We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Apollo Education Grp., Inc. | NASDAQ:APOL | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 9.995 | 9.89 | 10.00 | 0 | 01:00:00 |
|
(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, 2016
|
OR
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from ______ to ______
|
ARIZONA
(State or other jurisdiction of incorporation or organization)
|
86-0419443
(I.R.S. Employer Identification No.)
|
|
|
|
(Former name, former address and former fiscal year, if changed since last report)
|
Large accelerated filer
þ
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if smaller reporting company)
|
Smaller reporting company
o
|
|
|
|
Page
|
|
|
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
|
|
|
|
|
•
|
Changes in regulation of the U.S. education industry and eligibility of proprietary schools to participate in U.S. federal student financial aid programs, including the factors discussed in Item 1, Business, of our Annual Report on Form 10-K for the year ended
August 31, 2016
, under “Accreditation and Jurisdictional Authorizations,” “Financial Aid Programs” and “Regulatory Environment;”
|
•
|
The impact and effectiveness of the initiatives to transform University of Phoenix into a more focused, higher retaining and less complex institution, as discussed in Item 1, Business, of our Annual Report on Form 10-K for the year ended
August 31, 2016
, under “University of Phoenix;”
|
•
|
Each of the factors discussed in Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended
August 31, 2016
and Part II, Item 1A, Risk Factors, in this Form 10-Q; 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, 2016
and Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this Form 10-Q.
|
|
As of
|
||||||
($ in thousands)
|
November 30,
2016 |
|
August 31,
2016 |
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
517,274
|
|
|
$
|
464,024
|
|
Restricted cash and cash equivalents
|
124,871
|
|
|
142,170
|
|
||
Marketable securities
|
117,392
|
|
|
197,886
|
|
||
Accounts receivable, net
|
246,306
|
|
|
224,990
|
|
||
Prepaid taxes
|
25,058
|
|
|
19,287
|
|
||
Other current assets
|
50,788
|
|
|
40,368
|
|
||
Total current assets
|
1,081,689
|
|
|
1,088,725
|
|
||
Marketable securities
|
6,893
|
|
|
18,758
|
|
||
Property and equipment, net
|
321,345
|
|
|
332,702
|
|
||
Goodwill
|
265,692
|
|
|
272,699
|
|
||
Intangible assets, net
|
179,417
|
|
|
191,146
|
|
||
Deferred taxes
|
68,703
|
|
|
78,366
|
|
||
Other assets
|
31,504
|
|
|
30,510
|
|
||
Total assets
|
$
|
1,955,243
|
|
|
$
|
2,012,906
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
|
|
||
Short-term borrowings and current portion of long-term debt
|
$
|
23,530
|
|
|
$
|
55,609
|
|
Accounts payable
|
63,360
|
|
|
59,640
|
|
||
Student deposits
|
145,018
|
|
|
178,160
|
|
||
Current deferred revenue
|
234,794
|
|
|
188,092
|
|
||
Accrued and other current liabilities
|
214,404
|
|
|
233,976
|
|
||
Total current liabilities
|
681,106
|
|
|
715,477
|
|
||
Long-term debt
|
33,251
|
|
|
35,186
|
|
||
Deferred taxes
|
15,479
|
|
|
16,323
|
|
||
Other long-term liabilities
|
156,488
|
|
|
169,326
|
|
||
Total liabilities
|
886,324
|
|
|
936,312
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Redeemable noncontrolling interests
|
5,767
|
|
|
5,860
|
|
||
Shareholders’ equity:
|
|
|
|
|
|
||
Preferred stock, no par value
|
—
|
|
|
—
|
|
||
Apollo Class A nonvoting common stock, no par value
|
103
|
|
|
103
|
|
||
Apollo Class B voting common stock, no par value
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
—
|
|
|
—
|
|
||
Apollo Class A treasury stock, at cost
|
(3,857,845
|
)
|
|
(3,868,341
|
)
|
||
Retained earnings
|
5,018,613
|
|
|
5,024,528
|
|
||
Accumulated other comprehensive loss
|
(97,933
|
)
|
|
(85,957
|
)
|
||
Total Apollo shareholders’ equity
|
1,062,939
|
|
|
1,070,334
|
|
||
Noncontrolling interests
|
213
|
|
|
400
|
|
||
Total equity
|
1,063,152
|
|
|
1,070,734
|
|
||
Total liabilities, redeemable noncontrolling interests and shareholders’ equity
|
$
|
1,955,243
|
|
|
$
|
2,012,906
|
|
|
Three Months Ended
November 30, |
||||||
(In thousands, except per share data)
|
2016
|
|
2015
|
||||
Net revenue
|
$
|
484,499
|
|
|
$
|
586,021
|
|
Costs and expenses:
|
|
|
|
||||
Instructional and student advisory
|
248,753
|
|
|
291,327
|
|
||
Marketing
|
90,967
|
|
|
93,802
|
|
||
Admissions advisory
|
26,588
|
|
|
34,188
|
|
||
General and administrative
|
51,325
|
|
|
67,445
|
|
||
Depreciation and amortization
|
26,854
|
|
|
27,394
|
|
||
Provision for uncollectible accounts receivable
|
13,930
|
|
|
15,313
|
|
||
Restructuring and impairment charges
|
15,365
|
|
|
97,823
|
|
||
Merger, acquisition and other related costs, net
|
2,313
|
|
|
3,978
|
|
||
Total costs and expenses
|
476,095
|
|
|
631,270
|
|
||
Operating income (loss)
|
8,404
|
|
|
(45,249
|
)
|
||
Interest income
|
1,087
|
|
|
919
|
|
||
Interest expense
|
(1,425
|
)
|
|
(1,456
|
)
|
||
Other loss, net
|
(644
|
)
|
|
(843
|
)
|
||
Income (loss) from continuing operations before income taxes
|
7,422
|
|
|
(46,629
|
)
|
||
Provision for income taxes
|
(4,223
|
)
|
|
(12,239
|
)
|
||
Income (loss) from continuing operations
|
3,199
|
|
|
(58,868
|
)
|
||
Loss from discontinued operations, net of tax
|
—
|
|
|
(3,259
|
)
|
||
Net income (loss)
|
3,199
|
|
|
(62,127
|
)
|
||
Net loss attributable to noncontrolling interests
|
871
|
|
|
1,362
|
|
||
Net income (loss) attributable to Apollo
|
$
|
4,070
|
|
|
$
|
(60,765
|
)
|
Earnings income (loss) per share - Basic:
|
|
|
|
||||
Continuing operations attributable to Apollo
|
$
|
0.04
|
|
|
$
|
(0.53
|
)
|
Discontinued operations attributable to Apollo
|
—
|
|
|
(0.03
|
)
|
||
Basic income (loss) per share attributable to Apollo
|
$
|
0.04
|
|
|
$
|
(0.56
|
)
|
Earnings income (loss) per share - Diluted:
|
|
|
|
||||
Continuing operations attributable to Apollo
|
$
|
0.04
|
|
|
$
|
(0.53
|
)
|
Discontinued operations attributable to Apollo
|
—
|
|
|
(0.03
|
)
|
||
Diluted income (loss) per share attributable to Apollo
|
$
|
0.04
|
|
|
$
|
(0.56
|
)
|
Basic weighted average shares outstanding
|
109,724
|
|
|
108,446
|
|
||
Diluted weighted average shares outstanding
|
110,186
|
|
|
108,446
|
|
|
Three Months Ended
November 30, |
||||||
($ in thousands)
|
2016
|
|
2015
|
||||
Net income (loss)
|
$
|
3,199
|
|
|
$
|
(62,127
|
)
|
Other comprehensive loss (net of tax):
|
|
|
|
||||
Currency translation adjustment
|
(12,274
|
)
|
|
(3,564
|
)
|
||
Change in fair value of available-for-sale securities
(1)
|
(55
|
)
|
|
(99
|
)
|
||
Comprehensive loss
|
(9,130
|
)
|
|
(65,790
|
)
|
||
Comprehensive loss attributable to noncontrolling interests
|
1,224
|
|
|
2,029
|
|
||
Comprehensive loss attributable to Apollo
|
$
|
(7,906
|
)
|
|
$
|
(63,761
|
)
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Apollo Class A
Treasury Stock
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive Loss
|
|
