DEVRY INC.

FORM 10-Q FOR THEQUARTERLY PERIOD ENDED ~~MARCH 31,~~SEPTEMBER 30, 2013

TABLE OF CONTENTS

	Page No.

PART I – Financial Information
Item 1 — Financial Statements (Unaudited)
Consolidated Balance Sheets	3
Consolidated Statements of Income	4
Consolidated Statements of Comprehensive (Loss) Income	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	7
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations	2628
Item 3 — Quantitative and Qualitative Disclosures About Market Risk	3940
Item 4 — Controls and Procedures	4041

PART II – Other Information
Item 1 — Legal Proceedings	41
Item 1A — Risk Factors	4243
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds	4245
Item 4 — Mine Safety Disclosure	4345
Item 6 — Exhibits	4345

Signatures	4446

	2

DEVRY INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)
March 31, June 30, March 31,
2013 2012 2012
(Dollars in thousands)
ASSETS:
Current Assets:
Cash and Cash Equivalents $ 277,994 $ 174,076 $ 329,440
Marketable Securities and Investments 2,952 2,632 2,665
Restricted Cash 7,151 2,498 13,194
Accounts Receivable, Net 194,398 113,911 254,661
Deferred Income Taxes, Net 24,459 27,845 23,019
Refundable Income Taxes 657 40,278 8,212
Prepaid Expenses and Other 40,414 39,874 34,177
Total Current Assets 548,025 401,114 665,368
Land, Buildings and Equipment:
Land 66,063 65,172 66,019
Buildings 389,345 386,028 382,972
Equipment 485,570 433,949 422,271
Construction In Progress 64,412 61,752 50,192
1,005,390 946,901 921,454
Accumulated Depreciation (435,427 ) (387,924 ) (374,904 )
Land, Buildings and Equipment, Net 569,963 558,977 546,550
Other Assets:
Intangible Assets, Net 292,098 285,220 292,118
Goodwill 566,497 549,961 567,316
Perkins Program Fund, Net 13,450 13,450 13,450
Other Assets 27,953 29,894 27,400
Total Other Assets 899,998 878,525 900,284
TOTAL ASSETS $ 2,017,986 $ 1,838,616 $ 2,112,202

LIABILITIES:
Current Liabilities:
Accounts Payable $ 53,999 $ 63,094 $ 53,208
Accrued Salaries, Wages and Benefits 81,290 77,741 72,443
Accrued Expenses 76,442 76,243 56,328
Advance Tuition Payments 17,226 20,580 23,257
Deferred Tuition Revenue 180,498 77,551 349,200
Total Current Liabilities 409,455 315,209 554,436
Other Liabilities:
Deferred Income Taxes, Net 58,354 62,276 63,693
Deferred Rent and Other 92,037 96,496 91,415
Total Other Liabilities 150,391 158,772 155,108
TOTAL LIABILITIES 559,846 473,981 709,544

NON-CONTROLLING INTEREST 9,017 8,242 8,168
SHAREHOLDERS’ EQUITY:
Common Stock, $0.01 Par Value, 200,000,000 Shares Authorized; 62,989,000; 64,722,000 and 65,831,000 Shares Issued and Outstanding at March 31, 2013, June 30, 2012 and March 31, 2012, Respectively 744 741 741
Additional Paid-in Capital 285,242 272,962 267,285
Retained Earnings 1,616,850 1,488,988 1,490,371
Accumulated Other Comprehensive (Loss) Income (5,934 ) (5,889 ) 3,163
Treasury Stock, at Cost (11,409,000, 9,386,000 and 8,266,000 Shares, Respectively) (447,779 ) (400,409 ) (367,070 )
TOTAL SHAREHOLDERS’ EQUITY 1,449,123 1,356,393 1,394,490
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 2,017,986 $ 1,838,616 $ 2,112,202

September 30, June 30, September 30,
2013 2013 2012
(Dollars in thousands)
ASSETS:
Current Assets:
Cash and Cash Equivalents $ 308,544 $ 196,576 $ 247,572
Marketable Securities and Investments 3,104 2,975 2,750
Restricted Cash 7,251 7,019 4,546
Accounts Receivable, Net 183,487 139,778 167,045
Deferred Income Taxes, Net 33,336 29,758 25,078
Refundable Income Taxes 618 154 34,651
Prepaid Expenses and Other 51,083 49,685 35,983
Current Assets of Business Held for Sale 5,053 16,219 28,428
Total Current Assets 592,476 442,164 546,053
Land, Building and Equipment:
Land 67,101 71,122 65,249
Building 427,194 424,902 389,057
Equipment 471,905 475,656 458,340
Construction in Progress 44,226 33,724 35,931
1,010,426 1,005,404 948,577
Accumulated Depreciation (439,933) (433,747) (386,797)
Land, Building and Equipment of Business Held for Sale, Net - - 5,879
Land, Building and Equipment, Net 570,493 �� 571,657 567,659
Other Assets:
Intangible Assets, Net 298,419 281,998 297,054
Goodwill 517,655 508,937 564,841
Perkins Program Fund, Net 13,450 13,450 13,450
Other Assets 32,805 33,025 31,263
Other Assets of Business Held for Sale 1,509 5,787 -
Total Other Assets 863,838 843,197 906,608
TOTAL ASSETS $ 2,026,807 $ 1,857,018 $ 2,020,320
LIABILITIES:
Current Liabilities:
Accounts Payable $ 57,798 $ 55,131 $ 61,543
Accrued Salaries, Wages and Benefits 96,100 88,444 83,242
Accrued Expenses 82,496 74,451 69,697
Deferred and Advance Tuition 243,353 97,478 255,222
Current Liabilities of Business Held for Sale - 713 4,545
Total Current Liabilities 479,747 316,217 474,249
Other Liabilities:
Deferred Income Taxes, Net 63,850 60,103 67,286
Deferred Rent and Other 88,175 82,576 102,245
Total Other Liabilities 152,025 142,679 169,531
Other Liabilities of Business Held for Sale - 112 144
TOTAL LIABILITIES 631,772 459,008 643,924
COMMITMENTS AND CONTINGENCIES (NOTE 12)
NON-CONTROLLING INTEREST 5,890 854 8,637
SHAREHOLDERS' EQUITY
Common Stock, $0.01 Par Value, 200,000,000 Shares Authorized: 63,198,000, 62,946,000 and 63,782,000 Shares Issued and Outstanding at September 30, 2013, June 30, 2013
and September 30, 2012, Respectively 751 745 743
Additional Paid-in Capital 298,386 291,269 278,144
Retained Earnings 1,562,662 1,575,009 1,520,415
Accumulated Other Comprehensive Loss (17,605) (17,101) (5,412)
Treasury Stock, at Cost (11,662,000, 11,581,000 and 10,544,000 Shares, Respectively) (455,049) (452,766) (426,131)
TOTAL SHAREHOLDERS' EQUITY 1,389,145 1,397,156 1,367,759
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,026,807 $ 1,857,018 $ 2,020,320

The accompanying notes are an integral part of these consolidated financial statements.

	3

DEVRY INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands Except Per Share Amounts)

(Unaudited)
For the Quarter Ended
March 31, For the Nine Months Ended
March 31,
2013 2012 2013 2012

REVENUES:
Tuition $ 472,239 $ 505,651 $ 1,400,199 $ 1,488,432
Other Educational 36,513 35,156 96,533 95,462
Total Revenues 508,752 540,807 1,496,732 1,583,894
COSTS AND EXPENSES:
Cost of Educational Services 241,020 244,195 726,966 723,655
Student Services and Administrative Expense 192,100 201,158 572,955 596,125
Restructuring Expenses 2,029 - 11,513 -
Asset Impairment Charges - - �� - 75,039
Total Operating Costs and Expenses 435,149 445,353 1,311,434 1,394,819
Operating Income 73,603 95,454 185,298 189,075
INTEREST AND OTHER (EXPENSE) INCOME:
Interest Income 415 110 1,206 520
Interest Expense (756 ) (650 ) (3,006 ) (1,653 )
Net Gain on Sale of Assets - - - 3,695
Net Interest and Other (Expense) Income (341 ) (540 ) (1,800 ) 2,562
Income Before Income Taxes 73,262 94,914 183,498 191,637
Income Tax Provision 16,102 27,610 43,292 57,741
NET INCOME 57,160 67,304 140,206 133,896
Net (Income) Loss Attributable to Non-controlling Interest (339 ) (173 ) (1,110 ) (416 )
NET INCOME ATTRIBUTABLE TO DEVRY INC. $ 56,821 $ 67,131 $ 139,096 $ 133,480

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO DEVRY INC. SHAREHOLDERS:
Basic $ 0.89 $ 1.01 $ 2.16 $ 1.97
Diluted $ 0.88 $ 1.00 $ 2.15 $ 1.96

Cash Dividend Declared per Common Share $ - $ - $ 0.17 $ 0.15

For the Three Months Ended
September 30,
2013 2012
REVENUES:
Tuition $ 419,318 $ 448,685
Other Educational 31,595 31,235
Total Revenues 450,913 479,920
OPERATING COSTS AND EXPENSES:
Cost of Educational Services 241,737 239,453
Student Services and Administrative Expense 189,158 191,019
Gain on Sale of Asset (1,918) -
Restructuring Expenses 11,665 -
Total Operating Costs and Expenses 440,642 430,472
Operating Income 10,271 49,448
INTEREST (EXPENSE) INCOME:
Interest Income 583 561
Interest Expense (1,000) (1,491)
Net Interest (Expense) Income (417) (930)
Income from Continuing Operations Before Income Taxes 9,854 48,518
Income Tax Provision (1,703) (14,522)
Income from Continuing Operations 8,151 33,996
DISCONTINUED OPERATIONS (NOTE 3):
Loss from Operations of Held for Sale Component (16,324) (3,658)
Income Tax Benefit 996 1,484
Loss on Discontinued Operations (15,328) (2,174)

NET (LOSS) INCOME (7,177) 31,822
Net Loss Attributable to Non-controlling Interest 45 167
NET (LOSS) INCOME ATTRIBUTABLE TO DEVRY INC. $ (7,132) $ 31,989

AMOUNTS ATTRIBUTABLE TO DEVRY INC.:
Income from Continuing Operations, Net of Income Taxes 8,196 34,163
Loss from Discontinuing Operations, Net of Income Taxes (15,328) (2,174)
NET (LOSS) INCOME ATTRIBUTABLE TO DEVRY INC. $ (7,132) $ 31,989

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO DEVRY INC. SHAREHOLDERS
Basic:
Continuing Operations $ 0.13 $ 0.52
Discontinued Operations (0.24) (0.03)
$ (0.11) $ 0.49

Diluted:
Continuing Operations $ 0.13 $ 0.52
Discontinued Operations (0.24) (0.03)
$ (0.11) $ 0.49

The accompanying notes are an integral part of these consolidated financial statements.

	4

DEVRY INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Dollars in Thousands)

(Unaudited)
For the Three Months
Ended March 31, For the Nine Months
Ended March 31,
2013 2012 2013 2012

NET INCOME $ 57,160 $ 67,304 $ 140,206 $ 133,896
OTHER COMPREHENSIVE INCOME , NET OF TAX
Currency Translation Gain (Loss) 651 (1,392 ) (218 ) (12,581 )
Change in Fair Value of Available -For- Sale Securities 111 97 173 15
COMPREHENSIVE INCOME 57,922 66,009 140,161 121,330
COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST (526 ) 75 (1,164 ) 1,833
COMPREHENSIVE INCOME ATTRIBUTABLE TO DEVRY INC. $ 57,396 $ 66,084 $ 138,997 $ 123,163

For the Three Months Ended
September 30,
2013 2012
NET (LOSS) INCOME $ (7,177) $ 31,822
OTHER COMPREHENSIVE INCOME , NET OF TAX
Currency Translation (Loss) Gain (624) 410
Change in Fair Value of Available -For- Sale Securities 120 67
COMPREHENSIVE (LOSS) INCOME (7,681) 32,299
COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE
TO NON-CONTROLLING INTEREST 80 79
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE
TO DEVRY INC. $ (7,601) $ 32,378

The accompanying notes are an integral part of these consolidated financial statements.

	5

DEVRY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
For the Nine Months Ended
March 31,
2013 2012
(Dollars in Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 140,206 $ 133,896
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Stock-Based Compensation Expense 12,090 12,891
Depreciation 63,717 56,512
Amortization 7,605 8,336
Impairment of Goodwill and Intangible Assets - 75,039
Provision for Refunds and Uncollectible Accounts 62,432 73,058
Deferred Income Taxes (2,760 ) (5,157 )
Loss on Disposals of Land, Buildings and Equipment 1,664 805
Unrealized Loss on Assets Held for Sale 6,250 -
Realized Gain on Sale of Assets - (3,695 )
Changes in Assets and Liabilities, Net of Effects from Acquisitions of Businesses:
Restricted Cash (4,653 ) (10,886 )
Accounts Receivable (139,481 ) (212,973 )
Prepaid Income Taxes 40,434 (2,364 )
Prepaid Expenses and Other (6,218 ) (3,028 )
Accounts Payable (9,095 ) (11,327 )
Accrued Salaries, Wages, Benefits and Expenses 10,812 (26,149 )
Advance Tuition Payments (3,527 ) 877
Deferred Tuition Revenue 102,947 269,294
NET CASH PROVIDED BY OPERATING ACTIVITIES 282,423 355,129
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (79,329 ) (92,167 )
Marketable Securities Purchases (268 ) (66 )
Payment for Purchase of Business, Net of Cash Acquired (31,386 ) (250,150 )
Cash Received from Sale of Assets — 4,475
NET CASH USED IN INVESTING ACTIVITIES (110,983 ) (337,908 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Exercise of Stock Options 1,774 6,041
Proceeds from Stock Issued Under Employee Stock Purchase Plan 1,278 1,298
Repurchase of Common Stock for Treasury (48,353 ) (124,160 )
Cash Dividends Paid (20,707 ) (18,430 )
Excess Tax Benefit from Stock-Based Payments (332 ) 727
Payment of Debt Financing Fees - (70 )
NET CASH USED IN FINANCING ACTIVITIES (66,340 ) (134,594 )
Effects of Exchange Rate Differences (1,182 ) (332 )
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 103,918 (117,705 )
Cash and Cash Equivalents at Beginning of Period 174,076 447,145
Cash and Cash Equivalents at End of Period $ 277,994 $ 329,440

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid During the Period For:
Interest $ 788 $ 742
Income Taxes 9,383 49,226
Non-cash Investing and Financing Activity:
Declaration of Cash Dividends to be Paid - -
Accretion of Non-controlling Interest Put Option (335 ) 997

For the Three Months
Ended September 30,
2013 2012
(Dollars in thousands)
CASH FLOW FROM OPERATING ACTIVITIES:
Net (Loss) Income $ (7,177) $ 31,822
Loss from Discontinued Operations 15,328 2,174
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
Stock Based Compensation Expense 5,816 5,716
Depreciation 19,980 19,826
Amortization 1,649 2,442
Provision for Refunds and Uncollectible Accounts 17,819 20,376
Deferred Income Taxes (1,122) 4,942
Loss on Disposal of Land, Buildings and Equipment 592 361
Realized Gain on Sale of Assets (1,918) -
Changes in Assets and Liabilities, Net of Effects from Acquisition of Businesses:
Restricted Cash (232) (2,048)
Accounts Receivable (60,565) (90,909)
Prepaid Expenses and Other (3,163) 7,513
Accounts Payable 2,666 (290)
Accrued Salaries, Wages, Benefits and Expenses 7,984 6,376
Deferred and Advanced Tuition 144,840 156,927
Net Cash Provided by Operating Activities-Continuing Operations 142,497 165,228
Net Cash Used by Operating Activities- Discontinued Operations (1,277) (1,106)
NET CASH PROVIDED BY OPERATING ACTIVITIES 141,220 164,122
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (22,180) (25,622)
Payment for Purchase of Business, Net of Cash Acquired (12,343) (29,538)
Marketable Securities Purchased (9) (8)
Cash Received on Sale of Assets 6,662 -
Net Cash Used in Investing Activities-Continuing Operations (27,870) (55,168)
Net Cash Used in Investing Activities- Discontinued Operations - (615)
NET CASH USED IN INVESTING ACTIVITIES (27,870) (55,783)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Exercise of Stock Options 1,197 1,030
Proceeds from Stock Issued Under Employee Stock Purchase Plan 339 487
Repurchase of Common Stock for Treasury - (25,712)
Cash Dividends Paid (14) (9,793)
Excess Tax Benefit from Stock-Based Payments - 6
Payments of Seller Financed Debt (2,138) -
NET CASH USED IN FINANCING ACTIVITIES (616) (33,982)
Effects of Exchange Rate Differences (1,334) (867)
NET INCREASE IN CASH AND CASH EQUIVALENTS 111,400 73,490
Cash and Cash Equivalents at Beginning of Period 197,144 174,076
Cash and Cash Equivalents at End of Period 308,544 247,566
Less: Cash and Cash Equivalents of Discontinued Operations at End of Period - (6)
Cash and Cash Equivalents at End of Period $ 308,544 $ 247,572

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash Paid During the Period For:
Interest $ 30 $ 263
Income Taxes, Net 381 616
Non-cash Investing and Financing Activity:
Accretion of Non-controlling Interest Put Option 5,081 562

The accompanying notes are an integral part of these consolidated financial statements.

