[June 29, 2015] |
|
Apollo Education Group, Inc. Reports Third Quarter Fiscal Year 2015 Results
Apollo Education Group, Inc. (NASDAQ: APOL) today reported financial
results for the three and nine months ended May 31, 2015, with third
quarter revenue of $681.5 million and diluted earnings per share of
$0.44, or $0.53 excluding special items.
"At Apollo Education Group, we are building a diversified global network
committed to academic excellence and strong student support, as we work
to change lives through higher education," said Greg Cappelli, Chief
Executive Officer, Apollo Education Group. "In a time of transformation,
University of Phoenix, our largest subsidiary, is working to become a
more focused, higher retaining and less complex institution. Our
commitment across all of our institutions is to deliver world-class
experiences and outcomes, connecting students' education with their
career aspirations, and helping employers recruit, retain, and develop a
highly engaged and productive workforce."
Third Quarter 2015 Results of Operations
Apollo Education Group (the "Company") reported net revenue for the
third quarter 2015 of $681.5 million, compared to $793.6 million for the
third quarter 2014. Third quarter 2015 University of Phoenix New Degreed
Enrollment was 29,400 and Degreed Enrollment was 206,900, compared to
New Degreed Enrollment of 33,900 and Degreed Enrollment of 241,900 for
the prior year third quarter. Operating income for the third quarter
2015 was $90.7 million, compared to $116.3 million for the third quarter
2014. Income from continuing operations attributable to Apollo Education
Group for the third quarter 2015 was $48.1 million, or $0.44 per share,
compared to $68.1 million, or $0.61 per share for the prior year third
quarter.
Excluding special items, operating income was $101.6 million for the
third quarter 2015, compared to $140.3 million for the third quarter
2014, and income from continuing operations attributable to Apollo
Education Group for the third quarter 2015 was $57.5 million, or $0.53
per share, compared to $86.9 million, or $0.78 per share, for the third
quarter 2014. Adjusted Operating Income was $132.2 million for the third
quarter 2015 compared to $178.1 million for the third quarter 2014.
(Special items and Adjusted Operating Income for the respective periods
are included in the reconciliation of GAAP to non-GAAP financial
information tables of this press release.)
First Nine Months of 2015 Results of Operations
Net revenue for the first nine months of fiscal year 2015 totaled $2.0
billion, compared to $2.3 billion in the first nine months of fiscal
year 2014. In the first nine months of 2015, University of Phoenix
Average Degreed Enrollment was 220,400, compared to 256,100 for the
first nine months of 2014. Operating income for the first nine months of
2015 was $96.6 million, compared to $297.0 million in the prior year
period. Income from continuing operations attributable to Apollo
Education Group for the first nine months of 2015 was $48.2 million, or
$0.44 per share, compared to $183.9 million, or $1.63 per share, for the
first nine months of 2014.
Excluding special items, operating income was $167.2 million for the
first nine months of 2015, compared to $390.2 million for the first nine
months of 2014. Income from continuing operations attributable to Apollo
Education Group for the first nine months of 2015 was $95.0 million, or
$0.87 per share, compared to $240.1 million, or $2.12 per share, for the
first nine months of 2014. Adjusted Operating Income was $269.0 million
for the first nine months of 2015 compared to $501.7 million for the
first nine months of 2014. (Special items and Adjusted Operating Income
for the respective periods are included in the reconciliation of GAAP to
non-GAAP financial information tables of this press release.)
Balance Sheet and Cash Flow
As of May 31, 2015, the Company's unrestricted cash and cash equivalents
and short-term marketable securities totaled $778.4 million, compared to
$1.4 billion as of August 31, 2014. The decrease was primarily
attributable to $600.7 million of net payments on borrowings, $74.3
million for capital expenditures, $40.7 million of share repurchases
(which includes $2.6 million of share repurchases for tax withholding
requirements on share-based awards), $34.5 million paid for contingent
consideration, and $21.2 million for an acquisition. These items were
partially offset by cash provided by operations.
Total debt outstanding (including short-term borrowings and the current
portion of long-term debt) was $55.5 million as of May 31, 2015.
Business Outlook
The Company offers the following revised outlook for fiscal year 2015
based on the business trends observed during the third quarter of fiscal
year 2015, as well as management's current expectations of future trends.
