a greater percentage.

(b)    Unless the Articles provide otherwise, any or all directors may participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting, in which case, any required notice of the meeting may generally describe the arrangements (rather than or in addition to the place) for the holding thereof. A director participating in a meeting by this means is deemed to be present in person at the meeting.

(c)    A director who is present at a meeting of the Board of Directors or a committee of the Board of Directors when corporate action is taken is deemed to have assented to the action taken unless: (1) the director objects at the beginning of the meeting (or promptly upon his/her arrival) to holding it or transacting business at the meeting; or (2) his/her dissent or abstention from the action taken is entered in the minutes of the meeting; or (3) he/she delivers written notice of his/her dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation before 5:00 p.m. on the next business day after the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken.

4.08. Director Action Without a Meeting. Unless the Articles provide otherwise, any action required or permitted to be taken by the Board of Directors at a meeting may be taken without a meeting if the action is taken by unanimous written consent of the Board of Directors as evidenced by one (1) or more written consents describing the action taken, signed by each director and filed with the minutes or corporate records. Action taken by consent is effective when the last director signs the consent, unless the consent specifies a different effective date. A signed consent has the effect of a meeting vote and may be described as such in any document.

4.09. Removal of Directors by Class B Shareholders. The Class B shareholders may remove one (1) or more directors at a meeting called for that purpose if notice has been given that a purpose of the meeting is such removal. The removal may be with or without cause unless the Articles provide that directors may only be removed with cause. If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in a shareholder vote to remove him. If less than the entire Board of Directors is to be removed, a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against the director’s removal.

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4.10.    Board of Director Vacancies.

(a)    Unless the Articles provide otherwise, if a vacancy occurs on the Board of Directors, including a vacancy resulting from an increase in the number of directors, either the shareholders or the Board of Directors may fill the vacancy.

(b)    If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the shareholders.

(c)    A vacancy that will occur at a specific later date (by reason of resignation effective at a later date) may be filled before the vacancy occurs, but the new director may not take office until the vacancy occurs.

(d)    The term of a director elected to fill a vacancy expires at the next shareholders meeting at which directors are elected.

4.11. Director Compensation. Unless otherwise provided in the Articles by resolution of the Board of Directors, each director may be paid his/her expenses, if any, of attendance at each meeting of the Board of Directors or any committee thereof, and may be paid a stated salary as director or a fixed sum for attendance at each meeting of the Board of Directors or any committee thereof, or both. No such payment shall preclude any director from serving the corporation in any capacity and receiving compensation therefor.

4.12. Director Committees.

(a)    Creation of Committees. Unless the Articles provide otherwise, the Board of Directors may create one (1) or more committees and appoint members of the Board of Directors to serve on them. Each committee shall have one (1) or more members, who serve at the pleasure of the Board of Directors.

(b)    Selection of Members. The creation of a committee and appointment of members to it shall be approved by the greater of (1) a majority of all the directors in office when the action is taken or (2) the number of directors required by the Articles to take such action.

(c)    Required Procedures. Sections 4.03 through 4.08 of this Article IV, which govern meetings, action without meetings, notice and waiver of notice, and quorum and voting requirements of the Board of Directors, apply to committees and their members.

(d)    Authority. Unless limited by the Articles, each committee may exercise those aspects of the authority of the Board of Directors which the Board of Directors confers upon such committee in the resolution creating the committee, provided, however, that a committee may not: (1) authorize distributions; (2) approve or propose to

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shareholders action that requires shareholder approval under the Arizona Business Corporation Act; (3) fill vacancies on the Board of Directors or on any of its committees; (4) amend the Articles of Incorporation without shareholder action as provided by law; (5) adopt, amend or repeal these Bylaws; (6) approve a plan of merger not requiring shareholder approval; (7) authorize or approve reacquisition of shares, except according to a formula or method prescribed by the Board of Directors; (8) authorize or approve the issuance or sale or contract for sale of shares or determine the designation and relative rights, preferences, and limitations of a class or series of shares, except within limits specifically prescribed by the Board of Directors; or (9) fix the compensation of directors for serving on the Board of Directors or any committee of the Board of Directors.

4.13. Director Resignations. Any director or committee member may resign from his or her office at any time by written notice delivered to the Board of Directors, the Chairman of the Board, or the corporation at its known place of business. Any such resignation will be effective upon its receipt unless some later time is therein fixed, and then from that time. The acceptance of a resignation will not be required to make it effective.

4.14 Indemnification. Each director, and any former director, shall be indemnified to the maximum extent permitted by law from any liability related to such service to the corporation, and shall be entitled to advances for expenses as permitted by law.

V. OFFICERS

5.01. Number of Officers. The officers of the corporation shall be a President, a Secretary, and a Treasurer, each of whom shall be appointed by the Board of Directors. Such other officers and assistant officers as may be deemed necessary, including any Vice Presidents, may be appointed by the Board of Directors. If specifically authorized by the Board of Directors, an officer may appoint one (1) or more other officers or assistant officers. The same individual may simultaneously hold more than one (1) office in the corporation.

5.02. Appointment and Term of Office. The officers of the corporation shall be appointed by the Board of Directors for a term as determined by the Board of Directors. The designation of a specified term grants to the officer no contract rights, and the Board of Directors can remove the officer at any time prior to the termination of such term. If no term is specified, an officer of the corporation shall hold office until he or she resigns, dies, or until he or she is removed in the manner provided by law or in Section 5.03 of this Article V. The regular election or appointment of officers will take place at each annual meeting of the Board of Directors, but elections of officers may be held at any other meeting of the Board.

5.03. Resignation and Removal of Officers. An officer may resign at any time by delivering written notice to the corporation at its known place of business. A resignation is effective when the notice is delivered unless the notice specifies a later effective date or event. Any officer may be removed by the Board of Directors at any time, with or without cause. Such removal

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shall be without prejudice to the contract rights, if any, of the person so removed. Appointment of an officer shall not of itself create contract rights.

5.04. Duties of Officers. Officers of the corporation shall have authority to perform such duties as may be prescribed from time to time by law, in these Bylaws, or by the Board of Directors, the President, or the superior officer of any such officer. Each officer of the corporation (in the order designated herein or by the Board) will be vested with all of the powers and charged with all of the duties of his or her superior officer in the event of such superior officer’s absence, death, or disability.

5.05. Bonds and Other Requirements. The Board of Directors may require any officer to give bond to the corporation (with sufficient surety and conditioned for the faithful performance of the duties of his or her office) and to comply with such other conditions as may from time to time be required of him or her by the Board of Directors.

5.06. President. Unless otherwise specified by resolution of the Board of Directors, the President shall be the principal executive officer of the corporation and, subject to the control of the Board of Directors, shall supervise and control all of the business and affairs of the corporation and the performance by all of its other officers of their respective duties and in general shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time. The President shall, when present, and in the absence of a Chairman of the Board, preside at all meetings of the shareholders and of the Board of Directors. The President will be a proper officer to sign on behalf of the corporation any deed, bill of sale, assignment, option, mortgage, pledge, note, bond, evidence of indebtedness, application, consent (to service of process or otherwise), agreement, indenture, contract, or other instrument, except in each such case where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed. The President may represent the corporation at any meeting of the shareholders or members of any other corporation, association, partnership, joint venture, or other entity in which the corporation then holds shares of capital stock or has an interest, and may vote such shares of capital stock or other interest in person or by proxy appointed by him or her, provided that the Board of Directors may from time to time confer the foregoing authority upon any other person or persons.

5.07. The Vice-President. If appointed, in the absence of the President or in the event of his/her death or disability, the Vice-President (or in the event there be more than one Vice-President, the Vice-Presidents in the order designated at the time of their election, or in the absence of any such designation, then in the order of their appointment) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. If there is no Vice-President or in the event of the death or disability of all Vice-Presidents, then the Treasurer shall perform such duties of the President in the event of his or her absence, death, or disability. Each Vice-President will be a proper officer to sign on behalf of the corporation any deed, bill of sale, assignment, option, mortgage, pledge,

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note, bond, evidence of indebtedness, application, consent (to service of process or otherwise), agreement, indenture, contract, or other instrument, except in each such case where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed. Any Vice-President may represent the corporation at any meeting of the shareholders or members of any other corporation, association, partnership, joint venture, or other entity in which the corporation then holds shares of capital stock or has an interest, and may vote such shares of capital stock or other interest in person or by proxy appointed by him or her, provided that the Board of Directors may from time to time confer the foregoing authority upon any other person or persons. A Vice- President shall perform such other duties as from time to time may be assigned to him/her by the President or by the Board of Directors.

5.08. The Secretary. The Secretary shall: (a) keep the minutes of the proceedings of the shareholders and of the Board of Directors and any committee of the Board of Directors and all unanimous written consents of the shareholders, Board of Directors, and any committee of the Board of Directors in one (1) or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the corporate records and of any seal of the corporation; (d) when requested or required, authenticate any records of the corporation; (e) keep a register of the address of each shareholder which shall be furnished to the Secretary by such shareholder; and (f) in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him/her by the President or by the Board of Directors. Except as may otherwise be specifically provided in a resolution of the Board of Directors, the Secretary will be a proper officer to take charge of the corporation’s stock transfer books and to compile the voting record pursuant to Section 3.05 above, and to impress the corporation’s seal, if any, on any instrument signed by the President, any Vice President, or any other duly authorized person, and to attest to the same. In the absence of the Secretary, a secretary pro tempore may be chosen by the directors or shareholders as appropriate to perform the duties of the Secretary.

5.09. The Treasurer. The Treasurer shall: (a) have charge and custody of and be responsible for all funds and securities of the corporation; (b) receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in such bank, trust companies, or other depositories as shall be selected by the Board of Directors or any proper officer; (c) keep full and accurate accounts of receipts and disbursements in books and records of the corporation; and (d) in general perform all of the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him/her by the President or by the Board of Directors. The Treasurer will render to the President, the directors, and the shareholders at proper times an account of all his or her transactions as Treasurer and of the financial condition of the corporation. The Treasurer shall be responsible for preparing and filing such financial reports, financial statements, and returns as may be required by law.

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5.10. Assistant Secretaries and Assistant Treasurers. The Assistant Secretaries and the Assistant Treasurers, when authorized by the Board of Directors, may sign with the President or a Vice-President certificates for shares of the corporation, the issuance of which shall have been authorized by a resolution of the Board of Directors. The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the President or the Board of Directors.

5.11. Chairman of the Board. The Board of Directors may elect a Chairman to serve as a general executive officer of the corporation, and, if specifically designated as such by the Board of Directors, as the chief executive officer of the corporation. If elected, the Chairman will preside at all meetings of the Board of Directors and be vested with such other powers and duties as the Board of Directors may from time to time delegate to him or her.

5.12. Salaries. The salaries of the officers of the corporation may be fixed from time to time by the Board of Directors or (except as to the President’s own) left to the discretion of the President. No officer will be prevented from receiving a salary by reason of the fact that he or she is also a director of the corporation.

5.13. Additional Appointments. In addition to the officers contemplated in this Article V, the Board of Directors may appoint other agents of the corporation with such authority to perform such duties as may be prescribed from time to time by the Board of Directors.

5.14 Indemnification. Each officer, and any former officer, shall be indemnified to the maximum extent permitted by law from any liability related to such service to the corporation, and shall be entitled to advances for expenses as permitted by law.

VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER

6.01. Certificates for Shares.

(a)    Content. Certificates representing shares of the corporation shall, at a minimum, state on their face the name of the issuing corporation and that it is formed under the laws of the State of Arizona, the name of the person to whom issued, and the number and class of shares and the designation of the series, if any, the certificate represents. Such certificates shall be signed (either manually or by facsimile to the extent allowable by law) by one or more officers of the corporation, as determined by the Board of Directors, or, if no such determination is made, by any of the Chairman of the Board (if any), the President, any Vice- President, the Secretary, or the Treasurer of the corporation, and may be sealed with a corporate seal or a facsimile thereof. Each certificate for shares shall be consecutively numbered or otherwise identified and will exhibit such information as may be required by law. If a supply of unissued certificates bearing the facsimile signature of a person remains when that person ceases to hold the office of the corporation indicated on such certificates or ceases to be the transfer agent or registrar of the corporation, they may still be issued by the corporation and countersigned, registered, issued, and delivered by the

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corporation’s transfer agent and/or registrar thereafter, as though such person had continued to hold the office indicated on such certificate.

(b)    Legend as to Class or Series. If the corporation is authorized to issue different classes of shares or different series within a class, the designations, relative rights, preferences, and limitations applicable to each class and the variations in rights, preferences, and limitations determined for each series (and the authority of the Board of Directors to determine variations for future series) shall be summarized on the front or back of each certificate. Alternatively, each certificate may state conspicuously on its front or back that the corporation will furnish a shareholder this information on request in writing and without charge.

(c)    Shareholder List. The name and address of the person to whom shares are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the corporation.

(d)    Lost Certificates. In the event of the loss, theft, or destruction of any certificate representing shares of the corporation or of any predecessor corporation, the corporation may issue (or, in the case of any such shares as to which a transfer agent and/or registrar have been appointed, may direct such transfer agent and/or registrar to countersign, register, and issue) a new certificate, and cause the same to be delivered to the registered owner of the shares represented thereby; provided that such owner shall have submitted such evidence showing the circumstances of the alleged loss, theft, or destruction, and his, her, or its ownership of the certificate, as the corporation considers satisfactory, together with any other facts that the corporation considers pertinent; and further provided that, if so required by the corporation, the owner shall provide a bond or other indemnity in form and amount satisfactory to the corporation (and to its transfer agent and/or registrar, if applicable).

6.02. Registration of the Transfer of Shares. Registration of the transfer of shares of the corporation shall be made only on the stock transfer books of the corporation. In order to register a transfer, the record owner shall surrender the shares to the corporation for cancellation, properly endorsed by the appropriate person or persons with reasonable assurances that the endorsements are genuine and effective. Unless the corporation has established a procedure by which a beneficial owner of shares held by a nominee is to be recognized by the corporation as the owner, the corporation will be entitled to treat the registered owner of any share of the capital stock of the corporation as the absolute owner thereof and, accordingly, will not be bound to recognize any beneficial, equitable, or other claim to, or interest in, such share on the part of any other person, whether or not it has notice thereof, except as may expressly be provided by applicable law.

6.03. Shares Without Certificates. The Board of Directors may authorize the issuance of uncertificated shares by the corporation and may prescribe procedures for the issuance and registration of transfer thereof and with respect to such other matters as the Board of Directors shall deem necessary or appropriate.

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VII. DISTRIBUTIONS

7.01. Distributions. Subject to such restrictions or requirements as may be imposed by applicable law or the corporation’s Articles or as may otherwise be binding upon the corporation, the Board of Directors may from time to time declare, and the corporation may pay or make, dividends or other distributions to its shareholders.

VIII. CORPORATE SEAL

8.01. Corporate Seal. The Board of Directors may provide for a corporate seal of the corporation that will have inscribed thereon any designation including the name of the corporation, Arizona as the state of incorporation, the year of incorporation, and the words “Corporate Seal.”

IX. AMENDMENTS

9.01. Amendments. The corporation’s Board of Directors may amend or repeal the corporation’s Bylaws unless:

(1)    the Articles or the Arizona Business Corporation Act reserve this power exclusively to the shareholders in whole or part; or

(2)    the shareholders in adopting, amending, or repealing a particular Bylaw provide expressly that the Board of Directors may not amend or repeal that Bylaw.

The corporation’s shareholders may amend or repeal the corporation’s Bylaws even though the Bylaws may also be amended or repealed by its Board of Directors.

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EX-10.1

APOLLO EDUCATION GROUP, INC.
DEFERRED COMPENSATION PLAN

As Amended and Restated November 15, 2013

Effective February 1, 2012

EXHIBIT 10.1

APOLLO EDUCATION GROUP, INC.DEFERRED COMPENSATION PLAN

The purpose of this Plan is to provide certain specified benefits to a select group of management and highly compensated employees who contribute materially to the continued growth, development and future business success of Apollo Education Group, Inc., (or any successor thereto) and its Affiliates. This Plan is unfunded for tax purposes and for purposes of Title I of ERISA. The Plan is intended to satisfy and be in compliance with the provisions of the Internal Revenue Code of 1986 (the “Code”) as they relate to deferred compensation benefits, with particular emphasis on §409A of the said Code. If any provision or term of this document would be prohibited by or inconsistent with the requirements of Section 409A of the Code, then such provision or term shall be deemed to be reformed to comply with Section 409A of the Code.

ARTICLE I: DEFINITIONS

1.010    Account(s) means one of the accounts established for the purpose of measuring and determining a Participant’s interest in this Plan, such accounts being the Participant’s Deferral Account(s) and Company Match Account(s) and Company Discretionary Contribution Account(s).

1.020    Account Balance means, with respect to each Participant, an account in the records of the Company equal to the sum of the Participant’s:

(a) Deferral Account balance,

(b) Company Match Account balance

(c) Company Discretionary Contribution Account balance.

The Account Balance (and each underlying balance making up such Account Balance) is a bookkeeping entry only and will be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his designated Beneficiary, pursuant to this Plan.

1.030 Administrative Committeemeans the Administrative Committee designated by the Company to administer the Plan.

As Amended and Restated November 15, 2013 1

1.040    Affiliate means:

(a) any corporation incorporated under the laws of one of the United States of America of which the Company owns, directly or indirectly, eighty percent (80%) or more of the combined voting power of all classes of stock or eighty percent (80%) or more of the total value of the shares of all classes of stock (all within the meaning of Code §1563);

(b) any partnership or other business entity organized under such laws, of which the Company owns, directly or indirectly, eighty percent (80%) or more of the voting power or eighty percent (80%) or more of the total value (all within the meaning of Code §414(c)); and

(c) any other company deemed to be an Affiliate by the Company.

1.050    Annual Company Discretionary Contribution Amount for any Plan Year means the amount determined in accordance with Section 3.040.

1.060    Annual Company Match Amount for any Plan Year means the amount determined in accordance with Section 3.030.

1.070    Annual Deferral Amount means that portion of a Participant’s Base Annual Salary and/or Bonus which a Participant elects to have deferred, in accordance with Article III, for any one Plan Year.

1.080    Annual Installment Method means a benefit payment method involving a series of annual installment payments over the number of years selected by the Participant in accordance with this Plan, which will be calculated in the manner set forth in this Section. The Account Balance of the Participant will be determined as of the close of the business day that is closest to the date of distribution as administratively practicable. The annual installment will be calculated by multiplying this balance by a fraction, the numerator of which is one (1), and the denominator of which is the remaining number of annual payments due the Participant. (By way of example, if a Participant were to elect a 10-year payment under the Annual Installment Method, the first payment would be one-tenth (1/10) of the Account Balance, calculated as described in this definition. The following year, the payment would be one-ninth (1/9) of the Account Balance, calculated as described in this definition.) Each annual installment will be paid within the first sixty (60) days of the calendar year following the applicable year or as soon as administratively practicable.

1.090    Base Annual Salary means the annual cash compensation relating to services performed during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form W‑2 for such calendar year, excluding bonuses, severance pay, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, directors fees and other fees, automobile and other allowances (whether or not such allowances are included in the Employee’s gross income) paid to a Participant for employment services rendered. Base Annual Salary will be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non‑qualified plans

As Amended and Restated November 15, 2013 2

of the Company or any Affiliate and will be calculated to include amounts not otherwise included in the Participant’s gross income under Code §125, 402(e)(3), 402(h), or 403(b), pursuant to plans established by the Company or an Affiliate; provided, however, that all such amounts will be included in compensation only to the extent that, had there been no such plan, the amount would have been payable in cash to the Participant.

1.100    Beneficiary means one or more persons, trusts, estates or other entities, designated in accordance with Article IX who or which are entitled to receive benefits under this Plan upon the death of a Participant.

1.110    Beneficiary Designation Form means the form established from time to time by the Administrative Committee or its delegate that a Participant completes, signs and returns to the Administrative Committee or its delegate or completes electronically, in order to designate one or more Beneficiaries.