	6

DEVRY INC.

Notes to Consolidated Financial Statements ~~(Unaudited)~~

NOTE 1: INTERIM FINANCIAL STATEMENTS

The interim consolidated financial statements include the accounts of DeVry Inc. (“DeVry”) and its wholly-owned and majority-owned subsidiaries. These financial statements are unaudited but, in the opinion of management, contain all adjustments, consisting only of normal, recurring adjustments, necessary to present fairly the financial condition and results of operations of DeVry. The June 30, ~~2012~~2013 data that is presented is derived from audited financial statements.

The interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in DeVry's Annual Report on Form 10-K for the fiscal year ended June 30, ~~2012, and DeVry’s Quarterly Reports on Form 10-Q for the quarters ended September 30, 2012 and December 31, 2012, each~~2013, as filed with the Securities and Exchange Commission.

The results of operations for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2013, are not necessarily indicative of results to be expected for the entire fiscal year.

NOTE 2:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses reported during the period. Actual results could differ from those estimates.
Revenue Recognition
DeVry University tuition revenues are recognized ratably on a straight-line basis over the applicable academic term. Ross University School of Medicine, Ross University School of Veterinary Medicine (together “Ross University”) and American University of the Caribbean School of Medicine (“AUC”) basic science curriculum revenues are recognized ratably on a straight-line basis over the academic term. The clinical portion of the Ross University and AUC education programs are conducted under the supervision of U.S. teaching hospitals and veterinary schools. Ross University and AUC are responsible for the billing and collection of tuition from its students during the period of clinical education. Revenues are recognized on a weekly basis based on actual program attendance during the period of the clinical program. Fees paid to the hospitals and veterinary schools for supervision of Ross University and AUC students are charged to expense on the same basis. Carrington, Chamberlain and DeVry Brasil tuition and fee revenues are recognized ratably on a straight-line basis over the applicable academic term. The provision for refunds, which is reported as a reduction to Tuition Revenues in the Consolidated Statements of Income, and the provision for uncollectible accounts, which is included in the Cost of Educational Services in the Consolidated Statements of Income, also are recognized in the same ratable fashion as revenue to most appropriately match these costs with the tuition revenue in that term.
Estimates of DeVry’s expected refunds are determined at the outset of each academic term, based upon actual experience in previous terms, and monitored and adjusted as necessary within the term. If a student leaves school prior to completing a term, federal, state and/or Canadian provincial regulations and accreditation criteria permit DeVry to retain only a set percentage of the total tuition received from such student, which varies with, but generally equals or exceeds, the percentage of the term completed by such student. Payment amounts received by DeVry in excess of such set percentages of tuition are refunded to the student or the appropriate funding source. All refunds are netted against revenue during the applicable academic term. The allowance for uncollectible accounts is determined by analyzing the current aging of accounts receivable and historical loss rates on collections of accounts receivable. In addition, management considers projections of future receivable levels and collection loss rates. We monitor the inputs to this analysis periodically throughout the year. Provisions required to maintain the allowance at appropriate levels are charged to expense in each period as required. Related reserves with respect to uncollectible accounts and refunds totaled $50.4 million and $63.1 million at September 30, 2013 and September 30, 2012, respectively.
Sales of textbooks, electronic course materials, and other educational products, including training services and the Becker self-study products, are included in Other Educational Revenues in the Consolidated Statements of Income. Textbook, electronic course materials and other educational product revenues are recognized when the sale occurs. Revenues from training services, which are generally short-term in duration, are recognized when the training service is provided. In addition, fees from international licensees of the Becker programs are included in Other Educational Revenues and recognized when confirmation of course delivery is received.
7

Internal-Use Software Development Costs
DeVry capitalizes certain internal-use software development costs that are amortized using the straight-line method over the estimated lives of the software, not to exceed ~~seven~~five years. Capitalized costs include external direct costs of equipment, materials and services consumed in developing or obtaining internal-use software and payroll-related costs for employees directly associated with the internal-use software development project. Capitalization of such costs ceases at the point at which the project is substantially complete and ready for its intended purpose. Capitalized internal-use software development costs for projects not yet complete are included as construction in progress in the Land, Buildings and Equipment section of the Consolidated Balance Sheets. ~~Costs~~There were no costs capitalized during ~~the nine months ended March 31, 2013, were approximately $2.4 million. No costs were capitalized in~~ the three months ended ~~March 31,~~September 30, 2013. ~~Costs capitalized during~~For the three ~~and nine~~ months ended ~~March 31,~~September 30, 2012, capitalized costs were approximately ~~$4.7~~ $2.1million, ~~and $14.9 million, respectively. In both years these costs were~~ primarily related to Project DELTA (a new student information system for DeVry University and Chamberlain College of Nursing) ~~and the Becker e-Commerce system.~~. As of ~~March 31,~~September 30, 2013 and 2012, the net balance of capitalized software development costs was ~~$65.4~~ $57.5 and $73.0 million, ~~and $73.7 million,~~ respectively.
Perkins Program Fund
DeVry University is required, under federal aid program regulations, to make contributions to the Perkins Student Loan Fund, most recently at a rate equalto ~~33%~~33% of new contributions by the federal government. No new federal contributions were received ~~in fiscal years~~during the three months ended September 30, 2013 or 2012. DeVry carries its investment in such contributions at original values, net of allowances for expected losses on loan collections of ~~$2.6~~$2.6 million at ~~March 31,~~September 30, 2013 and 2012. The allowance for future loan losses is based upon an analysis of actual loan losses experienced since the inception of the program. As previous borrowers repay their Perkins loans, their payments are used to fund new loans thus creating a revolving loan fund. The federal contributions to this revolving loan program do not belong to DeVry and are not recorded onin its financial statements. Under current law, upon termination of the program by the federal government or withdrawal from future program participation by DeVry University, subsequent student loan repayments would be divided between the federal government and DeVry University to satisfy their respective cumulative contributions to the fund.
Non-Controlling Interest
DeVry maintains ~~an 83.5~~a 96.3 percent ownership interest in DeVry Brasil with the remaining ~~16.5~~3.7 percent ~~mostly~~ owned by ~~members~~some of the current DeVry Brasil senior management group. Prior to a June 2013 purchase of additional DeVry Brasil stock, DeVry’s ownership percentage was 93.5 percent. Beginning ~~January 2013,~~July 1, 2015, DeVry has the right to exercise a call option and purchase any remaining DeVry Brasil stock from DeVry Brasil management. Likewise, DeVry Brasil management has the right to exercise a put option and sell its remaining ownership interest in DeVry Brasil to DeVry. Since the put option is out of the control of DeVry, authoritative guidance requires the non-controlling interest, which includes the value of the put option, to be displayed outside of the equity section of the consolidated balance sheet. ~~DeVry intends on exercising its rights under this call option before the end of fiscal 2013~~
The DeVry Brasil management put option is being accreted to its redemption value ~~according to~~in accordance with the stock purchase agreement. The adjustment to increase or decrease the put option to its expected redemption value each reporting period is recorded to retained earnings in accordance with ~~the authoritative guidance. The fair value of this put option does not exceed its recorded redemption value.~~United States Generally Accepted Accounting Principles. The adjustment to increase or decrease the DeVry Brasil non-controlling interest each reporting period for its proportionate share of DeVry Brasil’s profit/loss will continue to flow through the consolidated income statement based on DeVry's historical non-controlling interest accounting policy.
The following is a reconciliation of the non-controlling interest balance (in thousands):
Three Months Ended
March 31, Nine Months Ended
March 31,
2013 2012 2013 2012
Balance at Beginning of period $ 8,901 $ 7,632 $ 8,242 $ 6,755
Net Income Attributable to Non-controlling Interest 339 173 1,110 416
Accretion of Non-controlling Interest Put Option (223 ) 363 (335 ) 997
Balance at End of period $ 9,017 $ 8,168 $ 9,017 $ 8,168
Three Months Ended
September 30,
2013 2012
Balance at Beginning of Period $ 854 $ 8,242
Net Income Attributable to Non-controlling Interest (45) (167)
Accretion of Non-controlling Interest Put Option 5,081 562
Balance at End of Period $ 5,890 $ 8,637
Earnings per Common Share
Basic earnings per share is computed by dividing net income ~~attributable to DeVry~~ by ~~the sum of~~ the weighted average number of common shares outstanding during the period plus unvested participating restricted share units. Diluted earnings per share is computed by dividing net income attributable to DeVry Inc. by the weighted average number of shares assuming dilution. Dilutive shares are computed using the Treasury Stock Method and reflect the additional shares that would be outstanding if dilutive stock options were exercised during the period. Excluded from the September 30, 2013 and 2012 computations of diluted earnings per share were options to purchase ~~2.1 million~~2,169,000 and ~~2.8 million~~2,498,000 shares of common stock, ~~for the three and nine months ended March 31, 2013, respectively, and 1.2 million and 1.6 million shares of common stock for the three and nine months ended March 31, 2012,~~ respectively. These outstanding options were excluded because the option exercise prices were greater than the average market price of the common shares or the assumed proceeds upon exercise under the Treasury Stock Method resulted in the repurchase of more shares than would be issued; thus, their effect would be anti-dilutive.
8

The following is a reconciliation of basic shares to diluted shares ~~(in~~(amounts in thousands):
Three Months Ended
March 31, Nine Months Ended
March 31,
2013 2012 2013 2012
Weighted Average Shares Outstanding 63,131 66,254 63,615 67,249
Unvested Participating Restricted Shares 845 446 755 413
Basic shares 63,976 66,700 64,370 67,662
Effect of Dilutive Stock Options 303 525 269 573
Diluted Shares 64,279 67,225 64,639 68,235
.
Three Months Ended
September 30,
2013 2012
Weighted Average Shares Outstanding 63,061 64,245
Unvested Participating Restricted Shares 922 628
Basic Shares 63,983 64,873
Effect of Dilutive Stock Options 527 236
Diluted Shares 64,510 65,109
Treasury Stock
DeVry’s Board of Directors has authorized stock repurchase programs on eight ~~occasions (see “Note 6 – Dividends and Stock Repurchase Program”). The first seven repurchase programs were all completed as of December 2012.~~occasions. The eighth repurchase program was approved by the DeVry Board of Directors on August 29, 2012 and commenced in November 2012. Share repurchases under this plan were suspended as of May 2013. Shares that are repurchased by DeVry are recorded as Treasury Stock at cost and result in a reduction of Shareholders’ Equity.
From time to time, shares of its common stock are delivered back to DeVry under a swap arrangement resulting from employees’ exercise of incentive stock options pursuant to the terms of the DeVry Stock Incentive Plans (see “Note 34 – Stock-Based Compensation”). These shares are recorded as Treasury Stock at cost and result in a reduction of Shareholders’ Equity.
Treasury shares are reissued on a monthly basis at market value, to the DeVry Employee Stock Purchase Plan in exchange for employee payroll deductions. When treasury shares are reissued, DeVry uses an average cost method to reduce the Treasury Stock balance. Gains on the difference between the average cost and the reissuance price are credited to Additional Paid-in Capital. Losses on the difference are charged to Additional Paid-in Capital to the extent that previous net gains from reissuance are included therein; otherwise such losses are charged to Retained Earnings.
Accumulated Other Comprehensive ~~(Loss) Income~~Loss
Accumulated Other Comprehensive ~~(Loss) Income~~Loss is ~~composed~~comprised of the change in cumulative translation ~~adjustments~~adjustment and unrealized gains and losses on available-for-sale marketable securities, net of the effects of income taxes.
The Accumulated Other Comprehensive Loss balance at ~~March 31,~~September 30, 2013, consists of ~~$5.9~~$17.7 million of cumulative translation losses ($~~5.3~~17.2 million attributable to DeVry Inc. and ~~$0.6~~$0.5 million attributable to non-controlling interests) and ~~$0.1~~$0.1 million of unrealized ~~losses~~gains on available-for-sale marketable securities, net of tax of ~~$0.1~~$0.1 million and all attributable to ~~DeVry.~~DeVry Inc. At ~~March 31,~~September 30, 2012, ~~the Accumulated Other Comprehensive Income~~this balance consisted of ~~$3.4~~$5.2 million of cumulative translation ~~gains~~losses ($~~2.5~~4.6 million attributable to DeVry Inc. and ~~$0.9~~$0.6 million attributable to non-controlling interests) and $0.2 million of unrealized losses on available-for-sale marketable securities, net of tax of ~~$0.1~~$0.1 million and all attributable to ~~DeVry.~~
DeVry Inc.
Advertising Expense
Advertising costs are recognized as expense in the period in which materials are purchased or services are performed. Advertising expense, which is included in student services and administrative expense in the Consolidated Statements of Income, was ~~$69.2~~$73.0 million, and ~~$199.0~~$66.7 million for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2013 ~~respectively,~~ and ~~$70.6 million and $203.4 million for the three and nine months ended March 31,~~ 2012, respectively.
Recent Accounting Pronouncements

~~Recent Accounting Pronouncements~~
In ~~April~~July 2013, the ~~FASB~~Financial Accounting Standards Board issued ~~authoritative~~Accounting Standards Update No. 2013-11: “Income Taxes (Topic 740): Presentation of Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. This guidance ~~updating disclosure requirements for Comprehensive Income. The amendments do~~requires an unrecognized tax benefit related to a net operating loss carryforward, a similar tax loss or a tax credit carryforward to be presented as a reduction to a deferred tax asset, unless the tax benefit is not ~~change~~available at the ~~current requirements for~~ reporting ~~net~~date to settle any additional income ~~or other comprehensive income in financial statements. However,~~taxes under the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the facetax law of the ~~statement where net income~~applicable tax jurisdiction. The guidance is ~~presented or~~effective for the fiscal years and interim periods beginning December 15, 2013 with early adoption permitted. Management is in the ~~notes, significant amounts reclassified out~~process of ~~accumulated other comprehensive income by~~evaluating the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. The guidance will be effective for our interim and annual reporting period beginning July 1, 2013. Applicationeffects of this guidance but does not believe it will ~~not~~ have a ~~material effect~~significant impact on DeVry’s consolidated financial statements.
9

Reclassifications
The previously reported amounts in the Consolidated Balance Sheets and Consolidated Statements of Cash Flows for Advance Tuition Payments and Deferred Tuition Revenue have been combined as Deferred and Advance Tuition to conform to the current presentation format.