-
Net revenue of $2.60 billion to $2.62 billion; and
-
Operating income of $190 to $200 million, excluding the impact of
special items.
Conference Call Information
The Company will hold a conference call to discuss these earnings
results at 5:00 p.m. (ET), 2:00 p.m. (PT), today, Monday, June 29, 2015.
Dial-In Numbers: 877-292-6888
(Domestic) 973-200-3381 (International) Conference ID: 59341014
A live webcast of this event may be accessed by visiting the Company's
website at www.apollo.edu.
A webcast replay will be available approximately one hour following the
conclusion of the call at the same link.
A telephone replay will be available approximately two hours following
the conclusion of the call until July 7, 2015.
Dial-In Numbers: 855-859-2056
(Domestic) 404-537-3406 (International) Conference ID: 59341014
About Apollo Education Group, Inc.
Apollo Education Group, Inc. is one of the world's largest private
education providers, serving students since 1973. Through its
subsidiaries, Apollo Education Group offers undergraduate, graduate,
professional development and other nondegree educational programs and
services, online and on-campus principally to working learners. Its
educational programs and services are offered throughout the United
States and in Europe, Australia, Latin America, Africa and Asia, as well
as online throughout the world.
For more information about Apollo Education Group, Inc. and its
subsidiaries, call (800) 990-APOL or visit the Company's website at www.apollo.edu.
|
|
|
|
|
Apollo Education Group, Inc. and Subsidiaries
|
Condensed Consolidated Statements of Income
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
|
|
|
(In thousands, except per share data)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net revenue
|
|
$
|
681,481
|
|
|
$
|
793,610
|
|
|
$
|
1,979,105
|
|
|
$
|
2,314,512
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
Instructional and student advisory
|
|
298,506
|
|
|
324,621
|
|
|
915,843
|
|
|
978,400
|
|
Marketing
|
|
119,505
|
|
|
135,894
|
|
|
375,719
|
|
|
408,995
|
|
Admissions advisory
|
|
52,994
|
|
|
56,256
|
|
|
167,919
|
|
|
159,075
|
|
General and administrative
|
|
65,274
|
|
|
75,112
|
|
|
208,239
|
|
|
217,166
|
|
Depreciation and amortization
|
|
30,556
|
|
|
37,721
|
|
|
101,779
|
|
|
111,524
|
|
Provision for uncollectible accounts receivable
|
|
13,005
|
|
|
12,485
|
|
|
42,372
|
|
|
37,997
|
|
Restructuring and impairment charges
|
|
11,444
|
|
|
14,904
|
|
|
66,008
|
|
|
62,076
|
|
Acquisition and other related (credit) costs, net
|
|
(455
|
)
|
|
16,168
|
|
|
4,506
|
|
|
29,173
|
|
Litigation charges
|
|
-
|
|
|
4,125
|
|
|
100
|
|
|
13,125
|
|
Total costs and expenses
|
|
590,829
|
|
|
677,286
|
|
|
1,882,485
|
|
|
2,017,531
|
|
Operating income
|
|
90,652
|
|
|
116,324
|
|
|
96,620
|
|
|
296,981
|
|
Interest income
|
|
762
|
|
|
453
|
|
|
2,091
|
|
|
1,620
|
|
Interest expense
|
|
(1,715
|
)
|
|
(1,915
|
)
|
|
(5,116
|
)
|
|
(5,984
|
)
|
Other (loss) income, net
|
|
(2,039
|
)
|
|
(284
|
)
|
|
(4,470
|
)
|
|
630
|
|
Income from continuing operations before income taxes
|
|
87,660