1.120    Bonus means compensation earned and payable to a Participant under any incentive pay plan or program that is determined by the Company to qualify as “Performance-Based Compensation” under Code Section 409A, and that is designated by the Company as eligible for deferral under the Plan. For this purpose, “Performance-Based Compensation” shall be compensation, the payment or amount of which is contingent upon pre-established organizational or individual performance criteria, which satisfies the requirements of Treasury Regulation Section 1.409A-1(e). As of February 2013, the only bonus plan that satisfies this requirement and that has been designated by the Company as eligible for deferral under the plan is the Company’s Executive Officer Performance Incentive Plan.

1.130    Code means the Internal Revenue Code of 1986, as from time to time amended.

1.140    Company means Apollo Education Group, Inc., an Arizona corporation.

1.150    Company Discretionary Contribution Account means:

(a) the sum of all of a Participant’s Annual Company Discretionary Contribution Amounts,

(b) adjusted by amounts credited or debited (gains or losses) thereto, in accordance with the provisions of Section 4.020(b), as such provisions relate to such Company Discretionary Contribution Account(s), and

(c) reduced by any amount debited thereon equal to the amount of all distributions made to the Participant or his Beneficiary pursuant to this Plan which are related to such Company Discretionary Contribution Account(s).

1.160    Company Match Account means:

(a) the sum of all of a Participant’s Annual Company Match Amounts,

(b) adjusted by amounts credited or debited (gains or losses) thereto, in accordance with the provisions of Section 4.020(b), as such provisions relate to such Company Match Account(s), and

As Amended and Restated November 15, 2013 3

(c) reduced by any amount debited thereon equal to the amount of all distributions made to the Participant or his Beneficiary pursuant to this Plan which are related to such Company Match Account(s).

1.170 Corporate Event means the occurrence of any one of the following events:

(1)    A change in the ownership of the Company, which shall occur on the date that any one person, or more than one person Acting as a Group, other than Excluded Person(s), acquires ownership of stock of the Company possessing more than fifty percent (50%) of the total voting power of the outstanding stock of the Company. However, if any one person or more than one person Acting as a Group is considered to own more than fifty percent (50%) of the total voting power of the outstanding stock of the Company, the acquisition of additional voting stock by the same person or persons is not considered to cause a Corporate Event.

(2)    The date all of the members of the Company’s board of directors are replaced during any 12 month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s board of directors before the date of the appointment or election.

(3)    A sale or other disposition in a single transaction or series of related transactions occurring within a twelve (12) month period of 80% or more of the Company’s assets except pursuant to an Excluded Transaction (as defined below).

For purposes of this Section 1.170:

Persons will not be considered to be “Acting as a Group” solely because they purchase or own stock of the Company at the same time, or as a result of the same public offering, or solely because they purchase assets of the Company at the same time, or as a result of the same public offering, as the case may be.

The term “Excluded Transaction” means any transaction in which assets are transferred to: (A) a shareholder of the Company (determined immediately before the asset transfer) in exchange for or with respect to its stock; (B) an entity, forty percent (40%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company (determined after the asset transfer); (C) a person, or more than one person Acting as a Group, that owns, directly or indirectly, fifty percent (50%) or more of the total value of voting power of all the outstanding stock of the Company (determined after the asset transfer); or (D) an entity at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a person described in clause (C) of this definition (determined after the asset transfer).

The term “Excluded Person(s)” means (A) John G. Sperling and Peter V. Sperling, (B) any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of John G. Sperling or Peter V. Sperling and any person (other than a tenant or employee) sharing the household of John

As Amended and Restated November 15, 2013 4

G. Sperling or Peter V. Sperling; (C) any trust established by John G. Sperling or Peter V. Sperling; (D) any person or entity controlling, controlled by or under common control with a person or entity described in clauses (A), (B) and (C) of this definition; (E) the Company or any of its Affiliates; (F) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates; (G) an underwriter temporarily holding securities of the Company pursuant to an offering of such securities; or (H) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock in the Company.

For the avoidance of doubt, a “Corporate Event,” as defined above, shall only constitute a Corporate Event for purposes of this Plan if it also constitutes a change in ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company, as determined in accordance with any guidance, rules or regulations promulgated by the Internal Revenue Service in construing the rules and regulations applicable to Code Section 409A.

1.180    Deferral Account means:

(a) the sum of all of a Participant’s Annual Deferral Amounts,

(b) adjusted by amounts credited or debited (gains or losses) thereto, in accordance with the provisions of Section 4.020(b), as such provisions relate to such Deferral Account(s), and

(c) reduced by any amount debited thereon equal to the amount of all distributions made to the Participant or his Beneficiary pursuant to this Plan which are related to such Deferral Account(s).

1.190    Deferral Election means an election made pursuant to Article III by a Participant to defer receipt of a part of his Base Annual Salary and/or Bonus. Participants will be required to make a separate election with respect to Base Annual Salary and/or Bonus and the Company will maintain separate accounts for Base Annual Salary Deferrals and Bonus Deferrals for each Participant.

1.200    Deferral Election Form means the form established from time to time by the Administrative Committee or its delegate that a Participant completes, signs and returns to the Administrative Committee or its delegate or completes electronically to make a Deferral Election pursuant to Article III, in order to defer receipt of a part of his Base Annual Salary and/or Bonus and to designate the form of distribution for such deferrals and the earnings thereon.

1.210    Disability means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. Notwithstanding the foregoing, a Participant shall not be considered to have a termination of employment due to Disability unless the Participant has had a Separation from Service.

1.220    Effective Date means February 1, 2012 for this Plan.

As Amended and Restated November 15, 2013 5

1.230    Eligible Employee means any Employee who: (i) is employed in the United States or paid from United States payroll by the Company or an Affiliate; (ii) has completed a year of continuous employment with the Company or an Affiliate; and (iii) effective as of November 15, 2013, has a Base Annual Salary which is equal to or greater than One Hundred Thirty Thousand Dollars ($130,000.00). The term “Eligible Employee” shall also include the Chairman of the board of directors of the Company and the Vice Chairman of the board of directors of the Company.

1.240    Employee means any person who is employed by the Company or by an Affiliate.

1.250    ERISA means the Employee Retirement Income Security Act of 1974, as from time to time amended.

1.260    Measurement Funds means the investment vehicles offered under this Plan which shall be (unless otherwise provided by the Administrative Committee) the same as the Investment Funds offered under the Apollo Education Group, Inc. Savings and Investment Plan (or its successor), each of whose purpose is to mirror, to the greatest extent reasonably possible, the investment performance of a particular benchmark mutual fund sponsored and offered by the Apollo Education Group, Inc. Savings and Investment Plan.

1.270    Named Fiduciary means the Administrative Committee, its delegates and the Trustee.

1.280    Participant means an Eligible Employee:

(a) who elects to participate in the Plan;

(b) who signs a Deferral Election Form;

(c) whose signed Deferral Election Form is accepted by the Administrative Committee or its delegate;

(d) who commences participation in the Plan; and

(e) who has not elected to terminate participation in the Plan.

A spouse or former spouse of a Participant will not be treated as a Participant in the Plan or have any Account Balances under the Plan, even if the spouse or former spouse has an interest in the Participant’s benefits under the Plan as a result of applicable law or property settlements resulting from legal separation or divorce.

1.290    Plan means this Apollo Education Group, Inc. Deferred Compensation Plan, which is evidenced by this instrument and by the forms associated with the said instrument, as they may be amended from time to time.

1.300    Plan Year means each twelve-month period ending on the last day of December, except the initial Plan Year which will be from February 1, 2012 through December 31, 2012.

As Amended and Restated November 15, 2013 6

1.310    Retirement, Retire(s) or Retired means, with respect to an Employee, severance from employment with the Company and all of its Affiliates for any reason other than a leave of absence, death or Disability on or after the attainment of age 55 with 10 years of service with the Company or an Affiliate; age 60 with 5 years of service; or age 65. Notwithstanding the foregoing, a Participant shall not be considered to have Retired until such Participant has had a Separation from Service. Further notwithstanding the foregoing, for purposes of eligibility to receive an installment form of distribution, a Participant shall not be considered to have Retired unless his Separation from Service was on account of Retirement.

1.320    Retirement Benefit means the benefit set forth in Article VI.

1.330    Separation from Service means a termination of employment with the Company and all affiliates of the Company for any reason (including Retirement, death, Disability or other termination) subject to the following:

(a) The employment relationship is treated as continuing intact while the individual is on military leave, sick leave, or other bona fide leave of absence (such as temporary employment by the government) if the period of such leave does not exceed six months, or if longer, so long as the individual’s right to reemployment with the Company is provided either by statute or by contract. If the period of leave exceeds six months and the individual’s right to reemployment is not provided either by statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period.

(b) Whether a termination of employment has occurred is determined based on the facts and circumstances. Where an employee either actually or purportedly continues in the capacity of an employee, such as through the execution of an employment agreement under which the employee agrees to be available to perform services if requested, but the facts and circumstances indicate that the employer and the employee did not intend for the employee to provide more than insignificant services for the employer, an employee will be treated as having a Separation from Service. For purposes of the preceding sentence, an employer and employee will not be treated as having intended for the employee to provide insignificant services where the employee continues to provide services as an employee at an annual rate that is at least equal to 20 percent of the services rendered, on average, during the immediately preceding three full calendar years of employment (or, if employed less than three years, such lesser period). Where an employee continues to provide services to a previous employer in a capacity other than as an employee, a Separation from Service will not be deemed to have occurred if the former employee is providing services at an annual rate that is 50 percent or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or if employed less than three years, such lesser period) and the annual remuneration for such services is 50 percent or more of the annual remuneration earned during the final three full calendar years of employment (or if less, such lesser period). For purposes of this definition, the annual rate of providing services is determined based upon the measurement used to determine the individual’s base compensation (for example,

As Amended and Restated November 15, 2013 7

amounts of time required to earn salary, hourly wages, or payments for specific projects).

1.340    Short-Term Payout means the payout set forth in Section 5.010 of the Plan.

1.350    Termination Benefit means the benefit set forth in Article VII.

1.360    Termination of Employment means the severing of a Participant’s employment with the Company and all Affiliates, voluntarily or involuntarily, for any reason other than Retirement, Disability, death or an authorized leave of absence. Notwithstanding the foregoing, a Participant shall not be considered to have a Termination of Employment for purposes of this Plan unless the Participant has had a Separation from Service.

1.370    Trustmeans the trust established by agreement between the Company and the Trustee, which will be a grantor trust.

1.380    Trusteemeans the trustee of the Trust described in Section 1.350 of this Plan.

1.390    Unforeseeable Financial Emergency means an unanticipated emergency that is caused by an event beyond the control of the Participant which would result in severe financial hardship to the Participant and which itself results from:

(a) a sudden and unexpected illness or accident of the Participant or the spouse or a dependent (as defined in Code Section 152(a)) of the Participant,

(b) a loss of the Participant’s property due to casualty, or

(c) such other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the discretion of the Administrative Committee or its delegate.

Whether an Unforeseeable Financial Emergency exists shall be determined based on the relevant facts and circumstances but in no event shall an Unforeseeable Financial Emergency exist to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise or by liquidation of the Participant’s assets (to the extent that liquidation of such assets would not cause severe financial hardship).

ARTICLE II:PARTICIPATION

2.010    Select Group Defined. Since participation in the Plan is intended to be limited to a select group of management and highly compensated Employees, the Plan is only available to Eligible Employees of the Company and its Affiliates.

2.020    Commencement of Participation. In order to participate during a Plan Year, an Employee must, be an Eligible Employee as of the December 1 preceding the first day of the applicable Plan Year. For example, an Employee who is hired on December 2, 2012 and then becomes an Eligible Employee on December 2, 2013, would first be eligible to defer Base Annual Salary for Plan Year

As Amended and Restated November 15, 2013 8

2015 and Bonus payments made in Plan Year 2015. As a condition to initial participation in this Plan, each Eligible Employee who wishes to participate in the Plan will be required to complete a Deferral Election Form in accordance with Article III of the Plan and within the timeframes described below.

(a) In the case of such an Eligible Employee’s initial election to become a Participant in a particular Plan Year, such documentation must be provided by the Eligible Employee to the Administrative Committee or its delegate before the December 31 (or such later time set forth in Section 3.020 with respect to Bonuses) immediately preceding the Plan Year for which the deferral is intended.

(b) If an Eligible Employee has met all enrollment requirements set forth in this Plan and required by the Administrative Committee or its delegate (including returning all required documents to the Administrative Committee or its delegate) in the time frames described in the above subsections, that Eligible Employee will become a Plan Participant on the first day of the Plan Year following the month in which he completes all such enrollment requirements (or in the case of an election made in accordance with Section 3.020, immediately following such election).

In addition, the Administrative Committee or its delegate will establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary.

2.030    Termination of Participation and/or Deferrals. If the Administrative Committee or its delegate determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with ERISA §§201(2), 301(a)(3) and 401(a)(1), the Participant shall be prevented from making future Deferral Elections.

ARTICLE III:DEFERRAL AND COMPANY MATCH CREDITS

3.010    Base Annual Salary Deferral. Each Plan Participant will be permitted to make an irrevocable election to defer (such Deferral Election to be made in whole percentages) receipt of an amount equal to one percent (1%) through seventy‑five percent (75%) of his Base Annual Salary.

(a) For each Plan Year, a Participant, will be permitted, in his sole discretion, to make an irrevocable election for the following Plan Year (and such other elections as the Administrative Committee or its delegate deems necessary or desirable) and must deliver such Deferral Election to the Company or an Affiliate on a new Deferral Election Form before December 31 of the Plan Year immediately preceding the Plan Year for which the deferral is intended. If no such Deferral Election Form is timely delivered for a Plan Year, the Annual Deferral Amount with respect to Base Annual Salary will be zero for that Plan Year. .

(b) During each Plan Year, the Base Annual Salary Deferral Amount will be withheld from each regularly scheduled Base Annual Salary payroll in equal amounts, as adjusted from time to time for increases and decreases in Base Annual Salary.

As Amended and Restated November 15, 2013 9

3.020    Bonus Deferral. Each Plan Participant will be permitted to make an irrevocable election to defer (such Deferral Election to be made in whole percentages) receipt of an amount equal to one percent (1%) through seventy-five percent (75%) of his Bonus. For each Bonus (which, under this Plan is limited to bonus compensation that qualifies as “Performance Based Compensation” under Code Section 409A), a Participant, will be permitted, in his sole discretion, to make an irrevocable election pertaining to such Bonus by timely delivering a Deferral Election to the Company or an Affiliate on a Deferral Election Form no later than six (6) months before the end of the performance service period and in accordance with Code Section 409A or such earlier time as may be determined by the Company in its sole discretion. If no such Deferral Election Form is timely delivered for a Plan Year, the Annual Deferral Amount with respect to Bonus will be zero for that Plan Year.

3.030    Annual Company Match Amount. A Participant’s Annual Company Match Amount for any Plan Year will be equal to the amount determined under a formula or formulas, if any, established by the Company on an annual basis in its sole discretion. Such formula(s) may include a matching amount based on the amount a Participant elects to defer under the Apollo Education Group, Inc. Savings and Investment Plan for some or all of the Participants who have made the maximum elective contributions permitted under the terms of such plan. In no event, however, shall such formula(s) violate the requirements of the Code. The Annual Company Match Amount will be calculated and contributed as soon as administratively feasible. The time and form of distribution for the Annual Company Match Amount for a particular Plan Year shall be determined in accordance with the Deferral Elections made with respect to Base Annual Salary for that same Plan Year. For example, a matching contribution made with respect to Plan Year 2012, will be distributed in accordance with the rules applicable to the Deferral Elections made with respect to Plan Year 2012 Base Annual Salary. In the event no such Deferral Elections have been made with respect to a Plan Year, the Annual Company Match Amount for such Plan Year shall be paid in accordance with Section 7.020. Notwithstanding the foregoing, the Annual Company Match Amount shall be reduced for any Plan Year by the amount necessary to comply with the final regulations issued under Code Section 409A relating to the coordination of deferral elections under qualified plan with the benefits provided under nonqualified plans.

3.040    Annual Company Discretionary Contribution Amount. A Participant’s Annual Company Discretionary Contribution Amount for any Plan Year will be equal to the amount determined under a formula or formulas, if any, established by the Company on an annual basis in its sole discretion. In no event, however, shall such formula(s) violate the requirements of the Code. The Annual Company Discretionary Contribution Amount will be calculated and contributed as soon as administratively feasible. The time and form of distribution for the Annual Company Discretionary Contribution Amount for a particular Plan Year shall be determined in accordance with the Deferral Elections made with respect to Base Annual Salary for that same Plan Year. For example, a discretionary contribution made with respect to Plan Year 2012, will be distributed in accordance with the rules applicable to the Deferral Elections made with respect to Plan Year 2012 Base Annual Salary. In the event no such Deferral Elections have been made with respect to a Plan Year, the Annual Company Discretionary Contribution Amount for such Plan Year shall be paid in accordance with Section 7.020.

As Amended and Restated November 15, 2013 10

ARTICLE IV: PLAN ACCOUNTS

4.010    Vesting. A Participant will have a one hundred percent (100%) vested interest in his Deferral Account(s), Company Match Account(s), and Company Discretionary Contribution Account(s).

4.020    Crediting/Debiting of Account Balances. In accordance with, and subject to, the rules and procedures that are established from time to time by the Administrative Committee or its delegate, in its sole discretion, amounts will be credited or debited to a Participant’s Account Balance in the manner set forth in the provisions of this Section:

(a) Allocation to Measurement Funds. A Participant, in connection with his initial Deferral Election in accordance with Section 3.010 or Section 3.020 above, will be permitted to also elect to have one or more Measurement Funds used to determine the amounts to be credited to his Account Balance and his election will continue to be in effect thereafter, unless it should be changed in accordance with subsection (c).

(b) Crediting or Debiting Method. The performance (either positive or negative) of each elected Measurement Fund will be determined by the Administrative Committee or its delegate, based on the performance of the Measurement Funds themselves. A Participant’s Account Balance will be credited or debited on a daily basis based on the performance of each Measurement Fund selected by the Participant, as determined by the Administrative Committee or its delegate in its sole discretion, as though:

(1) a Participant’s Account Balance were actually invested in the Measurement Fund(s) selected by the Participant as of the close of business on any business day, at the closing price on that day;

(2) the portion of the Annual Deferral Amount that was actually deferred during any calendar quarter were invested in the Measurement Fund(s) selected by the Participant, as soon as administratively feasible after such amounts are actually deferred from the Participant’s Base Annual Salary and/or Bonus through reductions in his payroll; and

(3) any distribution made to a Participant that decreases such Participant’s Account Balance ceased being invested in the Measurement Fund(s), in the applicable percentages, on the closest administratively feasible business day prior to the distribution, at the closing price on such date.

(c) Transfers among Measurement Funds. The Participant will be permitted to change, on a daily basis, any previous Measurement Fund election or elections he has made with regard to his Account Balance. The elections and changes to such elections which a Participant makes pursuant to this subsection will be made by means of any method (including any available telephonic or electronic method which is acceptable to the Administrative Committee or its delegate at the time the election

As Amended and Restated November 15, 2013 11

or change is made by the Participant), and may be made at any time and will be effective as of the New York Stock Exchange closing immediately following the making of that election or change; provided, however, if it is determined by the Administrative Committee or its delegate that an investment election made by a Participant is invalid or defective, the Participant’s election, until duly corrected by him, will be deemed to have been made in favor of whatever short-term, money market vehicle is available under the Plan at that time.

(d) No Actual Investment. Notwithstanding any other provision of this Plan that may be interpreted to the contrary, the Measurement Funds are to be used for measurement purposes only, and a Participant’s election of any such Measurement Fund, the allocation to his Account Balance thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant’s Account Balance will not be considered or construed in any manner as an actual investment of his Account Balance in any such Measurement Fund. In the event that the Company or the Trustee, in its own discretion, decides to invest funds in any or all of the Measurement Funds, no Participant will have any rights in or to such investments themselves. Without limiting the foregoing, a Participant’s Account Balance will at all times be a bookkeeping entry only and will not represent any investment made on his behalf by the Company or the Trust. The Participant will at all times remain an unsecured creditor of the Company.