Total Apollo
Shareholders’ Equity
|
|
Noncontrolling
Interests |
|
Total
Equity
|
|
|
Redeemable Noncontrolling Interests
|
|||||||||||||||||||||||||||||||
|
Class A Nonvoting
|
|
Class B Voting
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
|
Shares
|
|
Stated
Value
|
|
Shares
|
|
Stated
Value
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
(In thousands)
|
|
|
|
|
|
Shares
|
|
Cost
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
Balance as of August 31, 2016
|
188,007
|
|
|
$
|
103
|
|
|
475
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
78,857
|
|
|
$
|
(3,868,341
|
)
|
|
$
|
5,024,528
|
|
|
$
|
(85,957
|
)
|
|
$
|
1,070,334
|
|
|
$
|
400
|
|
|
$
|
1,070,734
|
|
|
|
$
|
5,860
|
|
Share repurchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
115
|
|
|
(997
|
)
|
|
—
|
|
|
—
|
|
|
(997
|
)
|
|
—
|
|
|
(997
|
)
|
|
|
—
|
|
||||||||||
Share reissuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,452
|
)
|
|
(329
|
)
|
|
11,493
|
|
|
(9,041
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||||||||||
Net tax effect for stock incentive plans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(949
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(949
|
)
|
|
—
|
|
|
(949
|
)
|
|
|
—
|
|
||||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,401
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,401
|
|
|
—
|
|
|
3,401
|
|
|
|
—
|
|
||||||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,921
|
)
|
|
(11,921
|
)
|
|
(200
|
)
|
|
(12,121
|
)
|
|
|
(153
|
)
|
||||||||||
Available-for-sale securities adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
(55
|
)
|
|
—
|
|
|
(55
|
)
|
|
|
—
|
|
||||||||||
Redemption value adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(944
|
)
|
|
—
|
|
|
(944
|
)
|
|
—
|
|
|
(944
|
)
|
|
|
944
|
|
||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,070
|
|
|
—
|
|
|
4,070
|
|
|
13
|
|
|
4,083
|
|
|
|
(884
|
)
|
||||||||||
Balance as of November 30, 2016
|
188,007
|
|
|
$
|
103
|
|
|
475
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
78,643
|
|
|
$
|
(3,857,845
|
)
|
|
$
|
5,018,613
|
|
|
$
|
(97,933
|
)
|
|
$
|
1,062,939
|
|
|
$
|
213
|
|
|
$
|
1,063,152
|
|
|
|
$
|
5,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance as of August 31, 2015
|
188,007
|
|
|
$
|
103
|
|
|
475
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
80,082
|
|
|
$
|
(3,928,419
|
)
|
|
$
|
5,153,452
|
|
|
$
|
(80,579
|
)
|
|
$
|
1,144,558
|
|
|
$
|
500
|
|
|
$
|
1,145,058
|
|
|
|
$
|
11,915
|
|
Share repurchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|
(517
|
)
|
|
—
|
|
|
—
|
|
|
(517
|
)
|
|
—
|
|
|
(517
|
)
|
|
|
—
|
|
||||||||||
Share reissuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,050
|
)
|
|
(174
|
)
|
|
5,907
|
|
|
143
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||||||||||
Net tax effect for stock incentive plans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,470
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,470
|
)
|
|
—
|
|
|
(3,470
|
)
|
|
|
—
|
|
||||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,520
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,520
|
|
|
—
|
|
|
9,520
|
|
|
|
—
|
|
||||||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,897
|
)
|
|
(2,897
|
)
|
|
(25
|
)
|
|
(2,922
|
)
|
|
|
(642
|
)
|
||||||||||
Available-for-sale securities adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(99
|
)
|
|
(99
|
)
|
|
—
|
|
|
(99
|
)
|
|
|
—
|
|
||||||||||
Redemption value adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
165
|
|
|
—
|
|
|
165
|
|
|
—
|
|
|
165
|
|
|
|
(165
|
)
|
||||||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60,765
|
)
|
|
—
|
|
|
(60,765
|
)
|
|
44
|
|
|
(60,721
|
)
|
|
|
(1,406
|
)
|
||||||||||
Balance as of November 30, 2015
|
188,007
|
|
|
$
|
103
|
|
|
475
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
79,972
|
|
|
$
|
(3,923,029
|
)
|
|
$
|
5,092,995
|
|
|
$
|
(83,575
|
)
|
|
$
|
1,086,495
|
|
|
$
|
519
|
|
|
$
|
1,087,014
|
|
|
|
$
|
9,702
|
|
|
Three Months Ended
November 30,
|
||||||
($ in thousands)
|
2016
|
|
2015
|
||||
Operating activities:
|
|
|
|
|
|
||
Net income (loss)
|
$
|
3,199
|
|
|
$
|
(62,127
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Share-based compensation
|
3,401
|
|
|
9,520
|
|
||
Depreciation and amortization
|
26,854
|
|
|
27,394
|
|
||
Accelerated depreciation included in restructuring
|
1,728
|
|
|
2,953
|
|
||
Impairment charges and losses on asset dispositions
|
266
|
|
|
73,393
|
|
||
Non-cash foreign currency loss, net
|
483
|
|
|
352
|
|
||
Provision for uncollectible accounts receivable
|
13,930
|
|
|
15,313
|
|
||
Deferred income taxes
|
8,708
|
|
|
3
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|||
Restricted cash and cash equivalents
|
16,673
|
|
|
(10,973
|
)
|
||
Accounts receivable
|
(39,851
|
)
|
|
(32,899
|
)
|
||
Prepaid taxes
|
(3,173
|
)
|
|
11,612
|
|
||
Other assets
|
(10,912
|
)
|
|
(9,915
|
)
|
||
Accounts payable
|
4,176
|
|
|
(14,690
|
)
|
||
Student deposits
|
(31,587
|
)
|
|
(4,880
|
)
|
||
Current deferred revenue
|
50,878
|
|
|
2,087
|
|
||
Accrued and other liabilities
|
(28,319
|
)
|
|
(26,010
|
)
|
||
Net cash provided by (used in) operating activities
|
16,454
|
|
|
(18,867
|
)
|
||
Investing activities:
|
|
|
|
|
|
||
Purchases of property and equipment
|
(20,872
|
)
|
|
(14,456
|
)
|
||
Purchases of marketable securities
|
(8,993
|
)
|
|
(109,715
|
)
|
||
Maturities of marketable securities
|
96,562
|
|
|
57,627
|
|
||
Sales of marketable securities
|
4,009
|
|
|
5,149
|
|
||
Other investing activities
|
152
|
|
|
(196
|
)
|
||
Net cash provided by (used in) investing activities
|
70,858
|
|
|
(61,591
|
)
|
||
Financing activities:
|
|
|
|
|
|
||
Payments on borrowings
|
(32,377
|
)
|
|
(3,448
|
)
|
||
Proceeds from borrowings
|
—
|
|
|
926
|
|
||
Share repurchases
|
(997
|
)
|
|
(517
|
)
|
||
Net cash used in financing activities
|
(33,374
|
)
|
|
(3,039
|
)
|
||
Effect of foreign exchange rates on cash and cash equivalents
|
(688
|
)
|
|
(442
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
53,250
|
|
|
(83,939
|
)
|
||
Cash and cash equivalents, beginning of period
|
464,024
|
|
|
503,705
|
|
||
Cash and cash equivalents, end of period
|
$
|
517,274
|
|
|
$
|
419,766
|
|
Supplemental disclosure of cash flow and non-cash information:
|
|
|
|
|
|
||
Cash paid for income taxes, net of refunds
|
$
|
—
|
|
|
$
|
—
|
|
Cash paid for interest
|
1,455
|
|
|
1,392
|
|
||
Restricted stock units vested and released
|
2,898
|
|
|
1,430
|
|
||
Credits received for tenant improvements
|
402
|
|
|
—
|
|
|
|
Page
|
(i)
|
the absence of certain conditions or restrictions in the response of the U.S. Department of Education to the pre-acquisition review application filed by University of Phoenix; and
|
(ii)
|
the receipt of consents or approvals from other federal, state and foreign educational governing bodies, including the Higher Learning Commission (“HLC”).