|
|
|
114,578
|
|
|
89,125
|
|
|
293,247
|
|
Provision for income taxes
|
|
(40,220
|
)
|
|
(47,539
|
)
|
|
(45,354
|
)
|
|
(112,627
|
)
|
Income from continuing operations
|
|
47,440
|
|
|
67,039
|
|
|
43,771
|
|
|
180,620
|
|
Loss from discontinued operations, net of tax
|
|
-
|
|
|
(2,029
|
)
|
|
-
|
|
|
(4,392
|
)
|
Net income
|
|
47,440
|
|
|
65,010
|
|
|
43,771
|
|
|
176,228
|
|
Net loss attributable to noncontrolling interests
|
|
624
|
|
|
1,015
|
|
|
4,468
|
|
|
3,293
|
|
Net income attributable to Apollo
|
|
$
|
48,064
|
|
|
$
|
66,025
|
|
|
$
|
48,239
|
|
|
$
|
179,521
|
|
Earnings (loss) per share - Basic:
|
|
|
|
|
|
|
|
|
Continuing operations attributable to Apollo
|
|
$
|
0.45
|
|
|
$
|
0.62
|
|
|
$
|
0.45
|
|
|
$
|
1.64
|
|
Discontinued operations attributable to Apollo
|
|
-
|
|
|
(0.02
|
)
|
|
-
|
|
|
(0.04
|
)
|
Basic income per share attributable to Apollo
|
|
$
|
0.45
|
|
|
$
|
0.60
|
|
|
$
|
0.45
|
|
|
$
|
1.60
|
|
Earnings (loss) per share - Diluted:
|
|
|
|
|
|
|
|
|
Continuing operations attributable to Apollo
|
|
$
|
0.44
|
|
|
$
|
0.61
|
|
|
$
|
0.44
|
|
|
$
|
1.63
|
|
Discontinued operations attributable to Apollo
|
|
-
|
|
|
(0.02
|
)
|
|
-
|
|
|
(0.04
|
)
|
Diluted income per share attributable to Apollo
|
|
$
|
0.44
|
|
|
$
|
0.59
|
|
|
$
|
0.44
|
|
|
$
|
1.59
|
|
Basic weighted average shares outstanding
|
|
107,678
|
|
|
110,613
|
|
|
108,140
|
|
|
112,024
|
|
Diluted weighted average shares outstanding
|
|
108,623
|
|
|
112,082
|
|
|
109,124
|
|
|
113,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apollo Education Group, Inc. and Subsidiaries
|
Condensed Consolidated Balance Sheets
|
(Unaudited)
|
|
|
As of
|
($ in thousands)
|
|
May 31, 2015
|
|
August 31, 2014
|
ASSETS
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
577,222
|
|
|
$
|
1,228,813
|
|
Restricted cash and cash equivalents
|
|
231,324
|
|
|
224,135
|
|
Marketable securities
|
|
201,143
|
|
|
187,472
|
|
Accounts receivable, net
|
|
220,880
|
|
|
225,398
|
|
Prepaid taxes
|
|
12,731
|
|
|
34,006
|
|
Deferred taxes
|
|
78,668
|
|
|
83,871
|
|
Other current assets
|
|
59,505
|
|
|
58,855
|
|
Total current assets
|
|
1,381,473
|
|
|
2,042,550
|
|
Marketable securities
|
|
70,741
|
|
|
87,811
|
|
Property and equipment, net
|
|
399,584
|
|
|
435,733
|
|
Goodwill
|
|
243,968
|
|
|
259,901
|
|
Intangible assets, net
|
|
160,905
|
|
|
189,365
|
|
Deferred taxes
|
|
51,037
|
|
|
37,335
|
|
Other assets
|
|
43,733
|
|
|
40,240
|
|
Total assets
|
|
$
|
2,351,441
|
|
|
$
|
3,092,935
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND
SHAREHOLDERS' EQUITY
|
Current liabilities:
|
|
|
|
|
Short-term borrowings and current portion of long-term debt
|
|
$
|
15,088
|
|
|
$
|
609,506
|
|
Accounts payable
|
|
72,019
|
|
|
63,907
|
|
Student deposits
|
|
252,058
|
|
|
280,562
|
|
Deferred revenue
|
|
233,995
|
|
|
225,818
|
|
Accrued and other current liabilities
|
|
265,001
|
|
|
363,607
|
|
Total current liabilities
|
|
838,161
|
|
|
1,543,400
|
|
Long-term debt
|
|
40,383
|
|
|
47,590
|
|
Deferred taxes
|
|
22,695
|
|
|
22,674
|
|
Other long-term liabilities
|