(e) Company Reservation of Rights. Consistent with the preceding sentence, nothing to the contrary in this Plan or any of its forms or communication material, nor in any document associated with the Trust, should be interpreted or understood to provide Participants or their Beneficiaries with any current, direct rights with respect to the assets held by the Trustee in the Trust.

4.030    FICA and Other Taxes.

(a) Annual Deferral Amounts. For each Plan Year in which an Annual Deferral Amount is being withheld from a Participant or an Annual Company Match Amount or Annual Company Discretionary Contribution Amount is credited, the Company or any Affiliate employing the Participant will withhold from that portion of the Participant’s Base Annual Salary and/or Bonus which is not being deferred the Participant’s share of FICA and other employment taxes on such Annual Deferral Amount and Annual Company Match Amount and Annual Company Discretionary Contribution Amount.

(b) Distributions. The Company or any Affiliate employing the Participant, or the Trustee of the Trust, will withhold from any payments made to a Participant under this Plan all federal, state and local income, employment and other taxes required to be withheld in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Company and the Trustee of the Trust.

As Amended and Restated November 15, 2013 12

ARTICLE V: SHORT-TERM PAYOUTS, WITHDRAWALS AND CORPORATE EVENT DISTRIBUTIONS

5.010    Short-Term Payouts. In connection with each election to defer an Annual Deferral Amount, a Participant may elect to receive a future Short-Term Payout from the Plan with respect to such Annual Deferral Amount.

(a) The said Short-Term Payout will be a lump sum payment or in annual installments over a period not to exceed 10 years. The lump sum payment or annual installments shall be equal to the Annual Deferral Amount, as adjusted for amounts credited or debited in the manner provided in Section 4.020 on that amount, determined at the time that the Short‑Term Payout is paid (rather than at the date of a Termination of Employment).

(b) Subject to the terms and conditions of this Plan, each Short‑Term Payout elected will be paid out (or begin to be paid out) during a sixty (60) day period commencing immediately after the last day of any Plan Year designated by the Participant that is at least three Plan Years after the Plan Year in which the Annual Deferral Amount is actually deferred. By way of example, if a three-year Short-Term Payout in the form of a lump sum is elected for Annual Deferral Amounts that are deferred in the Plan Year commencing February 1, 2012, the three-year Short-Term Payout would be paid out during a sixty (60) day period commencing January 1, 2016.

(c) Subject to the provisions of Section 5.015, a Participant may change any election he has previously made to a different payout period permitted hereunder, but only one such a change may be made with respect to any single election. Such change will be accomplished by the Participant submitting notice of such change to the Administrative Committee or its delegate in the form prescribed by the to the Administrative Committee (including in electronic form), but such change will not be valid, unless such change satisfies the requirements of Section 5.015.

(d) Should an event occur that triggers a benefit under Article VI, VII or VIII, any Annual Deferral Amount, plus amounts credited or debited thereon, that is subject to a Short-Term Payout election under this Section will not be paid in accordance with this Section, but will instead be paid in accordance with the other applicable Article. For the avoidance of doubt, this Section 5.010(d) shall only apply if such event occurs prior to January 1 of the calendar year in which a Short-Term Payout is payable.

(e) Notwithstanding the foregoing, a Participant may elect two Short Term Payouts (which have not yet begun to be paid out) at any time.

5.020    Changes to Short-Term Payout Methods. A Participant may change any election he has previously made pursuant to Section 5.010, but; provided, however, that any such change must:

As Amended and Restated November 15, 2013 13

(a) not result in the acceleration of payments;

(b) not be effective for 12 months after such change is made;

(c) result in the deferral of payments with respect to which the election is changed for a period of at least 5 years (e.g., change from lump sum to installments commencing 5 years from the date previously elected);

(d) not be made less than 12 months prior to the first scheduled payment.

5.030    Withdrawal for Unforeseeable Financial Emergencies. In the event that any Participant should encounter an Unforeseeable Financial Emergency, such Participant may petition the Administrative Committee or its delegate to permit him to receive a partial or full payout from the Plan in a manner consistent with Code Section 409A. Such a payout will not exceed the lesser of --

(a) the Participant’s Account Balance, calculated as if the Participant were receiving a Termination Benefit, or

(b) the amount reasonably needed to satisfy the Unforeseeable Financial Emergency (which may include amounts necessary to pay any Federal, state or local income taxes or penalties reasonably anticipated to result from the distribution).

If, subject to the sole discretion of the Administrative Committee or its delegate, the petition for a payout is approved, such payout will be made within sixty (60) days of the date of approval and the Participant’s deferrals under the Plan shall be terminated as of the date of such approval.

In addition, a Participant’s deferral elections under this Plan shall be terminated to the extent the Company determines, in its sole discretion, that termination of such Participant’s deferral elections is required pursuant to Treas. Reg. §1.401(k)-1(d)(3) for the Participant to obtain a hardship distribution from an Employer’s 401(k) Plan. If the Company determines, in its sole discretion, that a termination of the Participant’s deferrals is required in accordance with the preceding sentence, the Participant’s deferrals shall be terminated following the date on which such determination is made.

5.040    Inclusion in Income Under Section 409A. Notwithstanding any other provision of this Plan, in the event this Plan fails to satisfy the requirements of Code Section 409A and regulations thereunder with respect to any Participant, there shall be distributed to such Participant the Participant’s Account Balance hereunder as promptly as possible after the Administrative Committee becomes aware of such fact of noncompliance.

5.050    Corporate Event Distribution. Notwithstanding any other provision of this Plan, if a Corporate Event occurs, each Participant’s Account Balance hereunder shall be distributed to such Participant in a lump sum 10 days after such Corporate Event.

As Amended and Restated November 15, 2013 14

ARTICLE VI: RETIREMENT BENEFITS

6.010    Retirement Benefit. A Participant who Retires will receive, as a Retirement Benefit, his Account Balance.

6.020    Payment of Retirement Benefit. A Participant may elect in his Deferral Election Form to receive the Retirement Benefit in a lump sum or pursuant to an Annual Installment Method of periods of from two (2) through ten (10) years. Subject to the provisions of Section 6.030, a Participant may change any election he has previously made to a different payout period permitted hereunder, but only one such a change may be made with respect to any single election. Such change will be accomplished by the Participant submitting notice of such change to the Administrative Committee or its delegate in the form prescribed by the to the Administrative Committee (including in electronic form), but such change will not be valid, unless it has been submitted by the Participant and accepted by the Administrative Committee or its delegate (in the Administrative Committee’s or delegate’s discretion) at least six (6) months prior to the Participant’s Retirement and such change satisfies the requirements of Section 6.030. The Deferral Agreement most recently accepted by the Administrative Committee or its delegate shall govern the payout of the Retirement Benefit. If a Participant does not make any election with respect to the payment of the Retirement Benefit, then such benefit shall be payable in a lump sum. The Account(s) of a Participant receiving payments pursuant to the Annual Installment Method shall continue to have his Account(s) credited with earnings and losses pursuant to Section 4.020.

A lump sum payment of amounts deferred and credited hereunder shall be paid, and installment payments herefrom shall begin, on the six (6) month anniversary of the date the Participant Retires.

6.030    Changes to Retirement Benefit Payment Methods.

A Participant may change any election he has previously made pursuant to Section 6.020, but; provided, however, that any such change must:

(a) not result in the acceleration of payments;

(b) not be effective for 12 months after such change is made;

(c) result in the deferral of payments with respect to which the election is changed for a period of at least 5 years (e.g., change from lump sum to installments commencing 5 years from the six (6) month anniversary of the participant’s termination date);

(d) not be made less than 12 months prior to the first scheduled payment.

6.040    Death Prior to Completion of Retirement Benefit. If a Participant dies after Retirement or Termination of Employment but before the Retirement Benefit or Termination Benefit is paid in full, the Participant’s unpaid Retirement Benefit payments shall be paid to the Participant’s Beneficiary in a lump sum within 60 days of the Participant’s death.

As Amended and Restated November 15, 2013 15

6.050    Death Prior to Retirement. If a Participant dies while still employed with the Company and prior to Retirement or Termination of Employment, the Participant’s benefits shall be paid to the Participant’s Beneficiary in a lump sum within sixty (60) days of the Participant’s death.

6.060    Small Accounts. Notwithstanding any other provision herein to the contrary, if the aggregate total of a Participant’s Account Balance along with the value of such Participant’s account balance or benefits under any other plan of the Company with which this Plan is required to be aggregated with under Section 409A of the Code as of such Participant’s Retirement date does not exceed the dollar amount of the deferral limit then in effect under Section 402(g) of the Code, the Participant’s Retirement Benefit shall be paid in a lump sum. A lump sum payment shall be paid on the six (6) month anniversary of the date the Participant Retires.

ARTICLE VII: TERMINATION BENEFIT

7.010    Termination Benefit. The Participant will receive a Termination Benefit, which will be equal to the Participant’s Account Balance if a Participant experiences a Termination of Employment prior to his Retirement, death or Disability.

7.020    Payment of Termination Benefit. The form of payment of a Participant’s Account Balance, if such payment is due to the Participant’s Termination of Employment, will in all cases be a lump sum. A lump sum payment of amounts deferred or credited hereunder shall be paid on the six (6) month anniversary of the date the Participant’s Termination of Employment.

ARTICLE VIII:DISABILITY WAIVER AND BENEFIT

8.010    Continued Eligibility; Disability Benefit. A Participant suffering a Disability will receive a Disability Benefit equal to his Account Balance at the time of the Disability determination; provided, however, that this Section 8.010 shall not apply should the Participant otherwise have been eligible to Retire at the time of the Disability determination. The Disability Benefit will be paid in a lump sum within sixty (60) days of the Disability determination.

ARTICLE IX: BENEFICIARY DESIGNATION

9.010    Beneficiary. Each Participant will have the right, at any time, to designate his Beneficiary or Beneficiaries (both primary and contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other plan of an Employer in which the Participant participates.

9.020    Beneficiary Designation or Change of Designation. A Participant will be permitted to designate his Beneficiary by completing and signing the Beneficiary Designation Form. A Participant will have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form. Upon the acceptance of a new Beneficiary Designation Form, all Beneficiary designations previously filed will be canceled.

As Amended and Restated November 15, 2013 16

9.030    Spousal Consent Required. If a Participant names someone other than his spouse as a Beneficiary, a spousal consent, in the form designated by the Company or its delegate, must be signed by that Participant’s spouse and returned to the Company or its delegate.

9.040    Acknowledgment. No designation or change in designation of a Beneficiary will be effective until received by the Company or its delegate.

9.050    Absence of Valid Beneficiary Designation. If a Participant fails to designate a Beneficiary as provided in the preceding Sections or, if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the Participant’s designated Beneficiary will be deemed to be his surviving spouse. If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary will be payable to the executor or personal representative of the Participant’s estate.

9.060    Doubt as to Beneficiary. If the Company or its delegate has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Company or its delegate will have the right, exercisable in its discretion, to withhold such payments until this matter is resolved to the Company’s or the delegate’s satisfaction.

9.070    Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary will fully and completely discharge the Company and all of its Affiliates and the Administrative Committee from all further obligations under this Plan with respect to the Participant, and that Participant’s participation in this Plan will terminate upon such full payment of benefits.

ARTICLE X:LEAVE OF ABSENCE

10.010    Paid Leave of Absence. If a Participant is authorized by the Company or the Affiliate employing the Participant for any reason to take a paid leave of absence, the Participant will continue to be considered to be an Employee and the Annual Deferral Amount will continue to be withheld during such paid leave of absence.

10.020    Unpaid Leave of Absence. If a Participant is authorized by the Company or the Affiliate employing the Participant to take an unpaid leave of absence, the Participant will be excused from making deferrals until the earlier of the date the leave of absence expires or the Participant returns to a paid employment status. Upon such expiration or return, deferrals will resume for the remaining portion of the Plan Year in which the expiration or return occurs, based on the Deferral Election, if any, made for that Plan Year. If no Deferral Election was made for that Plan Year, no deferral will be withheld.

ARTICLE XI:TERMINATION, AMENDMENT OR MODIFICATION

11.010    Termination. Although the Company and each Affiliate anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that the Company or any such Affiliate will continue the Plan or will not terminate the Plan at any time in the future. Accordingly, the Company reserves the right to discontinue sponsorship of the Plan and/or to terminate the Plan at any time with respect to any or all of its participating Employees, by action of the Company.

As Amended and Restated November 15, 2013 17

If this Plan is terminated, no additional deferrals or contributions shall be credited to any Participant Account hereunder. Following Plan termination, Participants’ Accounts shall be paid at such time and in such form as provided under the Plan. Notwithstanding the preceding sentence, either at the time of termination or on a subsequent date the Company may, in its discretion, determine to distribute the then existing Account Balances of Participants and Beneficiaries and, following such distribution, there shall be no further obligation to any Participant or Beneficiary under this Plan; provided, however, that the authority granted to the Company under this sentence shall be implemented only to the extent permissible under Code Section 409A and regulations and other guidance issued by the Internal Revenue Service interpreting the provisions of that Section.

11.020    Amendment. The Company may, at any time, amend or modify the Plan in whole or in part by action of the Administrative Committee; provided, however, that:

(a) no amendment or modification shall be effective to decrease or restrict the value of a Participant’s Account Balance in existence at the time the amendment or modification is made, calculated as if the Participant had experienced a Termination of Employment as of the effective date of the amendment or modification or, if the amendment or modification occurs after the date upon which the Participant was eligible to Retire, the Participant had Retired as of the effective date of the amendment or modification; and

(b) the amendment or modification of the Plan shall not affect any Participant or Beneficiary who has become entitled to the payment of benefits under the Plan as of the date of the amendment or modification.

Notwithstanding the foregoing, the Administrative Committee may make any amendment it deems necessary or desirable for purposes of compliance with the requirements of Code Section 409A and regulations thereunder.

11.030    Effect of Payment. The full payment of all applicable benefits hereunder shall completely discharge all obligations to a Participant and his Beneficiaries under this Plan.

ARTICLE XII: ADMINISTRATION

12.010    Administrative Committee Duties. Except as otherwise provided in this Article, this Plan will be administered by the Administrative Committee and its delegates. Members of the Administrative Committee may be Participants under this Plan. The Administrative Committee will also have the discretion and authority to:

(a) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan, and

(b) decide or resolve any and all questions including interpretations of this Plan, as may arise in connection with the Plan.

Any individual serving on the Administrative Committee who is a Participant will not be permitted to vote or act on any matter relating solely to himself or herself. When making a determination or

As Amended and Restated November 15, 2013 18

calculation, the Administrative Committee will be entitled to rely on information furnished by a Participant or the Company.

12.020    Agents. In the administration of this Plan, the Administrative Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to any Employer.

12.040    Binding Effect of Decisions. The decision or action of the Administrative Committee or its delegate with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder will be final and conclusive and binding upon all persons having any interest in the Plan.

12.050    Indemnity of Administrative Committee. The Company and its Affiliates shall indemnify and hold harmless the members of the Administrative Committee, any Employee to whom the duties of the Administrative Committee may be delegated, and the Administrative Committee or its delegate against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Administrative Committee, any of its members, or such Employee.

12.060    Employer Information. To enable the Administrative Committee and its delegates to perform their functions, the Company will supply full and timely information to the Administrative Committee and delegates on all matters relating to the compensation of its Participants, the date and circumstances of the Retirement, Disability, death or circumstances of the Retirement, Disability, death or Termination of Employment of its Participants, and such other pertinent information as the Administrative Committee or its delegate may reasonably require.

ARTICLE XIII: OTHER BENEFITS AND AGREEMENTS

13.010    Coordination with Other Benefits. The benefits provided for a Participant and Participant’s Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Company and its Affiliates. The Plan will supplement and will not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.

ARTICLE XIV: CLAIMS PROCEDURE

14.010    Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Administrative Committee or its delegate a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred and eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant. Claims should be submitted to:

As Amended and Restated November 15, 2013 19

Administrative Committee, Apollo Education Group, Inc. Deferred Compensation Plan, c/o Apollo Education Group, Inc., 4025 South Riverpoint Pkwy., Phoenix, AZ 85040.

14.020    Notification of Decision. The Administrative Committee or its delegate will consider a Claimant’s claim within a reasonable time, and will notify the Claimant in writing:

(a) that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or

(b) that the Administrative Committee or its delegate has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant;

(c) the specific reason(s) for the denial of the claim, or any part of it;

(1) specific reference(s) to pertinent provisions of the Plan upon which such denial was based;

(2) a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

(3) an explanation of the claim review procedure set forth in Section 14.030 below.

14.030    Review of a Denied Claim. Within sixty (60) days after receiving a notice from the Administrative Committee or its delegate that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized representative) may file with the Administrative Committee or its delegate a written request for a review of the denial of the claim. Thereafter, but not later than thirty (30) days after the review procedure began, the Claimant (or the Claimant’s duly authorized representative):

(a) may review pertinent documents;

(b) may submit written comments or other documents; and/or

(c) may request a hearing, which the Administrative Committee or its delegate, in its sole discretion, may grant.

14.040    Decision on Review. The Administrative Committee or its delegate will render any decision on review promptly, and not later than 60 days after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Administrative Committee’s or its delegate’s decision must be rendered within one hundred and twenty (120) days after such date. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

(a) specific reasons for the decision;

As Amended and Restated November 15, 2013 20

(b) specific reference(s) to the pertinent Plan provisions upon which the decision was based; and

(c) such other matters as the Administrative Committee or its delegate deems relevant.

14.050    Legal Action. A Claimant’s compliance with the foregoing provisions of this Article 14 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Plan.

ARTICLE XV: TRUST

15.010    Establishment of the Trust. The Company shall establish a Trust (which may be referred to herein as a “Rabbi Trust”). The Trust shall be irrevocable and shall remain irrevocable with respect to the Plan until all benefits due under this Plan and benefits and account balances due to participants and beneficiaries under any other plan covered by the Trust have been paid in full.

15.020    Interrelationship of the Plan and the Trust. The provisions of the Plan and each Participant’s Deferral Election Forms will govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust will govern the rights of the Company and its Affiliates, Participants and the creditors of the Company and its Affiliates to the assets transferred to the Trust. The Company and each of its Affiliates employing any Participant will at all times remain liable to carry out their obligations under the Plan.

15.030    Distributions From the Trust. The Company’s and each of its Affiliate’s obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution will reduce their obligations under this Plan.

15.040    Rabbi Trust. The Rabbi Trust shall:

(a) be a non-qualified grantor trust which satisfies in all material respects the requirement of Revenue Procedure 92-64, 1992-2 CB 122 (or any successor Revenue Procedure or other applicable authority);

(b) provide that any successor trustee shall be a bank trust department or other party that may be granted corporate trustee powers under state law.

ARTICLE XVI: MISCELLANEOUS

16.010    Status of Plan. The Plan is intended to be a plan that is not qualified within the meaning of Code §401(a) and that “is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employee” within the meaning of ERISA §§201(2), 301(a)(3) and 401(a)(1). The Plan will be administered and interpreted to the extent possible in a manner consistent with that intent.

As Amended and Restated November 15, 2013 21

16.020    Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Company or its Affiliates. For purposes of the payment of benefits under this Plan, any and all of the Company’s or Affiliate’s assets shall be, and remain, the general, unpledged unrestricted assets of the Company or Affiliate. The Company or Affiliate’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.

16.030    Company Liability. The Company’s or an Affiliate’s liability for the payment of benefits will be defined only by the Plan. The Company and its Affiliates will have no obligation to a Participant under the Plan, except as expressly provided in the Plan.

16.040    Nonassignability. Neither a Participant nor any other person will have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable will, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise.

