Segment Reporting

6 Months Ended

Feb. 28, 2015

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 nondegree 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”);

• Faculdade da Educacional da Lapa (“FAEL”);

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

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

• Apollo Global corporate operations.

Apollo Global acquired FAEL during the second quarter of fiscal year 2015. Refer to Note 4, Acquisitions. Apollo Global also acquired Open Colleges and Milpark Education during fiscal year 2014. The operating results for each of these entities are included in our Apollo Global operating segment from the date of each respective acquisition.

Other includes:

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

• Carnegie Learning, Inc.;

• Western International University, Inc.; and

• Apollo Corporate activities.

During 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 Operations 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 February 28,						Six Months Ended February 28,
($ in thousands)	2015			2014			2015			2014
Net revenue:
University of Phoenix	$	487,769		$	594,081		$	1,080,622		$	1,338,944
Apollo Global	81,100			68,634			196,240			159,793
Other	9,703			10,039			20,762			22,165
Net revenue	$	578,572		$	672,754		$	1,297,624		$	1,520,902
Operating (loss) income(1):
University of Phoenix	$	1,350		$	86,682		$	94,861		$	270,155
Apollo Global(2)	(27,541		)	(40,004		)	(32,383		)	(37,787		)
Other(3)	(28,335		)	(36,382		)	(56,510		)	(51,711		)
Operating (loss) income	(54,526		)	10,296			5,968			180,657
Reconciling items:
Interest income	740			599			1,329			1,167
Interest expense	(1,739		)	(1,983		)	(3,401		)	(4,069		)
Other (loss) income, net	(1,146		)	107			(2,431		)	914
(Loss) income from continuing operations before income taxes	$	(56,671	)	$	9,019		$	1,465		$	178,669

⁽¹⁾ University of Phoenix, Apollo Global and Other include restructuring and impairment charges during the periods. Refer to Note 2, Restructuring and Impairment Charges.

⁽²⁾ During the three and six months ended February 28, 2015, Apollo Global incurred $1.0 million and $2.7 million of acquisition and other related costs, respectively. The operating loss for Apollo Global in the three and six months ended February 28, 2014 includes $13.0 million of acquisition and other related costs.

⁽³⁾ The operating loss for Other in the three and six months ended February 28, 2015 includes $0.7 million and $2.3 million of acquisition and other related costs, respectively. The operating loss for Other in the three and six months ended February 28, 2014 includes $9.0 million of charges associated with our legal matters.

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

($ in thousands)	February 28, 2015		August 31, 2014
University of Phoenix	$	769,666	$	824,895
Apollo Global	671,914		680,363
Other(1)	964,361		1,587,677
Total assets	$	2,405,941	$	3,092,935

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