NOTE 3:  ASSETS AND LIABILITIES OF BUSINESS HELD FOR SALE AND DISCONTINUED OPERATIONS
Assets and Liabilities of Business Held for Sale
During the fourth quarter of fiscal year 2013, management determined its Advanced Academics Inc. (“AAI”) subsidiary no longer coincides with DeVry’s long-term strategic plan and management is in the process of divesting AAI. As such, the assets and operations of AAI are considered “held for sale” at September 30, 2013.The assets and liabilities of AAI are separately disclosed on the Consolidated Balance Sheets as “Held for Sale”. The following is a summary of balance sheet information of “held for sale” assets and liabilities at September 30, 2013 and 2012 (dollars in thousands).
September 30, June 30, September 30,
2013 2013 2012
ASSETS:
Current Assets:
Cash and Cash Equivalents $ (84) $ 568 $ (6)
Accounts Receivable, Net 12,192 12,050 23,682
Deferred Income Taxes, Net 3,053 2,757 201
Prepaid Expenses and Other 736 844 4,551
Fair Market Value Reserve (10,844) - -
Total Current Assets of Business Held for Sale 5,053 16,219 28,428
Land, Building and Equipment of Business Held for Sale, Net - - 5,879
Other Assets:
Deferred Income Taxes, Net 1,509 2,602 -
Other Assets 3,715 3,185 -
Fair Market Value Reserve (3,715) - -
Total Other Assets of Business Held for Sale 1,509 5,787 -
Total Assets of Business Held for Sale $ 6,562 $ 22,006 $ 34,307

LIABILITIES:
Current Liabilities:
Accounts Payable $ 279 $ 178 $ 562
Accrued Salaries, Wages and Benefits 415 482 411
Accrued Expenses 4 47 34
Deferred and Advance Tuition 1,483 6 3,538
Fair Market Value Reserve (2,181) - -
Total Current Liabilities of Business Held for Sale - 713 4,545
Other Liabilities:
Deferred Rent and Other 41 112 144
Fair Market Value Reserve (41) - -
Total Other Liabilities of Business Held for Sale - 112 144
Liabilities of Business Held for Sale $ - $ 825 $ 4,689
10

Discontinued Operations
The operating results of AAI are separately disclosed in the Consolidated Income Statements as “Discontinued Operations – Loss from Operations of Held for Sale Component”. The following is a summary of operating results of the discontinued operations for the periods ended September 30, 2013 and 2012 (dollars in thousands).
For the Three Months
Ended September 30,
2013 2012
DISCONTINUED OPERATIONS:
Loss from Operations of Held for Sale Component $ (2,847) $ (3,658)
Asset Impairment Charge (Note 5) (13,477) -
Income Tax Benefit 996 1,484
Loss from Discontinued Operations, Net of Income Taxes $ (15,328) $ (2,174)

NOTE 3:4:  STOCK-BASED COMPENSATION
DeVry maintains four stock-based award plans: the 1994 Stock Incentive Plan, the 1999 Stock Incentive Plan, the 2003 Stock Incentive Plan and the Amended and Restated Incentive Plan of 2005. Under these plans, directors, key executives and managerial employees are eligible to receive incentive stock or nonqualified options to purchase shares of DeVry’s common stock. The Amended and Restated Incentive Plan of 2005 also permits the award of stock appreciation rights, restricted stock, performance stock and other stock and cash based compensation. Though options remain outstanding under the 1994, 1999 and 2003 Stock Incentive Plans, no further stock based awards will be issued from these plans. The 2003 Stock Incentive ~~Plan~~Plans and the Amended and Restated Incentive Plan of 2005 are administered by the Compensation Committee of the Board of Directors. Options are granted for terms of up to 10 years and can vest immediately or over periods of up to five years. The requisite service period is equal to the vesting period. The option price under the plans is the fair market value of the shares on the date of the grant.
DeVry accounts for options granted to retirement eligible employees that fully vest upon an employees’ retirement under the non-substantive vesting period approach to these options. Under this approach, the entire compensation cost is recognized at the grant date for options issued to retirement eligible employees.
At ~~March 31,~~September 30, 2013, ~~5,377,006~~6,245,754 authorized but unissued shares of common stock were reserved for issuance under DeVry’s stock incentive plans.
Stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as expense over the ~~employees~~employee requisite service period, reduced by an estimated forfeiture rate.
The following is a summary of options activity for the ~~nine~~three months ended ~~March 31,~~September 30, 2013:
Weighted
Weighted Average Aggregate
Average Remaining Intrinsic
Options Exercise Contractual Value
Outstanding Price Life in Years ($000)
Outstanding at July 1, 2012 2,939,772 $ 36.37
Options Granted 860,610 $ 18.63
Options Exercised (93,341 ) $ 18.99
Options Canceled (183,111 ) $ 38.80
Outstanding at March 31, 2013 3,523,930 $ 32.37 6.17 $ 18,612
Exercisable at March 31, 2013 2,095,453 $ 35.07 4.43 $ 7,808
Options
Outstanding Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual
Life Aggregate
Intrinsic
Value
($000)
Outstanding at July 1, 2013 3,327,668 $ 32.64
Options Granted 556,050 $ 28.32
Options Exercised (58,157) $ 21.79
Options Canceled and Forfeited (30,629) $ 39.98
Outstanding at September 30, 2013 3,794,932 $ 32.13 6.45 $ 16,358
Exercisable at September 30, 2013 2,352,083 $ 35.32 4.88 $ 8,143
11

The following is a summary of stock appreciation rights activity for the ~~nine~~three months ended ~~March 31,~~September 30, 2013:
Weighted
Stock Weighted Average Aggregate
Appreciation Average Remaining Intrinsic
Rights Exercise Contractual Value
Outstanding Price Life in Years ($000)
Outstanding at July 1, 2012 - $ -
Rights Granted 117,015 $ 42.87
Rights Exercised - $ -
Rights Canceled - $ -
Outstanding at March 31, 2013 117,015 $ 42.87 7.20 $ 21
Exercisable at March 31, 2013 67,614 $ 47.32 6.20 $ -
Stock
Appreciation
Rights
Outstanding Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual
Life Aggregate
Intrinsic
Value
($000)
Outstanding at July 1, 2013 117,015 $ 42.87
Rights Granted 1,050 $ 28.32
Rights Exercised - $ -
Rights Canceled and Forfeited - $ -
Outstanding at September 30, 2013 118,065 $ 42.74 6.45 $ 3
Exercisable at September 30, 2013 85,855 $ 45.25 5.45 $ -
The total intrinsic value of options exercised for the ~~nine~~three months ended ~~March 31,~~September 30, 2013 and 2012 was ~~$0.6~~$0.5 million, and ~~$4.1~~$0.3 million, respectively.
The fair ~~values~~value of DeVry’s stock-based awards was estimated using a binomial model. This model uses historical cancellation and exercise experience of DeVry to determine the option value. It also takes into account the illiquid nature of employee options during the vesting period.
The weighted average estimated grant date fair values for options granted at market price under DeVry’s stock option plans during the first ~~nine~~three months of fiscal years 2014 and 2013 were $11.68and ~~2012 were $7.62 and $17.41,~~$7.61, per share, respectively. The fair ~~value~~values of DeVry’s stock option awards were estimated assuming the following weighted average assumptions:
Fiscal Year
2013 2012
Expected Life (in Years) 6.63 6.65
Expected Volatility 43.67 % 42.27 %
Risk-free Interest Rate 1.03 % 1.52 %
Dividend Yield 0.61 % 0.38 %
Pre-vesting Forfeiture Rate 3.00 % 5.00 %
Fiscal Year
2013 2012
Expected life (in years) 6.58 6.63
Expected volatility 43.76 % 43.67 %
Risk-free interest rate 2.16 % 1.03 %
Dividend yield 0.90 % 0.61 %
Pre-vesting forfeiture rate 3.00 % 3.00 %
The expected life of the options granted is based on the weighted average exercise life with age and salary adjustment factors from historical exercise behavior. DeVry’s expected volatility is computed by combining and weighting the implied market volatility, the most recent volatility over the expected life of the option grant, and DeVry’s long-term historical volatility. The pre-vesting forfeiture rate is based on DeVry’s historical stock option forfeiture experience.
If factors change and different assumptions are employed in the valuation of stock-based awards in future periods, the stock-based compensation expense that DeVry records may differ significantly from what was recorded in previous periods.
12

During the first ~~nine months~~quarter of fiscal year ~~2013,~~2014, DeVry granted ~~697,940 units~~399,860 shares of restricted stock to selected employees and non-employee directors. Of these, ~~121,500~~ 73,010are performance based ~~units~~shares which are earned by the recipients over a three year period based on achievement of specified academic and student outcome goals when a minimum level of DeVry ~~performance targets.~~return on invested capital is attained. The remaining ~~576,440 units~~326,850shares and all other previously granted ~~units~~shares of restricted stock ~~that are not performance-based~~ are subject to restrictions which lapse ratably over three and four-year periods on the grant anniversary date based on the recipient’s continued service on the Board of Directors or employment with DeVry, or upon retirement. During the restriction period, the recipient of the non-performance based ~~units~~shares shall have ~~a beneficial interest in the restricted stock and all associated rights and privileges of a stockholder, including~~ the right to receive ~~dividends. These rights do~~dividend equivalents. This right does not pertain to the performance based ~~units.~~shares. The following is a summary of restricted stock ~~unit~~ activity for the ~~nine months~~year ended ~~March 31,~~September 30, 2013:
Weighted
Restricted Average
Stock Grant Date
Outstanding Fair Value
Nonvested at July 1, 2012 619,261 $ 42.06
Units Granted 697,940 $ 19.37
Units Vested (198,230 ) $ 45.51
Units Canceled (48,632 ) $ 33.37
Nonvested at March 31, 2013 1,070,339 $ 27.02
Restricted
Stock
Outstanding Weighted
Average
Grant
Date Fair
Value
Nonvested at July 1, 2013 1,058,443 $ 27.03
Shares Granted 399,860 $ 28.32
Shares Vested (269,543) $ 31.07
Shares Cancelled (23,986) $ 27.89
Nonvested at September 30, 2013 1,164,774 $ 26.52
The following table shows total stock-based compensation expense included in the Consolidated Statements of ~~Income~~Earnings (dollars in thousands):
For the Three Months For the Nine Months
Ended March 31, Ended March 31,
2013 2012 2013 2012
Cost of Educational Services $ 1,190 $ 1,292 $ 3,869 $ 4,125
Student Services and Administrative Expense 2,530 2,745 8,221 8,766
Income Tax Benefit (1,281 ) (1,340 ) (3,976 ) (4,177 )
Net Stock-Based Compensation Expense $ 2,439 $ 2,697 $ 8,114 $ 8,714
For the Three Months
Ended September 30,
2013 2012
Cost of Educational Services $ 1,861 $ 1,829
Student Services and Administrative Expense 3,955 3,887
5,816 5,716
Income Tax Benefit (1,946) (1,854)
Net Stock-Based Compensation Expense $ 3,870 $ 3,862
As of ~~March 31,~~September 30, 2013, ~~$26.2~~$32.8 million of total pre-tax unrecognized compensation costs related to non-vested awards is expected to be recognized over a weighted average period of ~~2.5~~2.7 years. The total fair value of options ~~and shares~~ vested during the ~~nine months~~quarters ended ~~March 31,~~September 30, 2013 and 2012 was approximately ~~$9.0~~$6.3 million and ~~$8.9~~ $9.2 million, respectively.
There were no capitalized stock-based compensation costs at ~~March 31,~~September 30, 2013 and 2012.
DeVry has an established practice of issuing new shares of common stock to satisfy share option exercises. However, DeVry also may issue treasury shares to satisfy option exercises under certain of its plans.

NOTE 4:5: FAIR VALUE MEASUREMENTS
DeVry has elected not to measure any assets or liabilities at fair value other than those required to be measured at fair value on a recurring basis, ~~and~~ assets measured at fair value on a non-recurring basis such as goodwill and intangible ~~assets.~~assets and assets of businesses where the long-term value of the operations have been impaired. Management has fully considered all authoritative guidance when determining the fair value of DeVry’s financial assets as of ~~March 31,~~September 30, 2013.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.  The guidance specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques.  Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions.  The guidance establishes fair value measurement classifications under the following hierarchy:
Level 1–Quoted prices for identical instruments in active markets.
13

Level 2– Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.
Level 3–3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.
When available, DeVry uses quoted market prices to determine fair value, and such measurements are classified within Level 1.  In some cases where market prices are not available, DeVry makes use of observable market based inputs to calculate fair value, in which case the measurements are classified within Level 2.  If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market-based parameters such as interest rates and yield curves.  These measurements are classified within Level 3.
Fair value measurements are classified according to the lowest level input or value-driver that is significant to the valuation.  A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable.
Assets measured at fair value on a non-recurring basis include goodwill and indefinite-lived intangibles arising from a business combination. These assets are not amortized and charged to expense over time. Instead, goodwill and indefinite-lived intangibles must be reviewed annually for impairment or more frequently if circumstances arise indicating potential impairment. ~~The annual~~This impairment review was most recently completed during the fourth quarter of fiscal year ~~2012.~~2013. See “Note 8: Intangible Assets” ~~to the Consolidated Financial Statements contained in DeVry’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012~~ for further discussion on the impairment review including valuation techniques and assumptions.
During the first quarter of fiscal year 2014, it was determined that net assets of AAI reporting unit had been impaired.This determination was made after review of the updated third party offers to purchase the assets of the business. Assets measured at fair value in circumstances where the long-term value of a business has been impaired include the assets of AAI. To determine the fair value of the AAI assets, management incorporated assumptions that a reasonable market participant would use regarding the impact of the current operating losses and the increased uncertainty impacting future operations. We used significant unobservable inputs (Level 3) in our analysis including third party offers received to acquire the assets of AAI along with estimated costs to dispose of the assets. Based on this analysis, the fair market value less the costs to sell exceeded the carrying value by approximately $13.5 million. As a result management recorded a pre-tax $13.5 million asset impairment charge in the first quarter of fiscal year 2014. See “Note 3: Assets and Liabilities of Business Held for Sale and Discontinued Operations” for further discussions on AAI.
The following tables present DeVry’s assets and liabilities at ~~March 31,~~September 30, 2013, ~~which~~that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (dollars in thousands).
March 31, 2013 Level 1 Level 2 Level 3
Cash and Cash Equivalents $ 277,994 $ - $ -
Available for Sale Investments:
Marketable Securities, short-term 2,952 - -
ATC Earn-out Liability - - 4,428
FAVIP Contingent Consideration - - 2,769
Total Financial Assets and Liabilities at Fair Value $ 280,946 $ - $ 7,197
Level 1 Level 2 Level 3
Cash and Cash Equivalents $ 308,544 $ - $ -
Available for Sale Investments:
Marketable Securities, short-term 3,104 - -
Favip Contingent Consideration - - 2,519
Total Financial Assets at Fair Value $ 311,648 $ - $ 2,519
Cash ~~equivalents~~Equivalents and investments in short-term ~~marketable securities~~Marketable Securities are valued using a market approach based on the quoted market prices of identical instruments. The ATC earn-out liability is valued using standard present value techniques using a discount rate of 6.2%, which management believes a reasonable market participant would assume for this type of liability and duration. The Faculdade do Vale do Ipojuca (“FAVIP”) contingent considerationFavip Contingent Consideration is valued at management’s estimate of the percentage likelihood of the contingency being realized. Management assumes that there is a ~~percentage~~70 percent likelihood that Favip will receive status of ~~its potential settlement price based on the estimated probability of FAVIP achieving~~a university center ~~status. See “Note 7: Business Combinations” for further information on these liabilities.~~
and that the contingency will be payable.
The fair value of the institutional loans receivable included in Accounts Receivable, ~~net~~Net and Other Assets on the Consolidated Balance Sheet as of ~~March 31,~~September 30, 2013 is estimated by discounting the future cash flows using current rates for similar arrangements. As of ~~March 31,~~September 30, 2013, the carrying value and the estimated fair value of these financial instruments was approximately ~~$36.2~~$44.5 million. See “Note 5:6: Financing Receivables” for further discussion on these institutional loans receivable.
14

Below is a roll-forward of liabilities measured at fair value using Level 3 inputs for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2013 (dollars in thousands). The amount recorded as ~~interest expense in fiscal 2013 is classified in the Interest and Other (Expense) Income section of the Consolidated Statements of Income. The amount recorded as~~ foreign currency translation ~~loss~~gain is classified as student services and administrative expense in the Consolidated Statements of Income.
Long-Term Liabilities
Three Months
Ended March
31, 2013 Nine Months
Ended March
31, 2013

Balance at Beginning of Period $ 7,419 $ 4,361
Total Realized Losses Included in Income:
Interest Expense- ATC Accretion 47 187
Foreign Currency Translation Loss (269 ) (120 )
Transfers into Level 3:
FAVIP Contingent Consideration - 2,769
Balance at March 31, 2013 $ 7,197 $ 7,197
Accrued
Expenses

Balance at Beginning of Period $ 2,509
Total Unrealized Gains (Losses) Included in AOCI:
Foreign Currency Translation Changes 10
Balance at September 30, 2013 $ 2,519

NOTE 5:6: FINANCING RECEIVABLES
DeVry’s institutional loan programs are available to students at its DeVry University, Chamberlain College of Nursing, Carrington College and Carrington College of California schools as well as selected students at Ross University School of Medicine and Ross University School of Veterinary Medicine. These loan programs are designed to assist students who are unable to completely cover educational costs by other means. These loans may be used for tuition, books, and fees, and are available only after all other student financial assistance has been applied toward those purposes. In addition, Ross University School of Medicine and Ross University School of Veterinary Medicine loans may be used for students’ living expenses. Repayment plans for institutional loan program balances are developed to address the financial circumstances of the particular student. Interest charges accrue each month on the unpaid balance. DeVry University, Chamberlain College of Nursing, Carrington College and Carrington College of California require that students begin repaying a small portion of the loans while they are still in school, and then payments increase upon completing or departing the program. After a student leaves school, the student typically will have a monthly installment repayment plan with all balances due within 12 to 60 months ~~or 15 to 25 years for Ross University School of Medicine and Ross University of Veterinary Medicine borrowers.~~. In addition, the Becker CPA Review ~~and Falcon Physician Review courses~~Course can be financed through Becker with a zero percent, 18-month ~~and 6-month, respectively,~~ term loan.
Reserves for uncollectible loans are determined by analyzing the current aging of accounts receivable and historical loss rates of loans at each educational institution. Management performs this analysis periodically throughout the year. Since all of DeVry’s financing receivables are generated through the extension of credit to students to fund educational costs, all such receivables are considered part of the same loan portfolio.
The following table details the institutional loan balances along with the related allowances for credit losses as of ~~March 31,~~September 30, 2013 and 2012 (dollars in thousands).
As of March 31,
2013 2012
Gross Institutional Student Loans $ 58,003 $ 53,486

Allowance for Credit Losses (21,768 ) (20,940 )