16.050    Not a Contract of Employment. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between the Company or any of its Affiliates and the Participant. Such employment is hereby acknowledged to be an “at will” employment relationship that can be terminated at any time for any reason, or no reason, with or without cause, and with or without notice, unless expressly provided in a written employment agreement. Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of any the Company or an Affiliate or to interfere with the right of the Company or an Affiliate to discipline or discharge the Participant at any time.

16.060    Furnishing Information. A Participant or his Beneficiary will cooperate with the Administrative Committee or its delegate by furnishing any and all information requested by the Administrative Committee or its delegate and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Administrative Committee or its delegate may deem necessary.

16.070    Terms. Whenever any words are used herein in the masculine, they should be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they should be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.

16.080    Captions. The captions of the articles, sections and paragraphs of this Plan are for convenience only and do not control or affect the meaning or construction of any of its provisions.

As Amended and Restated November 15, 2013 22

16.090    Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the laws of the State of Arizona.

16.100    Successors. The provisions of this Plan shall bind and inure to the benefit of the Company and its successors and assigns and the Participant and the Participant’s designated Beneficiaries.

16.110    Spouse’s Interest. The interest in the benefits hereunder of a spouse of a Participant who has predeceased the Participant will automatically pass to the Participant and will not be transferable by such spouse in any manner, including but not limited to such spouse’s will, nor will such interest pass under the laws of intestate succession.

16.120    Validity. In case any provision of this Plan should be found to be illegal or invalid for any reason, said illegality or invalidity will not affect the remaining parts hereof, but this Plan should be construed and enforced as if such illegal or invalid provision had never been inserted herein.

16.130    Minors, Incompetent Persons, etc. If the Administrative Committee or its delegate determines that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Administrative Committee or its delegate may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Administrative Committee or its delegate may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and will be a complete discharge of any liability under the Plan for such payment amount.

16.140    Court Order. The Administrative Committee or its delegate is authorized to make any payments directed by court order in any action in which the Plan or the Administrative Committee has been named as a party. In addition, if a court determines that a spouse or former spouse of a Participant has an interest in the Participant’s benefits under the Plan in connection with a property settlement or otherwise, the Administrative Committee or its delegate, in its sole discretion, will have the right, notwithstanding any election made by a Participant, to distribute the spouse’s or former spouse’s interest in the Participant’s benefits under the Plan to that spouse or former spouse.

16.150    Insurance. The Company, on its own behalf or on behalf of the trustee of the Trust, and, in its discretion, may apply for and procure insurance on the life of the Participant, in such amounts and in such forms as the Trust may choose. The Company or the trustee of the Trust, as the case may be, will be the sole owner and beneficiary of any such insurance. The Participant will have no interest whatsoever in any such policy or policies, and at the request of the Company will submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to which the Company has applied for insurance.

As Amended and Restated November 15, 2013 23

16.160    Requirement for Release. Any payment to any Participant or a Participant’s present, future or former spouse or Beneficiary in accordance with the provisions of this Plan will, to the extent thereof, be in full satisfaction of all claims against the Plan, the Trustee and the Company, and the Trustee may require such Participant or Beneficiary, as a condition precedent to such payment to execute a receipt and release to such effect. Any such release, if required, must become effective prior to time payment is scheduled to commence under the terms of this Plan and any applicable Deferral Election.

In Witness Whereof, the authorized officers of the Employer have signed this document on November 20, 2013, but effective as of November 15, 2013.

APOLLO EDUCATION GROUP, INC.

By: /s/ Fred Newton            

Fred Newton

Senior Vice President – Human Resources

As Amended and Restated November 15, 2013 24

Table of Contents

Page

ARTICLE I:	DEFINITIONS	1
ARTICLE II:	PARTICIPATION	8
ARTICLE III:	DEFERRAL AND COMPANY MATCH CREDITS	9
ARTICLE IV:	PLAN ACCOUNTS	11
ARTICLE V:	SHORT-TERM PAYOUTS, WITHDRAWALS AND CORPORATE EVENT DISTRIBUTIONS	13
ARTICLE VI:	RETIREMENT BENEFITS	15
ARTICLE VII:	TERMINATION BENEFIT	16
ARTICLE VIII:	DISABILITY WAIVER AND BENEFIT	16
ARTICLE IX:	BENEFICIARY DESIGNATION	16
ARTICLE X:	LEAVE OF ABSENCE	17
ARTICLE XI:	TERMINATION, AMENDMENT OR MODIFICATION	17
ARTICLE XII:	ADMINISTRATION	18
ARTICLE XIII:	OTHER BENEFITS AND AGREEMENTS	19
ARTICLE XIV:	CLAIMS PROCEDURE	19
ARTICLE XV:	TRUST	21
ARTICLE XVI:	MISCELLANEOUS	21

As Amended and Restated November 15, 2013 i

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Gregory W. Cappelli, certify that:

1. I have reviewed this Form 10-Q of Apollo Education Group, Inc. (the “registrant”);

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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

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

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

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report 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(s) 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: January 7, 2014

/s/ Gregory W. Cappelli  

Gregory W. Cappelli 

Chief Executive Officer and Director

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Brian L. Swartz, certify that:

1. I have reviewed this Form 10-Q of Apollo Education Group, Inc. (the “registrant”);

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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

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

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

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report 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(s) 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: January 7, 2014

/s/ Brian L. Swartz

Brian L. Swartz

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Apollo Education Group, Inc. (the “Company”) on Form 10-Q for the quarter ended Novebmer 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gregory W. Cappelli, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; 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: January 7, 2014

/s/ Gregory W. Cappelli  

Gregory W. Cappelli 

Chief Executive Officer and Director

(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to Apollo Education Group, Inc. and will be retained by Apollo Education Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Apollo Education Group, Inc. (the “Company”) on Form 10-Q for the quarter ended November 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brian L. Swartz, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; 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: January 7, 2014

/s/ Brian L. Swartz  

Brian L. Swartz 

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to Apollo Education Group, Inc. and will be retained by Apollo Education Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Share-Based Compensation

3 Months Ended

Nov. 30, 2013

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

Stock and Savings Plans

Share-Based Compensation

The following details share-based compensation expense for the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013		2012
Instructional and student advisory	$	3,533	$	7,588
Marketing	1,108		2,043
Admissions advisory	102		170
General and administrative	5,368		6,023
Restructuring and other charges	1,862		1,065
Share-based compensation expense	$	11,973	$	16,889

In accordance with our Apollo Education Group, Inc. Amended and Restated 2000 Stock Incentive Plan, we granted 65,000 restricted stock units and performance share awards during the three months ended November 30, 2013. The granted awards had a weighted average grant date fair value of $26.63. As of November 30, 2013, there was $65.6 million and $2.8 million of total unrecognized share-based compensation cost, net of forfeitures, related to unvested restricted stock units and performance share awards, respectively. These costs are expected to be recognized over a weighted average period of 2.7 years.

We did not grant any stock options during the three months ended November 30, 2013. As of November 30, 2013, there was $7.7 million of total unrecognized share-based compensation cost, net of forfeitures, related to unvested stock options. These costs are expected to be recognized over a weighted average period of 1.9 years.

XML

Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Nov. 30, 2013		Nov. 30, 2012
Statement of Comprehensive Income [Abstract]
Net income	$ 99,041		$ 133,740
Other comprehensive income (net of tax):
Currency translation gain	2,835	[1]	759	[1]
Comprehensive income	101,876		134,499
Comprehensive income attributable to noncontrolling interests	(249)		(272)
Comprehensive income attributable to Apollo	$ 101,627		$ 134,227

[1] The tax effect on other comprehensive income during the three months ended November 30, 2013 and 2012 is not significant.

XML

Accounts Receivable, Net

3 Months Ended

Nov. 30, 2013

Receivables [Abstract]

Accounts Receivable, Net

Accounts Receivable, Net

Accounts receivable, net consist of the following as of the respective periods:

($ in thousands)	November 30, 2013			August 31, 2013
Student accounts receivable	$	251,860		$	243,660
Less allowance for doubtful accounts	(55,895		)	(59,744		)
Net student accounts receivable	195,965			183,916
Other receivables	18,260			31,485
Total accounts receivable, net	$	214,225		$	215,401

Student accounts receivable is composed primarily of amounts due related to tuition and educational services. The following summarizes the activity in allowance for doubtful accounts for the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013			2012
Beginning allowance for doubtful accounts	$	59,744		$	107,230
Provision for uncollectible accounts receivable	13,978			33,406
Write-offs, net of recoveries	(17,827		)	(38,843		)
Ending allowance for doubtful accounts	$	55,895		$	101,793

XML

Accounts Receivable, Net (Tables)

3 Months Ended

Nov. 30, 2013

Receivables [Abstract]

Accounts receivable, net

Accounts receivable, net consist of the following as of the respective periods:

($ in thousands)	November 30, 2013			August 31, 2013
Student accounts receivable	$	251,860		$	243,660
Less allowance for doubtful accounts	(55,895		)	(59,744		)
Net student accounts receivable	195,965			183,916
Other receivables	18,260			31,485
Total accounts receivable, net	$	214,225		$	215,401

Allowance for doubtful accounts

The following summarizes the activity in allowance for doubtful accounts for the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013			2012
Beginning allowance for doubtful accounts	$	59,744		$	107,230
Provision for uncollectible accounts receivable	13,978			33,406
Write-offs, net of recoveries	(17,827		)	(38,843		)
Ending allowance for doubtful accounts	$	55,895		$	101,793

XML

Commitments and Contingencies

3 Months Ended

Nov. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Surety Bonds

As part of our normal operations, our insurers issue surety bonds for us that are required by various states where we operate. We are obligated to reimburse our insurers for any surety bonds that are paid. As of November 30, 2013, the face amount of these surety bonds was $41.6 million.

Letters of Credit

As of November 30, 2013, we had approximately $21 million of outstanding letters of credit that are required as part of our normal operations.

Litigation and Other Matters

We are subject to various claims and contingencies that arise from time to time in the ordinary course of business, including those related to regulation, litigation, business transactions, employee-related matters and taxes, among others. We do not believe any of these are material for separate disclosure.

The following is a description of pending litigation, settlements, and other proceedings that fall outside the scope of ordinary and routine litigation incidental to our business.

Securities Class Action (Apollo Institutional Investors Group)

On August 13, 2010, a securities class action complaint was filed in the U.S. District Court for the District of Arizona by Douglas N. Gaer naming us, John G. Sperling, Gregory W. Cappelli, Charles B. Edelstein, Joseph L. D’Amico, Brian L. Swartz and Gregory J. Iverson as defendants for allegedly making false and misleading statements regarding our business practices and prospects for growth. That complaint asserted a putative class period stemming from December 7, 2009 to August 3, 2010. A substantially similar complaint was also filed in the same Court by John T. Fitch on September 23, 2010 making similar allegations against the same defendants for the same purported class period. Finally, on October 4, 2010, another purported securities class action complaint was filed in the same Court by Robert Roth against the same defendants as well as Brian Mueller, Terri C. Bishop and Peter V. Sperling based upon the same general set of allegations, but with a defined class period of February 12, 2007 to August 3, 2010. The complaints allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On October 15, 2010, three additional parties filed motions to consolidate the related actions and be appointed the lead plaintiff.

On November 23, 2010, the Fitch and Roth actions were consolidated with Gaer and the Court appointed the “Apollo Institutional Investors Group” consisting of the Oregon Public Employees Retirement Fund, the Mineworkers’ Pension Scheme, and Amalgamated Bank as lead plaintiffs. The case is now entitled, In re Apollo Group, Inc. Securities Litigation, Lead Case Number CV-10-1735-PHX-JAT. On February 18, 2011, the lead plaintiffs filed a consolidated complaint naming Apollo, John G. Sperling, Peter V. Sperling, Joseph L. D’Amico, Gregory W. Cappelli, Charles B. Edelstein, Brian L. Swartz, Brian E. Mueller, Gregory J. Iverson, and William J. Pepicello as defendants. The consolidated complaint asserts a putative class period of May 21, 2007 to October 13, 2010. On April 19, 2011, we filed a motion to dismiss and oral argument on the motion was held before the Court on October 17, 2011. On October 27, 2011, the Court granted our motion to dismiss and granted plaintiffs leave to amend. On December 6, 2011, the lead plaintiffs filed an Amended Consolidated Class Action Complaint, which alleges similar claims against the same defendants. On January 9, 2012, we filed a motion to dismiss the Amended Consolidated Class Action Complaint. On June 22, 2012, the Court granted our motion to dismiss and entered a judgment in our favor. On July 20, 2012, the plaintiffs filed a Notice of Appeal with the U.S. Court of Appeals for the Ninth Circuit, and their appeal remains pending before that Court. If the plaintiffs are successful in their appeal, we anticipate they will seek substantial damages.

Because of the many questions of fact and law that may arise, the outcome of this legal proceeding is uncertain at this point. Based on the information available to us at present, we cannot reasonably estimate a range of loss for this action and, accordingly, we have not accrued any liability associated with this action.

Securities Class Action (Teamsters Local 617 Pensions and Welfare Funds)

On November 2, 2006, the Teamsters Local 617 Pension and Welfare Funds filed a class action complaint purporting to represent a class of shareholders who purchased our stock between November 28, 2001 and October 18, 2006. The complaint, filed in the U.S. District Court for the District of Arizona, is entitled Teamsters Local 617 Pension & Welfare Funds v. Apollo Group, Inc. et al., Case Number 06-cv-02674-RCB, and alleges that we and certain of our current and former directors and officers violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by purportedly making misrepresentations concerning our stock option granting policies and practices and related accounting. The defendants are Apollo, J. Jorge Klor de Alva, Daniel E. Bachus, John M. Blair, Dino J. DeConcini, Kenda B. Gonzales, Hedy F. Govenar, Brian E. Mueller, Todd S. Nelson, Laura Palmer Noone, John R. Norton III, John G. Sperling and Peter V. Sperling. On September 11, 2007, the Court appointed The Pension Trust Fund for Operating Engineers as lead plaintiff. Lead plaintiff filed an amended complaint on November 23, 2007, asserting the same legal claims as the original complaint and adding claims for violations of Section 20A of the Securities Exchange Act of 1934 and allegations of breach of fiduciary duties and civil conspiracy. On April 30, 2009, plaintiffs filed their Second Amended Complaint, which alleges similar claims for alleged securities fraud against the same defendants.

On March 31, 2011, the U.S. District Court for the District of Arizona dismissed the case with prejudice and entered judgment in our favor. Plaintiffs filed a motion for reconsideration of this ruling, and the Court denied this motion on April 2, 2012. On April 27, 2012, the plaintiffs filed a Notice of Appeal with the U.S. Court of Appeals for the Ninth Circuit, and their appeal remains pending before that Court. If the plaintiffs are successful in their appeal, we anticipate they will seek substantial damages.

Because of the many questions of fact and law that may arise, the outcome of this legal proceeding is uncertain at this point. Based on the information available to us at present, we cannot reasonably estimate a range of loss for this action and, accordingly, we have not recorded a loss associated with this action.

Incentive Compensation False Claims Act Lawsuit

On May 25, 2011, we were notified that a qui tam complaint had been filed against us in the U.S. District Court, Eastern District of California, by private relators under the Federal False Claims Act and California False Claims Act, entitled USA and State of California ex rel. Hoggett and Good v. University of Phoenix, et al, Case Number 2:10-CV-02478-MCE-KJN. When the federal government declines to intervene in a qui tam action, as it has done in this case, the relators may elect to pursue the litigation on behalf of the federal government and, if successful, they are entitled to receive a portion of the federal government’s recovery.

The complaint alleges, among other things, that University of Phoenix has violated the Federal False Claims Act since December 12, 2009 and the California False Claims Act for the preceding ten years by falsely certifying to the U.S. Department of Education and the State of California that University of Phoenix was in compliance with various regulations that require compliance with federal rules regarding the payment of incentive compensation to admissions personnel, in connection with University of Phoenix’s participation in student financial aid programs. In addition to injunctive relief and fines, the relators seek significant damages on behalf of the Department of Education and the State of California, including all student financial aid disbursed by the Department to our students since December 2009 and by the State of California to our students during the preceding ten years. On July 12, 2011, we filed a motion to dismiss and on August 30, 2011, relators filed a motion for leave to file a Second Amended Complaint, which the Court granted. On November 2, 2011, we filed a motion to dismiss relators’ Second Amended Complaint, which was denied by the Court on July 6, 2012. On August 1, 2012, we filed a motion for certification of an interlocutory appeal, which was denied by the Court on March 7, 2013. Discovery in this matter has commenced, and trial is scheduled for January 2015.

Because of the many questions of fact and law that may arise, the outcome of this legal proceeding is uncertain at this point. Based on the information available to us at present, we cannot reasonably estimate a range of loss for this action and, accordingly, we have not accrued any liability associated with this action.

Patent Infringement Litigation

On March 3, 2008, Digital-Vending Services International Inc. filed a complaint against University of Phoenix and Apollo, as well as Capella Education Company, Laureate Education Inc., and Walden University Inc. in the U.S. District Court for the Eastern District of Texas, since transferred on plaintiff’s motion to the Eastern District of Virginia. The case is entitled, Digital Vending Services International, LLC vs. The University of Phoenix, et al, Case Number 2:09cv555 (JBF-TEM). The complaint alleges that we and the other defendants have infringed and are infringing various patents relating to managing courseware in a shared use operating environment and seeks injunctive relief and substantial damages, including royalties as a percentage of our net revenue over a multi-year period. We filed an answer to the complaint on May 27, 2008, in which we denied that Digital-Vending Services International’s patents were duly and lawfully issued, and asserted defenses of non-infringement and patent invalidity, among others. We also asserted a counterclaim seeking a declaratory judgment that the patents are invalid, unenforceable, and not infringed by us.

On January 7, 2011, the Court granted our motion for summary judgment and dismissed the case with prejudice, citing plaintiff’s failure to point to admissible evidence that could support a finding of infringement. Plaintiff appealed the order granting summary judgment to the United States Court of Appeals for the Federal Circuit, which held oral argument on December 5, 2011. On March 7, 2012, a divided three-judge panel of the Federal Circuit issued an opinion affirming in part and reversing in part the order granting summary judgment, and it remanded a portion of the plaintiff’s claims to the district court for further proceedings. We filed a Petition for Rehearing with the Federal Circuit regarding the portion of the decision reversing the grant of summary judgment, which the Federal Circuit denied on May 25, 2012. Accordingly, the case was remanded to the U.S. District Court for the Eastern District of Virginia for further proceedings. In July 2013, we filed another motion for summary judgment based on non-infringement, and on October 4, 2013, the Court granted our motion and dismissed each of plaintiff’s remaining claims with prejudice. On November 1, 2013, plaintiff filed a Notice of Appeal of the District Court’s order. The parties subsequently entered into a settlement agreement for an immaterial amount pursuant to which plaintiff agreed to dismiss its appeal. Plaintiff’s appeal was dismissed on November 21, 2013, which resolved the litigation.

Himmel Derivative Action

On November 12, 2010, we received a shareholder demand to investigate, address and commence proceedings against each of our directors and certain of our officers for violation of any applicable laws, including in connection with the subject matter of the report of the Government Accountability Office prepared for the U.S. Senate in August 2010, our withdrawal of the outlook we previously provided for our fiscal year 2011, the investigation into possible unfair and deceptive trade practices associated with certain alleged practices of University of Phoenix by the State of Florida Office of the Attorney General in Fort Lauderdale, Florida, the participation by the State of Oregon Office of the Attorney General in the Securities Class Action (Apollo Institutional Investors Group), and the informal inquiry by the Enforcement Division of the Securities and Exchange Commission commenced in October 2009.