|
(i)
|
Our aggregate cash, cash equivalents and marketable securities must not be less than the specified amount for the applicable month end;
|
(ii)
|
University of Phoenix fiscal year-to-date new degreed enrollments as of the applicable month end must not have declined by more than certain levels (which are derived from the projections we prepared in December 2015 in connection with the Merger, which we refer to as the December 2015 forecast);
|
(iii)
|
University of Phoenix trailing twelve month net revenue as of the applicable month end shall not have declined by more than certain levels (which are derived from the December 2015 forecast); and
|
(iv)
|
Our consolidated trailing twelve month adjusted earnings before interest, taxes, depreciation and amortization as of the applicable month end shall not have declined by more than certain levels (which are derived from the December 2015 forecast).
|
•
|
University of Phoenix
- University of Phoenix generally has lower net revenue in our second fiscal quarter (December through February) compared to other quarters due to holiday breaks.
|
•
|
Apollo Global
- Our Apollo Global subsidiaries experience seasonality associated with the timing of when courses begin, exam dates, the timing of their respective holidays and other factors. These factors have historically resulted in lower net revenue in our second and fourth fiscal quarters, particularly for BPP, which also results in substantially lower operating results during these quarters due to BPP’s relatively fixed cost structure.
|
•
|
During the second quarter of fiscal year 2016, we began presenting expenses incurred associated with our pending Merger discussed above in
Merger, acquisition and other related costs, net
on our Condensed Consolidated Statements of Operations. The associated costs incurred in the first quarter of fiscal year 2016 were included in
General and administrative
and we have reclassified such costs for the three months ended November 30, 2015 to conform with our current presentation.
|
•
|
We began separately presenting maturities and sales of our marketable securities, which have all been designated as available-for-sale, on our Condensed Consolidated Statements of Cash Flows. This reclassification did not impact total cash flows from investing activities.
|
|
Three Months Ended
November 30, |
||||||
($ in thousands)
|
2016
|
|
2015
|
||||
Restructuring charges
|
$
|
15,365
|
|
|
$
|
24,430
|
|
Goodwill impairments
(1)
|
—
|
|
|
73,393
|
|
||
Restructuring and impairment charges
|
$
|
15,365
|
|
|
$
|
97,823
|
|
|
Three Months Ended
November 30, |
||||||
($ in thousands)
|
2016
|
|
2015
|
||||
University of Phoenix
|
$
|
5,805
|
|
|
$
|
19,090
|
|
Apollo Global
|
1,417
|
|
|
404
|
|
||
Other
|
8,143
|
|
|
4,936
|
|
||
Restructuring charges
|
$
|
15,365
|
|
|
$
|
24,430
|
|
|
Lease and Related
Costs, Net
|
|
Severance and Other Employee
Separation Costs
|
|
Other Restructuring
Related Costs
|
|
Total
|
||||||||||||||||||||
($ in thousands)
|
2017 Restructuring
|
|
Prior Year Restructuring
(1)
|
|
2017 Restructuring
|
|
Prior Year Restructuring
(1)
|
|
2017 Restructuring
|
|
Prior Year Restructuring
(1)
|
|
|||||||||||||||
August 31, 2016
|
$
|
—
|
|
|
$
|
64,659
|
|
|
$
|
—
|
|
|
$
|
3,834
|
|
|
$
|
—
|
|
|
$
|
111
|
|
|
$
|
68,604
|
|
Expense
|
—
|
|
|
9,423
|
|
|
3,893
|
|
|
431
|
|
|
—
|
|
|
1,618
|
|
|
15,365
|
|
|||||||
Other
|
—
|
|
|
1,486
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,338
|
)
|
|
148
|
|
|||||||
Payments
|
—
|
|
|
(10,378
|
)
|
|
(2,854
|
)
|
|
(2,596
|
)
|
|
—
|
|
|
(253
|
)
|
|
(16,081
|
)
|
|||||||
November 30, 2016
(2)
|
$
|
—
|
|
|
$
|
65,190
|
|
|
$
|
1,039
|
|
|
$
|
1,669
|
|
|
$
|
—
|
|
|
$
|
138
|
|
|
$
|
68,036
|
|
|
November 30, 2016
|
||||||||||||||||||||||||||
($ in thousands)
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Cash and Cash
Equivalents
(1)
|
|
Current
Marketable
Securities
|
|
Noncurrent
Marketable
Securities
|
||||||||||||||
Cash
|
$
|
470,237
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
470,237
|
|
|
$
|
470,237
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Money market funds
|
137,424
|
|
|
—
|
|
|
—
|
|
|
137,424
|
|
|
137,424
|
|
|
—
|
|
|
—
|
|
|||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Corporate bonds
|
38,588
|
|
|
15
|
|
|
(61
|
)
|
|
38,542
|
|
|
—
|
|
|
33,382
|
|
|
5,160
|
|
|||||||
Tax-exempt municipal bonds
|
56,955
|
|
|
3
|
|
|
(63
|
)
|
|
56,895
|
|
|
7,494
|
|
|
47,668
|
|
|
1,733
|
|
|||||||
Other
|
63,330
|
|
|
12
|
|
|
(10
|
)
|
|
63,332
|
|
|
26,990
|
|
|
36,342
|
|
|
—
|
|
|||||||
Total
|
$
|
766,534
|
|
|
$
|
30
|
|
|
$
|
(134
|
)
|
|
$
|
766,430
|
|
|
$
|
642,145
|
|
|
$
|
117,392
|
|
|
$
|
6,893
|
|
|
August 31, 2016
|
||||||||||||||||||||||||||
($ in thousands)
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Cash and Cash
Equivalents
(1)
|
|
Current
Marketable
Securities
|
|
Noncurrent
Marketable
Securities
|
||||||||||||||
Cash
|
$
|
527,662
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
527,662
|
|
|
$
|
527,662
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Money market funds
|
66,265
|
|
|
—
|
|
|
—
|
|
|
66,265
|
|
|
66,265
|
|
|
—
|
|
|
—
|
|
|||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Corporate bonds
|
91,426
|
|
|
33
|
|
|
(56
|
)
|
|
91,403
|
|
|
—
|
|
|
79,055
|
|
|
12,348
|
|
|||||||
Tax-exempt municipal bonds
|
75,696
|
|
|
26
|
|
|
(13
|
)
|
|
75,709
|
|
|
100
|
|
|
70,697
|
|
|
4,912
|
|
|||||||
Other
|
61,801
|
|
|
12
|
|
|
(14
|
)
|
|
61,799
|
|
|
12,167
|
|
|
48,134
|
|
|
1,498
|
|
|||||||
Total
|
$
|
822,850
|
|
|
$
|
71
|
|
|
$
|
(83
|
)
|
|
$
|
822,838
|
|
|
$
|
606,194
|
|
|
$
|
197,886
|
|
|
$
|
18,758
|
|
•
|
Money market funds - We use Level 1 inputs that primarily consist of real-time quotes for transactions in active exchange markets involving identical assets.