Net Institutional Student Loans $ 36,235 $ 32,546
As of September 30,
2013 2012
Gross Institutional Student Loans $ 64,023 $ 56,106
Allowance for Credit Losses (19,476) (18,145)
Net Institutional Student Loans $ 44,547 $ 37,961
Of the net balances above, ~~$19.2~~$20.8 million ~~was~~and $19.5 million were classified as Accounts Receivable, Net in the Consolidated Balance Sheets at ~~both March 31,~~September 30, 2013 and ~~2012. $17.0~~2012, respectively, and $23.7 million and ~~$13.4~~$18.5 million, representing amounts due beyond one year, were classified in the Consolidated Balance Sheets as Other Assets at ~~March 31,~~September 30, 2013 and 2012, ~~respectively, as the amounts are due beyond the next twelve months.~~
respectively.
15

The following tables detail the credit risk profiles of the institutional student loan balances based on payment activity and provide an aging analysis of past due institutional student loans as of ~~March 31,~~September 30, 2013 and 2012. Loans are considered nonperforming if they are more than 120 days past due (dollars in thousands).
As of March 31,
2013 2012
Institutional Student Loans:
Performing $ 42,545 $ 39,987
Nonperforming 15,458 13,499
Total Institutional Student Loans $ 58,003 $ 53,486
30-59
Days
Past
Due 60-89
Days
Past
Due 90-119
Days
Past
Due Greater
Than
120 Days
Past Due Total
Past
Due Current Total
Institutional
Student
Loans
Institutional Student Loans:
March 31, 2013 $ 3,838 $ 1,214 $ 783 $ 15,458 $ 21,293 $ 36,710 $ 58,003
March 31, 2012 $ 3,551 $ 1,241 $ 1,127 $ 13,499 $ 19,418 $ 34,068 $ 53,486
~~NOTE 6: DIVIDENDS AND STOCK REPURCHASE PROGRAM~~
~~During fiscal years 2013 and 2012, the DeVry Board of Directors (the “Board”) declared the following cash dividends. Future dividends will be at the discretion of the Board of Directors.~~
Declaration Date Record
Date Payment Date Dividend
Per Share Total Dividend
Amount
(In Thousands)
November 2, 2011 December 8, 2011 January 10, 2012 $ 0.15 $ 10,039
May 14, 2012 June 21, 2012 July 12, 2012 $ 0.15 $ 9,794
November 8, 2012 November 30, 2012 December 19, 2012 $ 0.17 $ 10,913
~~DeVry has repurchased shares under the following programs as of December 31, 2012:~~
Date Authorized Shares Repurchased Total Cost (millions)
November 15, 2006 908,399 $ 35.0
May 13, 2008 1,027,417 50.0
November 11, 2009 972,205 50.0
August 11, 2010 1,103,628 50.0
November 10, 2010 968,105 50.0
May 20, 2011 2,396,143 100.0
November 2, 2011 3,478,299 100.0
August 29, 2012 544,072 14.7
Totals 11,398,268 $ 449.7
In October 2012, DeVry completed its seventh share repurchase program. On August 29, 2012, the Board authorized an eighth share repurchase program, which will allow DeVry to repurchase up to $100 million of its common stock through December 31, 2014. This program commenced in November 2012. The timing and amount of any repurchase will be determined by management based on its evaluation of market conditions and other factors. These repurchases may be made through the open market, including block purchases, in privately negotiated transactions, or otherwise. The buyback will be funded through available cash balances and/or borrowings and may be suspended or discontinued at any time.
Shares of stock repurchased under the programs are held as treasury shares. These repurchased shares have reduced the weighted average number of shares of common stock outstanding for basic and diluted earnings per share calculations.
As of September 30,
2013 2012
Institutional Student Loans:
Performing $ 47,670 $ 42,008
Nonperforming 16,353 14,098
Total Institutional Student Loans $ 64,023 $ 56,106
30-59
Days
Past Due 60-89
Days
Past Due 90-119
Days
Past Due Greater
Than
120 Days
Past Due Total
Past
Due Current Total
Institutional
Student
Loans
Institutional Student Loans:
September 30, 2013 $ 4,283 $ 1,725 $ 2,068 $ 16,353 24,429 $ 39,594 $ 64,023
September 30, 2012 $ 3,876 $ 1,579 $ 1,330 $ 14,098 20,883 $ 35,223 $ 56,106

NOTE 7:  BUSINESS COMBINATIONS
Faculdade ~~do Vale do Ipojuca~~Diferencial Integral
On ~~September 3, 2012,~~July 1, 2013, DeVry Educacional do Brasil S/A (f/k/a Fanor-Faculdades Nordeste S/A) ~~(“DeVry Brasil”)~~(DeVry Brasil), a subsidiary of DeVry, acquired the~~business operations~~ stock of Faculdade ~~do Vale do Ipojuca~~Diferencial Integral (“~~FAVIP”~~Facid”), ~~which is~~ located in the state of ~~Pernambuco, Brazil.~~Piaui, Brazil, for approximately ~~Under the terms of the agreement, DeVry Brasil paid approximately $32.2~~$16.1 million in ~~cash in exchange for the stock of FAVIP.~~cash. In addition, DeVry Brasil will be required to make an additional ~~payment~~payments of approximately ~~$3.9~~$9.0 million over the next ~~12 months should FAVIP receive status of a university center. As of March 31, 2013, $2.9 million is accrued for this additional payment.~~
~~FAVIP~~four years. Facid currently serves ~~about 5,000~~approximately 2,500 students ~~and offers more than 30 undergraduate and graduate programs~~ at two campuses ~~located in Caruaru, the state’s second largest city. The institution’s largest programs are~~ in the ~~areas~~city of Teresina, and offers degree programs primarily in healthcare, including a Doctor of Medicine (M.D.)program. Facid also offers undergraduate degrees in other healthcare fields such as nursing, pharmacy, and dentistry, as well as a law ~~business, psychology and nutrition.~~program. Facid joins DeVry Brasil, which now operates six institutions at ~~The acquisition~~13 campuses in northeast Brazil. With the addition of ~~FAVIP is consistent with DeVry's growth and diversification strategy, increasing its international presence in Brazil.~~Facid, these institutions provide education programs to nearly 30,000
students.
The operations of ~~FAVIP~~Facid are included in DeVry’s International ~~K-12~~ and Professional Education segment. The results of ~~FAVIP��s~~Facid’s operations have been included in the Consolidated Financial Statements of DeVry since the date of acquisition.
The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition (dollars in thousands).
At September 3,
2012
Current Assets $ 4,414
Property and Equipment 2,897
Other Long-term Assets 844
Intangible Assets 13,571
Goodwill 16,120
Total Assets Acquired 37,846
Liabilities Assumed 5,677
Net Assets Acquired $ 32,169
At July 1, 2013
Current Assets $ 4,699
Property and Equipment 2,037
Other Long-term Assets 167
Intangible Assets 17,723
Goodwill 8,238
Total Assets Acquired 32,864
Liabilities Assumed 16,801
Net Assets Acquired $ 16,063
16

Goodwill, which represents the excess of cost over the fair value of the net tangible and intangible assets acquired, was all assigned to the DeVry Brasil reporting unit which is classified within the International ~~K-12~~ and Professional Education segment. Factors that contributed to a purchase price resulting in the recognition of goodwill include ~~FAVIP’s~~Facid’s strategic fit into DeVry’s expanding presence in northeast Brazil, the reputation of the educational programs and the acquired assembled ~~workforce.None~~workforce.None of the goodwill acquired is expected to be deductible for income tax purposes. Of the ~~$13.6~~$17.7 million of acquired intangible assets, ~~$10.2~~$15.2 million was assigned to Accreditations and ~~$1.1~~$1.9 million was assigned to Trade Names, both of which have been determined not to be subject to amortization. The remaining acquired intangible asset was determined to be subject to amortization with an average useful life of approximately 15 years. Their values and estimated useful lives by asset type are as follows (dollars in thousands):
At July 1, 2013
Value
Assigned Estimated
Useful Life

Clinical Agreement $ 583 15 years
There is no pro forma presentation of operating results for this acquisition due to the insignificant effect on consolidated operations.
Faculdade do Vale do Ipojuca
On September 3, 2012, DeVry Educacional do Brasil S/A (f/k/a, Fanor-Faculdades Nordeste S/A) (“DeVry Brasil”), a subsidiary of DeVry acquired the business operations of Faculdade do Vale do Ipojuca (“Favip”), which is located in the state of Pernambuco, Brazil. Under the terms of the agreement, DeVry Brasil paid approximately $32.2 million in cash in exchange for the stock of Favip.In addition, DeVry Brasil will be required to make an additional payment of approximately $3.9 million over the next 12 months should Favip receive status of a university center. As of September 30, 2013, $2.5 million is accrued for this additional payment.
Favip currently serves about 5,000 students and offers more than 30 undergraduate and graduate programs at two campuses located in Caruaru, the state’s second largest city. The institution’s largest programs are in the areas of law, business, psychology and nutrition. The acquisition of Favip is consistent with DeVry's growth and diversification strategy, increasing its international presence in Brazil.
The operations of Favip are included in DeVry’s International and Professional Education segment. The results of Favip’s operations have been included in the Consolidated Financial Statements of DeVry since the date of acquisition.
The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition (dollars in thousands).
At September 3,
2012
Current Assets $ 4,414
Property and Equipment 2,897
Other Long-term Assets 844
Intangible Assets 13,571
Goodwill 16,120
Total Assets Acquired 37,846
Liabilities Assumed 5,677
Net Assets Acquired $ 32,169
17

Goodwill, which represents the excess of cost over the fair value of the net tangible and intangible assets acquired, was all assigned to the DeVry Brasil reporting unit which is classified within the International and Professional Education segment. Factors that contributed to a purchase price resulting in the recognition of goodwill include Favip’s strategic fit into DeVry’s expanding presence in northeast Brazil, the reputation of the educational programs and the acquired assembled workforce.None of the goodwill acquired is expected to be deductible for income tax purposes. Of the $13.6 million of acquired intangible assets, $10.2 million was assigned to Accreditations and $1.1 million was assigned to Trade Names, both of which have been determined not to be subject to amortization. The remaining acquired intangible assets were determined to be subject to amortization with an average useful life of approximately 4.9 years. Their values and estimated useful lives by asset type are as follows (dollars in thousands):
At September 3, 2012
Value
Assigned Estimated
Useful Lives

Student Relationships $ 2,257 5 years
Curriculum 79 2 years
At September 3, 2012
Value
Assigned Estimated
Useful Lives
Student Relationships $ 2,257 5 years
Curriculum 79 2 years
There is no pro forma presentation of operating results for this acquisition due to the insignificant effect on consolidated operations.

NOTE 8:  INTANGIBLE ASSETS
Intangible assets relate mainly to acquired business operations. These assets consist of the acquisition fair value of certain identifiable intangible assets acquired and goodwill. Goodwill represents the excess of the purchase price over the fair value of assets acquired less liabilities assumed.
Intangible assets consist of the following (dollars in thousands):
As of March 31, 2013
Gross
Carrying
Amount Accumulated
Amortization Weighted Avg.
Amortization
Period
Amortizable Intangible Assets:
Student Relationships $ 82,719 $ (73,818 ) (1 )
Customer Relationships 3,364 (600 ) 12 years
Non-compete Agreements 2,505 (1,749 ) (2 )
Curriculum/Software 5,628 (4,087 ) 5 years
Outplacement Relationships 3,900 (1,179 ) (3 )
Trade Names 6,074 (4,766 ) 8.5 years
Total $ 104,190 $ (86,199 )
Indefinite-lived Intangible Assets:
Trade Names $ 39,238
Trademark 1,645
Ross Title IV Eligibility and Accreditations 14,100
Intellectual Property 13,940
Chamberlain Title IV Eligibility and Accreditations 1,200
Carrington Title IV Eligibility and Accreditations 71,100
AUC Title IV Eligibility and Accreditations 100,000
DeVry Brasil Accreditation 32,884
Total $ 274,107
September 30, 2013
Gross
Carrying
Amount Accumulated
Amortization Weighted Avg.
Amortization
Period
Amortizable Intangible Assets:
Student Relationships $ 81,619 $ (76,130) (a)
Customer Relationships 3,554 (813) 12 years
Non-compete Agreements 2,517 (1,859) (b)
Curriculum/Software 5,648 (4,424) 5 years
Outplacement Relationships 3,900 (1,309) 15 years
Trade Names 5,838 (4,828) (c)
Clinical Agreement 585 (10) 15 years
Total $ 103,661 $ (89,373)
Indefinite-lived Intangible Assets:
Trade Names $ 40,894
Trademark 1,645
Ross Title IV Eligibility and Accreditations 14,100
Intellectual Property 13,940
Chamberlain Title IV Eligibility and Accreditations 1,200
Carrington Title IV Eligibility and Accreditations 67,200
AUC Title IV Eligibility and Accreditations 100,000
DeVry Brasil Accreditations 45,152
Total $ 284,131
(a) The total weighted average estimated amortization period for Student Relationships is 5 years for DeVry Brasil (Fanor, Ruy Barbosa and AREA 1), 6 years for FBV, 5 years for Favip and 4 years for AUC. All other student student relationships are fully amortized as of September 30, 2013.
(b) The total weighted average estimated amortization period for Non-compete Agreements is 1.5 years for ATC and 5 years for Falcon. All other and Non-compete agreements are fully amortized as of September 30, 2013.
(c) The total weighted average estimated amortization period for Trade Names is 2 years for ATC, 8.5 years for DeVry Brasil (Fanor, Ruy Barbosa and AREA1) and 1.5 years for Falcon. All other trade names are fully amortized at September 30, 2013.
~~(1)~~18 The total weighted average estimated amortization period for Student Relationships is 5 years for DeVry Brasil (Fanor, Ruy Barbosa and AREA 1), 6 years for FBV, 5 years for FAVIP and 4 years for American University of the Caribbean School of Medicine ("AUC"). All other Student Relationships are fully amortized at March 31, 2013.

~~(2)~~ ~~The total weighted average estimated amortization period for Non-compete Agreements is 1.5 years for ATC and 5 years for Falcon. All other Non-compete Agreements are fully amortized at March 31, 2013.~~
~~(3)~~ The total weighted average estimated amortization period for Trade Names is 2 years for ATC, 8.5 years for DeVry Brasil (Fanor, Ruy Barbosa and AREA1) and 1.5 years for Falcon. All other Trade Names are fully amortized at March 31, 2013.
As of March 31, 2012
Gross
Carrying
Amount Accumulated
Amortization
Amortizable Intangible Assets:
Student Relationships $ 81,534 $ (66,683 )
Customer Relationships 3,121 (277 )
Customer Contracts 7,000 (5,921 )
License and Non-compete Agreements 2,775 (2,719 )
Curriculum/Software 4,775 (3,158 )
Outplacement Relationships 3,900 (919 )
Trade Names 6,327 (4,438 )
Total $ 109,432 $ (84,115 )
Indefinite-lived Intangible Assets:
Trade Names $ 39,667
Trademark 1,645
Ross Title IV Eligibility and Accreditations 14,100
Intellectual Property 13,940
Chamberlain Title IV Eligibility and Accreditations 1,200
Carrington Title IV Eligibility and Accreditations 71,100
AUC Title IV Eligibility and Accreditations 100,000
DeVry Brasil Accreditation 25,149
Total $ 266,801
As of September 30, 2012
Gross
Carrying
Amount Accumulated
Amortization
Amortizable Intangible Assets:
Student Relationships $ 82,700 $ (69,975)
Customer Relationships 3,550 (458)
License and Non-compete Agreements 3,716 (2,837)
Curriculum/Software 5,689 (3,763)
Outplacement Relationships 3,900 (1,049)
Trade Names 6,078 (4,546)
Total $ 105,633 $ (82,628)
Indefinite-lived Intangible Assets:
Trade Names $ 39,233
Trademark 1,645
Ross Title IV Eligibility and Accreditations 14,100
Intellectual Property 13,940
Chamberlain Title IV Eligibility and Accreditations 1,200
Carrington Title IV Eligibility and Accreditations 71,100
AUC Title IV Eligibility and Accreditations 100,000
DeVry Brasil Accreditations 32,831
Total $ 274,049
Amortization expense for amortized intangible assets was ~~$2.4~~$1.6 million and ~~$7.1~~$2.3 million for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2013 ~~respectively,~~ and ~~$2.8 million and $7.8 for the three and nine months ended March 31,~~ 2012, respectively. Estimated amortization expense for ~~amortizable~~amortized intangible assets for the next five fiscal years ending June 30, by reporting unit, is as follows (dollars in thousands):
Fiscal Year Becker DeVry
Brasil Carrington AUC Total
2013 $ 1,022 $ 3,010 $ 420 $ 4,973 $ 9,425
2014 903 2,173 295 3,346 6,717
2015 895 1,164 260 386 2,705
2016 856 730 260 - 1,846
2017 608 329 260 - 1,197
Fiscal Year AUC Becker DeVry
Brasil Carrington Total
2014 $ 3,347 $ 935 $ 1,882 $ 295 $ 6,459
2015 387 926 1,093 260 2,666
2016 - 892 701 260 1,853
2017 - 627 333 260 1,220
2018 - 355 210 260 825
Thereafter - 1,140 565 1,356 3,061
All amortizable intangible assets, except for the DeVry Brasil ~~(Fanor, Ruy Barbosa and AREA 1)~~ Student Relationships, the FBV Student Relationships, the ~~FAVIP~~Favip Student Relationships and the AUC Student Relationships, are being amortized on a straight-line basis.
17
The ~~amount~~amounts being amortized for ~~the DeVry Brasil~~theses Student Relationships isare based on the estimated progression of the students through the respective programs, giving consideration to the revenue and cash flow associated with both existing students and new applicants. This results in the basis being amortized at an annual rate for each of the years of estimated economic life as follows:
Fiscal Year
2009 8.3 %
2010 30.3 %
2011 24.7 %
2012 19.8 %
2013 13.6 %
2014 3.3 %
The amount being amortized for the FBV Student Relationships is based on the estimated progression of the students through the respective programs, giving consideration to the revenue and cash flow associated with both existing students and new applicants. This results in the basis being amortized at an annual rate for each of the years of estimated economic life as follows:
Fiscal Year
2012 11.9 %
2013 33.7 %
2014 25.9 %
2015 16.7 %
2016 9.0 %
2017 2.6 %
2018 0.2 %
The amount being amortized for the FAVIP Student Relationships is based on the estimated progression of the students through the respective programs, giving consideration to the revenue and cash flow associated with both existing students and new applicants. This results in the basis being amortized at an annual rate for each of the years of estimated economic life as follows:
Fiscal Year
2013 27.6 %
2014 32.2 %
2015 23.0 %
2016 13.2 %
2017 4.0 %
The amount being amortized for the AUC Student Relationships is based on the estimated progression of the students through the respective programs, giving consideration to the revenue and cash flow associated with both existing students and new applicants. This results in the basis being amortized at an annual rate for each of the years of estimated economic life as follows:
Fiscal Year
2012 38.0 %
2013 38.5 %
2014 21.6 %
2015 1.9 %
Fiscal
Year AUC DeVry
Brasil FBV FAVIP
2009 - 8.3 % - -
2010 - 30.3 % - -
2011 - 24.7 % - -
2012 38.0 % 19.8 % 11.9 % -
2013 38.5 % 13.6 % 33.7 % 27.6 %
2014 21.6 % 3.3 % 25.9 % 32.2 %
2015 1.9 % - 16.7 % 23.0 %
2016 - - 9.0 % 13.2 %
2017 - - 2.6 % 4.0 %
2018 - - 0.2 % -
19