On March 24, 2011, a shareholder derivative complaint was filed in the Superior Court for the State of Arizona, Maricopa County by Daniel Himmel, the foregoing shareholder who previously made a demand for investigation. In the complaint, the plaintiff asserts a derivative claim on our behalf against certain of our current and former officers and directors for breach of fiduciary duty, waste of corporate assets, and unjust enrichment. The complaint alleges that the individual defendants made improper statements and engaged in improper business practices that caused our stock price to drop, led to securities class actions against us, and enhanced regulation and scrutiny by various government entities and regulators. The case is entitled, Himmel v. Bishop, et al, Case Number CV2011-005604. Pursuant to a stipulation between all parties, on August 31, 2011, the Court ordered this action stayed during the pendency of the underlying Securities Class Action (Apollo Institutional Investors Group) matter.

K.K. Modi Investment and Financial Services Pvt. Ltd.

On November 8, 2010, a suit was filed by K.K. Modi Investment and Financial Services Pvt. Ltd. (“Modi”) in the High Court of Delhi at New Delhi against defendants Apollo, Western International University, Inc., University of Phoenix, Inc., Apollo Global, Inc., Modi Apollo International Group Pvt. Ltd., Apollo International, Inc., John G. Sperling, Peter V. Sperling and Jorge Klor De Alva, seeking to permanently enjoin the defendants from making investments in the education industry in the Indian market in breach of an exclusivity and noncompete provision which plaintiff alleges is applicable to Apollo and its subsidiaries. The case is entitled, K.K. Modi Investment and Financial Services Pvt. Ltd. v. Apollo International, et. al. We believe that the relevant exclusivity and noncompete provision is inapplicable to us and our affiliates, we have sought to dismiss this action on those grounds, and our application for such relief remains pending before the Court. If plaintiff ultimately obtains the requested injunctive relief, our ability to conduct business in India, including through our joint venture with HT Media Limited, may be adversely affected. It is also possible that in the future K.K. Modi may seek to expand existing litigation in India or commence litigation in the U.S. in which it may assert a significant damage claim against us.

Attorney General Investigations

On October 22, 2010, University of Phoenix received notice that the State of Florida Office of the Attorney General in Fort Lauderdale, Florida had commenced an investigation into possible unfair and deceptive trade practices associated with certain alleged practices of the University. The notice included a subpoena to produce documents and detailed information for the time period of January 1, 2006 to the present about a broad spectrum of the University’s business. We are cooperating with the investigation, but also filed a suit to quash or limit the subpoena and to protect information sought that constitutes propriety or trade secret information. We cannot predict the eventual scope, duration or outcome of the investigation at this time.

In May 2011 and January 2013, University of Phoenix received Civil Investigative Demands from the State of Massachusetts Office of the Attorney General. The Demands relate to an investigation of possible unfair or deceptive methods, acts, or practices by for-profit educational institutions in connection with the recruitment of students and the financing of education. The Demands seek documents, information and testimony regarding a broad spectrum of the University’s business for the time period of January 1, 2002 to the present. We are cooperating with the investigation. We cannot predict the eventual scope, duration or outcome of the investigation at this time.

UNIACC Investigations

UNIACC was advised by the National Accreditation Commission of Chile in November 2011 that its institutional accreditation would not be renewed and therefore had lapsed. Subsequently, in June 2012, a prosecutor’s office in Santiago, Chile requested that UNIACC provide documents relating to UNIACC’s relationship with a former employee and consultant who served as a member of the National Accreditation Commission until March 2012, and we have since received requests for additional information in connection with this investigation. Furthermore, in August 2012, the prosecutor’s office began requesting that UNIACC provide information about UNIACC’s business structure and operations and its relationship with other Apollo entities, in connection with an additional investigation regarding UNIACC’s compliance with applicable laws concerning the generation of profit by universities such as UNIACC. The prosecutor’s office is also requesting additional information from UNIACC regarding certain government funding received by the institution. UNIACC is cooperating with these investigations. At this time, we cannot predict the eventual scope, duration or outcome of these investigations.

In November 2012, UNIACC learned that the Ministry of Education was commencing a formal investigation into profit related issues and concerning the official recognition of UNIACC as a university under Chilean law. On November 18, 2013, we were notified by the Ministry of Education that it declined to pursue any charges against UNIACC and closed its investigation without imposing any sanction on UNIACC. In closing its investigation, the Ministry forwarded certain of its files for review by the Chilean tax authorities and the criminal prosecutor conducting the profit investigation referenced above.

Refer to Note 9, Income Taxes, for discussion of Internal Revenue Service audits.

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Debt (Details) (USD $)	3 Months Ended
	Nov. 30, 2013	Aug. 31, 2013
Debt [Line Items]
Total debt	$ 75,781,000	$ 692,054,000
Less short-term borrowings and current portion of long-term debt	(21,214,000)	(628,050,000)
Long-term debt	54,567,000	64,004,000
Letters of credit outstanding	21,000,000	14,000,000
Bank Facility [Member]
Debt [Line Items]
Total debt	0	605,000,000
Borrowing capacity	625,000,000
Debt term	5 years
Debt repaid	605,000,000
Weighted average interest rate		3.50%
Bank Facility [Member] | Minimum [Member]
Debt [Line Items]
Fees	0.25%
Bank Facility [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt [Line Items]
Fees for borrowings	1.25%
Bank Facility [Member] | Maximum [Member]
Debt [Line Items]
Fees	0.40%
Bank Facility [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt [Line Items]
Fees for borrowings	1.85%
Capital Lease Obligations [Member]
Debt [Line Items]
Total debt	41,868,000	49,628,000
Other Debt [Member]
Debt [Line Items]
Total debt	$ 33,913,000	$ 37,426,000
Weighted average interest rate	5.80%	5.30%
Technology Purchase Obligation [Member]
Debt [Line Items]
Debt term	10 years

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Debt (Tables)

3 Months Ended

Nov. 30, 2013

Debt Disclosure [Abstract]

Debt

Debt and short-term borrowings consist of the following as of the respective periods:

($ in thousands)	November 30, 2013			August 31, 2013
Revolving Credit Facility, see terms below	$	—		$	605,000
Capital lease obligations	41,868			49,628
Other, see terms below	33,913			37,426
Total debt	75,781			692,054
Less short-term borrowings and current portion of long-term debt	(21,214		)	(628,050		)
Long-term debt	$	54,567		$	64,004

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Accrued and Other Liabilities (Tables)

3 Months Ended

Nov. 30, 2013

Payables and Accruals [Abstract]

Accrued and other current liabilities

Accrued and other current liabilities consist of the following as of the respective periods:

($ in thousands)	November 30, 2013		August 31, 2013
Salaries, wages and benefits	$	69,102	$	135,553
Restructuring obligations	57,900		55,191
Accrued legal and other professional obligations	31,839		31,310
Accrued advertising	26,941		45,850
Student refunds, grants and scholarships	24,525		7,180
Deferred rent and other lease liabilities	13,227		14,001
Curriculum materials	11,962		10,764
Other	47,553		46,857
Total accrued and other current liabilities	$	283,049	$	346,706

Other long-term liabilities

Other long-term liabilities consist of the following as of the respective periods:

($ in thousands)	November 30, 2013		August 31, 2013
Deferred rent and other lease liabilities	$	65,484	$	67,641
Restructuring lease obligations	60,561		64,610
Uncertain tax positions	35,727		33,637
Deferred gains on sale-leasebacks	22,223		22,894
Other	60,928		44,660
Total other long-term liabilities	$	244,923	$	233,442

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Regulatory Matters (Details)	3 Months Ended		3 Months Ended				12 Months Ended
	Nov. 30, 2013 Three Year Measuring Period [Member]	Nov. 30, 2013 Maximum [Member]	Nov. 30, 2013 Maximum [Member] Three Year Measuring Period [Member] Title IV Ineligibility [Member] Three Consecutive Cohorts [Member]	Nov. 30, 2013 Maximum [Member] Three Year Measuring Period [Member] Title IV Ineligibility [Member] One Cohort [Member]	Nov. 30, 2013 Maximum [Member] Proposed Regulatory Threshold [Member]	Aug. 31, 2013 University Of Phoenix [Member]	Aug. 31, 2013 University Of Phoenix [Member] Three Year Measuring Period [Member]	Aug. 31, 2013 University Of Phoenix [Member] Minimum [Member]
Percentage of consolidated net revenue						90.00%
Percentage of consolidated operating income								100.00%
Title IV percentage		90.00%			85.00%	83.00%
Cohort default rate measuring period	3 years
Cohort default rate			30.00%	40.00%			26.00%

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Marketable Securities (Details) (USD $) In Thousands, unless otherwise specified	Nov. 30, 2013	Aug. 31, 2013
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity securities, current	$ 128,736	$ 105,809
Held-to-maturity securities, noncurrent	102,779	37,995
Marketable securities, current	128,736	105,809
Marketable securities, noncurrent	108,725	43,941
US States and Political Subdivisions Debt Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity securities, current	57,169	69,621
Held-to-maturity securities, noncurrent	43,879	24,070
Commercial Paper [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity securities, current	28,109	9,828
Held-to-maturity securities, noncurrent	0	0
Corporate Debt Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity securities, current	26,480	24,503
Held-to-maturity securities, noncurrent	56,206	13,925
Other Debt [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity securities, current	16,978	1,857
Held-to-maturity securities, noncurrent	2,694	0
Auction Rate Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Available-for-sale securities, current	0	0
Available-for-sale securities, noncurrent	$ 5,946	$ 5,946

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Shareholders' Equity (Details 2) (Apollo Education Group Class A nonvoting common stock [Member], USD $)	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
Share Repurchases [Line Items]
Treasury stock reissued, shares	300,000	400,000
Aggregate share repurchase program	$ 250,000,000
Treasury stock purchases, cost	16,871,000
Amount remaining on repurchase authorization	235,000,000
Share Repurchases [Member]
Share Repurchases [Line Items]
Treasury stock purchases (in shares)	600,000	0
Treasury stock purchases, cost	15,000,000
Treasury stock purchases, average price per share	$ 26.02
Repurchases Related To Restricted Stock Units [Member]
Share Repurchases [Line Items]
Treasury stock purchases (in shares)	100,000	100,000
Treasury stock purchases, cost	$ 1,900,000	$ 3,472,000

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Segment Reporting (Tables)

3 Months Ended

Nov. 30, 2013

Segment Reporting [Abstract]

Segment reporting information

A summary of financial information by reportable segment is as follows:

	Three Months Ended November 30,
($ in thousands)	2013			2012
Net revenue
University of Phoenix	$	744,863		$	935,784
Apollo Global	91,159			90,514
Other	20,313			28,885
Net revenue	$	856,335		$	1,055,183
Operating income (loss)(1):
University of Phoenix	$	183,473		$	243,860
Apollo Global	2,217			(9,366		)
Other(2)	(15,896		)	(3,548		)
Operating income	169,794			230,946
Reconciling items:
Interest income	568			549
Interest expense	(2,086		)	(2,042		)
Other, net	807			1,799
Income before income taxes	$	169,083		$	231,252

⁽¹⁾ University of Phoenix, Apollo Global and Other include charges associated with our restructuring activities. Refer to Note 3, Restructuring and Other Charges.

⁽²⁾ The operating loss for Other for the three months ended November 30, 2012 is net of a $16.9 million credit associated with a legal matter.

A summary of our consolidated assets by reportable segment is as follows:

($ in thousands)	November 30, 2013		August 31, 2013
University of Phoenix	$	780,839	$	790,537
Apollo Global	393,063		359,903
Other(1)	1,289,128		1,847,507
Total assets	$	2,463,030	$	2,997,947

⁽¹⁾ The majority of assets included in Other consists of corporate cash and cash equivalents and marketable securities.

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Share-Based Compensation (Details 2) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended
	Nov. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted	0
Restricted stock units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized shared-based compensation cost	$ 65.6
Performance share awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized shared-based compensation cost	2.8
Restricted stock units and performance share awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted	65,000
Weighted average fair value of granted awards	$ 26.63
Weighted average period unrecognized share-based compensation expected to be recognized	2 years 8 months 12 days
Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized shared-based compensation cost	$ 7.7
Weighted average period unrecognized share-based compensation expected to be recognized	1 year 10 months 24 days

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Fair Value Measurements (Tables)

3 Months Ended

Nov. 30, 2013

Fair Value Disclosures [Abstract]

Fair value assets and liabilities measured on recurring basis

Assets and liabilities measured at fair value on a recurring basis consist of the following as of November 30, 2013:

			Fair Value Measurements at Reporting Date Using
	November 30, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
($ in thousands)
Cash equivalents (including restricted cash equivalents):
Money market funds	$	635,109	$	635,109	$	—	$	—
Marketable securities:
Auction-rate securities	5,946		—		—		5,946
Total assets at fair value on a recurring basis	$	641,055	$	635,109	$	—	$	5,946
Other long-term liabilities:
Contingent payment	$	5,743	$	—	$	—	$	5,743
Total liabilities at fair value on a recurring basis	$	5,743	$	—	$	—	$	5,743

Assets and liabilities measured at fair value on a recurring basis consist of the following as of August 31, 2013:

			Fair Value Measurements at Reporting Date Using
	August 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
($ in thousands)
Cash equivalents (including restricted cash equivalents):
Money market funds	$	732,530	$	732,530	$	—	$	—
Marketable securities:
Auction-rate securities	5,946		—		—		5,946
Total assets at fair value on a recurring basis	$	738,476	$	732,530	$	—	$	5,946
Other long-term liabilities:
Contingent payment	$	5,277	$	—	$	—	$	5,277
Total liabilities at fair value on a recurring basis	$	5,277	$	—	$	—	$	5,277

Fair value liabilities measured on recurring basis, unobservable input reconciliation

The following summarizes the changes in liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013		2012
Beginning balance	$	5,277	$	—
Purchase of noncontrolling interest	—		6,000
Change in fair value included in net income	466		—
Ending balance	$	5,743	$	6,000

Fair value liabilities measured on nonrecurring basis

Liabilities measured at fair value on a nonrecurring basis during the three months ended November 30, 2013, all of which are included in other liabilities on our Condensed Consolidated Balance Sheets, consist of the following:

			Fair Value Measurements at Measurement Dates Using
($ in thousands)	Fair Value at Measurement Dates		Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Losses for Three Months Ended November 30, 2013
Initial lease obligations	$	9,951	$	—	$	—	$	9,951	$	9,951

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Nature of Operations

3 Months Ended

Nov. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

Nature of Operations

Apollo Education Group, Inc. and its wholly-owned subsidiaries and majority-owned subsidiaries, collectively referred to herein as “the Company,” “Apollo Education Group,” “Apollo,” “APOL,” “we,” “us,” or “our,” has been an education provider since 1973. We offer educational programs and services, online and on-campus, at the undergraduate, master’s and doctoral levels. Our learning platforms include the following:

• The University of Phoenix, Inc. (“University of Phoenix”);

• Apollo Global, Inc. (“Apollo Global”):

• BPP Holdings Limited (“BPP”) in the United Kingdom (“U.K.”);

• Open Colleges Australia Pty Ltd. (“Open Colleges”) in Australia;

• Universidad Latinoamericana (“ULA”) in Mexico;

• Universidad de Artes, Ciencias y Comunicación (“UNIACC”) in Chile; and

• Indian Education Services Private Ltd. in India;

• Western International University, Inc. (“Western International University”, or “WIU”);

• Institute for Professional Development (“IPD”);

• The College for Financial Planning Institutes Corporation (“CFFP”);

• Carnegie Learning, Inc. (“Carnegie Learning”); and

• Apollo Lightspeed.

During the first quarter of fiscal year 2014, Apollo changed its name from Apollo Group, Inc. to Apollo Education Group, Inc.

Subsequent Event

On December 20, 2013, Apollo Global acquired 70% of the outstanding shares of Open Colleges for an initial cash payment of A$110 million (equivalent to $98.1 million on the transaction date), plus a contingent obligation based on the satisfaction of certain conditions that we expect to become determinable in the second half of calendar year 2014. In addition, we have the option to buy the remaining outstanding shares, and the holders of those equity interests have the option to sell their shares to us, in early 2017. The prices for these options are principally based on a multiple of Open Colleges’ calendar year 2016 financial performance. Open Colleges is a provider of education and training to adult learners in Australia, and this acquisition supports our strategy to expand our global operations. Open Colleges’ operating results are not material to our consolidated financial statements and they will be included in our Apollo Global operating segment from date of acquisition. We have not yet completed the purchase price allocation for this acquisition principally due to the recent acquisition date.

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Restructuring and Other Charges

3 Months Ended

Nov. 30, 2013

Restructuring and Related Activities [Abstract]

Restructuring and Other Charges

Restructuring and Other Charges

The U.S. higher education industry, including the proprietary sector, is experiencing unprecedented, rapidly developing changes that challenge many of the core principles underlying the industry. We are reengineering our business processes and refining our educational delivery systems to improve the effectiveness of our services to students, and reducing the size of our services infrastructure and associated operating expenses to align with our reduced enrollment. We have incurred restructuring and other charges associated with these activities beginning in fiscal year 2011 as summarized below:

	Three Months Ended November 30,				Cumulative Costs as of November 30, 2013
($ in thousands)	2013		2012
Lease and related costs, net	$	13,760	$	10,112	$	186,071
Severance and other employee separation costs	15,254		10,943		66,280
Other restructuring related costs	2,949		3,061		39,845
Restructuring and other charges	$	31,963	$	24,116	$	292,196

The following summarizes the restructuring and other charges in our segment reporting format:

	Three Months Ended November 30,				Cumulative Costs as of November 30, 2013
($ in thousands)	2013		2012
University of Phoenix	$	25,426	$	16,896	$	227,098
Apollo Global	1,263		79		13,028
Other	5,274		7,141		52,070
Restructuring and other charges	$	31,963	$	24,116	$	292,196

The following details the changes in our restructuring liabilities by type of cost during the three months ended November 30, 2013:

($ in thousands)	Lease and Related Costs, Net			Severance and Other Employee Separation Costs			Other Restructuring Related Costs			Total
Balance at August 31, 2013(1)	$	104,048		$	7,623		$	8,130		$	119,801
Restructuring and other charges	13,760			15,254			2,949			31,963
Non-cash adjustments(2)	(1,490		)	(1,862		)	—			(3,352		)
Payments	(15,532		)	(10,740		)	(3,679		)	(29,951		)
Balance at November 30, 2013(1)	$	100,786		$	10,275		$	7,400		$	118,461

⁽¹⁾ The current portion of our restructuring liabilities was $57.9 million and $55.2 million as of November 30, 2013 and August 31, 2013, respectively. These balances are included in accrued and other current liabilities on our Condensed Consolidated Balance Sheets and the long-term portion is included in other long-term liabilities. The gross, undiscounted obligation associated with our restructuring liabilities as of November 30, 2013 is approximately $190 million, which principally represents non-cancelable leases that will be paid over the respective lease terms through fiscal year 2023.

⁽²⁾ Non-cash adjustments for lease and related costs, net represents $2.8 million of accelerated depreciation, partially offset by the release of certain associated liabilities such as deferred rent. Non-cash adjustments for severance and other employee separation costs represents share-based compensation.

• Lease and Related Costs, Net - Beginning in fiscal year 2011, University of Phoenix began rationalizing its administrative real estate facilities. In addition to continuing to rationalize its administrative facilities, University of Phoenix began implementing a plan during fiscal year 2013 to close 115 of its ground locations. As of November 30, 2013, University of Phoenix has closed approximately two-thirds of the locations included in these plans, which represents approximately 85% of the total square feet we are exiting. The remaining closures will continue through fiscal year 2014 and beyond as University of Phoenix obtains the necessary regulatory approvals and completes its teach-out obligations. We have recorded $133.6 million of initial aggregate charges, representing the estimated fair value of future contractual operating lease obligations, which were recorded in the periods we ceased using the respective facilities, $10.0 million of which was recorded in the three months ended November 30, 2013. The other lease and related costs in the three months ended November 30, 2013 consist of accelerated depreciation, as discussed below, and interest accretion on the lease obligations.