|
•
|
Other financial instruments - We use a market approach with Level 2 observable inputs for all other securities. The Level 2 inputs include quoted prices for similar assets in active markets, or quoted prices for identical or similar assets in markets that are not active.
|
($ in thousands)
|
November 30,
2016 |
|
August 31,
2016 |
||||
Student accounts receivable
|
$
|
278,955
|
|
|
$
|
258,397
|
|
Allowance for doubtful accounts
|
(44,279
|
)
|
|
(48,650
|
)
|
||
Net student accounts receivable
|
234,676
|
|
|
209,747
|
|
||
Other receivables
|
11,630
|
|
|
15,243
|
|
||
Total accounts receivable, net
|
$
|
246,306
|
|
|
$
|
224,990
|
|
|
Three Months Ended
November 30, |
||||||
($ in thousands)
|
2016
|
|
2015
|
||||
Beginning allowance for doubtful accounts
|
$
|
48,650
|
|
|
$
|
42,259
|
|
Provision for uncollectible accounts receivable
|
13,930
|
|
|
15,313
|
|
||
Write-offs, net of recoveries
|
(17,662
|
)
|
|
(9,491
|
)
|
||
Currency translation adjustment
|
(639
|
)
|
|
(43
|
)
|
||
Ending allowance for doubtful accounts
|
$
|
44,279
|
|
|
$
|
48,038
|
|
($ in thousands)
|
University of
Phoenix
|
|
Apollo
Global
|
|
Other
|
|
Total
|
||||||||
Goodwill as of August 31, 2016
|
$
|
—
|
|
|
$
|
241,501
|
|
|
$
|
31,198
|
|
|
$
|
272,699
|
|
Currency translation adjustment
|
—
|
|
|
(7,007
|
)
|
|
—
|
|
|
(7,007
|
)
|
||||
Goodwill as of November 30, 2016
|
$
|
—
|
|
|
$
|
234,494
|
|
|
$
|
31,198
|
|
|
$
|
265,692
|
|
($ in thousands)
|
Remainder of 2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||||
Estimated future amortization expense
(1)
|
$
|
10,388
|
|
|
$
|
10,243
|
|
|
$
|
4,975
|
|
|
$
|
3,054
|
|
|
$
|
2,176
|
|
|
$
|
1,871
|
|
|
$
|
3,160
|
|
|
$
|
35,867
|
|
|
|
|
Fair Value Measurements at Reporting Dates Using
|
||||||||||||
|
Fair Value
as of Respective
Reporting Dates
|
|
Quoted Prices in
Active Markets for Identical Liabilities
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
($ in thousands)
|
|
|
|
||||||||||||
Contingent consideration as of November 30, 2016
|
$
|
11,574
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,574
|
|
Contingent consideration as of August 31, 2016
|
$
|
11,851
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,851
|
|
|
Three Months Ended
November 30, |
||||||
($ in thousands)
|
2016
|
|
2015
|
||||
Beginning balance
|
$
|
11,851
|
|
|
$
|
7,499
|
|
Change in fair value included in net income (loss)
|
337
|
|
|
43
|
|
||
Currency translation adjustment
|
(614
|
)
|
|
—
|
|
||
Ending balance
|
$
|
11,574
|
|
|
$
|
7,542
|
|
|
|
|
Fair Value Measurements at Measurement Date Using
|
|
|
||||||||||||||
($ in thousands)
|
Fair Value at
Measurement
Date
|
|
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, 2016
|
||||||||||
Restructuring obligations
|
$
|
8,028
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,028
|
|
|
$
|
8,028
|
|
($ in thousands)
|
November 30,
2016 |
|
August 31,
2016 |
||||
Salaries, wages and benefits
|
$
|
48,113
|
|
|
$
|
55,309
|
|
Restructuring obligations
|
33,643
|
|
|
32,220
|
|
||
Student discounts, grants and scholarships
|
32,607
|
|
|
35,981
|
|
||
Legal and other professional obligations
|
16,487
|
|
|
22,234
|
|
||
Contingent consideration
|
11,574
|
|
|
11,851
|
|
||
Curriculum materials
|
9,987
|
|
|
10,995
|
|
||
Deferred rent and other lease liabilities
|
9,923
|
|
|
9,627
|
|
||
Advertising
|
9,467
|
|
|
12,430
|
|
||
Other
|
42,603
|
|
|
43,329
|
|
||
Total accrued and other current liabilities
|
$
|
214,404
|
|
|
$
|
233,976
|
|
($ in thousands)
|
November 30,
2016 |
|
August 31,
2016 |
||||
Deferred rent and other lease liabilities
|
$
|
41,995
|
|
|
$
|
44,405
|
|
Restructuring obligations
|
34,393
|
|
|
36,384
|
|
||
Noncurrent deferred revenue
|
28,808
|
|
|
31,169
|
|
||
Deferred gains on sale-leasebacks
|
18,320
|
|
|
18,663
|
|
||
Other
|
32,972
|
|
|
38,705
|
|
||
Total other long-term liabilities
|
$
|
156,488
|
|
|
$
|
169,326
|
|
($ in thousands)
|
November 30,
2016 |
|
August 31,
2016 |
||||
Revolving Credit Facility
|
$
|
—
|
|
|
$
|
30,000
|
|
Capital lease obligations
|
25,565
|
|
|
28,489
|
|
||
Other
|
31,216
|
|
|
32,306
|
|
||
Total debt
|
56,781
|
|
|
90,795
|
|
||
Less short-term borrowings and current portion of long-term debt
|
(23,530
|
)
|
|
(55,609
|
)
|
||
Long-term debt
|
$
|
33,251
|
|
|
$
|
35,186
|
|
|
Three Months Ended
November 30, |
||||||
(In thousands, except per share data)
|
2016
|
|
2015
|
||||
Number of shares repurchased
|
115
|
|
|
64
|
|
||
Cost of share repurchases
|
$
|
997
|
|
|
$
|
517
|
|
|
Three Months Ended
November 30, |
||||
(In thousands)
|
2016
|
|
2015
|
||
Number of shares reissued
|
329
|
|
|
174
|
|
|
Three Months Ended
November 30, |
||||||
(In thousands, except per share data)
|
2016
|
|
2015
|
||||
Numerator:
|
|
|
|
||||
Net income (loss) attributable to Apollo (basic and diluted)
|
$
|
4,070
|
|
|
$
|
(60,765
|
)
|
Denominator:
|
|
|
|
||||
Basic weighted average shares outstanding
|
109,724
|
|
|
108,446
|
|
||
Dilutive effect of restricted stock units and performance share awards
(1)
|
462
|
|
|
—
|
|
||
Dilutive effect of stock options
(1)
|
—
|
|
|
—
|
|
||
Diluted weighted average shares outstanding
|
110,186
|
|
|
108,446
|
|
||
Basic income (loss) per share attributable to Apollo
|
$
|
0.04
|
|
|
$
|
(0.56
|
)
|
Diluted income (loss) per share attributable to Apollo
|
$
|
0.04
|
|
|
$
|
(0.56
|
)
|
|
|
|
|
||||