Indefinite-lived intangible assets related to Trademarks, Trade Names, Title IV Eligibility, Accreditations and Intellectual Property are not amortized, as there are no legal, regulatory, contractual, economic or other factors that limit the useful life of these intangible assets to the reporting entity.
~~Authoritative guidance provides that~~
In accordance with U.S. generally accepted accounting principles, goodwill and indefinite-lived intangibles arising from a business combination are not amortized and charged to expense over time. Instead, ~~goodwill and indefinite-lived intangibles~~these assets must be reviewed annually for impairment or more frequently if circumstances arise indicating potential impairment. This annual impairment review was most recently completed during the fourth quarter of fiscal year ~~2012.~~2013. As a result, it was determined that the goodwill and the indefinite-lived intangible asset of the Carrington Colleges Group (“Carrington”) reporting unit had been impaired. As of the fourth quarter of fiscal year ~~2012~~2013 impairment review, there was no impairment loss associated with recorded goodwill or indefinite-lived intangible assets for any other reporting unit, ~~other than Advanced Academics, Inc. (“AAI”),~~ as estimated fair values exceeded the carrying amounts.
All other DeVry reporting units’ estimated fair values exceeded their carrying values as of the fourth quarter impairment analysis by at least 25% except for Carrington. At Carrington the fair value slightly exceeded carrying value. The smaller excess margin for the Carrington reporting unit would be expected considering an impairment charge was recorded for this reporting unit during fiscal 2012. Consequently, there had been less time for this organization to have appreciated in value from its previous impairment date.
Management ~~does consider~~considers certain triggering events when evaluating whether an interim impairment analysis is warranted. Among these would be a significant long-term decrease in the market capitalization of DeVry based on events specific to DeVry’s operations. As of ~~March 31,~~September 30, 2013, DeVry’s market capitalization exceeded its book value by approximately ~~38%. Though this~~40%, which is consistent with the premium ~~is lower than the 47%~~ as of June 30, 2012, it is partially the result of a decline in revenue, primarily within DeVry University, which has resulted in lower earnings. Management is making progress towards achieving its top priorities of realigning DeVry’s cost structure with student enrollments levels, regaining enrollment growth, and making targeted investments to drive future growth. Management believes these planned business and operational strategies will reverse the negative trends in the foreseeable future. Management also believes the decline in the market price of DeVry’s common stock has been partially caused by the increased competition facing DeVry as well as the continued overhang of government regulatory changes in the education industry. These factors have led to significant uncertainty among investors and have worked to keep the prices of private sector education stocks at depressed levels for the last few years.2013. Other triggering events that could be cause for an interim impairment review would be changes in the accreditation, regulatory or legal environment; increased competition; innovation changes and changes in the market acceptance of our educational programs and the graduates of those programs.
The estimated fair values of DeVry’s reporting units exceeded their carrying values by at least 12% as of the end of fiscal year 2013, except that of Carrington. The estimated fair values of the indefinite-lived intangible assets exceeded their carrying values by at least 100% as of the end of fiscal year 2013, except those indefinite-lived intangible assets acquired with the acquisitions of AUC and FBV and where fair values exceeded carrying values by 4% to 67%. The smaller premiums for the FBV and AUC indefinite-lived intangible assets would be expected considering the assets were acquired within two years of the fourth quarter fiscal year 2013 valuation date and there has been less time for these assets to have appreciated in value from their fair market value purchase price. As for Carrington, during the fourth quarter of fiscal year 2013, management recorded an impairment loss of $57.0 million for the decline in fair value of this reporting unit and its associated indefinite-lived intangible assets. Therefore, no premiums existed with respect to either the reporting unit’s carrying value or the carrying value of the indefinite-lived intangible assets as of June 30, 2013. Accordingly, this situation also requires management to remain cognizant of the fact that if Carrington’s realized and projected operating results do not meet expectations, an interim review and possible further impairment would be necessary.
To improve Carrington’s financial results, management continues to execute a turn-around plan initiated in fiscal year 2012 which includes increasing its focus on building Carrington’s brand awareness, optimizing its marketing approach to emphasize the development of internally-generated inquiries, improving its recruiting process through its new student contact center and narrowing its focus geographically and programmatically around Carrington’s core strengths in healthcare. Carrington continues to make additional investments in its website interface and admissions processes to better serve prospective students.Despite a difficult economy, evidence of a recovery in enrollments was experienced at Carrington where total student enrollment increased for four consecutive terms through September 2013. Though new student enrollment decreased in the September 2013 term as compared to the year-ago term, this was the result of the number of session starts in the current year period as compared to the year-ago period. During the first quarter of fiscal year 2014, Carrington had only four session starts as compared to five in the year-ago period.
These improvements in enrollment resulted in increased revenues in the first quarter of fiscal year 2014 compared to the same period last fiscal year and, along with cost control efforts, reduced the operating losses from levels of a year ago in the quarter ended September 30, 2013. The revenue and operating results also exceeded internal plans for the first quarter.Management believes its planned business and operational strategies have reversed the negative trend in revenue and operating income declines experienced over the past several years. However, if operating improvements do not continue, all or some of the remaining goodwill could be impaired in the future.
Though certain reporting units experienced a decline in operating results ~~during~~in the first ~~nine months~~quarter of fiscal ~~2013 as~~year 2014 compared to the year-ago ~~period,~~quarter, management ~~does~~did not believe business conditions ~~have~~had deteriorated in any of its reporting units ~~to the extent~~such that it was more likely than not that the fair ~~values of the~~value was below carrying value for those reporting units or their associated indefinite-lived intangible assets ~~would differ materially from their~~at September 30, 2013. In this regard, revenues, operating results and cash flows grew for all reporting units in fiscal year ~~2012 fair values.~~
2013 except at DeVry University and DeVry Brasil. The revenue and operating results of DeVry Brasil exceeded internal plans for the first quarter of fiscal 2014. Revenues grew by more than 35% from the year-ago quarter. Operating earnings declined from the year-ago quarter reflecting investments for expansion and growth.
At DeVry University, which carries a goodwill ~~and indefinite-lived intangible asset balances~~balance of ~~$22.2~~$22.2 million, ~~and $1.6 million, respectively, at March 31, 2013,~~ revenue ~~for the first nine months of fiscal year 2013~~ declined by ~~approximately 15%~~approximately18% from the year-ago ~~period.~~quarter. The revenue decline at DeVry University was primarily the result of a decline in undergraduate student enrollments and graduate coursetakers due to lower ~~cyclical~~ demand among the university’s target segment of students, believed to be driven by the challenging economic environment, persistent high levels of unemployment, perceptions of the value of a college degree, increased reluctance to take on debt and heightened competition. To address this issue, DeVry University is focused on ~~improving~~implementing management’s five-point turnaround plan which is:
20

·
Further improve academic quality;
·
Align the cost structure with enrollment levels;
·
Regain enrollment growth;
·
Make targeted investments with the intent to drive future growth; and
·
Manage the change while developing the team.
In aligning the ~~admissions~~cost structure, management is focused on increasing efficiencies. Over the past year DeVry has reduced costs through staffing adjustments and ~~student service process~~by lowering costs. Management has made the decision to ~~better serve prospective students and drive future growth~~close or consolidate certain DeVry University campuses while balancing the potential impact on enrollment and student satisfaction. ~~Though operating profits declined by approximately 46%,~~Management is also focused on process redesign and restructuring in areas such as student finance.
The plan to increase enrollments includes communication of DeVry University’s value proposition, which is educational quality, career prospects and high levels of student service. This communication plan includes integrated university-wide efforts at key points in the year. A September 2013 “call to action event” included the new Career Catalyst Scholarship. Under the Career Catalyst Scholarship DeVry University ~~remains profitable with operating margins~~has committed more than $15 million over the next three years to be awarded to qualifying students who enroll in the September 2013 session. The scholarships are valued at up to a total of ~~11%.~~ $20,000 per student, depending on the degree and credits required to attain that degree. Students qualifying for DeVry University’s Career Catalyst Scholarship are eligible to receive scholarship awards of progressive amounts over a period of three years. For example, students in their first year of a bachelor’s degree program can be awarded up to $5,000. During the second year, the available award may increase up to $7,000. For the third year, the award can increase up to $8,000. To facilitate this new scholarship, management consolidated multiple, smaller scholarships into a larger program which was more clearly communicated to prospective students. In addition, tuition rates for fiscal year 2014 at DeVry University remain unchanged from those of fiscal year 2013. Enhanced use of technology is also expected to increase the effectiveness of the student recruiting process.
Management believes its planned business and operational strategies will reverse the negative trends inover the ~~foreseeable future.~~next several years. However, if operating improvements are not realized, all or some of the goodwill could be impaired in the future. The impairment review completed in the fourth quarter of fiscal year ~~2012~~2013 indicated the fair value exceeded the carrying value of the DeVry University reporting unit by ~~250%~~100%.
~~At Carrington, which carries~~ This excess margin has been declining in recent years. Should business conditions at DeVry University continue to deteriorate resulting in the carrying value of this reporting unit exceeding its fair value then goodwill and indefinite-lived intangible asset balances of $151.9 million and $71.1 million, respectively, as of March 31, 2013, revenue for the first nine months of fiscal 2013 declined by 5% from the year-ago period. The revenue decline at Carrington was primarily the result of lower total student enrollments. Management believes these declines are due to heightened competition, the prolonged economic downturn and persistent unemployment, which has resulted in reductions in the volume of inquiries from potential students from the levels of a few years ago. The decline in revenue has also resulted in operating losses. To address these issues, Carrington continues to execute a turnaround plan, which includes increasing itsfocus on building awareness of Carrington’s brand, optimizing its marketing approach to emphasize the development of internally-generated inquiries, improving its recruiting process through its new student contact centerand narrowing it focus geographically and programmatically around Carrington’s core strengths in healthcare. Carrington is also making targeted investments in enhancing its students’ academic experience. Management believes it is making progress in its turnaround plan and that its planned business and operational strategies will continue to reverse the negative trends in the foreseeable future. Despite a difficult economy, evidence of a recovery in enrollments has been experienced at Carrington where new student enrollments increased over the prior year by 33.3%, 12.7% and 17.5% as of September 2012, December 2012 and March 2013, respectively, and total student enrollments increased by approximately 9% over the prior year as of March 2013. These improvements resulted in increased revenues in the third quarter of fiscal 2013 compared to the same period last fiscal year and, along with cost control efforts, have reduced the operating losses from levels of a year ago in both the quarter and nine months ended March 31, 2013. The revenue and operating results also exceeded internal plans for the nine months ended March 31, 2013. Along with a narrowing programmatic focus, management continues to evaluate Carrington’s online strategy. As a result there is a risk that if future operating improvements are not realized to the extent necessary to increase the long-term value of the Carrington operations all or some of the remaining goodwill and indefinite-lived intangible assets could be ~~impaired in the future. The next annual impairment review will be performed in the fourth quarter~~impaired. This would require a possible write-off of ~~fiscal 2013. The impairment review completed in the fourth quarter of fiscal year 2012 indicated the fair value exceeded the carrying value of the Carrington reporting unit by less than five percent.~~
up to $22.2 million.
Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions. Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates.
The table below summarizes the goodwill balances by reporting unit as of ~~March 31,~~September 30, 2013 (dollars in thousands):
Reporting Unit As of
March 31,
2013
DeVry University $ 22,196
Becker Professional Review 32,638
Ross University 237,175
Chamberlain College of Nursing 4,716
Carrington 151,876
American University of the Caribbean 68,321
DeVry Brasil 49,575
Total $ 566,497
As of
September 30,
Reporting Unit 2013
DeVry University $ 22,196
Becker Professional Review 32,936
Ross University 237,174
Chamberlain College of Nursing 4,716
Carrington Colleges Group 98,784
American University of the Caribbean 68,321
DeVry Brasil 53,528
Total $ 517,655
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The table below summarizes goodwill balances by reporting segment as of ~~March 31,~~September 30, 2013 (dollars in thousands):
Reporting Segment: As of March
31, 2013
Business, Technology and Management $ 22,196
Medical and Healthcare 462,088
International, K-12 and Professional Education 82,213
Total $ 566,497
~~Total~~
As of
September 30,
2013
Reporting Segment:
Business, Technology and Management $ 22,196
Medical and Healthcare 408,995
International and Professional Education 86,464
Total $ 517,655
The table below summarizes the changes in the carrying amount of goodwill, ~~increased~~ by ~~$16.5 million~~segment, for the quarter ended September 30, 2013 (dollars in thousands):
Goodwill Changes by Segment
Business,
Technology and
Management Medical and
Healthcare International
and Professional
Education Total
Balance at June 30, 2013 $ 22,196 $ 408,994 $ 77,747 $ 508,937
Acquisitions - - 8,238 8,238
Dispositions - - - -
Impairments - - - -
Foreign currency exchange rate changes and other - - 480 480
Balance at September 30, 2013 $ 22,196 $ 408,994 $ 86,465 $ 517,655
The increase in the goodwill balance from June 30, ~~2012. This increase~~2013 in the International and Professional Education segment is the result of the addition of ~~$16.1~~goodwill of $8.2 million ~~of goodwill associated with~~from the acquisition of ~~FAVIP~~Facid and changes in the ~~values~~value of the Brazilian Real and ~~the~~ British Pound Sterling as compared to the U.S. dollar. See the discussions above for further explanation of the acquisition. Since DeVry Brasil and ATC goodwill is recorded in their respective local currencies, fluctuations in ~~their~~its value in relation to the U.S. dollar will cause changes in the balance of this asset.
~~The table below summarizes the changes in the carrying amount of goodwill, by segment as of March 31, 2013 (dollars in thousands):~~
Business,
Technology and
Management Medical and
Healthcare International,
K-12 and
Professional
Education Total
Balance at June 30, 2012 $ 22,196 $ 462,088 $ 65,677 $ 549,961
Acquisitions - - 16,120 16,120
Foreign currency exchange rate changes and other - - 416 416
Balance at March 31, 2013 $ 22,196 $ 462,088 $ 82,213 $ 566,497
The table below summarizes the indefinite-lived intangible ~~asset~~assets balances by reporting unit as of ~~March 31,~~September 30, 2013 (dollars in thousands):
Reporting Unit: As of March
31, 2013
DeVry University $ 1,645
Becker Professional Review 27,912
Ross University 19,200
Chamberlain College of Nursing 1,200
Carrington 71,100
American University of the Caribbean 117,100
DeVry Brasil 35,950
Total $ 274,107
Reporting Unit: Indefinite-
lived
Intangible
Assets
DeVry University $ 1,645
Becker Professional Review 27,912
Ross University 19,200
Chamberlain College of Nursing 1,200
Carrington Colleges Group 67,200
American University of the Caribbean 117,100
DeVry Brasil 49,874
Total $ 284,131
Total indefinite-lived intangible assets increased by ~~$11.6~~$17.3 million from June 30, ~~2012.~~2013. This increase is the result of the addition of ~~$11.3~~$17.1 million of indefinite-lived intangibles associated with the acquisition of ~~FAVIP plus~~Facid and by the effects of foreign currency translation on the DeVry Brasil assets. Since DeVry Brasil intangible assets are recorded in the local Brazilian currency, fluctuations in the value of the Brazilian Real in relation to the U.S. dollar will cause changes in the balance of these assets.
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NOTE 9:  RESTRUCTURING CHARGES
During the ~~fourth~~first quarter of fiscal ~~2012,~~year 2014, DeVry implemented a Voluntary Separation Plan (VSP) that reduced its workforce by 66 positions across DeVry University and DeVry Inc. Home Office. This resulted in a pre-tax charge of $10.4 million in the quarter that represented severance pay and benefits for these employees. In addition, charges related to real estate consolidation of $1.3 million were recorded in the first quarter of fiscal year 2014. These restructuring costs were allocated to the segments as follows: $8.0 million to Business Technology and Management, $0.7 million to Medical and Healthcare, $3.0 million to DeVry home office which is classified as “Depreciation and Other” in “Note 13- Segment Information”.
During fiscal year 2013, DeVry implemented an involuntary reduction in force (RIF), a Voluntary Separation Plan (VSP), and other staff reduction actions that reduced its workforce by approximately ~~570~~475 positions across all ~~operating segments.~~reporting units. This resulted in a pre-tax charge of approximately ~~$7.1~~$10.3 million in fiscal year 2013 that ~~primarily~~ represented severance pay and benefits for these employees. This was allocated to the segments as follows: $5.0 million to Business Technology and Management, $2.0 million to Medical and Healthcare and $0.1 million to International, K-12 and Professional Education. During the first and third quarters ofAlso during fiscal year 2013, DeVry ~~recorded additional~~made decisions to consolidate facilities at its Carrington and DeVry University educational institutions. This resulted in pre-tax charges of ~~$0.7~~$6.3 million and $1.5 million, respectively, for additional severance pay and benefits related primarily to the Business Technology and Management and Medical and Healthcare segments. Cash payments for the severance charges and restructuring charges were approximately $6.5 million for the nine months ended March 31, 2013. As of March 31, 2013, approximately $1.4 million remains accrued and is expected to be paid by the end of fiscal 2013.
~~During the second quarter of~~in fiscal year ~~2013,~~2013. In addition, DeVry consolidated its administrative offices in the Chicagoland area. As a result, ~~the DeVry-owned~~a DeVry owned facility in Wood Dale, Illinois was closed in December 2012, and employees were re-located to other facilities in the area. The Wood Dale facility is held as available for sale. This resulted in a pre-tax charge of ~~$7.9~~$7.9 million in ~~the second quarter of~~ fiscal year 2013 for a write-down of ~~these~~ assets to fair market value and an expected loss on this asset sale. ~~Also, decisions~~Other restructuring charges totaling $1.7 million were ~~made~~also expensed in fiscal year 2013.
The following table summarizes the separation and restructuring plan activity for the three months ended September 30, 2013, for which cash payments are required (dollars in millions):
Liability balance at June 30, 2013 $ 13.2
Increase in liability (separation and other charges) 11.0
Reduction in liability (payments and adjustments) (6.7)
Liability balance at September 30, 2013 $ 17.5
The remaining liability balances as of September 30, 2013 primarily represent costs for employees that have either not yet separated from DeVry or their full severance has not yet been paid. Of these remaining costs approximately $15.5 million is expected to ~~consolidate facilities at DeVry’s Carrington and DeVry University operating units. These decisions resulted in pre-tax charges of $1.6 million and $0.5 million during~~be paid over the ~~second and third quarters of fiscal 2013, respectively.~~
next 12 months.