We measure lease obligations at fair value using a discounted cash flow approach encompassing significant unobservable inputs (Level 3). The significant unobservable inputs principally include estimated future cash flows and discount rates, which have ranged between 3%-6% for our lease obligations. The estimation of future cash flows includes non-cancelable contractual lease costs over the remaining terms of the leases, partially offset by estimated future sublease rental income, which involves significant judgment. Our estimate of the amount and timing of sublease rental income considers subleases that we have executed and subleases we expect to execute, current commercial real estate market data and conditions, comparable transaction data and qualitative factors specific to the facilities. The estimates will be subject to adjustment as market conditions change or as new information becomes available, including the execution of additional sublease agreements. As of November 30, 2013, we have recorded adjustments to our initial lease obligation liabilities for interest accretion and immaterial adjustments for changes in estimated sublease income.

Lease and related costs, net includes $2.8 million of accelerated depreciation in the three months ended November 30, 2013 associated with revising the useful lives of the fixed assets at the facilities we are closing through their expected closure dates. Prior to revising the useful lives, we perform a recoverability analysis for the facilities’ fixed assets by comparing the estimated undiscounted cash flows of the locations through their expected closure dates to the carrying amount of the locations’ fixed assets. Based on such analyses, we recorded immaterial impairment charges during fiscal year 2013 and no impairment charges in the three months ended November 30, 2013.

• Severance and Other Employee Separation Costs -Beginning in fiscal year 2011 and continuing into fiscal year 2014, we have implemented workforce reductions as we reengineer our business processes and refine our educational delivery systems. We incurred severance and other employee separation costs of $15.3 million and $10.9 million in the three months ended November 30, 2013 and November 30, 2012, respectively. These costs are included in the reportable segments in which the respective personnel were employed.

We expect to incur approximately $35 million of future restructuring charges for the initiatives announced to date. The majority of these charges represent lease related costs associated with closing University of Phoenix campuses and administrative facilities, and will generally be incurred as the University obtains the necessary regulatory approvals and completes its teach-out obligations. We expect to incur approximately half of the $35 million in the remainder of fiscal year 2014 and the rest of the expected charges in future years.

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Fair Value Measurements

3 Months Ended

Nov. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Assets and liabilities measured at fair value on a recurring basis consist of the following as of November 30, 2013:

			Fair Value Measurements at Reporting Date Using
	November 30, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
($ in thousands)
Cash equivalents (including restricted cash equivalents):
Money market funds	$	635,109	$	635,109	$	—	$	—
Marketable securities:
Auction-rate securities	5,946		—		—		5,946
Total assets at fair value on a recurring basis	$	641,055	$	635,109	$	—	$	5,946
Other long-term liabilities:
Contingent payment	$	5,743	$	—	$	—	$	5,743
Total liabilities at fair value on a recurring basis	$	5,743	$	—	$	—	$	5,743

Assets and liabilities measured at fair value on a recurring basis consist of the following as of August 31, 2013:

			Fair Value Measurements at Reporting Date Using
	August 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
($ in thousands)
Cash equivalents (including restricted cash equivalents):
Money market funds	$	732,530	$	732,530	$	—	$	—
Marketable securities:
Auction-rate securities	5,946		—		—		5,946
Total assets at fair value on a recurring basis	$	738,476	$	732,530	$	—	$	5,946
Other long-term liabilities:
Contingent payment	$	5,277	$	—	$	—	$	5,277
Total liabilities at fair value on a recurring basis	$	5,277	$	—	$	—	$	5,277

We measure the above items on a recurring basis at fair value as follows:

• Money market funds - Classified within Level 1 and valued primarily using real-time quotes for transactions in active exchange markets involving identical assets. As of November 30, 2013 and August 31, 2013, our remaining cash and cash equivalents not disclosed in the above tables approximate fair value because of the short-term nature of the financial instruments. We determine the fair value of cash equivalents not included in the above table using a market approach principally consisting of Level 2 inputs. These inputs include quoted prices for similar assets in active markets, or quoted prices for identical or similar assets in markets that are not active.

• Auction-rate securities - Classified within Level 3 due to the illiquidity of the market and valued using a discounted cash flow model encompassing significant unobservable inputs such as estimated interest rates, credit spreads, timing and amount of cash flows, credit quality of the underlying securities and illiquidity considerations.

• Contingent payment - As a result of our purchase of the noncontrolling interest in Apollo Global during fiscal year 2013, we have a contingent payment based on a portion of Apollo Global’s operating results through the fiscal years ending August 31, 2017. This contingent payment is classified within Level 3 and valued using a discounted cash flow valuation method encompassing significant unobservable inputs. The inputs include estimated operating results scenarios for the applicable performance period, probability weightings assigned to operating results scenarios and the discount rate applied.

As of November 30, 2013 and August 31, 2013, the carrying value of our debt, excluding capital leases, was $33.9 million and $642.4 million, respectively. Based on the nature of our debt, including consideration of the portion that is variable-rate, the carrying value of our debt as of both dates approximates fair value.

We did not change our valuation techniques associated with recurring fair value measurements from prior periods. Additionally, there were no changes in the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended November 30, 2013. The following summarizes the changes in liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013		2012
Beginning balance	$	5,277	$	—
Purchase of noncontrolling interest	—		6,000
Change in fair value included in net income	466		—
Ending balance	$	5,743	$	6,000

Liabilities measured at fair value on a nonrecurring basis during the three months ended November 30, 2013, all of which are included in other liabilities on our Condensed Consolidated Balance Sheets, consist of the following:

			Fair Value Measurements at Measurement Dates Using
($ in thousands)	Fair Value at Measurement Dates		Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Losses for Three Months Ended November 30, 2013
Initial lease obligations	$	9,951	$	—	$	—	$	9,951	$	9,951

During the three months ended November 30, 2013, we recorded $10.0 million of aggregate initial lease obligations at fair value associated with closing certain leased facilities as part of our restructuring activities. We recorded the lease obligation liabilities on the dates we ceased use of the facilities, and we measured the liabilities at fair value using Level 3 inputs included in the valuation method. Refer to Note 3, Restructuring and Other Charges.

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Marketable Securities

3 Months Ended

Nov. 30, 2013

Marketable Securities [Abstract]

Marketable Securities

Marketable Securities

Marketable securities consist of the following as of the respective periods:

	Current				Noncurrent
($ in thousands)	November 30, 2013		August 31, 2013		November 30, 2013		August 31, 2013
Tax-exempt municipal bonds	$	57,169	$	69,621	$	43,879	$	24,070
Commercial paper	28,109		9,828		—		—
Corporate bonds	26,480		24,503		56,206		13,925
Other(1)	16,978		1,857		2,694		—
Total held-to-maturity securities	128,736		105,809		102,779		37,995
Available-for-sale auction-rate securities	—		—		5,946		5,946
Total marketable securities	$	128,736	$	105,809	$	108,725	$	43,941

⁽¹⁾ Other principally consists of certificates of deposit.

Our marketable securities are classified as held-to-maturity as we have the intent and ability to hold them until contractual maturity, which will occur within two years. Our held-to-maturity securities are reported at amortized cost, which approximates fair value. We determine the fair value of our held-to-maturity investments using a market approach principally consisting of Level 2 inputs. These inputs include quoted prices for similar assets in active markets, or quoted prices for identical or similar assets in markets that are not active. We have not recorded gains or losses on our held-to-maturity investments.

Our auction-rate securities are classified as available-for-sale and reported at fair value. We have classified our auction-rate securities as noncurrent due to illiquidity considerations. Refer to Note 6, Fair Value Measurements.

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
Earnings Per Share [Abstract]
Net income attributable to Apollo (basic and diluted)	$ 98,891	$ 133,495
Basic weighted average shares outstanding (in shares)	113,326,000	112,420,000
Anti-dilutive securities [Line Items]
Diluted weighted average shares outstanding (in shares)	113,960,000	112,849,000
Basic income per share attributable to Apollo (in dollars per share)	$ 0.87	$ 1.19
Diluted income per share attributable to Apollo (in dollars per share)	$ 0.87	$ 1.18
Stock options [Member]
Anti-dilutive securities [Line Items]
Dilutive effect of share-based awards (in shares)	44,000	0
Anti-dilutive securities excluded from earnings per share computation	3,200,000	8,400,000
Restricted stock units and performance share awards [Member]
Anti-dilutive securities [Line Items]
Dilutive effect of share-based awards (in shares)	590,000	429,000
Anti-dilutive securities excluded from earnings per share computation	1,000,000	2,000,000

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Shareholders' Equity (Tables)

3 Months Ended

Nov. 30, 2013

Equity [Abstract]

Shareholders' Equity

The following details changes in shareholders’ equity during the respective periods:

	Common Stock				Additional Paid-in Capital									Accumulated Other Comprehensive Loss			Total Apollo Shareholders’ Equity			Non-Controlling Interests
	Class A		Class B					Treasury Stock Class A			Retained Earnings											Total Equity
	Stated Value		Stated Value
($ in thousands)								Cost
Balance as of August 31, 2013	$	103	$	1	$	—		$	(3,824,758	)	$	4,978,815		$	(36,563	)	$	1,117,598		$	411	$	1,118,009
Treasury stock purchases	—		—		—			(16,871		)	—			—			(16,871		)	—		(16,871		)
Treasury stock issued under stock purchase plans	—		—		(1,286		)	2,082			—			—			796			—		796
Treasury stock issued under stock incentive plans	—		—		(5,849		)	9,587			(3,738		)	—			—			—		—
Net tax effect for stock incentive plans	—		—		(4,838		)	—			—			—			(4,838		)	—		(4,838		)
Share-based compensation	—		—		11,973			—			—			—			11,973			—		11,973
Currency translation adjustment, net of tax	—		—		—			—			—			2,736			2,736			99		2,835
Net income	—		—		—			—			98,891			—			98,891			150		99,041
Balance as of November 30, 2013	$	103	$	1	$	—		$	(3,829,960	)	$	5,073,968		$	(33,827	)	$	1,210,285		$	660	$	1,210,945

	Common Stock				Additional Paid-in Capital			Treasury Stock Class A					Accumulated Other Comprehensive Loss			Total Apollo Shareholders’ Equity			Non-Controlling Interests (Deficit)
	Class A		Class B								Retained Earnings											Total Equity
	Stated Value		Stated Value
($ in thousands)								Cost
Balance as of August 31, 2012	$	103	$	1	$	93,770		$	(3,878,612	)	$	4,743,150	$	(30,034	)	$	928,378		$	(4,055	)	$	924,323
Treasury stock purchases	—		—		—			(3,472		)	—		—			(3,472		)	—			(3,472		)
Treasury stock issued under stock purchase plans	—		—		(936		)	2,049			—		—			1,113			—			1,113
Treasury stock issued under stock incentive plans	—		—		(15,046		)	15,046			—		—			—			—			—
Net tax effect for stock incentive plans	—		—		(4,823		)	—			—		—			(4,823		)	—			(4,823		)
Share-based compensation	—		—		16,889			—			—		—			16,889			—			16,889
Currency translation adjustment, net of tax	—		—		—			—			—		732			732			27			759
Purchase of noncontrolling interest	—		—		(48,543		)	—			—		(4,886		)	(53,429		)	4,929			(48,500		)
Net income	—		—		—			—			133,495		—			133,495			245			133,740
Balance as of November 30, 2012	$	103	$	1	$	41,311		$	(3,864,989	)	$	4,876,645	$	(34,188	)	$	1,018,883		$	1,146		$	1,020,029

Change From Net Income Attributable To Apollo And Transfer To Noncontrolling Interest

The following details net income attributable to Apollo and transfers to noncontrolling interest during the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013		2012
Net income attributable to Apollo	$	98,891	$	133,495
Transfer to noncontrolling interest:
Decrease in equity for purchase of The Carlyle Group interest in Apollo Global(1)	—		(48,543		)
Change from net income attributable to Apollo and transfer to noncontrolling interest	$	98,891	$	84,952

⁽¹⁾ Represents the difference between the fair value of the consideration paid to purchase the noncontrolling ownership interest in Apollo Global and the carrying amount of the noncontrolling interest acquired, and an adjustment to accumulated other comprehensive loss to reflect the change in Apollo’s proportionate interest.

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Nature of Operations (Details) (Subsequent Event [Member]) In Millions, unless otherwise specified	1 Months Ended
	Dec. 31, 2013 USD ($)	Dec. 31, 2013 AUD	Dec. 20, 2013
Subsequent Event [Line Items]
Percentage of shares acquired			70.00%
Initial cash payment	$ 98.1	110.0

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Accrued and Other Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Nov. 30, 2013	Aug. 31, 2013
Other Liabilities, Current [Abstract]
Salaries, wages and benefits	$ 69,102	$ 135,553
Restructuring obligations	57,900	55,191
Accrued legal and other professional obligations	31,839	31,310
Accrued advertising	26,941	45,850
Student refunds, grants and scholarships	24,525	7,180
Deferred rent and other lease liabilities	13,227	14,001
Curriculum materials	11,962	10,764
Other	47,553	46,857
Total accrued and other current liabilities	283,049	346,706
Other Long-Term Liabilities [Abstract]
Deferred rent and other lease liabilities	65,484	67,641
Restructuring lease obligations	60,561	64,610
Uncertain tax positions	35,727	33,637
Deferred gains on sale-leasebacks	22,223	22,894
Other	60,928	44,660
Total other long-term liabilities	$ 244,923	$ 233,442

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Commitments and Contingencies (Details 2) (Securities Class Action (Apollo Institutional Investors Group) [Member])	1 Months Ended
	Oct. 31, 2010 Plaintiffs
Securities Class Action (Apollo Institutional Investors Group) [Member]
Loss Contingencies [Line Items]
Number of plaintiffs	3

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Condensed Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
Income Statement [Abstract]
Net revenue	$ 856,335	$ 1,055,183
Instructional and student advisory	339,679	432,150
Marketing	137,844	162,873
Admissions advisory	51,509	71,308
General and administrative	75,230	73,539
Depreciation and amortization	36,338	43,695
Provision for uncollectible accounts receivable	13,978	33,406
Restructuring and other charges	31,963	24,116
Litigation credit	0	(16,850)
Total costs and expenses	686,541	824,237
Operating income	169,794	230,946
Interest income	568	549
Interest expense	(2,086)	(2,042)
Other, net	807	1,799
Income before income taxes	169,083	231,252
Provision for income taxes	(70,042)	(97,512)
Net income	99,041	133,740
Net income attributable to noncontrolling interests	(150)	(245)
Net income attributable to Apollo	$ 98,891	$ 133,495
Basic income per share attributable to Apollo (in dollars per share)	$ 0.87	$ 1.19
Diluted income per share attributable to Apollo (in dollars per share)	$ 0.87	$ 1.18
Basic weighted average shares outstanding (in shares)	113,326	112,420
Diluted weighted average shares outstanding (in shares)	113,960	112,849

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Income Taxes

3 Months Ended

Nov. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We determine our interim income tax provision by estimating our effective income tax rate expected to be applicable for the full fiscal year. Our effective income tax rate is dependent upon several factors, such as tax rates in state and foreign jurisdictions and the relative amount of income we earn in such jurisdictions. In determining our full year estimate, we do not include the estimated impact of unusual and/or infrequent items, which may cause significant variations in the customary relationship between income tax expense and income before income taxes. We exercise significant judgment in determining our income tax provision due to transactions, credits and calculations where the ultimate tax determination is uncertain.

Our U.S. federal income tax returns for fiscal year 2012 and 2011 are currently under review by the Internal Revenue Service (“IRS”). In addition, we are participating in the IRS’s Compliance Assurance Process for fiscal year 2014, which is a voluntary program in which taxpayers seek to resolve all or most issues with the IRS prior to or soon after filing their U.S. federal income tax returns. We are also subject to numerous ongoing audits by state, local and foreign tax authorities. Although we believe our tax accruals are reasonable, the final determination of tax returns under review or returns that may be reviewed in the future and any related litigation could result in tax liabilities that materially differ from our historical income tax provisions and accruals.

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
Operating activities:
Net income	$ 99,041	$ 133,740
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation	11,973	16,889
Depreciation and amortization	36,338	43,695
Accelerated depreciation included in restructuring	2,806	9,326
Non-cash foreign currency gain, net	(1,099)	(607)
Provision for uncollectible accounts receivable	13,978	33,406
Litigation credit	0	(16,850)
Deferred income taxes	4,738	6,064
Changes in assets and liabilities:
Restricted cash and cash equivalents	(26,438)	(33,241)
Accounts receivable	(11,148)	(36,349)
Other assets	(11,190)	(6,432)
Accounts payable	(8,835)	(11,771)
Income taxes	64,469	82,032
Student deposits	(805)	18,522
Deferred revenue	8,076	8,075
Accrued and other liabilities	(53,007)	(36,368)
Net cash provided by operating activities	128,897	210,131
Investing activities:
Purchases of property and equipment	(34,366)	(27,539)
Purchases of marketable securities	(146,333)	(14,819)
Maturities of marketable securities	57,412	0
Net cash used in investing activities	(123,287)	(42,358)
Financing activities:
Payments on borrowings	(615,925)	(625,762)
Proceeds from borrowings	0	2,176
Purchase of noncontrolling interest	0	(42,500)
Purchases of stock for treasury	(16,871)	(3,472)
Issuances of stock	796	1,113
Net cash used in financing activities	(632,000)	(668,445)
Exchange rate effect on cash and cash equivalents	35	306
Net decrease in cash and cash equivalents	(626,355)	(500,366)
Cash and cash equivalents, beginning of period	1,414,485	1,276,375
Cash and cash equivalents, end of period	788,130	776,009
Supplemental disclosure of cash flow and non-cash information:
Cash paid for income taxes, net of refunds	0	10,243
Cash paid for interest	1,891	1,906
Restricted stock units vested and released	$ 5,113	$ 9,496

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Nov. 30, 2013	Aug. 31, 2013
Current assets
Cash and cash equivalents	$ 788,130	$ 1,414,485
Restricted cash and cash equivalents	285,612	259,174
Marketable securities	128,736	105,809
Accounts receivable, net	214,225	215,401
Prepaid taxes	3,508	30,359
Deferred tax assets	52,159	60,294
Other current assets	60,733	64,134
Total current assets	1,533,103	2,149,656
Marketable securities	108,725	43,941
Property and equipment, net	473,058	472,614
Goodwill	103,937	103,620
Intangible assets, net	132,865	132,192
Deferred tax assets	63,791	63,894
Other assets	47,551	32,030
Total assets	2,463,030	2,997,947
Current liabilities
Short-term borrowings and current portion of long-term debt	21,214	628,050
Accounts payable	64,487	73,123
Income taxes payable	37,554	0
Student deposits	309,800	309,176
Deferred revenue	223,164	213,260
Accrued and other current liabilities	283,049	346,706
Total current liabilities	939,268	1,570,315
Long-term debt	54,567	64,004
Deferred tax liabilities	13,327	12,177
Other long-term liabilities	244,923	233,442
Total liabilities	1,252,085	1,879,938
Commitments and contingencies
Shareholders’ equity
Preferred stock, no par value
Additional paid-in capital	0	0
Apollo Education Group Class A treasury stock, at cost	(3,829,960)	(3,824,758)
Retained earnings	5,073,968	4,978,815
Accumulated other comprehensive loss	(33,827)	(36,563)
Total Apollo shareholders’ equity	1,210,285	1,117,598
Noncontrolling interests	660	411
Total equity	1,210,945	1,118,009
Total liabilities and shareholders’ equity	2,463,030	2,997,947
Common stock [Member] | Apollo Education Group Class A nonvoting common stock [Member]
Shareholders’ equity
Apollo Education Group common stock	103	103
Total equity	103	103
Common stock [Member] | Apollo Education Group Class B voting common stock [Member]
Shareholders’ equity
Apollo Education Group common stock	1	1
Total equity	$ 1	$ 1

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Earnings Per Share (Tables)

3 Months Ended

Nov. 30, 2013

Earnings Per Share [Abstract]

Earnings per share

The components of basic and diluted earnings per share are as follows:

	Three Months Ended November 30,
(In thousands, except per share data)	2013		2012
Net income attributable to Apollo (basic and diluted)	$	98,891	$	133,495
Basic weighted average shares outstanding	113,326		112,420
Dilutive effect of stock options	44		—
Dilutive effect of restricted stock units and performance share awards	590		429
Diluted weighted average shares outstanding	113,960		112,849
Basic income per share attributable to Apollo	$	0.87	$	1.19
Diluted income per share attributable to Apollo	$	0.87	$	1.18

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Marketable Securities (Tables)

3 Months Ended

Nov. 30, 2013

Marketable Securities [Abstract]

Marketable securities

Marketable securities consist of the following as of the respective periods:

	Current				Noncurrent
($ in thousands)	November 30, 2013		August 31, 2013		November 30, 2013		August 31, 2013
Tax-exempt municipal bonds	$	57,169	$	69,621	$	43,879	$	24,070
Commercial paper	28,109		9,828		—		—
Corporate bonds	26,480		24,503		56,206		13,925
Other(1)	16,978		1,857		2,694		—
Total held-to-maturity securities	128,736		105,809		102,779		37,995
Available-for-sale auction-rate securities	—		—		5,946		5,946
Total marketable securities	$	128,736	$	105,809	$	108,725	$	43,941

⁽¹⁾ Other principally consists of certificates of deposit.