Anti-dilutive securities excluded from diluted income (loss) per share:
|
|
|
|
||||
Anti-dilutive restricted stock units and performance share awards
(1)
|
1,962
|
|
|
4,385
|
|
||
Anti-dilutive stock options
(1)
|
3,055
|
|
|
3,716
|
|
|
Three Months Ended
November 30, |
||||||
($ in thousands)
|
2016
|
|
2015
|
||||
Instructional and student advisory
|
$
|
1,007
|
|
|
$
|
2,784
|
|
Marketing
|
214
|
|
|
764
|
|
||
Admissions advisory
|
34
|
|
|
165
|
|
||
General and administrative
|
2,146
|
|
|
5,754
|
|
||
Restructuring and impairment charges
|
—
|
|
|
53
|
|
||
Share-based compensation expense
|
$
|
3,401
|
|
|
$
|
9,520
|
|
•
|
Casey
v.
Apollo Education Group, Inc., et al.
, Case No. CV2016-051605 filed on February 25, 2016;
|
•
|
Miglio
v.
Apollo Education Group, Inc.
,
et al.
, Case No. CV2016-003718 filed on February 26, 2016;
|
•
|
Blanchfield
v.
Apollo Education Group, Inc.
,
et al
., Case No. CV2016-001738 filed on February 29, 2016;
|
•
|
Wagner
v.
Apollo Education Group, Inc.
,
et al.
, Case No. CV2016-001905 filed on March 9, 2016;
|
•
|
Ladouceur
v.
Apollo Education Group, Inc.
,
et al.
, Case No. CV2016-002148 filed on March 17, 2016; and
|
•
|
Simkhovich
v.
Apollo Education Group, Inc.
,
et al.
, Case No. CV2016-002339 filed on March 23, 2016.
|
•
|
a school breaches contractual promises to a student;
|
•
|
certain judgments based on any state or federal law are entered against a school related to the loan or the educational services after a contested proceeding; or
|
•
|
a school makes substantial misrepresentations about the nature of its educational programs, financial charges or employability of graduates.
|
•
|
A failure to satisfy the 90/10 test for the prior fiscal year;
|
•
|
For publicly traded institutions, a failure to timely file annual or quarterly reports with the Securities and Exchange Commission, the receipt of certain warnings from the SEC or the relevant stock exchange, or the delisting of the institution’s stock; and
|
•
|
Cohort default rates above
30%
for the two most recent measuring periods.
|
•
|
The institution incurs a liability in connection with a judicial or administrative proceeding, including as a result of settlement;
|
•
|
The institution is sued after July 1, 2017 by a federal or state authority regarding certain matters involving student loans or the provision of educational services and such suit is still pending after 120 days;
|
•
|
The institution is otherwise sued after July 1, 2017 and such lawsuit has survived a motion for summary judgment or the time to assert such a motion has expired;
|
•
|
The institution is required by its accrediting agency to submit a teach-out plan in connection with closure of the institution or certain of its locations;
|
•
|
The institution has programs that could become ineligible to participate in Title IV programs based on the gainful employment debt service-to-earnings rates for the next measuring year; or
|
•
|
The institution has a composite score of less than
1.5
and experiences a withdrawal of owner’s equity by any means, including by declaring a dividend.
|
•
|
significant fluctuation in the amount of Title IV funds received by the institution;
|
•
|
citation of noncompliance by a state licensing or authorizing agency;
|
•
|
failure of a financial stress test to be developed by the Department;
|
•
|
high annual dropout rates, as calculated by the Department;
|
•
|
action by an accrediting agency to place the institution on probation or issue a show-cause order for failure to meet one or more accrediting standards;
|
•
|
violation of a provision in a loan agreement; or
|
•
|
pending borrower defense to repayment claims or an expectation that a significant number of borrower defense to repayment claims will be filed related to the institution, as determined by the Department.
|
•
|
Require an institution offering distance education to have requisite state authority to offer such programs to state residents if required by the state;
|
•
|
Define and recognize acceptable state authorization reciprocity agreements;
|
•
|
Require institutions to document individualized state processes for resolving student complaints; and
|
•
|
Require an institution to provide extensive public and individualized disclosures to enrolled and prospective students regarding its programs offered solely through distance education, including information concerning adverse actions filed against the school by state entities or accrediting bodies.
|
•
|
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.
|
•
|
University of Phoenix
, which offers undergraduate and graduate degrees through its colleges and schools in a wide range of program areas as well as various nondegree programs. A
significant majority
of the University’s students attend classes exclusively online, and the University also offers its educational programs and services at ground locations throughout the U.S.
|
•
|
Apollo Global
, which includes our institutions based outside the U.S., and its corporate operations. Apollo Global acquired Career Partner during the second quarter of fiscal year 2016, and the operating results are included in our Apollo Global operating segment from the date of acquisition.
|
•
|
Other
,
which includes College for Financial Planning,
Western International University, The Iron Yard, Apollo Professional Development, and Apollo corporate activities.
