Segment Reporting

3 Months Ended

Nov. 30, 2014

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

We operate in the education industry and our operating segments have been determined based on the method by which our chief operating decision maker evaluates performance and allocates resources. We have not aggregated any of our operating segments, which are presented in our segment reporting as follows:

• University of Phoenix;

• Apollo Global; and

• Other.

University of Phoenix offers undergraduate and graduate degrees in a wide range of program areas as well as various non-degree programs. The University’s students attend classes online and at ground campus locations throughout the U.S. and Puerto Rico. The majority of students attend classes exclusively online.

Apollo Global includes:

• BPP Holdings Limited (“BPP”);

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

• Universidad Latinoamericana (“ULA”);

• Milpark Education (Pty) Ltd. (“Milpark Education”);

• Apollo Global Chile S.A. (“Apollo Global Chile”);

• India Education Services Private Ltd (“India Education Services”); and

• Apollo Global corporate operations.

Apollo Global acquired Open Colleges and Milpark Education during fiscal year 2014. The operating results of Open Colleges and Milpark Education are included in our Apollo Global operating segment from the date of each respective acquisition. Additionally, as discussed in Subsequent Event in Note 1, Nature of Operations and Significant Accounting Policies, Apollo Global acquired a 75% interest in FAEL in December 2014, and its operating results will be included in our Apollo Global operating segment from the date of acquisition.

Other includes:

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

• Carnegie Learning, Inc.;

• Western International University, Inc.;

• Apollo Lightspeed; and

• Apollo Corporate activities.

During the fourth quarter of fiscal year 2014, we sold the assets of IPD and began presenting it as discontinued operations. IPD was previously included in Other in our segment reporting. As IPD’s operating results are presented as discontinued operations on our Condensed Consolidated Statements of Income for all periods presented, we have revised our financial information by segment to exclude IPD’s operating results.

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

	Three Months Ended November 30,
($ in thousands)	2014			2013
Net revenue:
University of Phoenix	$	592,853		$	744,863
Apollo Global	115,140			91,159
Other	11,059			12,126
Net revenue	$	719,052		$	848,148
Operating income (loss)(1):
University of Phoenix	$	93,511		$	183,473
Apollo Global(2)	(4,842		)	2,217
Other(2)	(28,175		)	(15,329		)
Operating income	60,494			170,361
Reconciling items:
Interest income	589			568
Interest expense	(1,662		)	(2,086		)
Other (loss) income, net	(1,285		)	807
Income from continuing operations before income taxes	$	58,136		$	169,650

⁽¹⁾ University of Phoenix, Apollo Global and Other include charges associated with our restructuring activities. Refer to Note 2, Restructuring and Other Charges.

⁽²⁾ During the three months ended November 30, 2014, Apollo Global and Other incurred $1.7 million and $1.5 million of acquisition costs and contingent consideration charges, respectively.

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

($ in thousands)	November 30, 2014		August 31, 2014
University of Phoenix	$	814,470	$	824,895
Apollo Global	684,019		680,363
Other(1)	923,799		1,587,677
Total assets	$	2,422,288	$	3,092,935

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