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Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	Nov. 30, 2013	Aug. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Outstanding surety bonds	$ 41.6
Letters of credit outstanding	$ 21	$ 14

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Shareholders' Equity (Details) (USD $)	3 Months Ended
	Nov. 30, 2013		Nov. 30, 2012
Balance	$ 1,118,009,000		$ 924,323,000
Treasury stock issued under stock purchase plans	796,000		1,113,000
Treasury stock issued under stock incentive plans	0
Treasury stock issued under stock incentive plans			0
Net tax effect for stock incentive plans	(4,838,000)		(4,823,000)
Share-based compensation	11,973,000		16,889,000
Currency translation adjustment, net of tax	2,835,000	[1]	759,000	[1]
Purchase of noncontrolling interest			(48,500,000)
Net income	99,041,000		133,740,000
Balance	1,210,945,000		1,020,029,000
Net income attributable to Apollo	98,891,000		133,495,000
Change from net income attributable to Apollo and transfer to noncontrolling interest	98,891,000		84,952,000
Apollo Education Group Class A nonvoting common stock [Member]
Treasury stock purchases	(16,871,000)
Apollo Education Group Class A nonvoting common stock [Member] | Repurchases Related To Restricted Stock Units [Member]
Treasury stock purchases	(1,900,000)		(3,472,000)
Common stock [Member] | Apollo Education Group Class A nonvoting common stock [Member]
Balance	103,000		103,000
Treasury stock purchases	0		0
Treasury stock issued under stock purchase plans	0		0
Treasury stock issued under stock incentive plans	0
Treasury stock issued under stock incentive plans			0
Net tax effect for stock incentive plans	0		0
Share-based compensation	0		0
Currency translation adjustment, net of tax	0		0
Purchase of noncontrolling interest			0
Net income	0		0
Balance	103,000		103,000
Common stock [Member] | Apollo Education Group Class B voting common stock [Member]
Balance	1,000		1,000
Treasury stock purchases	0		0
Treasury stock issued under stock purchase plans	0		0
Treasury stock issued under stock incentive plans	0
Treasury stock issued under stock incentive plans			0
Net tax effect for stock incentive plans	0		0
Share-based compensation	0		0
Currency translation adjustment, net of tax	0		0
Purchase of noncontrolling interest			0
Net income	0		0
Balance	1,000		1,000
Additional paid-in capital [Member]
Balance	0		93,770,000
Treasury stock purchases	0		0
Treasury stock issued under stock purchase plans	(1,286,000)		(936,000)
Treasury stock issued under stock incentive plans	(5,849,000)
Treasury stock issued under stock incentive plans			(15,046,000)
Net tax effect for stock incentive plans	(4,838,000)		(4,823,000)
Share-based compensation	11,973,000		16,889,000
Currency translation adjustment, net of tax	0		0
Purchase of noncontrolling interest	0		(48,543,000)
Net income	0		0
Balance	0		41,311,000
Apollo Education Group Class A treasury stock [Member]
Balance	(3,824,758,000)		(3,878,612,000)
Treasury stock issued under stock purchase plans	2,082,000		2,049,000
Treasury stock issued under stock incentive plans	9,587,000
Treasury stock issued under stock incentive plans			15,046,000
Net tax effect for stock incentive plans	0		0
Share-based compensation	0		0
Currency translation adjustment, net of tax	0		0
Purchase of noncontrolling interest			0
Net income	0		0
Balance	(3,829,960,000)		(3,864,989,000)
Apollo Education Group Class A treasury stock [Member] | Apollo Education Group Class A nonvoting common stock [Member]
Treasury stock purchases	(16,871,000)
Apollo Education Group Class A treasury stock [Member] | Apollo Education Group Class A nonvoting common stock [Member] | Repurchases Related To Restricted Stock Units [Member]
Treasury stock purchases			(3,472,000)
Retained earnings [Member]
Balance	4,978,815,000		4,743,150,000
Treasury stock purchases	0		0
Treasury stock issued under stock purchase plans	0		0
Treasury stock issued under stock incentive plans	(3,738,000)
Treasury stock issued under stock incentive plans			0
Net tax effect for stock incentive plans	0		0
Share-based compensation	0		0
Currency translation adjustment, net of tax	0		0
Purchase of noncontrolling interest			0
Net income	98,891,000		133,495,000
Balance	5,073,968,000		4,876,645,000
Accumulated other comprehensive loss [Member]
Balance	(36,563,000)		(30,034,000)
Treasury stock purchases	0		0
Treasury stock issued under stock purchase plans	0		0
Treasury stock issued under stock incentive plans	0
Treasury stock issued under stock incentive plans			0
Net tax effect for stock incentive plans	0		0
Share-based compensation	0		0
Currency translation adjustment, net of tax	2,736,000		732,000
Purchase of noncontrolling interest			(4,886,000)
Net income	0		0
Balance	(33,827,000)		(34,188,000)
Total Apollo shareholders' equity [Member]
Balance	1,117,598,000		928,378,000
Treasury stock issued under stock purchase plans	796,000		1,113,000
Treasury stock issued under stock incentive plans	0
Treasury stock issued under stock incentive plans			0
Net tax effect for stock incentive plans	(4,838,000)		(4,823,000)
Share-based compensation	11,973,000		16,889,000
Currency translation adjustment, net of tax	2,736,000		732,000
Purchase of noncontrolling interest			(53,429,000)
Net income	98,891,000		133,495,000
Balance	1,210,285,000		1,018,883,000
Total Apollo shareholders' equity [Member] | Apollo Education Group Class A nonvoting common stock [Member]
Treasury stock purchases	(16,871,000)
Total Apollo shareholders' equity [Member] | Apollo Education Group Class A nonvoting common stock [Member] | Repurchases Related To Restricted Stock Units [Member]
Treasury stock purchases			(3,472,000)
Noncontrolling interests (deficit) [Member]
Balance	411,000		(4,055,000)
Treasury stock purchases	0		0
Treasury stock issued under stock purchase plans	0		0
Treasury stock issued under stock incentive plans	0
Treasury stock issued under stock incentive plans			0
Net tax effect for stock incentive plans	0		0
Share-based compensation	0		0
Currency translation adjustment, net of tax	99,000		27,000
Purchase of noncontrolling interest			(4,929,000)
Net income	150,000		245,000
Balance	$ 660,000		$ 1,146,000

[1] The tax effect on other comprehensive income during the three months ended November 30, 2013 and 2012 is not significant.

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Accounts Receivable, Net (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	Aug. 31, 2013
Accounts receivable, net [Abstract]
Student accounts receivable	$ 251,860		$ 243,660
Less allowance for doubtful accounts	(55,895)	(101,793)
Net student accounts receivable	195,965		183,916
Other receivables	18,260		31,485
Total accounts receivable, net	214,225		215,401
Allowance for doubtful accounts [Abstract]
Allowance for doubtful accounts	59,744	107,230
Provision for uncollectible accounts receivable	13,978	33,406
Write-offs, net of recoveries	(17,827)	(38,843)
Allowance for doubtful accounts	$ 55,895	$ 101,793

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Fair Value Measurements (Details) (USD $)	3 Months Ended					3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	Aug. 31, 2013	Nov. 30, 2013 Recurring Fair Value Measurement [Member]	Aug. 31, 2013 Recurring Fair Value Measurement [Member]	Nov. 30, 2013 Nonrecurring Fair Value Measurement [Member]	Nov. 30, 2013 Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] Recurring Fair Value Measurement [Member]	Aug. 31, 2013 Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] Recurring Fair Value Measurement [Member]	Nov. 30, 2013 Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] Nonrecurring Fair Value Measurement [Member]	Nov. 30, 2013 Significant Other Observable Inputs (Level 2) [Member] Recurring Fair Value Measurement [Member]	Aug. 31, 2013 Significant Other Observable Inputs (Level 2) [Member] Recurring Fair Value Measurement [Member]	Nov. 30, 2013 Significant Other Observable Inputs (Level 2) [Member] Nonrecurring Fair Value Measurement [Member]	Nov. 30, 2013 Significant Unobservable Inputs (Level 3) [Member] Recurring Fair Value Measurement [Member]	Aug. 31, 2013 Significant Unobservable Inputs (Level 3) [Member] Recurring Fair Value Measurement [Member]	Nov. 30, 2012 Significant Unobservable Inputs (Level 3) [Member] Recurring Fair Value Measurement [Member]	Aug. 31, 2012 Significant Unobservable Inputs (Level 3) [Member] Recurring Fair Value Measurement [Member]	Nov. 30, 2013 Significant Unobservable Inputs (Level 3) [Member] Nonrecurring Fair Value Measurement [Member]
Assets and liabilities measured on a recurring and nonrecurring basis [Line Items]
Money market funds (cash and cash equivalents)				$ 635,109,000	$ 732,530,000		$ 635,109,000	$ 732,530,000		$ 0	$ 0		$ 0	$ 0
Auction-rate securities (marketable securities)				5,946,000	5,946,000		0	0		0	0		5,946,000	5,946,000
Total assets at fair value on a recurring basis				641,055,000	738,476,000		635,109,000	732,530,000		0	0		5,946,000	5,946,000
Contingent payment (other long-term liabilities)				5,743,000	5,277,000		0	0		0	0		5,743,000	5,277,000	6,000,000	0
Total liabilities at fair value on a recurring basis				5,743,000	5,277,000		0	0		0	0		5,743,000	5,277,000
Carrying value of debt, excluding capital leases	33,913,000		642,400,000
Initial lease obligations						9,951,000			0			0					9,951,000
Losses for period	31,963,000	24,116,000				9,951,000
Liabilities Measured at Fair Value Recurring Basis [Roll Forward]
Balance				5,743,000	5,277,000		0	0		0	0		5,743,000	5,277,000	6,000,000	0
Purchase of noncontrolling interest	0	6,000,000
Change in fair value included in net income	466,000	0
Balance				$ 5,743,000	$ 5,277,000		$ 0	$ 0		$ 0	$ 0		$ 5,743,000	$ 5,277,000	$ 6,000,000	$ 0

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Debt

3 Months Ended

Nov. 30, 2013

Debt Disclosure [Abstract]

Debt

Debt

Debt and short-term borrowings consist of the following as of the respective periods:

($ in thousands)	November 30, 2013			August 31, 2013
Revolving Credit Facility, see terms below	$	—		$	605,000
Capital lease obligations	41,868			49,628
Other, see terms below	33,913			37,426
Total debt	75,781			692,054
Less short-term borrowings and current portion of long-term debt	(21,214		)	(628,050		)
Long-term debt	$	54,567		$	64,004

• Revolving Credit Facility - In fiscal year 2012, we entered into a syndicated $625 million unsecured revolving credit facility (the “Revolving Credit Facility”). The Revolving Credit Facility is used for general corporate purposes, which may include acquisitions and share repurchases. The term is five years and will expire in April 2017. The Revolving Credit Facility may be used for borrowings in certain foreign currencies and letters of credit, in each case up to specified sublimits.

We borrowed $605.0 million and had approximately $14 million of outstanding letters of credit under the Revolving Credit Facility as of August 31, 2013. We repaid the entire amount borrowed under the Revolving Credit Facility during the first quarter of fiscal year 2014. As of November 30, 2013, we have approximately $21 million of outstanding letters of credit under the Revolving Credit Facility.

The Revolving Credit Facility fees are determined based on a pricing grid that varies according to our leverage ratio. The Revolving Credit Facility fee ranges from 25 to 40 basis points. Incremental fees for borrowings under the facility generally range from LIBOR + 125 to 185 basis points. The weighted average interest rate on outstanding short-term borrowings under the Revolving Credit Facility at August 31, 2013 was 3.5%.

The Revolving Credit Facility contains various customary representations, covenants and other provisions, including a material adverse event clause and the following financial covenants: maximum leverage ratio, minimum coverage interest and rent expense ratio, and a U.S. Department of Education financial responsibility composite score. We were in compliance with all applicable covenants related to the Revolving Credit Facility at November 30, 2013 and August 31, 2013.

• Other - Other principally includes debt at subsidiaries of Apollo Global and the present value of an obligation payable over a 10-year period associated with our purchase of technology in fiscal year 2012. The weighted average interest rate on our outstanding other debt at November 30, 2013 and August 31, 2013 was 5.8% and 5.3%, respectively.

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Share-Based Compensation (Table)

3 Months Ended

Nov. 30, 2013

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

Share-based compensation expense

The following details share-based compensation expense for the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013		2012
Instructional and student advisory	$	3,533	$	7,588
Marketing	1,108		2,043
Admissions advisory	102		170
General and administrative	5,368		6,023
Restructuring and other charges	1,862		1,065
Share-based compensation expense	$	11,973	$	16,889

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Share-Based Compensation (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
Share-based compensation expense [Line Items]
Share-based compensation expense	$ 11,973	$ 16,889
Instructional and student advisory [Member]
Share-based compensation expense [Line Items]
Share-based compensation expense	3,533	7,588
Marketing [Member]
Share-based compensation expense [Line Items]
Share-based compensation expense	1,108	2,043
Admissions advisory [Member]
Share-based compensation expense [Line Items]
Share-based compensation expense	102	170
General and administrative [Member]
Share-based compensation expense [Line Items]
Share-based compensation expense	5,368	6,023
Restructuring and other charges [Member]
Share-based compensation expense [Line Items]
Share-based compensation expense	$ 1,862	$ 1,065

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Earnings Per Share

3 Months Ended

Nov. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Our outstanding shares consist of Apollo Education Group Class A and Class B common stock. Our Articles of Incorporation treat the declaration of dividends on the Apollo Education Group Class A and Class B common stock in an identical manner. As such, both the Apollo Education Group Class A and Class B common stock are included in the calculation of our earnings per share.

Diluted weighted average shares outstanding includes the incremental effect of shares that would be issued upon the assumed exercise of stock options and the vesting and release of restricted stock units and performance share awards. The components of basic and diluted earnings per share are as follows:

	Three Months Ended November 30,
(In thousands, except per share data)	2013		2012
Net income attributable to Apollo (basic and diluted)	$	98,891	$	133,495
Basic weighted average shares outstanding	113,326		112,420
Dilutive effect of stock options	44		—
Dilutive effect of restricted stock units and performance share awards	590		429
Diluted weighted average shares outstanding	113,960		112,849
Basic income per share attributable to Apollo	$	0.87	$	1.19
Diluted income per share attributable to Apollo	$	0.87	$	1.18

During the three months ended November 30, 2013 and 2012, 3.2 million and 8.4 million, respectively, of our stock options outstanding and 1.0 million and 2.0 million, respectively, of our restricted stock units and performance share awards were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. These share-based awards could be dilutive in the future.

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Accrued and Other Liabilities

3 Months Ended

Nov. 30, 2013

Payables and Accruals [Abstract]

Accrued and other liabilities

Accrued and Other Liabilities

Accrued and other current liabilities consist of the following as of the respective periods:

($ in thousands)	November 30, 2013		August 31, 2013
Salaries, wages and benefits	$	69,102	$	135,553
Restructuring obligations	57,900		55,191
Accrued legal and other professional obligations	31,839		31,310
Accrued advertising	26,941		45,850
Student refunds, grants and scholarships	24,525		7,180
Deferred rent and other lease liabilities	13,227		14,001
Curriculum materials	11,962		10,764
Other	47,553		46,857
Total accrued and other current liabilities	$	283,049	$	346,706

Other long-term liabilities consist of the following as of the respective periods:

($ in thousands)	November 30, 2013		August 31, 2013
Deferred rent and other lease liabilities	$	65,484	$	67,641
Restructuring lease obligations	60,561		64,610
Uncertain tax positions	35,727		33,637
Deferred gains on sale-leasebacks	22,223		22,894
Other	60,928		44,660
Total other long-term liabilities	$	244,923	$	233,442

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Significant Accounting Policies

3 Months Ended

Nov. 30, 2013

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Basis of Presentation

The unaudited interim condensed consolidated financial statements include the accounts of Apollo Education Group, Inc., its wholly-owned subsidiaries, and subsidiaries that we control. These unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission and, in the opinion of management, contain all adjustments, consisting of normal, recurring adjustments, necessary to fairly present the financial condition, results of operations and cash flows for the periods presented.

These unaudited interim condensed consolidated financial statements do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for annual financial statements. Therefore, this information should be read in conjunction with the audited consolidated financial statements and notes thereto contained in our 2013 Annual Report on Form 10-K as filed with the Securities and Exchange Commission on October 22, 2013. We consistently applied the accounting policies described in Item 8, Financial Statements and Supplementary Data, in our 2013 Annual Report on Form 10-K in preparing these unaudited interim condensed consolidated financial statements.

The preparation of financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Our fiscal year is from September 1 to August 31. Unless otherwise noted, references to particular years or quarters refer to our fiscal years and the associated quarters of those fiscal years.

Our operations are generally subject to seasonal trends. We experience, and expect to continue to experience, fluctuations in our results of operations as a result of seasonal variations in the level of our institutions’ enrollments. Although University of Phoenix enrolls students throughout the year, its net revenue is generally lower in our second fiscal quarter (December through February) than the other quarters due to holiday breaks. Because of the seasonal nature of our business and other factors, the results of operations for the three months ended November 30, 2013 are not necessarily indicative of results to be expected for the entire fiscal year.

Reclassifications

During fiscal year 2013, we began presenting amortization of deferred gains on sale-leasebacks and amortization of lease incentives as a component of the change in accrued and other liabilities on our Condensed Consolidated Statements of Cash Flows. We also began presenting purchases of marketable securities as a separate line item within investing activities. We have reclassified the three months ended November 30, 2012 to conform to our current presentation. These reclassifications did not impact total cash provided by operating activities, or total cash used in investing or financing activities.