|
|
Three Months Ended
November 30, |
||||||
($ in thousands)
|
2016
|
|
2015
|
||||
Net revenue:
|
|
|
|
|
|||
University of Phoenix
|
$
|
354,294
|
|
|
$
|
462,617
|
|
Apollo Global
|
121,246
|
|
|
115,332
|
|
||
Other
|
8,959
|
|
|
8,072
|
|
||
Net revenue
|
$
|
484,499
|
|
|
$
|
586,021
|
|
Operating income (loss)
(1)
:
|
|
|
|
|
|||
University of Phoenix
|
$
|
32,550
|
|
|
$
|
(17,504
|
)
|
Apollo Global
|
(3,643
|
)
|
|
(2,335
|
)
|
||
Other
|
(20,503
|
)
|
|
(25,410
|
)
|
||
Operating income (loss)
|
8,404
|
|
|
(45,249
|
)
|
||
Reconciling items:
|
|
|
|
||||
Interest income
|
1,087
|
|
|
919
|
|
||
Interest expense
|
(1,425
|
)
|
|
(1,456
|
)
|
||
Other loss, net
|
(644
|
)
|
|
(843
|
)
|
||
Income (loss) from continuing operations before income taxes
|
$
|
7,422
|
|
|
$
|
(46,629
|
)
|
($ in thousands)
|
November 30,
2016 |
|
August 31,
2016
|
||||
University of Phoenix
|
$
|
609,546
|
|
|
$
|
599,790
|
|
Apollo Global
|
690,169
|
|
|
704,207
|
|
||
Other
(1)
|
655,528
|
|
|
708,909
|
|
||
Total assets
|
$
|
1,955,243
|
|
|
$
|
2,012,906
|
|
(i)
|
the absence of certain conditions or restrictions in the response of the U.S. Department of Education to the pre-acquisition review application filed by University of Phoenix; and
|
(ii)
|
the receipt of consents or approvals from other federal, state and foreign educational governing bodies, including the Higher Learning Commission (“HLC”).
|
(i)
|
Our aggregate cash, cash equivalents and marketable securities must not be less than the specified amount for the applicable month end;
|
(ii)
|
University of Phoenix fiscal year-to-date new degreed enrollments as of the applicable month end must not have declined by more than 15% from forecasted levels (which are derived from the projections we prepared in December 2015 in connection with the Merger, which we refer to as the December 2015 forecast);
|
(iii)
|
University of Phoenix trailing twelve month net revenue as of the applicable month end shall not have declined by more than 10% from forecasted levels (which are derived from the December 2015 forecast); and
|
(iv)
|
Our consolidated trailing twelve month adjusted earnings before interest, taxes, depreciation and amortization as of the applicable month end shall not have declined by more than $75 million from forecasted levels (which are derived from the December 2015 forecast).
|
•
|
Current Report on Form 8-K filed February 8, 2016;
|
•
|
Definitive Proxy Statement filed March 23, 2016;
|
•
|
Supplement to the Definitive Proxy Statement filed May 2, 2016;
|
•
|
Amendments to the Merger Agreement attached to our Current Report on Form 8-K filed on May 2, 2016 and our Quarterly Report on Form 10-Q filed July 8, 2016;
|
•
|
Current Report on Form 8-K filed July 7, 2016;
|
•
|
Annual Report on Form 10-K filed October 20, 2016;
|
•
|
Current Report on Form 8-K filed December 8, 2016; and
|
•
|
Current Report on Form 8-K filed December 21, 2016.
|
•
|
Student outcomes initiatives
designed to better prepare incoming students and to help existing students progress in their programs to completion. This includes tailoring initial course sequences to match the academic capabilities of students when they first enroll, assessing our programs and retiring or improving those which have lower retention rates or are less career relevant, adding more career-focused pathways that offer certificates and four-year bachelor’s degrees in key growth areas of the employment market, and piloting diagnostic tools for development of enhanced admissions guidelines and pathways expected to be implemented in fiscal year 2017.
|
•
|
Student experience initiatives
such as concentrating on fewer ground locations in selected major metropolitan areas throughout the U.S. while maintaining a regional presence for both on-ground and online students, and continuing to improve the classroom experience by offering student cohort start dates approximately every five weeks for most programs to optimize class size and classroom dynamics.
|
•
|
Brand health and outreach initiatives
designed to better manage the University’s marketing message, improve its ability to identify those students more likely to persist in its educational programs, and build on the University’s move away from third-party operated websites for marketing purposes.
|
•
|
Operational excellence initiatives
designed to reduce costs, improve operations and facilitate future systems upgrades such as continuing the transition of technology systems from proprietary and legacy systems to commercial software and software as a service. This includes the University’s online classroom and developing increased student self-service capabilities in admissions, financial aid, academic planning and class scheduling.
|
•
|
Gainful Employment Regulations
|
•
|
Defense to Repayment Regulations
|
•
|
a school breaches contractual promises to a student;
|
•
|
certain judgments based on any state or federal law are entered against a school related to the loan or the educational services after a contested proceeding; or
|
•
|
a school makes substantial misrepresentations about the nature of its educational programs, financial charges or employability of graduates.
|
•
|
Financial Responsibility Standards
|
•
|
A failure to satisfy the 90/10 test for the prior fiscal year;
|
•
|
For publicly traded institutions, a failure to timely file annual or quarterly reports with the Securities and Exchange Commission, the receipt of certain warnings from the SEC or the relevant stock exchange, or the delisting of the institution’s stock; and
|
•
|
Cohort default rates above 30% for the two most recent measuring periods.
|
•
|
The institution incurs a liability in connection with a judicial or administrative proceeding, including as a result of settlement;
|
•
|
The institution is sued after July 1, 2017 by a federal or state authority regarding certain matters involving student loans or the provision of educational services and such suit is still pending after 120 days;
|
•
|
The institution is otherwise sued after July 1, 2017 and such lawsuit has survived a motion for summary judgment or the time to assert such a motion has expired;
|
•
|
The institution is required by its accrediting agency to submit a teach-out plan in connection with closure of the institution or certain of its locations;
|
•
|
The institution has programs that could become ineligible to participate in Title IV programs based on the gainful employment debt service-to-earnings rates for the next measuring year; or
|
•
|
The institution has a composite score of less than 1.5 and experiences a withdrawal of owner’s equity by any means, including by declaring a dividend.
|
•
|
significant fluctuation in the amount of Title IV funds received by the institution;
|
•
|
citation of noncompliance by a state licensing or authorizing agency;
|
•
|
failure of a financial stress test to be developed by the Department;
|
•
|
high annual dropout rates, as calculated by the Department;
|
•
|
action by an accrediting agency to place the institution on probation or issue a show-cause order for failure to meet one or more accrediting standards;
|
•
|
violation of a provision in a loan agreement; or
|
•
|
pending borrower defense to repayment claims or an expectation that a significant number of borrower defense to repayment claims will be filed related to the institution, as determined by the Department.
|
•
|
State Authorization Regulations
|
•
|
Require an institution offering distance education to have requisite state authority to offer such programs to state residents if required by the state;
|
•
|
Define and recognize acceptable state authorization reciprocity agreements;
|
•
|
Require institutions to document individualized state processes for resolving student complaints; and
|
•
|
Require an institution to provide extensive public and individualized disclosures to enrolled and prospective students regarding its programs offered solely through distance education, including information concerning adverse actions filed against the school by state entities or accrediting bodies.
|
•
|
Financial Responsibility Composite Score
|
•
|
Primary Reserve Ratio - measure of an institution’s financial viability and liquidity;
|
•
|
Equity Ratio - measure of an institution’s capital resources and its ability to borrow; and
|
•
|
Net Income Ratio - measure of an institution’s profitability.