|
214,410
|
|
|
233,942
|
|
Total liabilities
|
|
1,115,649
|
|
|
1,847,606
|
|
Commitments and contingencies
|
|
|
|
|
Redeemable noncontrolling interests
|
|
56,345
|
|
|
64,527
|
|
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
|
|
(3,962,717
|
)
|
|
(3,936,607
|
)
|
Retained earnings
|
|
5,201,238
|
|
|
5,143,949
|
|
Accumulated other comprehensive loss
|
|
(59,923
|
)
|
|
(27,320
|
)
|
Total Apollo shareholders' equity
|
|
1,178,702
|
|
|
1,180,126
|
|
Noncontrolling interests
|
|
745
|
|
|
676
|
|
Total equity
|
|
1,179,447
|
|
|
1,180,802
|
|
Total liabilities, redeemable noncontrolling interests and
shareholders' equity
|
|
$
|
2,351,441
|
|
|
$
|
3,092,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apollo Education Group, Inc. and Subsidiaries
|
Condensed Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
|
|
|
Nine Months Ended May 31,
|
($ in thousands)
|
|
2015
|
|
2014
|
Operating activities:
|
|
|
|
|
Net income
|
|
$
|
43,771
|
|
|
$
|
176,228
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
Share-based compensation
|
|
29,768
|
|
|
33,694
|
|
Excess tax benefits from share-based compensation
|
|
(236
|
)
|
|
(49
|
)
|
Depreciation and amortization
|
|
101,779
|
|
|
111,524
|
|
Accelerated depreciation included in restructuring
|
|
7,207
|
|
|
6,159
|
|
Loss (gain) on asset dispositions and impairment charges, net
|
|
22,228
|
|
|
(862
|
)
|
Non-cash foreign currency loss, net
|
|
1,722
|
|
|
642
|
|
Provision for uncollectible accounts receivable
|
|
42,372
|
|
|
37,997
|
|
Deferred income taxes
|
|
(12,471
|
)
|
|
(22,067
|
)
|
Changes in assets and liabilities, excluding the impact of
acquisitions and disposition:
|
|
|
|
|
Restricted cash and cash equivalents
|
|
5,529
|
|
|
3,659
|
|
Accounts receivable
|
|
(51,555
|
)
|
|
(20,472
|
)
|
Prepaid taxes
|
|
21,038
|
|
|
39,724
|
|
Other assets
|
|
(1,974
|
)
|
|
(9,436
|
)
|
Accounts payable
|
|
7,753
|
|
|
(10,789
|
)
|
Student deposits
|
|
(25,918
|
)
|
|
(15,436
|
)
|
Deferred revenue
|
|
22,677
|
|
|
(7,768
|
)
|
Accrued and other liabilities
|
|
(89,987
|
)
|
|
(33,742
|
)
|
Net cash provided by operating activities
|
|
123,703
|
|
|
289,006
|
|
Investing activities:
|
|
|
|
|
Purchases of property and equipment
|
|
(74,254
|
)
|
|
(80,642
|
)
|
Purchases of marketable securities
|
|
(156,465
|
)
|
|
(265,083
|
)
|
Maturities and sales of marketable securities
|
|
156,337
|
|
|
136,157
|
|
Acquisitions, net of cash acquired
|
|
(21,166
|
)
|
|
(119,454
|
)
|
Changes in restricted cash and other investing activities
|
|
(14,216
|
)
|
|
3,446
|
|
Net cash used in investing activities
|
|
(109,764
|
)
|
|
(325,576
|
)
|
Financing activities:
|
|
|
|
|
Payments on borrowings
|
|
(605,214
|
)
|
|
(624,393
|
)
|
Proceeds from borrowings
|
|
4,515
|
|
|
1,081
|
|
Share repurchases
|
|
(40,700
|
)
|
|
(118,478
|
)
|
Share reissuances
|
|
995
|
|
|
1,793
|
|
Excess tax benefits from share-based compensation
|
|
236
|
|
|
49
|
|
Payment for contingent consideration
|
|
(21,371
|
)
|
|
-
|
|
Net cash used in financing activities
|
|
(661,539
|
)
|
|
(739,948
|
)
|