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Segment Reporting (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				3 Months Ended			3 Months Ended			3 Months Ended
	Nov. 30, 2013 Segments2	Nov. 30, 2012	Aug. 31, 2013	Dec. 20, 2013 Subsequent Event [Member]	Nov. 30, 2013 University Of Phoenix [Member]	Nov. 30, 2012 University Of Phoenix [Member]	Aug. 31, 2013 University Of Phoenix [Member]	Nov. 30, 2013 Apollo Global [Member]	Nov. 30, 2012 Apollo Global [Member]	Aug. 31, 2013 Apollo Global [Member]	Nov. 30, 2013 Other [Member]	Nov. 30, 2012 Other [Member]	Aug. 31, 2013 Other [Member]
Segment Reporting [Abstract]
Number of operating segments	7
Segment reporting [Line Items]
Percentage of shares acquired				70.00%
Net revenue	$ 856,335	$ 1,055,183			$ 744,863	$ 935,784		$ 91,159	$ 90,514		$ 20,313	$ 28,885
Operating income	169,794	230,946			183,473	243,860		2,217	(9,366)		(15,896)	(3,548)
Interest income	568	549
Interest expense	(2,086)	(2,042)
Other, net	807	1,799
Income before income taxes	169,083	231,252
Litigation credit	0	(16,850)										(16,850)
Total assets	$ 2,463,030		$ 2,997,947		$ 780,839		$ 790,537	$ 393,063		$ 359,903	$ 1,289,128		$ 1,847,507

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Restructuring and Other Charges (Details) (USD $)	3 Months Ended		39 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	Nov. 30, 2013	Aug. 31, 2013
Restructuring [Line Items]
Restructuring and other charges	$ 31,963,000	$ 24,116,000
Cumulative costs for restructuring activities			292,196,000
Balance	119,801,000
Non-cash adjustments	(3,352,000)
Payments	(29,951,000)
Balance	118,461,000		118,461,000
Accelerated depreciation	2,806,000	9,326,000
Percentage of square feet exited	85.00%		85.00%
Expected future restructuring charges	35,000,000
Restructuring liability, current	57,900,000		57,900,000	55,191,000
Restructuring gross obligation	190,000,000		190,000,000
Minimum [Member]
Restructuring [Line Items]
Discount rate			3.00%
Maximum [Member]
Restructuring [Line Items]
Discount rate			6.00%
University Of Phoenix [Member]
Restructuring [Line Items]
Restructuring and other charges	25,426,000	16,896,000
Cumulative costs for restructuring activities			227,098,000
Expected number of facilities abandoned	115
Apollo Global [Member]
Restructuring [Line Items]
Restructuring and other charges	1,263,000	79,000
Cumulative costs for restructuring activities			13,028,000
Other [Member]
Restructuring [Line Items]
Restructuring and other charges	5,274,000	7,141,000
Cumulative costs for restructuring activities			52,070,000
Lease and related costs, net [Member]
Restructuring [Line Items]
Restructuring and other charges	13,760,000	10,112,000
Cumulative costs for restructuring activities			186,071,000
Balance	104,048,000
Non-cash adjustments	(1,490,000)
Payments	(15,532,000)
Balance	100,786,000		100,786,000
Lease and related costs, net [Member] | University Of Phoenix [Member]
Restructuring [Line Items]
Accelerated depreciation	2,806,000
Lease Abandonment Obligation [Member] | University Of Phoenix [Member]
Restructuring [Line Items]
Cumulative costs for restructuring activities	9,951,000		133,600,000
Severance and other employee separation costs [Member]
Restructuring [Line Items]
Restructuring and other charges	15,254,000	10,943,000
Cumulative costs for restructuring activities			66,280,000
Balance	7,623,000
Non-cash adjustments	(1,862,000)
Payments	(10,740,000)
Balance	10,275,000		10,275,000
Other restructuring related costs [Member]
Restructuring [Line Items]
Restructuring and other charges	2,949,000	3,061,000
Cumulative costs for restructuring activities			39,845,000
Balance	8,130,000
Non-cash adjustments	0
Payments	(3,679,000)
Balance	$ 7,400,000		$ 7,400,000

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Regulatory Matters

3 Months Ended

Nov. 30, 2013

Notes to Consolidated Financial Statements [Abstract]

Regulatory Matters

Regulatory Matters

Student Financial Aid

In fiscal year 2013, University of Phoenix generated 90% of our total consolidated net revenue and more than 100% of our operating income, and 83% of the University’s cash basis revenue for eligible tuition and fees was derived from Title IV financial aid program funds, as calculated under the 90/10 Rule described below.

All U.S. federal financial aid programs are established by Title IV of the Higher Education Act and regulations promulgated thereunder. The U.S. Congress must periodically reauthorize the Higher Education Act and annually determine the funding level for each Title IV program. In August 2008, the Higher Education Act was reauthorized through September 30, 2013 by the Higher Education Opportunity Act. Congress has begun Higher Education Act reauthorization hearings and there is currently an automatic one year extension that continues the current authorization through September 30, 2014. Changes to the Higher Education Act, including changes in eligibility and funding for Title IV programs, are likely to occur in connection with this reauthorization, but we cannot predict the scope and substance of any such changes.

The Higher Education Act, as reauthorized, specifies the manner in which the U.S. Department of Education reviews institutions for eligibility and certification to participate in Title IV programs. Every educational institution involved in Title IV programs must be certified to participate and is required to periodically renew this certification.

University of Phoenix was recertified in November 2009 and entered into a new Title IV Program Participation Agreement which expired on December 31, 2012. University of Phoenix has submitted necessary documentation for re-certification and its eligibility continues on a month-to-month basis until the Department issues its decision on the application. We have no reason to believe that the University’s application will not be renewed in due course, and it is not unusual to be continued on a month-to-month basis until the Department completes its review. However, we cannot predict whether, or to what extent, the imposition of the Notice sanction by The Higher Learning Commission, as described below, might have on this process.

Western International University was recertified in May 2010 and entered into a new Title IV Program Participation Agreement which expires September 30, 2014.

Higher Learning Commission (“HLC”)

University of Phoenix and Western International University are accredited by The Higher Learning Commission of the North Central Association of Colleges and Schools (“HLC”). This accreditation provides the following:

• Recognition and acceptance by employers, other higher education institutions and governmental entities of the degrees and credits earned by students;

• Qualification to participate in Title IV programs (in combination with state higher education operating and degree granting authority); and

• Qualification for authority to operate in certain states.

During fiscal year 2013, the accreditations of University of Phoenix and Western International University were reaffirmed by HLC through the 2022-2023 academic year. At the same time, HLC placed both universities on Notice status for a two-year period. Notice status is a sanction that means that HLC has determined that an institution is on a course of action that, if continued, could lead the institution to be out of compliance with one or more of the HLC Criteria for Accreditation or Core Components. We believe the imposition of the sanction of Notice on University of Phoenix could adversely impact our business.

90/10 Rule

To remain eligible to participate in Title IV programs, proprietary institutions of higher education must comply with the so-called “90/10 Rule” under the Higher Education Act, as reauthorized, and must derive 90% or less of their cash basis revenue, as defined in the rule, from Title IV programs. The 90/10 Rule percentage for University of Phoenix was 83% for fiscal year 2013. Based on recent trends, we do not expect the 90/10 Rule percentage for University of Phoenix to exceed 90% for fiscal year 2014. However, the 90/10 Rule percentage for University of Phoenix remains high and could exceed 90% in the future depending on the degree to which its various initiatives are effective, the impact of future changes in its enrollment mix, and regulatory and other factors outside our control, including any reduction in military benefit programs or changes in the treatment of such funding for purposes of the 90/10 Rule calculation. Various members of Congress have proposed changes to the 90/10 Rule that would, if enacted, reduce the percentage to 85% and adversely change the manner in which military aid is treated for purposes of the rule calculation.

Student Loan Cohort Default Rates

To remain eligible to participate in Title IV programs, an educational institution’s student loan cohort default rates must remain below certain specified levels. Educational institutions will lose eligibility to participate in Title IV programs if their three-year cohort default rate equals or exceeds 40% for any given year or 30% for three consecutive years. The three-year cohort default rate for University of Phoenix for the 2010 federal fiscal year was 26.0%. Based on our most recent trends, we expect that our 2011 three-year cohort default rate will be lower than the 2010 three-year cohort default rate. However, if our student loan default rates approach the applicable limits, we may be required to increase efforts and resources dedicated to improving these default rates.

Office of the Inspector General of the U.S. Department of Education (“OIG”)

In October 2011, the OIG notified us that it was conducting a nationwide audit of the Department’s program requirements, guidance, and monitoring of institutions of higher education offering distance education. In connection with the OIG’s audit of the Department, the OIG examined a sample of University of Phoenix students who enrolled during the period from July 1, 2010 to June 30, 2011. The OIG subsequently notified University of Phoenix that in the course of this review it identified certain conditions that the OIG believes are Title IV compliance exceptions at University of Phoenix. Although University of Phoenix is not the direct subject of the OIG’s audit of the Department, the OIG has asked University of Phoenix to respond so that it may consider University of Phoenix’s views in formulating its audit report of the Department. In September 2013, the OIG provided to University of Phoenix, among other institutions, a draft appendix to its audit report. The draft appendix again identifies compliance exceptions at University of Phoenix. University of Phoenix has responded to the appendix. These exceptions relate principally to the calculation of the amount of Title IV funds returned after student withdrawals and the process for confirming student eligibility prior to disbursement of Title IV funds. We are not the direct subject of the OIG’s audit of the Department, and we have not accrued any liability associated with this matter.

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Shareholders' Equity

3 Months Ended

Nov. 30, 2013

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

The following details changes in shareholders’ equity during the respective periods:

	Common Stock				Additional Paid-in Capital									Accumulated Other Comprehensive Loss			Total Apollo Shareholders’ Equity			Non-Controlling Interests
	Class A		Class B					Treasury Stock Class A			Retained Earnings											Total Equity
	Stated Value		Stated Value
($ in thousands)								Cost
Balance as of August 31, 2013	$	103	$	1	$	—		$	(3,824,758	)	$	4,978,815		$	(36,563	)	$	1,117,598		$	411	$	1,118,009
Treasury stock purchases	—		—		—			(16,871		)	—			—			(16,871		)	—		(16,871		)
Treasury stock issued under stock purchase plans	—		—		(1,286		)	2,082			—			—			796			—		796
Treasury stock issued under stock incentive plans	—		—		(5,849		)	9,587			(3,738		)	—			—			—		—
Net tax effect for stock incentive plans	—		—		(4,838		)	—			—			—			(4,838		)	—		(4,838		)
Share-based compensation	—		—		11,973			—			—			—			11,973			—		11,973
Currency translation adjustment, net of tax	—		—		—			—			—			2,736			2,736			99		2,835
Net income	—		—		—			—			98,891			—			98,891			150		99,041
Balance as of November 30, 2013	$	103	$	1	$	—		$	(3,829,960	)	$	5,073,968		$	(33,827	)	$	1,210,285		$	660	$	1,210,945

	Common Stock				Additional Paid-in Capital			Treasury Stock Class A					Accumulated Other Comprehensive Loss			Total Apollo Shareholders’ Equity			Non-Controlling Interests (Deficit)
	Class A		Class B								Retained Earnings											Total Equity
	Stated Value		Stated Value
($ in thousands)								Cost
Balance as of August 31, 2012	$	103	$	1	$	93,770		$	(3,878,612	)	$	4,743,150	$	(30,034	)	$	928,378		$	(4,055	)	$	924,323
Treasury stock purchases	—		—		—			(3,472		)	—		—			(3,472		)	—			(3,472		)
Treasury stock issued under stock purchase plans	—		—		(936		)	2,049			—		—			1,113			—			1,113
Treasury stock issued under stock incentive plans	—		—		(15,046		)	15,046			—		—			—			—			—
Net tax effect for stock incentive plans	—		—		(4,823		)	—			—		—			(4,823		)	—			(4,823		)
Share-based compensation	—		—		16,889			—			—		—			16,889			—			16,889
Currency translation adjustment, net of tax	—		—		—			—			—		732			732			27			759
Purchase of noncontrolling interest	—		—		(48,543		)	—			—		(4,886		)	(53,429		)	4,929			(48,500		)
Net income	—		—		—			—			133,495		—			133,495			245			133,740
Balance as of November 30, 2012	$	103	$	1	$	41,311		$	(3,864,989	)	$	4,876,645	$	(34,188	)	$	1,018,883		$	1,146		$	1,020,029

The following details net income attributable to Apollo and transfers to noncontrolling interest during the respective periods:

	Three Months Ended November 30,
($ in thousands)	2013		2012
Net income attributable to Apollo	$	98,891	$	133,495
Transfer to noncontrolling interest:
Decrease in equity for purchase of The Carlyle Group interest in Apollo Global(1)	—		(48,543		)
Change from net income attributable to Apollo and transfer to noncontrolling interest	$	98,891	$	84,952

⁽¹⁾ Represents the difference between the fair value of the consideration paid to purchase the noncontrolling ownership interest in Apollo Global and the carrying amount of the noncontrolling interest acquired, and an adjustment to accumulated other comprehensive loss to reflect the change in Apollo’s proportionate interest.

Share Reissuances

During the three months ended November 30, 2013 and 2012, we issued 0.3 million and 0.4 million shares, respectively, of our Apollo Education Group Class A common stock from our treasury stock. These reissuances are a result of the release of shares covered by vested restricted stock units, stock option exercises and purchases under our employee stock purchase plan.

Share Repurchases

Our Board of Directors has authorized us to repurchase outstanding shares of Apollo Education Group Class A common stock from time to time depending on market conditions and other considerations. During fiscal year 2013, our Board of Directors authorized an increase in the amount available under our share repurchase program up to an aggregate amount of $250 million. There is no expiration date on the repurchase authorizations and repurchases occur at our discretion.

During the three months ended November 30, 2013, we repurchased 0.6 million shares of our Apollo Education Group Class A common stock at a total cost of $15.0 million, representing a weighted average purchase price of $26.02 per share. We did not repurchase shares of our Apollo Education Group Class A common stock during the three months ended November 30, 2012.

As of November 30, 2013, $235 million remained available under our share repurchase authorization. The amount and timing of future share repurchase authorizations and repurchases, if any, will be made as market and business conditions warrant. Repurchases may be made on the open market through various methods including but not limited to accelerated share repurchase programs, or in privately negotiated transactions, pursuant to the applicable Securities and Exchange Commission rules, and may include repurchases pursuant to Securities and Exchange Commission Rule 10b5-1 nondiscretionary trading programs.

In connection with the release of vested shares of restricted stock, we repurchased 0.1 million shares of Class A common stock for $1.9 million and $3.5 million during the three months ended November 30, 2013 and 2012, respectively. These repurchases relate to tax withholding requirements on the restricted stock units and do not fall under the repurchase program described above.

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Restructuring and Other Charges (Tables)

3 Months Ended

Nov. 30, 2013

Restructuring and Related Activities [Abstract]

Restructuring and other charges

We have incurred restructuring and other charges associated with these activities beginning in fiscal year 2011 as summarized below:

	Three Months Ended November 30,				Cumulative Costs as of November 30, 2013
($ in thousands)	2013		2012
Lease and related costs, net	$	13,760	$	10,112	$	186,071
Severance and other employee separation costs	15,254		10,943		66,280
Other restructuring related costs	2,949		3,061		39,845
Restructuring and other charges	$	31,963	$	24,116	$	292,196

The following summarizes the restructuring and other charges in our segment reporting format:

	Three Months Ended November 30,				Cumulative Costs as of November 30, 2013
($ in thousands)	2013		2012
University of Phoenix	$	25,426	$	16,896	$	227,098
Apollo Global	1,263		79		13,028
Other	5,274		7,141		52,070
Restructuring and other charges	$	31,963	$	24,116	$	292,196

The following details the changes in our restructuring liabilities by type of cost during the three months ended November 30, 2013:

($ in thousands)	Lease and Related Costs, Net			Severance and Other Employee Separation Costs			Other Restructuring Related Costs			Total
Balance at August 31, 2013(1)	$	104,048		$	7,623		$	8,130		$	119,801
Restructuring and other charges	13,760			15,254			2,949			31,963
Non-cash adjustments(2)	(1,490		)	(1,862		)	—			(3,352		)
Payments	(15,532		)	(10,740		)	(3,679		)	(29,951		)
Balance at November 30, 2013(1)	$	100,786		$	10,275		$	7,400		$	118,461

⁽¹⁾ The current portion of our restructuring liabilities was $57.9 million and $55.2 million as of November 30, 2013 and August 31, 2013, respectively. These balances are included in accrued and other current liabilities on our Condensed Consolidated Balance Sheets and the long-term portion is included in other long-term liabilities. The gross, undiscounted obligation associated with our restructuring liabilities as of November 30, 2013 is approximately $190 million, which principally represents non-cancelable leases that will be paid over the respective lease terms through fiscal year 2023.

⁽²⁾ Non-cash adjustments for lease and related costs, net represents $2.8 million of accelerated depreciation, partially offset by the release of certain associated liabilities such as deferred rent. Non-cash adjustments for severance and other employee separation costs represents share-based compensation.

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Segment Reporting

3 Months Ended

Nov. 30, 2013

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

We operate primarily in the education industry. Our reportable segments have been determined based on the method by which management evaluates performance and allocates resources. Our seven operating segments are presented in the following reportable segments:

• University of Phoenix;

• Apollo Global; and

• Other.

Apollo Global includes BPP, ULA, UNIACC and the Apollo Global corporate operations. Other includes Western International University, IPD, CFFP, Carnegie Learning, Apollo Lightspeed and corporate activities.

During the fourth quarter of fiscal year 2013, we revised our internal management reporting structure and determined Carnegie Learning and Western International University are operating segments. Accordingly, Carnegie Learning is no longer included in our University of Phoenix reportable segment, and Western International University is no longer included in our Apollo Global reportable segment. These operating segments are included in Other in our segment reporting and we have changed our presentation for all periods presented to reflect our revised segment reporting.

During the second quarter of fiscal year 2014, Apollo Global acquired 70% of the outstanding shares of Open Colleges. Open Colleges’ operating results will be included in our Apollo Global operating segment from date of acquisition. Refer to Note 1, Nature of Operations.

A summary of financial information by reportable segment is as follows:

	Three Months Ended November 30,
($ in thousands)	2013			2012
Net revenue
University of Phoenix	$	744,863		$	935,784
Apollo Global	91,159			90,514
Other	20,313			28,885
Net revenue	$	856,335		$	1,055,183
Operating income (loss)(1):
University of Phoenix	$	183,473		$	243,860
Apollo Global	2,217			(9,366		)
Other(2)	(15,896		)	(3,548		)
Operating income	169,794			230,946
Reconciling items:
Interest income	568			549
Interest expense	(2,086		)	(2,042		)
Other, net	807			1,799
Income before income taxes	$	169,083		$	231,252

⁽¹⁾ University of Phoenix, Apollo Global and Other include charges associated with our restructuring activities. Refer to Note 3, Restructuring and Other Charges.

⁽²⁾ The operating loss for Other for the three months ended November 30, 2012 is net of a $16.9 million credit associated with a legal matter.

A summary of our consolidated assets by reportable segment is as follows:

($ in thousands)	November 30, 2013		August 31, 2013
University of Phoenix	$	780,839	$	790,537
Apollo Global	393,063		359,903
Other(1)	1,289,128		1,847,507
Total assets	$	2,463,030	$	2,997,947

⁽¹⁾ The majority of assets included in Other consists of corporate cash and cash equivalents and marketable securities.

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Document and Entity Information In Thousands, unless otherwise specified	3 Months Ended
	Nov. 30, 2013	Dec. 31, 2013 Apollo Education Group Class A nonvoting common stock [Member]	Dec. 31, 2013 Apollo Education Group Class B voting common stock [Member]
Entity Information [Line Items]
Document Type	10-Q
Document Period End Date	Nov. 30, 2013
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Registrant Name	Apollo Education Group Inc
Entity Central Index Key	0000929887
Current Fiscal Year End Date	--08-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock Outstanding (in shares)		112,212	475

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Significant Accounting Policies (Policies)

3 Months Ended

Nov. 30, 2013

Policy Text Block [Abstract]

Basis of Presentation Policy

Basis of Presentation

The unaudited interim condensed consolidated financial statements include the accounts of Apollo Education Group, Inc., its wholly-owned subsidiaries, and subsidiaries that we control. These unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission and, in the opinion of management, contain all adjustments, consisting of normal, recurring adjustments, necessary to fairly present the financial condition, results of operations and cash flows for the periods presented.

These unaudited interim condensed consolidated financial statements do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for annual financial statements. Therefore, this information should be read in conjunction with the audited consolidated financial statements and notes thereto contained in our 2013 Annual Report on Form 10-K as filed with the Securities and Exchange Commission on October 22, 2013. We consistently applied the accounting policies described in Item 8, Financial Statements and Supplementary Data, in our 2013 Annual Report on Form 10-K in preparing these unaudited interim condensed consolidated financial statements.

Use of Estimates Policy

The preparation of financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.