|
|
Fiscal Year
|
||||
|
2016
|
|
2015
|
|
2014
|
Apollo Education Group
|
1.8
|
|
2.6
|
|
2.5
|
University of Phoenix
|
2.9
|
|
2.9
|
|
2.3
|
•
|
U.S. Department of Education Program Participation Agreement
|
•
|
Federal Trade Commission Investigation
|
•
|
California Attorney General Investigations
|
•
|
Financial Aid Funding Levels
|
•
|
University of Phoenix
- University of Phoenix generally has lower net revenue in our second fiscal quarter (December through February) compared to other quarters due to holiday breaks.
|
•
|
Apollo Global
- Our Apollo Global subsidiaries experience seasonality associated with the timing of when courses begin, exam dates, the timing of their respective holidays and other factors. These factors have historically resulted in lower net revenue in our second and fourth fiscal quarters, particularly for BPP, which also results in substantially lower operating results during these quarters due to BPP’s relatively fixed cost structure.
|
|
Three Months Ended
November 30,
|
||||||||||||
|
2016
|
|
2015
|
|
% of Net Revenue
|
||||||||
($ in thousands)
|
|
|
2016
|
|
2015
|
||||||||
Net revenue
|
$
|
484,499
|
|
|
$
|
586,021
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||
Instructional and student advisory
|
248,753
|
|
|
291,327
|
|
|
51.3
|
%
|
|
49.7
|
%
|
||
Marketing
|
90,967
|
|
|
93,802
|
|
|
18.8
|
%
|
|
16.0
|
%
|
||
Admissions advisory
|
26,588
|
|
|
34,188
|
|
|
5.5
|
%
|
|
5.8
|
%
|
||
General and administrative
|
51,325
|
|
|
67,445
|
|
|
10.6
|
%
|
|
11.5
|
%
|
||
Depreciation and amortization
|
26,854
|
|
|
27,394
|
|
|
5.5
|
%
|
|
4.7
|
%
|
||
Provision for uncollectible accounts receivable
|
13,930
|
|
|
15,313
|
|
|
2.9
|
%
|
|
2.6
|
%
|
||
Restructuring and impairment charges
|
15,365
|
|
|
97,823
|
|
|
3.2
|
%
|
|
16.7
|
%
|
||
Merger, acquisition and other related costs, net
|
2,313
|
|
|
3,978
|
|
|
0.5
|
%
|
|
0.7
|
%
|
||
Total costs and expenses
|
476,095
|
|
|
631,270
|
|
|
98.3
|
%
|
|
107.7
|
%
|
||
Operating income (loss)
|
8,404
|
|
|
(45,249
|
)
|
|
1.7
|
%
|
|
(7.7
|
)%
|
||
Interest income
|
1,087
|
|
|
919
|
|
|
0.2
|
%
|
|
0.2
|
%
|
||
Interest expense
|
(1,425
|
)
|
|
(1,456
|
)
|
|
(0.3
|
)%
|
|
(0.3
|
)%
|
||
Other loss, net
|
(644
|
)
|
|
(843
|
)
|
|
(0.1
|
)%
|
|
(0.2
|
)%
|
||
Income (loss) from continuing operations before income taxes
|
7,422
|
|
|
(46,629
|
)
|
|
1.5
|
%
|
|
(8.0
|
)%
|
||
Provision for income taxes
|
(4,223
|
)
|
|
(12,239
|
)
|
|
(0.8
|
)%
|
|
(2.0
|
)%
|
||
Income (loss) from continuing operations
|
3,199
|
|
|
(58,868
|
)
|
|
0.7
|
%
|
|
(10.0
|
)%
|
||
Loss from discontinued operations, net of tax
|
—
|
|
|
(3,259
|
)
|
|
—
|
%
|
|
(0.6
|
)%
|
||
Net income (loss)
|
3,199
|
|
|
(62,127
|
)
|
|
0.7
|
%
|
|
(10.6
|
)%
|
||
Net loss attributable to noncontrolling interests
|
871
|
|
|
1,362
|
|
|
0.1
|
%
|
|
0.2
|
%
|
||
Net income (loss) attributable to Apollo
|
$
|
4,070
|
|
|
$
|
(60,765
|
)
|
|
0.8
|
%
|
|
(10.4
|
)%
|
|
Three Months Ended
November 30, |
||||||
($ in thousands)
|
2016
|
|
2015
|
||||
Restructuring charges
|
$
|
15,365
|
|
|
$
|
24,430
|
|
Goodwill impairments
(1)
|
—
|
|
|
73,393
|
|
||
Restructuring and impairment charges
|
$
|
15,365
|
|
|
$
|
97,823
|
|
|
Three Months Ended
November 30, |
||||||
($ in thousands)
|
2016
|
|
2015
|
||||
University of Phoenix
|
$
|
5,805
|
|
|
$
|
19,090
|
|
Apollo Global
|
1,417
|
|
|
404
|
|
||
Other
|
8,143
|
|
|
4,936
|
|
||
Restructuring charges
|
$
|
15,365
|
|
|
$
|
24,430
|
|
|
Three Months Ended
November 30,
|
|||||||||||||
($ in thousands)
|
2016
|
|
2015
|
|
$
Change
|
|
%
Change
|
|||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||
University of Phoenix
|
$
|
354,294
|
|
|
$
|
462,617
|
|
|
$
|
(108,323
|
)
|
|
(23.4
|
)%
|
Apollo Global
|
121,246
|
|
|
115,332
|
|
|
5,914
|
|
|
5.1
|
%
|
|||
Other
|
8,959
|
|
|
8,072
|
|
|
887
|
|
|
11.0
|
%
|
|||
Net revenue
|
$
|
484,499
|
|
|
$
|
586,021
|
|
|
$
|
(101,522
|
)
|
|
(17.3
|
)%
|
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|||
University of Phoenix
|
$
|
32,550
|
|
|
$
|
(17,504
|
)
|
|
$
|
50,054
|
|
|
*
|
|
Apollo Global
|
(3,643
|
)
|
|
(2,335
|
)
|
|
(1,308
|
)
|
|
(56.0
|
)%
|
|||
Other
|
(20,503
|
)
|
|
(25,410
|
)
|
|
4,907
|
|
|
19.3
|
%
|
|||
Operating income (loss)
|
$
|
8,404
|
|
|
$
|
(45,249
|
)
|
|
$
|
53,653
|
|
|
*
|
|
|
Three Months Ended
November 30,
|
|||||||
(Rounded to the nearest hundred)
|
2016
|
|
2015
|
|
% Change
|
|||
Degreed Enrollment
(1), (2)
|
135,900
|
|
|
176,900
|
|
|
(23.2
|
)%
|
New Degreed Enrollment
(3)
|
20,200
|
|
|
24,500
|
|
|
(17.6
|
)%
|
Average Degreed Enrollment
(4)
|
139,200
|
|
|
183,800
|
|
|
(24.3
|
)%
|
•
|
University of Phoenix enrollment continues to be adversely impacted by the rapidly evolving and highly competitive education industry, which includes adverse publicity associated with the challenging political and regulatory environment, particularly for the proprietary education sector; and
|
•
|
Recently launched initiatives as part of the University’s transformation strategy including the retiring of a number of lower retaining associate’s degree programs. Some of these initiatives have accelerated the enrollment decline at University of Phoenix in recent years, and we expect that the University’s enrollment will continue declining in the near term.
