Shareholders' Equity and Redeemable Noncontrolling Interests

6 Months Ended

Feb. 28, 2014

Equity [Abstract]

Shareholders' Equity and Redeemable Noncontrolling Interests

Shareholders’ Equity and Redeemable Noncontrolling Interests

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, of which $180.3 million remained available as of February 28, 2014. There is no expiration date on the repurchase authorizations and the amount and timing of future share repurchase authorizations and repurchases, if any, will be made as market and business conditions warrant. Repurchases occur at our discretion and 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.

We also repurchase shares in connection with tax withholding requirements associated with the release of vested shares of restricted stock units, which do not fall under the repurchase program described above.

The following summarizes our share repurchase activity for the respective periods:

	Three Months Ended February 28,				Six Months Ended February 28,
(In thousands, except per share data)	2014		2013		2014		2013
Share repurchases under share repurchase program:
Number of shares repurchased	1,713		—		2,290		—
Weighted average purchase price per share	$	31.93	$	—	$	30.44	$	—
Cost of share repurchases	$	54,684	$	—	$	69,684	$	—
Share repurchases related to vesting of restricted stock units:
Number of shares repurchased	25		20		113		159
Cost of share repurchases	$	682	$	409	$	2,553	$	3,881

Share Reissuances

We reissue our Apollo Education Group Class A common stock from our treasury stock as 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 reissuances were as follows for the respective periods:

	Three Months Ended February 28,		Six Months Ended February 28,
(In thousands)	2014	2013	2014	2013
Share reissuances	110	118	391	524

Purchase of Noncontrolling Interest in Apollo Global

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

	Six Months Ended February 28,
($ in thousands)	2014		2013
Net income attributable to Apollo	$	113,496	$	147,022
Transfer to noncontrolling interest:
Decrease in equity for purchase of noncontrolling interest in Apollo Global(1)	—		(48,543		)
Change from net income attributable to Apollo and transfer to noncontrolling interest	$	113,496	$	98,479

⁽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.

Redeemable Noncontrolling Interests

On December 20, 2013, Apollo Global acquired 70% of the outstanding shares of Open Colleges. In connection with the acquisition, we also have the option to buy the remaining outstanding shares of Open Colleges, and the noncontrolling shareholders have the option to sell their shares to us, in early 2017, or earlier in limited circumstances. The prices for these options are based on a formula specified at the acquisition date and are principally based on a multiple of Open Colleges’ calendar year 2016 operating results as defined in the acquisition agreement, or an earlier measurement period in the limited circumstances that the options are exercised prior to 2017. There is no minimum or maximum price for these options. Since the options are embedded in the shares owned by the noncontrolling shareholders and the shareholders have the option to redeem their shares, we have classified the noncontrolling interests as redeemable equity on our Condensed Consolidated Balance Sheets.

The redeemable noncontrolling interests are probable of becoming redeemable. Accordingly, we record the redeemable noncontrolling interests at the greater of the carrying value or the redemption value at the end of each reporting period. We determine the redemption value using the formula specified at the acquisition date, and by assuming the end of each reporting period is the redemption date. We record redemption value adjustments through retained earnings. As of February 28, 2014, the redemption value of the redeemable noncontrolling interest approximated the carrying value.