Exchange rate effect on cash and cash equivalents
|
|
(3,991
|
)
|
|
829
|
|
Net decrease in cash and cash equivalents
|
|
(651,591
|
)
|
|
(775,689
|
)
|
Cash and cash equivalents, beginning of period
|
|
1,228,813
|
|
|
1,414,485
|
|
Cash and cash equivalents, end of period
|
|
$
|
577,222
|
|
|
$
|
638,796
|
|
Supplemental disclosure of cash flow and non-cash information:
|
|
|
|
|
Cash paid for income taxes, net of refunds
|
|
$
|
36,545
|
|
|
$
|
113,753
|
|
Cash paid for interest
|
|
5,134
|
|
|
5,859
|
|
Restricted stock units vested and released
|
|
7,407
|
|
|
10,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apollo Education Group, Inc. and Subsidiaries
|
Segment Data and University of Phoenix Operating Metrics
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
($ in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net revenue:
|
|
|
|
|
|
|
|
|
University of Phoenix:
|
|
|
|
|
|
|
|
|
Degree seeking gross revenues(1)
|
|
$
|
625,949
|
|
|
$
|
739,183
|
|
|
$
|
1,825,254
|
|
|
$
|
2,179,917
|
|
Less: Discounts and other
|
|
(79,362
|
)
|
|
(69,055
|
)
|
|
(219,315
|
)
|
|
(189,752
|
)
|
Degree seeking net revenues(1)
|
|
546,587
|
|
|
670,128
|
|
|
1,605,939
|
|
|
1,990,165
|
|
Other revenues
|
|
14,105
|
|
|
11,579
|
|
|
35,375
|
|
|
30,486
|
|
Total University of Phoenix
|
|
560,692
|
|
|
681,707
|
|
|
1,641,314
|
|
|
2,020,651
|
|
Apollo Global
|
|
109,622
|
|
|
100,459
|
|
|
305,862
|
|
|
260,252
|
|
Other
|
|
11,167
|
|
|
11,444
|
|
|
31,929
|
|
|
33,609
|
|
Net revenue
|
|
$
|
681,481
|
|
|
$
|
793,610
|
|
|
$
|
1,979,105
|
|
|
$
|
2,314,512
|
|
Operating income (loss):
|
|
|
|
|
|
|
|
|
University of Phoenix
|
|
$
|
102,773
|
|
|
$
|
135,153
|
|
|
$
|
197,634
|
|
|
$
|
405,308
|
|
Apollo Global
|
|
5,465
|
|
|
(13,845
|
)
|
|
(26,918
|
)
|
|
(51,632
|
)
|
Other
|
|
(17,586
|
)
|
|
(4,984
|
)
|
|
(74,096
|
)
|
|
(56,695
|
)
|
Operating income
|
|
$
|
90,652
|
|
|
$
|
116,324
|
|
|
$
|
96,620
|
|
|
$
|
296,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents revenue from tuition and other fees for
students enrolled in University of Phoenix degree programs or
certificate programs of at least 18 credits in length with some
course applicability into a related degree program.
|
University of Phoenix Enrollment Data:
|
|
(Rounded to the nearest hundred, except per degreed enrollment)
|
|
Three Months Ended May 31,
|
|
|
|
Nine Months Ended May 31,
|
|
2015
|
|
2014
|
|
% Change
|
|
|
|
2015
|
|
2014
|
|
% Change
|
Degreed Enrollment(1)
|
|
206,900
|
|
|
241,900
|
|
|
(14.5
|
)%
|
|
|
Average Degreed Enrollment(3)
|
220,400
|
|
|
256,100
|
|
|
(13.9
|
)%
|
New Degreed Enrollment(2)
|
|
29,400
|
|
|
33,900
|
|
|
(13.3
|
)%
|
|
|
|
|
|
|
|
|
Degree seeking net revenues per degreed enrollment
|
|
$
|
2,642
|
|
|
$
|
2,770
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents students enrolled in a 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 an 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 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 quarterly Degreed
Enrollment from the beginning to the end of the respective periods.