|
|
Three Months Ended
November 30, |
||||||
($ in thousands)
|
2016
|
|
2015
|
||||
Depreciation and amortization
|
$
|
11,292
|
|
|
$
|
8,701
|
|
Merger, acquisition and other related (credit) costs, net
|
(311
|
)
|
|
591
|
|
||
Restructuring and impairment charges
|
1,417
|
|
|
404
|
|
|
|
|
|
|
|
|
% of Total Assets at
|
|||||||||
($ in thousands)
|
November 30,
2016 |
|
August 31,
2016 |
|
% Change
|
|
November 30,
2016 |
|
August 31,
2016 |
|||||||
Cash and cash equivalents
|
$
|
517,274
|
|
|
$
|
464,024
|
|
|
11.5
|
%
|
|
26.5
|
%
|
|
23.1
|
%
|
Restricted cash and cash equivalents
|
124,871
|
|
|
142,170
|
|
|
(12.2
|
)%
|
|
6.4
|
%
|
|
7.1
|
%
|
||
Current marketable securities
|
117,392
|
|
|
197,886
|
|
|
(40.7
|
)%
|
|
6.0
|
%
|
|
9.8
|
%
|
||
Noncurrent marketable securities
|
6,893
|
|
|
18,758
|
|
|
(63.3
|
)%
|
|
0.3
|
%
|
|
0.9
|
%
|
||
Total
|
$
|
766,430
|
|
|
$
|
822,838
|
|
|
(6.9
|
)%
|
|
39.2
|
%
|
|
40.9
|
%
|
|
Three Months Ended
November 30,
|
||||||
($ in thousands)
|
2016
|
|
2015
|
||||
Net income (loss)
|
$
|
3,199
|
|
|
$
|
(62,127
|
)
|
Non-cash items
|
55,370
|
|
|
128,928
|
|
||
Changes in assets and liabilities
|
(42,115
|
)
|
|
(85,668
|
)
|
||
Net cash provided by (used in) operating activities
|
$
|
16,454
|
|
|
$
|
(18,867
|
)
|
•
|
A
$39.9 million
use of cash related to the change in accounts receivable, excluding the provision for uncollectible accounts receivable;
|
•
|
A
$31.6 million
decrease in student deposits principally attributable to the enrollment decline at University of Phoenix and the timing of course starts at BPP; and
|
•
|
A
$28.3 million
decrease in accrued and other liabilities principally attributable to the payment of accrued bonuses.
|
•
|
A
$32.9 million
use of cash related to the change in accounts receivable, excluding the provision for uncollectible accounts receivable;
|
•
|
A
$26.0 million
decrease in accrued and other liabilities principally attributable to the timing of our payroll cycle and the payment of accrued bonuses; and
|
•
|
A
$14.7 million
decrease in accounts payable.
|
|
Three Months Ended
November 30,
|
||||||
($ in thousands)
|
2016
|
|
2015
|
||||
Maturities and sales (purchases) of marketable securities, net
|
91,578
|
|
|
(46,939
|
)
|
||
Capital expenditures
|
(20,872
|
)
|
|
(14,456
|
)
|
||
Other
|
152
|
|
|
(196
|
)
|
||
Net cash provided by (used in) investing activities
|
$
|
70,858
|
|
|
$
|
(61,591
|
)
|
|
Three Months Ended
November 31,
|
||||||
($ in thousands)
|
2016
|
|
2015
|
||||
Payments on borrowings, net
|
$
|
(32,377
|
)
|
|
$
|
(2,522
|
)
|
Share repurchases
|
(997
|
)
|
|
(517
|
)
|
||
Net cash used in financing activities
|
$
|
(33,374
|
)
|
|
$
|
(3,039
|
)
|
•
|
a school breaches contractual promises to a student;
|
•
|
certain judgments based on any state or federal law are entered against a school related to the loan or the educational services after a contested proceeding; or
|
•
|
a school makes substantial misrepresentations about the nature of its educational programs, financial charges or employability of graduates.
|
•
|
For proprietary institutions, a failure to satisfy the 90/10 test for the prior fiscal year;
|
•
|
For publicly traded institutions:
|
◦
|
A warning from the Securities and Exchange Commission that it may suspend trading in the institution’s stock;
|
◦
|
The institution fails to timely file annual or quarterly periodic reports with the SEC;
|
◦
|
A notice from the relevant stock exchange that the institution is not in compliance with exchange requirements, or the delisting of its stock;
|
•
|
The institution’s two most recent cohort default rates are greater than 30%.
|
•
|
The institution incurs a liability in connection with a judicial or administrative proceeding, including as a result of settlement;
|
•
|
The institution is sued after July 1, 2017 by a federal or state authority regarding certain matters involving student loans or the provision of educational services and such suit is still pending after 120 days;
|
•
|
The institution is otherwise sued after July 1, 2017 and such lawsuit has survived a motion for summary judgment or the time to assert such a motion has expired;
|
•
|
The institution is required by its accrediting agency to submit a teach-out plan in connection with closure of the institution or certain of its locations;
|
•
|
The institution has programs that could become ineligible to participate in Title IV programs based on the gainful employment debt service-to-earnings rates for the next measuring year; or
|
•
|
The institution has a composite score of less than 1.5 and experiences a withdrawal of owner’s equity by any means, including by declaring a dividend.
|
•
|
significant fluctuation in the amount of Title IV funds received by the institution;
|
•
|
citation of noncompliance by a state licensing or authorizing agency;
|
•
|
failure of a financial stress test to be developed by the Department;
|
•
|
high annual dropout rates, as calculated by the Department;
|
•
|
action by an accrediting agency to place the institution on probation or issue a show-cause order for failure to meet one or more accrediting standards;
|
•
|
violation of a provision in a loan agreement; or
|
•
|
pending borrower defense to repayment claims or an expectation that a significant number of borrower defense to repayment claims will be filed related to the institution, as determined by the Department.
|
(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 Under the Plans or Programs
|
||||||
Treasury stock as of August 31, 2016
|
78,857
|
|
|
$
|
49.06
|
|
|
78,857
|
|
|
$
|
52,224
|
|
New authorizations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Share repurchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Share reissuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Treasury stock as of September 30, 2016
|
78,857
|
|
|
$
|
49.06
|
|
|
78,857
|
|
|
$
|
52,224
|
|
New authorizations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Share repurchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Share reissuances
|
(168
|
)
|
|
49.06
|
|
|
(168
|
)
|
|
—
|
|
||
Treasury stock as of October 31, 2016
|
78,689
|
|
|
$
|
49.06
|
|
|
78,689
|
|
|
$
|
52,224
|
|
New authorizations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Share repurchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Share reissuances
|
(46
|
)
|
|
49.06
|
|
|
(46
|
)
|
|
—
|
|
||
Treasury stock as of November 30, 2016
|
78,643
|
|
|
$
|
49.06
|
|
|
78,643
|
|
|
$
|
52,224
|
|
|
APOLLO EDUCATION GROUP, INC.
An Arizona Corporation
|
|
|
|
|
By:
|
/s/ Gregory J. Iverson
|
|
|
Gregory J. Iverson
Senior Vice President, Chief Financial Officer, Chief Accounting Officer and Treasurer
(Principal Financial and Accounting Officer)
|
1 Year Apollo Education Group, Inc. Chart |
1 Month Apollo Education Group, Inc. Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions