Segment Reporting

9 Months Ended

May 31, 2016

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, which offers undergraduate and graduate degrees through its nine colleges 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 United States.

• Apollo Global, which includes our institutions based outside the U.S., and its corporate operations. Apollo Global acquired Career Partner and FAEL during the second quarter of fiscal year 2016 and 2015, respectively. Refer to Note 4, Acquisitions. The operating results of these entities are included in our Apollo Global operating segment from the date of each respective acquisition.

• Other,which includes College for Financial Planning,Western International University, Apollo Professional Development, and Apollo corporate activities. Apollo acquired The Iron Yard during the fourth quarter of fiscal year 2015, and its operating results are included in Other in our segment reporting from the acquisition date.

During the fourth quarter of fiscal year 2015, we classified Carnegie Learning as held for sale and began presenting it as discontinued operations. Carnegie Learning’s operating results were previously included in Other in our segment reporting, and certain additional Carnegie Learning expenses associated with University of Phoenix’s use of Carnegie Learning technology were included in our University of Phoenix reportable segment. As Carnegie Learning’s operating results are presented as discontinued operations on our Condensed Consolidated Statements of Operations for all periods presented, we have revised our segment reporting to exclude Carnegie Learning’s operating results.

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

	Three Months Ended May 31,						Nine Months Ended May 31,
($ in thousands)	2016			2015			2016			2015
Net revenue:
University of Phoenix	$	424,479		$	560,692		$	1,252,052		$	1,641,314
Apollo Global	125,007			109,622			334,135			305,862
Other	8,516			6,044			23,184			18,810
Net revenue	$	558,002		$	676,358		$	1,609,371		$	1,965,986
Operating income (loss)(1):
University of Phoenix	$	59,681		$	103,395		$	33,099		$	216,776
Apollo Global(2)	(459		)	5,465			(29,677		)	(26,918		)
Other(3)	(27,223		)	(15,576		)	(97,488		)	(69,879		)
Operating income (loss)	31,999			93,284			(94,066		)	119,979
Reconciling items:
Interest income	1,041			762			2,883			2,091
Interest expense	(1,569		)	(1,715		)	(4,997		)	(5,116		)
Other loss, net	(273		)	(2,038		)	(2,229		)	(4,480		)
Income (loss) from continuing operations before income taxes	$	31,198		$	90,293		$	(98,409	)	$	112,474

⁽¹⁾ University of Phoenix, Apollo Global and Other include restructuring and impairment charges during the periods, which includes a $71.8 million goodwill impairment charge during the first quarter of fiscal year 2016 for our University of Phoenix reporting unit. Refer to Note 2, Restructuring and Impairment Charges, and Note 7, Goodwill and Intangibles.

⁽²⁾ During the three and nine months ended May 31, 2016, Apollo Global had $0.6 million and $3.8 million of expense included in Merger, acquisition and other related costs (credit), net, respectively. During the three and nine months ended May 31, 2015, Apollo Global had a net credit of $1.0 million and $1.7 million of net expense, respectively.

⁽³⁾ During the three and nine months ended May 31, 2016, Other had $7.7 million and $21.4 million of expense included in Merger, acquisition and other related costs (credit), net, respectively, and $0.5 million and $2.8 million during the three and nine months ended May 31, 2015, respectively.

Our consolidated assets by reportable segment consist of the following as of the respective period ends:

($ in thousands)	May 31, 2016		August 31, 2015
University of Phoenix	$	596,440	$	648,755
Apollo Global	714,248		588,434
Other(1)	726,938		963,875
Total assets	$	2,037,626	$	2,201,064

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