|
|
|
|
|
|
|
Apollo Education Group, Inc. and Subsidiaries
|
Reconciliation of GAAP Financial Information to Non-GAAP
Financial Information
|
(Unaudited)
|
|
|
|
|
|
Consolidated Financial Information
Reconciliation
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
($ in thousands, except per share data)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating income
|
|
$
|
90,652
|
|
|
$
|
116,324
|
|
|
$
|
96,620
|
|
|
$
|
296,981
|
|
Income from continuing operations before income taxes
|
|
87,660
|
|
|
114,578
|
|
|
89,125
|
|
|
293,247
|
|
Provision for income taxes
|
|
(40,220
|
)
|
|
(47,539
|
)
|
|
(45,354
|
)
|
|
(112,627
|
)
|
Net income attributable to Apollo
|
|
48,064
|
|
|
66,025
|
|
|
48,239
|
|
|
179,521
|
|
Loss from discontinued operations, net of tax
|
|
-
|
|
|
2,029
|
|
|
-
|
|
|
4,392
|
|
Income from continuing operations attributable to Apollo
|
|
$
|
48,064
|
|
|
$
|
68,054
|
|
|
$
|
48,239
|
|
|
$
|
183,913
|
|
Diluted income per share from continuing operations attributable to
Apollo
|
|
$
|
0.44
|
|
|
$
|
0.61
|
|
|
$
|
0.44
|
|
|
$
|
1.63
|
|
Special items:
|
|
|
|
|
|
|
|
|
Restructuring and impairment charges
|
|
$
|
11,444
|
|
|
$
|
14,904
|
|
|
$
|
66,008
|
|
|
$
|
62,076
|
|
Acquisition and other related (credit) costs, net
|
|
(455
|
)
|
|
16,168
|
|
|
4,506
|
|
|
29,173
|
|
Litigation charges
|
|
-
|
|
|
4,125
|
|
|
100
|
|
|
13,125
|
|
Gain related to foreign indirect taxes(1)
|
|
-
|
|
|
(11,173
|
)
|
|
-
|
|
|
(11,173
|
)
|
Special items before income taxes
|
|
10,989
|
|
|
24,024
|
|
|
70,614
|
|
|
93,201
|
|
Less: income tax effects of special items
|
|
(4,532
|
)
|
|
(5,171
|
)
|
|
(26,890
|
)
|
|
(26,819
|
)
|
Tax expense from resolution with tax authority
|
|
3,002
|
|
|
-
|
|
|
3,002
|
|
|
-
|
|
Tax benefit from Internal Revenue Service settlement
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(10,176
|
)
|
Special items, net of income tax
|
|
$
|
9,459
|
|
|
$
|
18,853
|
|
|
$
|
46,726
|
|
|
$
|
56,206
|
|
Excluding special items:
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
101,641
|
|
|
$
|
140,348
|
|
|
$
|
167,234
|
|
|
$
|
390,182
|
|
Income from continuing operations before income taxes
|
|
98,649
|
|
|
138,602
|
|
|
159,739
|
|
|
386,448
|
|
Provision for income taxes
|
|
(41,750
|
)
|
|
(52,710
|
)
|
|
(69,242
|
)
|
|
(149,622
|
)
|
Income from continuing operations attributable to Apollo
|
|
57,523
|
|
|
86,907
|
|
|
94,965
|
|
|
240,119
|
|
Diluted income per share from continuing operations attributable to
Apollo
|
|
$
|
0.53
|
|
|
$
|
0.78
|
|
|
$
|
0.87
|
|
|
$
|
2.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This gain is included in instructional and student
advisory on the Company's Condensed Consolidated Statements of Income.
Adjusted Operating Income (Loss)
Reconciliation
|
|
|
Consolidated
|
|
Apollo Global(1)
|
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
($ in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating income (loss)
|
|
$
|
90,652
|
|
|
$
|
116,324
|
|
|
$
|
96,620
|
|
|
$
|
296,981
|
|
|
$
|
5,465
|
|
|
$
|
(13,845
|
)
|
|
$
|
(26,918
|
)
|
|
$
|
(51,632
|
)
|
Depreciation and amortization
|
|
30,556
|
|
|
37,721
|
|
|
101,779
|
|
|
111,524
|
|
|
9,528
|
|
|
11,055
|
|
|
29,677
|
|
|
26,421
|
|
Restructuring and impairment charges
|
|
11,444
|
|
|
14,904
|
|
|
66,008
|
|
|
62,076
|
|
|
41
|
|
|
3,817
|
|
|
142
|
|
|
5,384
|
|
Acquisition and other related (credit) costs, net
|
|
(455
|
)
|
|
16,168
|
|
|
4,506
|
|
|
29,173
|
|
|
(1,040
|
)
|
|
15,837
|
|
|
1,658
|
|
|
28,834
|
|
Litigation charges
|
|
-
|
|
|
4,125
|
|
|
100
|
|
|
13,125
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Gain related to foreign indirect taxes
|
|
-
|
|
|
(11,173
|
)
|
|
-
|
|
|
(11,173
|
)
|
|
-
|
|
|
(11,173
|
)
|
|
-
|
|
|
(11,173
|
)
|
Adjusted Operating Income (Loss)
|
|
$
|
132,197
|
|
|
$
|
178,069
|
|
|
$
|
269,013
|
|
|
$
|
501,706
|
|
|
$
|
13,994
|
|
|
$
|
5,691
|
|
|
$
|
4,559
|
|
|
$
|
(2,166
|
)
|
(1) Open Colleges' educational offerings generally extend
beyond one year and the associated revenue is recognized over the
contractual period that students are provided access to complete their
program, or the time period it takes students to complete their program,
as applicable. However, Open Colleges' operating costs are period costs
that are expensed as incurred and a substantial portion are incurred
before, or soon after, the students begin their programs. Accordingly,
as a result of Open Colleges' enrollment growth, service model, and cost
structure, Apollo Global's operating results are negatively impacted in
the near term. However, these factors do not have the same adverse
impact on cash flows generated from Open Colleges.
Use of Non-GAAP Financial Information
The Company's non-GAAP financial measures are intended to supplement,
but not substitute for, the most directly comparable GAAP measures.
Management uses, and chooses to disclose to investors, these non-GAAP
financial measures because: (i) such measures provide an additional
analytical tool to clarify the Company's results from operations and
help to identify underlying trends in its results of operations; (ii) as
to the non-GAAP earnings measures, such measures help compare the
Company's performance on a consistent basis across time periods; and
(iii) these non-GAAP measures are employed by the Company's management
in its own evaluation of performance and are utilized in financial and
operational decision-making processes, such as budgeting and
forecasting. Exclusion of items in the non-GAAP presentation should not
be construed as an inference that these items are unusual, infrequent or
non-recurring. Other companies, including other companies in the
education industry, may calculate non-GAAP financial measures
differently, limiting their usefulness as a comparative measure across
companies.
Adjusted Operating Income (Loss) excludes depreciation and amortization
and certain other items and is intended to provide an indicator of our
operating performance across time periods due to the impact of
acquisitions.
Forward-Looking Statements Safe Harbor
Statements about Apollo Education Group and its business in this release
which are not statements of historical fact, including statements
regarding Apollo Education Group's future strategy and plans and
commentary regarding future results of operations and prospects, are
forward-looking statements and are subject to the Safe Harbor provisions
created by the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on current information and
expectations and involve a number of risks and uncertainties. Actual
plans implemented and actual results achieved may differ materially from
those set forth in or implied by such statements due to various factors,
including without limitation: (i) the impact of increased competition
from traditional public universities and proprietary educational
institutions; (ii) the impact of the initiatives to transform University
of Phoenix to a more focused, higher retaining and less complex
institution, including the near-term impact on enrollment; (iii) the
impact on retention from the technical challenges experienced in
implementing the new University of Phoenix online student classroom;
(iv) changes in law or regulation affecting the University of Phoenix's
eligibility to participate in or the manner in which it participates in
U.S. federal and state student financial aid programs, including the
recent Department of Education regulations relating to gainful
employment, future changes that may be included in the reauthorization
of the federal Higher Education Act and the Department of Education's
proposed regulation relating to state authorization; (v) any adverse
impact on University of Phoenix's business arising from the Notice
sanction imposed by the University's principal accreditor, and any
associated impact on the University's pending recertification by the
U.S. Department of Education for participation in Title IV student
financial aid programs; (vi) the impact of the Company's ongoing
restructuring and cost-reduction initiatives; (vii) the impact of any
reduction in financial aid available to students, including active and
retired military personnel, due to the U.S. government deficit reduction
proposals, debt ceiling limitations, budget sequestration or otherwise;
(viii) changes in University of Phoenix enrollment or student mix; and
(ix) unexpected expenses or other challenges in integrating acquired
businesses, consumer or regulatory impact arising from consummation of
such acquisitions, and unexpected changes or developments in the
acquired businesses. For a discussion of the various factors that may
cause actual plans implemented and actual results achieved to differ
materially from those set forth in the forward-looking statements,
please refer to the risk factors and other disclosures contained in
Apollo Education Group's Form 10-K for fiscal year 2014, and other
filings with the Securities and Exchange Commission which are available
at www.apollo.edu.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150629006229/en/
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