NOTE 10: INCOME TAXES
DeVry’s effective income tax rate reflects benefits derived from significant operations outside the United States. Earnings of these international operations are not subject to U.S. federal or state income taxes, so long as such earnings are not repatriated, as discussed below. Four of DeVry’s subsidiaries, Ross University School of Medicine (the Medical School) incorporated under the laws of the Commonwealth of Dominica, Ross University School of Veterinary Medicine (the Veterinary School) incorporated under the laws of the Federation of St. Christopher, Nevis, St. Kitts in the West Indies, AUC incorporated under the laws of St. Maarten, and DeVry Brasil incorporated under the laws of Brazil ~~and AUC School of Medicine BV (AUC) incorporated under the laws of St. Maarten~~ all benefit from local tax incentives. The Medical School and Veterinary Schools have agreements with the respective governments that exempt them from local income taxation. Both of these agreements have been extended to provide, ~~(in~~in the case of the Medical ~~School),~~School, an indefinite period of exemption and, ~~(in~~in the case of ~~for~~ the Veterinary ~~School),~~School, exemption until 2037. DeVry Brasil’s effective tax rate reflects benefits derived from its participation in PROUNI, a Brazilian program for providing scholarships to a portion of its undergraduate students. AUC’s effective tax rate reflects benefits derived from investment incentives.
DeVry has not recorded a U.S. federal or state tax provision for the undistributed earnings of its international subsidiaries. It is DeVry’s intention to indefinitely reinvest accumulated cash balances, future cash flows and post-acquisition undistributed earnings and profits to improve the facilities and operations of its international schools and pursue future opportunities outside the United States. In accordance with this plan, cash held by the international subsidiaries will not be available for general company purposes and under current laws will not be subject to U.S. taxation. As of ~~March 31,~~September 30, 2013 and 2012, cumulative undistributed earnings attributable to international operations were approximately ~~$490.2~~$542.7 million and ~~$395.6~~$432.4 million, respectively.
Taxes on income from continuing operations were ~~22.0%~~17.3% of pretax income for the ~~third~~first quarter ~~and 23.6%~~of fiscal year 2014, compared to 29.9% for the year-ago quarter. The lower effective tax rate for the first ~~nine months~~quarter of fiscal year 2013, compared to 29.1% for the third quarter and 30.1% for the first nine months of fiscal 2012. The decrease in effective income tax rates for the periods ended March 31, 2013 relative to the prior year2014 resulted primarily from the jurisdictional mix of pre-tax earnings from U.S. operations versus the offshore operations of Ross University School of Medicine, Ross University School of Veterinary Medicine, AUC and DeVry Brasil as well as the favorable impacts of the American Tax Relief Act of 2012 signed into law on January 2, 2013, in which Congress enacted legislation extending the benefits of Internal Revenue Code Section 954(c)(6) (”CFC Look-through”) for a two year period for tax years beginning after January 1, 2012 through December 31, 2013.
~~DeVry's~~
As of September 30, 2013, the total amount of gross unrecognized tax benefits ~~excluding interest and penalties, were $10.6 million as~~for uncertain tax positions, including positions impacting only the timing of ~~March 31, 2013 and $11.2 million as of March 31, 2012. All of DeVry’s unrecognized~~ tax benefits, ~~as of March 31, 2013,~~was $9.2 million, and, if recognized, the total amount would impact the effective tax rate. ~~In March 2013, DeVry completed an examination by the Internal Revenue Service.~~ As ~~a result, DeVry reduced its~~of September 30, 2012, gross unrecognized tax benefits, ~~by $13.0~~including positions impacting only the timing of benefits, was $23 million, ~~to reflect settlements with~~and, if recognized, the ~~Internal Revenue Service. Management expects~~total amount would impact the effective tax rate. We expect that our unrecognized tax benefits will increase by an insignificant amount during the next twelve months. ~~DeVry’s total accrued interest and penalties were $1.39 million as of March 31, 2013 and $1.23 million as of March 31, 2012.~~ DeVry classifies interest and penalties on tax uncertainties as a component of the provision for income taxes.
The total amount of interest and penalties accrued at June 30, 2013 was $1.2 million. The corresponding amount at September 30, 2013 was $1.3 million.
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NOTE 11:  DEBT
DeVry had no outstanding borrowings under its credit facility at September 30, 2013 and September 30, 2012. DeVry does have liabilities recorded for deferred purchase price agreements with sellers related to the purchases of FBV, Favip and Facid (see “Note 8: Business Combinations”). This financing is in the form of hold backs of a portion of the purchase price of these acquisitions or installment payments. Payments are made under these agreements as various conditions of the purchase are met.
Revolving Credit Facility
DeVry maintains a revolving credit facility ~~at March 31, 2013 and March 31, 2012.~~
~~Revolving Credit Facility~~
~~All of DeVry’s~~which expires on May 5, 2016. The facility provides aggregate commitments including borrowings and letters of credit ~~under its $400~~up to $400 million ~~revolving credit facility are through DeVry. At~~ and at the request of DeVry, the maximum borrowings and letters of credit can be increased to ~~$550~~$550 million. There are no required principal payments under this revolving credit agreement and all borrowings and letters of credit mature in May 2016. As a result of the agreement extending beyond one year, any borrowings would be classified as long-term with the exception of amounts expected to be repaid in the 12 months subsequent to the balance sheet date. DeVry Inc. letters of credit outstanding under this agreement were ~~$14.7 million and $9.3~~$13.2 million as of ~~March 31,~~September 30, 2013, and ~~2012, respectively.~~were $9.3 million as of September 30, 2012. As of ~~March 31,~~September 30, 2013, if there were outstanding borrowings under this agreement they would bear interest, payable quarterly or upon expiration of the interest rate period, at ~~the~~ prime rate plus ~~0.75%~~0.75% or at a LIBOR ~~rate~~ plus ~~1.75%~~1.75%, at the option of DeVry. As of ~~March 31,~~September 30, 2013, ~~outstanding letters of credit under the revolving credit agreement are~~DeVry is charged an annual fee equal to ~~0.125%~~0.125% of the undrawn face amount of the ~~letter~~outstanding letters of credit under the agreement, payable quarterly. The agreement also requires payment of a commitment fee equal to ~~0.2%~~0.2% of the undrawn portion of the credit facility as of ~~March 31,~~September 30, 2013. The interest rate, letter of credit fees and commitment fees are adjustable quarterly, based upon DeVry’s achievement of certain financial ratios. Interest rate margins can be raised as high as ~~1.5%~~1.5% on prime rate loans and ~~2.5%~~2.5% on LIBOR rate loans.
The revolving credit agreement contains ~~certain~~ covenants that, among other things, require maintenance of certain financial ratios, as defined in the agreement. These financial ratios include a consolidated fixed charge coverage ratio, a consolidated leverage ratio and a composite Equity, Primary Reserve and Net Income Department of Education ~~Financial Responsibility Ratio (“DOE Ratio”).~~financial responsibility ratio. Failure to maintain any of these ratios or to comply with other covenants contained in the agreement will constitute an event of default and could result in termination of the agreement and require payment of all outstanding ~~borrowings.~~borrowings and letters of credit. DeVry was in compliance with the ~~financial~~ debt covenants as of ~~March 31,~~September 30, 2013.
The stock of ~~certain~~most subsidiaries of DeVry is pledged as collateral for the borrowings under the revolving credit facility.

NOTE 12:  COMMITMENTS AND CONTINGENCIES
DeVry is subject to ~~occasional~~ lawsuits, administrative proceedings, regulatory reviews and investigations associated with financial assistance programs and other matters arising in the normal conduct of its business. The following is a description of pending litigation that may be considered other than ordinary and routine litigation that is incidental to the business.
The Boca Raton Firefighters’ and Police Pension Fund filed an initial complaint (the “Shareholder Case”) in the United States District Court for the Northern District of Illinois on November 1, 2010 (Case No. 1:10-cv-07031). The initial complaint was filed on behalf of a putative class of persons who purchased DeVry common stock between October 25, 2007, and August 13, 2010. Plaintiff filed an amended complaint (the “First Amended Complaint”) on March 7, 2011 alleging the same categories of claims in the initial complaint. The plaintiff claimed in the First Amended Complaint that DeVry, Daniel Hamburger and Richard M. Gunst violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by failing to disclose abusive and fraudulent recruiting and financial aid lending practices, thereby increasing DeVry’s student enrollment and revenues and artificially inflating DeVry’s stock price during the class period. On March 27, 2012, Judge John F. Grady dismissed the First Amended Complaint without prejudice, granting plaintiff leave to file a second amended complaint by May 4, 2012.
On May 4, 2012, the plaintiff again amended its allegations in the Shareholder Case (the “Second Amended Complaint”). The Second Amended Complaint alleged a longer putative class period of October 27, 2007 to August 11, 2011, but narrowed the scope of the alleged fraud significantly as compared to the previous two complaints. Plaintiff focused exclusively on DeVry’s practices for compensating student Admissions Advisors, alleging DeVry misled the market by failing to disclose that its compensation practices violated federal law and by making affirmative misrepresentations that DeVry complied with compensation regulations. The Second Amended Complaint was subsequently corrected to add an additional plaintiff, West Palm Beach Firefighters’ Pension Fund, in response to DeVry’s challenge of plaintiff’s standing to complain about statements DeVry made after plaintiff had purchased its stock.
24

On July 10, 2012, DeVry filed a Motion to Dismiss the corrected Second Amended Complaint. On March 27, 2013, Judge Grady granted DeVry’s Motion to Dismiss and entered judgment in favor of DeVry and against plaintiffs. Judge Grady thereby dismissed the case with prejudice; however, he reserved jurisdiction to examine the question of whether sanctions should be imposed against plaintiffs and/or their counsel. On April 26, 2013, the plaintiffs filed a notice of appeal of Judge Grady’s order of dismissal; however, the appeal has been stayed pending Judge Grady’s resolution of the sanctions issue. The issue of sanctions ~~is being~~was fully briefed by the parties ~~and is expected to be complete by~~as of May 17, ~~2013. Once~~2013, and remains under consideration by Judge Grady.
DeVry was served on October 11, 2013, with a complaint in a qui tam action filed under the ~~issue~~federal False Claims Act and the Minnesota False Claims Act by two former employees of ~~sanctions is resolved,~~a customer of DeVry’s subsidiary, Advanced Academics, Inc. (“AAI”). The lawsuit, United States and the ~~March 27, 2013 judgment will be subject to appeal by plaintiffs if they decide to contest the judgment.~~
~~Three shareholder derivative cases similar to the Shareholder Case had been filed (“Derivative Actions”)~~State of Minnesota ex rel. Jill Bachmann and Shelley Madore v. Minnesota Transitions Charter Schools, Advanced Academics, Inc., ~~but each has been voluntarily dismissed by the plaintiffs who brought them. Two of the Derivative Actions were~~DeVry Inc., and MN Virtual High School, CA No. 12-cv-01359-DWF-JSM, was filed in the ~~Circuit~~United States District Court for the District of ~~Cook County, Illinois, Chancery Division: DeVry shareholder Timothy Hald~~Minnesota. The complaint was filed ~~a derivative complaint~~on June 6, 2012 but kept under seal in order for the federal and Minnesota state governments to investigate the allegations and determine if they wished to intervene in the action and pursue the alleged claims.   Both the federal and Minnesota state governments declined to intervene, thereby giving the plaintiffs the choice to pursue the alleged claims on behalf of ~~DeVry~~the state and federal governments. The complaint was unsealed and made public on ~~January 3, 2011 (Hald v. Hamburger et al., Case No. 11 CH 0087)~~June 6, 2013. The complaint relates to certain federal and ~~Matthew Green (also~~state funding received by Minnesota Transitions Charter Schools and MN Virtual High School. The complaint alleges that Minnesota Transitions Charter Schools and MN Virtual High School received certain state and federal funding, which depended on the accurate reporting of student enrollment data. The complaint alleges that Minnesota Transitions Charter Schools and MN Virtual High School received more funding from the federal and state governments for special education and other services than they should have received in 2008, 2009 and 2010 as a ~~DeVry shareholder) filed~~result of allegedly non-compliant practices arising from the reporting of student enrollment data. The complaint further alleges that all schools of defendant Minnesota Transitions Charter Schools received over $75 million in total state and federal funding during fiscal years 2008 to 2010, a ~~derivative~~portion of which related to the school for which AAI provided services; plaintiff does not quantify what portion of the $75 million was obtained as a result of the allegedly fraudulent practices. The complaint ~~on behalf of DeVry on January 7, 2011 (Green v. Hamburger et al., Case No. 11 CH 0770).~~alleges that AAI provided certain curriculum and other services to MN Virtual High School and operated the school. The Hald and Green cases (the “Illinois Consolidated Action”) were consolidated by court order dated February 9, 2011 but was voluntarily dismissed without prejudice by Order entered January 15, 2013. Maria Dotro, another DeVry shareholder, filed a third derivative complaint on DeVry’s behalf in the Delaware Court of Chancery on March 11, 2011 (Dotro v. Hamburger et al., Case No. 6263). In the wake of Judge Grady’s award of judgment in favor ofonly reference to DeVry in the ~~Shareholder Case, described above,~~complaint pertains to its status as the ~~Dotro shareholder case was voluntarily dismissed without prejudice as well.~~
parent corporation to AAI.
Although DeVry believes that each of the appeal of the dismissed Shareholder Case and the ~~related derivative actions are~~allegations of the above-described qui tam case is without merit, the ultimate outcome of pending litigation is difficult to predict. ~~In the event that the plaintiffs in the Shareholder Case decide to appeal the adverse judgment entered against them or the shareholders decide to re-file their related claims,~~ DeVry will vigorously defend any ~~forthcoming litigation based on~~appellate proceedings which may proceed in the ~~same or similar~~Shareholder Case as well as the allegations in the qui tam case. At this time, DeVry does not expect that the outcome of ~~any such matter~~either of these two matters or any other pending lawsuits will have a material effect on its cash flows, results of operations or financial position.
In April 2013, DeVry received a subpoena from the Office of the Attorney General of the State of Illinois and a Civil Investigative Demand issued by the Office of the Attorney General of the Commonwealth of Massachusetts. The Illinois subpoena concerns potential state law implications in the event violations of federal law took place. It was issued pursuant to the Illinois False Claims Act in connection with an investigation concerning whether the compensation practices of DeVry and certain of its affiliates are in compliance with the Incentive Compensation Ban of the Higher Education Act and requires DeVry to provide documents relating to these matters for periods on or after January 1, 2002. The Massachusetts demand was issued in connection with an investigation into whether DeVry caused false claims and/or false statements to be submitted to the Commonwealth of Massachusetts relating to student loans, guarantees, and grants provided to DeVry’s Massachusetts students and requires DeVry to answer interrogatories and to provide documents relating to periods on or after January 1, 2007. The timing or outcome of the investigations, or their possible impact on DeVry’s business, financial condition or results of operations, cannot be predicted at this time.
23

NOTE 13:  SEGMENT INFORMATION
DeVry’s principal business is providing ~~secondary and postsecondary~~post-secondary education. ~~The services of our~~Our operations are described in more detail in “Note 1- Nature of Operations” to the consolidated financial statements contained in its Annual Report on Form 10-K for the fiscal year ended June 30, ~~2012.~~2013. DeVry presents three reportable segments: “Business, Technology and Management”, which includes DeVry University undergraduate and graduate operations; “Medical and Healthcare” which includes the operations of Ross University School of Medicine, Ross University School of Veterinary Medicine, American University of the Caribbean, Chamberlain College of Nursing and Carrington Colleges Group; and “International ~~K-12~~ and Professional Education”, which includes the operations of DeVry Brasil ~~Advanced Academics~~ and Becker Professional ~~Review.~~
Education.
These segments are consistent with the method by which the Chief Operating Decision Maker (DeVry’s President and CEO) evaluates performance and allocates resources. Performance evaluations are based, in part, on each segment’s operating income, which is defined as income before non-controlling interest, income taxes, interest income and expense, amortization, and certain corporate-related depreciation and expenses. Income taxes, interest income and expense, amortization, and certain corporate-related depreciation and expenses are reconciling items in arriving at income before income taxes for each segment. Intersegment sales are accounted for at amounts comparable to sales to nonaffiliated customers and are eliminated in consolidation. The consistent measure of segment assets excludes deferred income tax assets and certain depreciable corporate assets. Additions to long-lived assets have been measured in this same manner. Reconciling items are included as corporate assets. The accounting policies of the segments are the same as those described in “Note 23 — Summary of Significant Accounting Policies” to the consolidated financial statements contained in its Annual Report on Form 10-K for the fiscal year ended June 30, ~~2012.~~
2013.
25

Following is a tabulation of business segment information based on the segmentation for ~~each of the~~ three ~~and nine~~ months ended ~~March 31,~~September 30, 2013 and 2012. Corporate information is included where it is needed to reconcile segment data to the consolidated financial statements (dollars in thousands).
For the Three Months Ended
March 31, For the Nine Months Ended
March 31,
2013 2012 2013 2012
Revenues:
Business, Technology and Management $ 283,540 $ 338,790 $ 848,393 $ 1,001,959
Medical and Healthcare 175,125 160,483 501,228 461,456
International, K-12 and Professional Education 51,209 41,534 148,233 120,479
Intersegment Revenues (1,122 ) - (1,122 ) -
Total Consolidated Revenues $ 508,752 $ 540,807 $ 1,496,732 $ 1,583,894
Operating Income:
Business, Technology and Management $ 34,431 $ 64,667 $ 98,836 $ 183,850
Medical and Healthcare 34,635 25,963 86,522 (2,681 )
International, K-12 and Professional Education 8,582 7,214 22,210 14,378
Reconciling Items:
Amortization Expense (2,421 ) (2,800 ) (7,111 ) (7,844 )
Depreciation and Other (1,624 ) 410 (15,158 ) 1,372
Total Consolidated Operating Income $ 73,603 $ 95,454 $ 185,298 $ 189,075
Interest and Other Income (Expense):
Interest Income $ 415 $ 110 $ 1,206 $ 520
Interest Expense (756 ) (650 ) (3,006 ) (1,653 )
Net Gain on Sale of Assets - - - 3,695
Net Interest and Other Income (Expense) (341 ) (540 ) (1,800 ) 2,562
Total Consolidated Income Before Income Taxes $ 73,262 $ 94,914 $ 183,498 $ 191,637
Segment Assets:
Business, Technology and Management $ 526,705 $ 676,386 $ 526,705 $ 676,386
Medical and Healthcare 1,075,515 1,021,224 1,075,515 1,021,224
International, K-12 and Professional Education 293,693 279,331 293,693 279,331
Corporate 122,073 135,261 122,073 135,261
Total Consolidated Assets $ 2,017,986 $ 2,112,202 $ 2,017,986 $ 2,112,202
Additions to Long-lived Assets:
Business, Technology and Management $ 10,419 $ 12,557 $ 34,638 $ 36,449
Medical and Healthcare 16,265 7,931 28,722 258,108
International, K-12 and Professional Education 2,380 47,931 39,926 56,861
Corporate 2,080 6,743 8,637 21,617
Total Consolidated Additions to Long-lived Assets $ 31,144 $ 75,162 $ 111,922 $ 373,035
Reconciliation to Consolidated Financial Statements
Capital Expenditures 31,144 $ 29,140 $ 79,329 $ 92,167
Increase in Capital Assets from Acquisitions - 12,822 2,897 47,947
Increase (Decrease) in Intangible Assets and Goodwill - 33,200 29,696 232,921
Total Increase in Consolidated Long-lived Assets $ 31,144 $ 75,162 $ 111,922 $ 373,035
Depreciation Expense:
Business, Technology and Management $ 10,978 $ 9,726 $ 32,870 $ 28,244
Medical and Healthcare 5,999 5,426 18,089 16,070
International, K-12 and Professional Education 2,048 1,798 5,804 4,848
Corporate 2,473 2,603 6,954 7,350
Total Consolidated Depreciation $ 21,498 $ 19,553 $ 63,717 $ 56,512
Intangible Asset Amortization Expense:
Business, Technology and Management $ - $ - $ - $ -
Medical and Healthcare 1,349 1,631 4,044 4,383
International, K-12 and Professional Education 1,072 1,169 3,067 3,461
Total Consolidated Amortization $ 2,421 $ 2,800 $ 7,111 $ 7,844
For the Three Months Ended
September 30,
2013 2012
Revenues:
Business, Technology and Management $ 232,309 $ 284,614
Medical and Healthcare 175,856 158,357
International and Professional Education 43,721 36,949
Intersegment Revenues (973) -
Total Consolidated Revenues $ 450,913 $ 479,920
Operating Income:
Business, Technology and Management $ (11,061) $ 25,570
Medical and Healthcare 25,516 25,182
International and Professional Education 1,080 3,349
Reconciling Items:
Amortization Expense (1,649) (2,278)
Depreciation and Other (3,615) (2,375)
Total Consolidated Operating Income $ 10,271 $ 49,448
Interest and Other Income (Expense):
Interest Income $ 583 $ 561
Interest Expense (1,000) (1,491)
Net Interest and Other Income (Expense) (417) (930)
Total Consolidated Income from Continuing
     Operations Before Income Taxes $ 9,854 $ 48,518
Segment Assets:
Business, Technology and Management $ 484,630 $ 503,987
Medical and Healthcare 1,087,590 1,057,856
International and Professional Education 276,391 254,993
Corporate 171,634 175,257
Assets of Business Held for Sale 6,562 28,227
Total Consolidated Assets $ 2,026,807 $ 2,020,320
Additions to Long-lived Assets:
Business, Technology and Management $ 3,950 $ 12,644
Medical and Healthcare 14,296 5,567
International and Professional Education 29,857 33,228
Corporate 2,075 4,928
Total Consolidated Additions to Long-lived
   Assets $ 50,178 $ 56,367
Reconciliation to Consolidated Financial Statements:
Capital Expenditures $ 22,180 $ 25,622
Increase in Capital Assets from Acquisitions 2,037 2,897
Increase in Intangible Assets and Goodwill 25,961 �� 27,848
Total Increase in Consolidated Long-lived Assets $ 50,178 $ 56,367
Depreciation Expense:
Business, Technology and Management $ 10,835 $ 10,840
Medical and Healthcare 6,147 5,740
International and Professional Education 548 1,104
Corporate 2,450 2,142
Total Consolidated Depreciation $ 19,980 $ 19,826
Intangible Asset Amortization Expense:
Medical and Healthcare $ 942 $ 1,348
International and Professional Education 707 930
Total Consolidated Amortization $ 1,649 $ 2,278
26

DeVry conducts its educational operations in the United States, ~~Canada,~~ the Caribbean ~~countries~~Islands (countries of Dominica, ~~and~~ St. ~~Kitts/Nevis, Grand Bahama and~~Kitts, St. Maarten and Grand Bahama), Brazil, Canada, Europe, the Middle East and the Pacific Rim. Other international revenues, which are derived principally from ~~Europe~~Canada and ~~Canada,~~Europe, were less than 5%5% of total revenues for the ~~quarters~~three months ended ~~March 31,~~September 30, 2013 and 2012. Revenues and long-lived assets by geographic area are as follows:
For the Three Months Ended
March 31, For the Nine Months Ended
March 31,
2013 2012 2013 2012
Revenue from Unaffiliated Customers:

Domestic Operations $ 401,651 $ 450,964 $ 1,194,825 $ 1,325,618
International Operations:
Dominica and St. Kitts/Nevis, St. Maarten 76,607 72,502 225,190 205,791
Brazil 23,531 14,665 66,431 41,191
Other 6,963 2,676 10,286 11,294
Total International 107,101 89,843 301,907 258,276

Consolidated $ 508,752 $ 540,807 $ 1,496,732 $ 1,583,894
Long-lived Assets:
Domestic Operations $ 732,865 $ 745,363 $ 732,865 $ 745,363
International Operations:
Dominica and St. Kitts/Nevis, St. Maarten 594,904 582,388 594,904 582,388
Brazil 134,182 109,924 134,182 109,924
Other 8,010 9,159 8,010 9,159
Total International 737,096 701,471 737,096 701,471

Consolidated $ 1,469,961 $ 1,446,834 $ 1,469,961 $ 1,446,834
For the Three Months Ended
September 30,
2013 2012
Revenue from Unaffiliated Customers:
Domestic Operations $ 350,117 $ 390,139
International Operations:
Dominica, St. Kitts and St. Maarten 75,507 69,817
Brazil 23,521 17,316
Other 1,768 2,648
Total International 100,796 89,781
Consolidated $ 450,913 $ 479,920
Long-lived Assets:
Domestic Operations $ 402,817 $ 429,901
International Operations:
Dominica, St. Kitts and St. Maarten 169,907 134,158
Brazil 43,771 41,564
Other 253 870
Total International 213,931 176,592
Long-lived Assets of Business Held for Sale 1,509 5,879
Consolidated $ 618,257 $ 612,372
No one customer accounted for more than ~~10%~~10% of DeVry's consolidated revenues.
27

ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS
Through its website, DeVry offers (free of charge) its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed with the United States Securities and Exchange Commission. DeVry’s Web site is http://~~www.devryinc.com.~~
www.devryinc.com.
The following discussion of DeVry’s results of operations and financial condition should be read in conjunction with DeVry’s Consolidated Financial Statements and the related Notes thereto in Item 1, “FINANCIAL STATEMENTS” in this Quarterly Report on Form 10-Q and DeVry’s Consolidated Financial Statements and related Notes thereto in Item 8 “FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” in DeVry’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2012.~~2013. DeVry’s Annual Report on Form 10-K includes a description of critical accounting policies and estimates and assumptions used in the preparation of DeVry’s financial statements. These include, but are not limited to, the use of estimates and assumptions that affect the reported amounts of assets and liabilities; revenue and expense recognition; allowance for uncollectible accounts; internally developed software; land, buildings and equipment; stock-based compensation; impairment of goodwill and other intangible assets; valuation of long-lived ~~assets;~~assets and income taxes.
The seasonal pattern of DeVry’s enrollments and its educational program starting dates affect the results of operations and the timing of cash flows. Therefore, management believes that comparisons of its results of operations should primarily be made to the corresponding period in the preceding year. Comparisons of financial position should be made to both the end of the previous fiscal year and to the end of the corresponding quarterly period in the preceding year. ~~Sequential comparisons are also made in relation to enrollment and other trends.~~
26 28

FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-Q, including those that affect DeVry’s expectations or plans, may constitute “forward-looking statements” subject to the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as DeVry or its management “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “foresees,” “intends,” “plans” or other words or phrases of similar import. Such statements are inherently uncertain and may involve risks and uncertainties that could cause future results to differ materially from those projected or implied by these forward-looking statements.  Potential risks and uncertainties that could affect DeVry’s results are described throughout this Report, including those in Note 12 to the Consolidated Financial Statements, in Part II, Item 1, “Legal Proceedings”, in Part II, Item 1A. “Risk Factors”, and in DeVry’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2012~~2013 and filed with the Securities and Exchange Commission on August ~~28, 2012~~29, 2013 including, without limitation, in Item 1A, “Risk Factors” and in the subsections of “Item 1 — Business” entitled “Competition,” “Student Admissions,” “Accreditation,” “Approval and Licensing,” “Tuition and Fees,” “Financial Aid and Financing Student Education,” “Student Loan Defaults,” “Career Services,” “Seasonality,” and “Employees.”
All forward-looking statements included in this report speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the Securities and Exchange Commission, we are not under any obligation to update any forward-looking information — whether as a result of new information, future events, or otherwise. You should not place undue reliance on forward-looking statements.
OVERVIEW
DeVry’s financial results for the ~~third~~first quarter of fiscal ~~2013~~year 2014 reflect a continued revenue decline ~~primarily~~ within DeVry University, which resulted in decreased earnings as compared to the prior year. This decline was partially offset by continued growth from DeVry’s healthcare, international and professional education program offerings. Management believes that it is making progress ~~towards achieving its top priorities of~~on DeVry University’s turnaround plan, including further improving academic quality, realigning DeVry’s cost structure with student enrollment levels, regaining enrollment growth, and making targeted investments to drive future growth. Operational and financial highlights for the ~~third~~first quarter of fiscal year 2014 include:
⋅     During the first quarter of fiscal year 2014, DeVry made solid progress in aligning its cost structure with its enrollments. Management expects it will achieve $60 million in total expense savings in fiscal year 2014, primarily at DeVry University, Carrington College and Carrington College California (collectively “Carrington”).
⋅     During the first quarter of fiscal year 2014, DeVry recorded pre-tax restructuring charges totaling $11.7 million. Of these charges, $10.4 million relates to severance and benefits for workforce reductions and $1.3 million relates to real estate consolidations. These restructuring actions were made to align cost structure with enrollments primarily at DeVry University, Carrington and the DeVry Inc. home office.
⋅     The assets of Advanced Academics Inc. (“AAI”) are classified as “held for sale” on the Consolidated Balance Sheets, and the operating results are disclosed as “discontinued operations” in the Consolidated Statements of Income. The fiscal year 2014 first quarter loss on discontinued operations includes pre-tax operating losses of $2.8 million and pre-tax asset impairment charges of $13.5 million related to the write down of net assets to their fair market value.
⋅     For the September 2013 ~~include:~~
session, new undergraduate student enrollments at DeVry University increased slightly as compared to the same period last year. DeVry University continues to invest in its programs, student services, and in improving the effectiveness of its student recruiting efforts.
⋅     Management continues to make good progress on the Carrington turn-around plan. As of September 30, 2013, total student enrollment increased 1.0% to 7,706 as compared to 7,628 total students in the prior year.
⋅     For the September 2013 session, total student enrollments at Chamberlain College of Nursing (“Chamberlain”) increased 30.2% to a record 15,690 students as compared to the same term last year. Chamberlain continues to invest in its programs, student services and campus locations.
⋅     During the first quarter, The Engineering Technology Accreditation Commission of ABET re-accredited DeVry University’s onsite bachelor’s degree programs in biomedical engineering technology, computer engineering technology and electronics engineering technology.
⋅     On July 1, 2013, DeVry Brasil completed the acquisition of Faculdade Differential Integral (“Facid”) which serves about 2,500 students primarily in healthcare, including a Doctor of Medicine program at two campuses located in Teresina. This acquisition continues the process of expanding DeVry Brasil’s presence in the northeast area of the country. Including this most recent acquisition, DeVry Brasil now serves nearly 30,000 students in thirteen campuses across Northeastern Brazil.
⋅     DeVry’s financial position remained strong, generating $141.2 million of operating cash flow during the first quarter of fiscal year 2014. As of September 30, 2013, cash, marketable securities and investments balances totaled $311.6 million and there were no outstanding borrowings.
·29 During the quarter, DeVry made solid progress in aligning its cost structure with its enrollments, and reengineering and redesigning processes across its institutions. Management expects it will realize at least $100 million in total cost and expense savings in fiscal year 2013, primarily at DeVry University, Carrington College and Carrington College California (collectively “Carrington”) and Advanced Academics Inc.

· DeVry recorded pre-tax restructuring charges totaling $2.0 million. Of these charges, $0.9 million related to severance for DeVry University campus consolidation. The remaining $1.1 million in charges related to the costs of consolidating facilities at Carrington College and severance costs at DeVry Medical International.
· For the three month period ended March 31, 2013, new student enrollments at Carrington increased 17.5% as compared to the same period last year. This is the third straight quarter of positive new student enrollment growth.
· ~~For the March 2013 session, total student enrollments at Chamberlain College of Nursing (“Chamberlain”) increased 16.9% to a record 13,235 students as compared to the same session last year.~~
· ~~DeVry University received Reaffirmation of Accreditation by the Institutional Actions Council (IAC) ofThe Higher Learning Commission (HLC) of the North Central Association of Colleges and Schools (NCA). The IAC action continues the accreditation of DeVry University, DeVry College of New York and the University’s Keller Graduate School of Management until 2019.~~
· The American Institute of Certified Public Accountants released its 2012 Elijah Watt Sells award winners, honoring candidates with the highest scores on the CPA exam. There were 39 winners, and 37 of them prepared for the exam using Becker course material.
· ~~During the third quarter, DeVry repurchased a total of 347,280 shares of its common stock under its eight repurchase program at an average cost of $28.18 per share.~~
· DeVry’s financial position remained strong, generating $282.4 million of operating cash flow during the first nine months of fiscal year 2013. As of March 31, 2013, cash and marketable securities balances totaled $280.9 million and there were no outstanding borrowings.
USE OF NON-GAAP FINANCIAL INFORMATION AND SUPPLEMENTAL RECONCILIATION SCHEDULE
During the ~~third~~first quarter ~~and first nine months~~ of fiscal year ~~2013,~~2014, DeVry recorded restructuring ~~charges~~expenses related to ~~the costs~~workforce reductions and real estate consolidations to ~~consolidate facilities~~align its cost structure with enrollments at ~~Carrington College and~~ DeVry University, Carrington and ~~for severance at~~the DeVry Medical International. During the first nine months of fiscal 2013, DeVry also recorded restructuring charges for the write-down of land, building and equipment related to its decision to relocate a facility in Wood Dale, Illinois in order to consolidate administrative operations in the Chicagoland area. During the first nine months of fiscal year 2012, DeVry recorded impairment charges related to its Carrington Colleges Group reporting unit.Inc. home office. DeVry also recorded a gain from the sale of ~~Becker’s Stalla CFA review operations during~~a former DeVry University campus in Decatur, Georgia. Additionally, DeVry recorded the ~~first nine months~~operating results of ~~fiscal year 2012.~~its Advanced Academic Inc. reporting unit as discontinued operations. The following table illustrates the effects of ~~these~~the restructuring ~~and impairment charges~~expense, discontinued operations and gain ~~from~~on the sale of assets on DeVry’s earnings. Management believes that the non-GAAP disclosure of net income and earnings per share excluding these discrete items and discontinued operations provides investors with useful supplemental information regarding the underlying business trends and performance of DeVry’s ongoing operations and is useful for period-over-period comparisons of such operations given the discrete nature of the restructuring charges and gain on the sale of assets. DeVry uses these supplemental financial measures internally in its management and budgeting process. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, DeVry’s reported results prepared in accordance with GAAP. The following table reconciles these non-GAAP measures to the most directly comparable GAAP information (in thousands, except per share data):
For the Three Months For the Nine Months
Ended March 31, Ended March 31,
2013 2012 2013 2012
Net Income $ 56,821 $ 67,131 $ 139,096 $ 133,480
Earnings per Share (diluted) $ 0.88 $ 1.00 $ 2.15 $ 1.96
Restructuring Charges (net of tax) $ 1,271 $ - $ 7,211 $ -
Effect on Earnings per Share (diluted) $ 0.02 $ - $ 0.11 $ -
Impairment Charges (net of tax) $ - $ - $ - $ 55,751
Effect on Earnings per Share (diluted) $ - $ - $ - $ 0.82
Gain on Sale of Assets (net of tax) $ - $ - $ - $ (2,216 )
Effect on Earnings per Share (diluted) $ - $ - $ - $ (0.03 )
Net Income Excluding the Restructuring
Charges, Impairment Charges and
Gain on Sale of Assets $ 58,092 $ 67,131 $ 146,307 $ 187,015
Earnings per Share Excluding the
Impairment Charges and Gain on
Sale of Assets (diluted) $ 0.90 $ 1.00 $ 2.26 $ 2.74
For the Three Months
ended September 30,
2013 2012
Net (Loss) Income $ (7,132) $ 31,989
(Loss) Earnings per Share (diluted) $ (0.11) $ 0.49
Discontinued Operations (net of tax) $ 15,328 $ 2,174
Earnings per Share (diluted) $ 0.24 $ 0.03
Restructuring Expenses (net of tax) $ 7,181 $ -
Effect on Earnings per Share (diluted) $ 0.11 $ -
Gain on Sale of Assets (net of tax) $ (1,167) $ -
Effect on Earnings per Share (diluted) $ (0.02) $ -
Net Income from Continuing Operations Excluding the Restructuring
Expenses and Gain on Sale of Assets (net of tax) $ 14,210 $ 34,163
Earnings per Share from Continuing Operations Excluding the Restructuring
Expenses and Gain on Sale of Assets (net of tax) $ 0.22 $ 0.52
28 30

RESULTS OF OPERATIONS
The following table presents information with respect to the relative size to revenue of each item in the Consolidated Statements of Income for the ~~third quarter and~~ first ~~nine~~three months of both the current and prior fiscal year. Percentages may not add because of rounding.
For the Three
Months Ended
March 31, For the Nine Months
Ended March 31,
2013 2012 2013 2012
Revenues 100.0 % 100.0 % 100.0 % 100.0 %
Cost of Educational Services 47.4 % 45.2 % 48.6 % 45.7 %
Student Services and Administrative Expense 37.8 % 37.2 % 38.3 % 37.6 %
Restructuring Expenses 0.4 % 0.0 % 0.8 % 0.0 %
Asset Impairment Charges 0.0 % 0.0 % 0.0 % 4.7 %
Total Operating Costs and Expenses 85.5 % 82.3 % 87.6 % 88.1 %
Operating Income 14.5 % 17.7 % 12.4 % 11.9 %
Net Interest and Other (Expense) Income -0.1 % -0.1 % -0.1 % 0.2 %
Income Before Income Taxes 14.4 % 17.6 % 12.3 % 12.1 %
Income Tax Provision 3.2 % 5.1 % 2.9 % 3.6 %
Net Income 11.2 % 12.4 % 9.4 % 8.5 %
Net Income Attributable to Non-controlling Interest -0.1 % 0.0 % -0.1 % 0.0 %
Net Income Attributable to DeVry Inc. 11.2 % 12.4 % 9.3 % 8.4 %
For the Three
Months ended
September 30,
2013 2012
Revenues 100.0 % 100.0 %
Cost of Educational Services 53.6 % 49.9 %
Student Services and Administrative Expense 41.9 % 39.8 %
Gain on Sale of Assets (0.4) % 0.0 %
Restructuring Expenses 2.6 % 0.0 %
Total Operating Costs and Expense 97.7 % 89.7 %
Operating Income from Continuing Operations 2.3 % 10.3 %
Interest Income 0.1 % 0.1 %
Interest Expense (0.2) % (0.3) %
Net Interest (Expense) Income (0.1) % (0.2) %
Income from Continuing Operations Before Minority
Interest and Income Taxes 2.2 % 10.1 %
Income Tax Provision (0.4) % (3.0) %
Income from Continuing Operations 1.8 % 7.1 %
Loss on Discontinued Operations, Net of Tax (3.4) % (0.5) %
Net (Loss) Income (1.6) % 6.6 %
Net (Loss) Income Attributable to DeVry Inc. (1.6) % 6.7 %
REVENUES
Total consolidated revenues for the ~~third~~first quarter of fiscal year ~~2013~~2014 of ~~$508.8~~$450.9 million decreased ~~$32.1~~$29.0 million, or ~~5.9%~~6.0%, as compared to the year-ago quarter. For the first nine months of fiscal year 2013, total consolidated revenues decreased $87.2 million or 5.5% to $1,497 million. For both the third quarter and first nine months of fiscal year 2013, revenuesRevenues decreased within ~~DeVry’s~~the Business, Technology and Management segment as a result of a decline in ~~undergraduate and graduate~~ student enrollments and an increase in scholarships. This decrease was partially offset by revenue increases within ~~DeVry’s~~the Medical and Healthcare and International ~~K-12~~ and Professional Education segments as a result of growth in total student enrollments and tuition price increases. In addition, the two most recent additions to DeVry Brasil, Faculdade ~~Boa Viagem (FBV), which was acquired on February 29, 2012, and FAVIP,~~do Vale do Ipojuca (Favip) which was acquired on September 3, 2012, and Facid contributed to offsetting the revenue decline during ~~both~~ the ~~quarter and first nine months of the current fiscal year.~~
quarter.
Management expects that total revenues will be down for ~~total~~ fiscal year ~~2013~~2014 as compared to fiscal year ~~2012,~~2013, driven ~~largely~~ by the ~~continuing effect of~~impact from declines in new and total student enrollments within DeVry University ~~partially offset by the increase~~experienced in ~~new student enrollments experienced at Carrington in the first nine months of~~ fiscal year 2013 and which are expected to continue into fiscal year 2014. These lower revenues will be partially offset by anticipated revenue growth within DeVry’s other educational institutions.
Business, Technology and Management
Business, Technology and Management segment revenues decreased ~~16.3%~~18.4% to ~~$283.5~~$232.3 million ~~in the third quarter and declined 15.3% to $848.4 million for the first nine months of fiscal year 2013~~ as compared to the year-ago ~~periods~~period as a result of a decline in ~~undergraduate~~ student enrollments and ~~graduate coursetakers due~~increased scholarships. This trend is expected to continue into fiscal year 2014 which will result in lower ~~cyclical demand among~~revenues for the University’s target segment of students, driven by the challenging economic environment, persistent high levels of unemployment, perceptions of the value of a college degree and heightened competition.year. In addition, an increase in scholarships also contributed to the decline in revenues as compared to the prior year ~~periods.~~period. The Business, Technology and Management segment is comprised solely of DeVry University. Key trends in enrollment and tuition pricing are set forth below.
29
Undergraduate new student enrollment by term:
⋅   Decreased by 24.7% from July 2012 (7,532 students) to July 2013 (5,674 students); and
⋅   Increased by 0.1% from September 2012 (6,580 students) to September 2013 (6,589 students).
·31 ~~Decreased by 16.6% from July 2011 (9,026 students) to July 2012 (7,532 students);~~

· ~~Decreased by 8.6% from September 2011 (7,200 students) to September 2012 (6,580 students);~~
· ~~Decreased by 15.5% from November 2011 (6,488 students) to November 2012 (5,482 students);~~
· ~~Decreased by 4.7% from January 2012 (5,593 students) to January 2013 (5,330 students); and~~
· ~~Decreased by 21.2% from March 2012 (6,533 students) to March 2013 (5,146 students).~~
Undergraduate total student enrollment by term:
· ~~Decreased by 15.8% from July 2011 (59,966 students) to July 2012 (50,503 students);~~
· ~~Decreased by 14.9% from September 2011 (65,933 students) to September 2012 (56,086 students);~~
· ~~Decreased by 17.6% from November 2011 (60,103 students) to November 2012 (49,515 students);~~
· ~~Decreased by 14.9% from January 2012 (62,435 students) to January 2013 (53,138 students); and~~
· ~~Decreased by 16.5% from March 2012 (56,958 students) to March 2013 (47,537 students).~~
·   Decreased by 16.1% from July 2012 (50,503 students) to July 2013 (42,374 students); and
·   Decreased by 16.3% from September 2012 (56,086 students) to September 2013 (46,966 students).
Graduate coursetaker enrollment, ~~including~~principally the Keller Graduate School of Management:
The term “coursetaker” refers to the number of courses taken by a student. Thus, one student taking two courses is counted as two coursetakers.
·   Decreased by 18.0% from the July 2012 session (19,635 coursetakers) to the July 2013 session (16,107 coursetakers); and
·   Decreased by 18.8% from the September 2012 session (22,072 coursetakers) to the September 2013 session (17,925 coursetakers).
Tuition rates:
·   Effective July 2013, DeVry University froze both undergraduate and graduate tuition rates for the school year which ends in June 2014. Management believes this will increase interest from potential students and positively impact persistence among its current students.
·   DeVry University’s U.S. undergraduate tuition is $609 per credit hour for students enrolling in one to six credit hours per session. Tuition is $365 per credit hour for each credit hour in excess of six credit hours. These amounts do not include the cost of books, supplies, transportation and living expenses.
·   Keller Graduate School of Management program tuition per course is $2,298.
Management believes the decreases in enrollments were due to lower demand from DeVry University’s target student segment driven by the prolonged low level of economic growth, persistent higher levels of unemployment, negative perceptions of the value of a college degree and increased reluctance to take on debt, resulting in a reduction in interest from potential students. In addition, management believes heightened competition from both public-sector and private-sector education providers contributed to the decreases in DeVry University undergraduate and graduate enrollments. To improve performance at DeVry University, management is focused on implementing a turnaround plan which includes these points:
·     Further improve academic quality;
·     Align the cost structure with enrollment levels;
·     Regain enrollment growth;
·     Make targeted investments with the intent to drive future growth; and
·     Manage the change, while developing the team.
In aligning the cost structure, management is focused on increasing efficiencies. Over the past year DeVry has reduced costs through staffing adjustments. Management has made the decision to close or consolidate certain DeVry University campuses while balancing the potential impact on enrollment and student satisfaction. Management is also focused on process redesign and restructuring in areas such as student finance.
The plan to stabilize enrollments includes communication of DeVry University’s value proposition, which is educational quality, career prospects and high levels of student service.This communication plan includes integrated university-wide efforts at key points in the year. A September 2013 “call to action event” included the new Career Catalyst Scholarship. Under the Career Catalyst Scholarship, DeVry University has committed more than $15 million over the next three years to be awarded to qualifying students who enrolled in the September 2013 session. The scholarships are valued at up to a total of $20,000 per student, depending on the degree and credits required to attain that degree. Students qualifying for DeVry University’s Career Catalyst Scholarship are eligible to receive scholarship awards in progressive amounts over a period of three years. For example, students in their first year of a bachelor’s degree program can be awarded up to $5,000. During the second year, the available award can increase up to $7,000. For the third year, the award can increase up to $8,000.
DeVry is also exploring methods to increase the flexibility of its programs to lower the overall cost of education to its students along with better educating prospective students on the value of a college degree. Tuition rates for fiscal year 2014 at DeVry University remain unchanged from those of fiscal year 2013. Enhanced use of technology is also expected to increase the effectiveness of the student recruiting process.
·32 ~~Decreased by 9.0% from the July 2011 session (21,576 coursetakers) to the July 2012 session (19,635 coursetakers);~~

· ~~Decreased by 7.8% from the September 2011 session (23,937 coursetakers) to the September 2012 session (22,072 coursetakers);~~
· ~~Decreased by 16.0% from the November 2011 session (23,264 coursetakers) to the November 2012 session (19,540 coursetakers);~~
·
~~Decreased by 12.1% from the January 2012 session (24,029 coursetakers) to the January 2013 session (21,131coursetakers); and~~
· ~~Decreased by 18.4% from the March 2012 session (23,366 coursetakers) to the March 2013 session (19,075 coursetakers).~~
~~Tuition rates:~~
· Effective July 2012, DeVry University’s U.S. undergraduate tuition is $609 per credit hour for students enrolling in one to six credit hours per session. Tuition is $365 per credit hour for each credit hour in excess of six credit hours. These amounts do not include the cost of course materials and supplies. These tuition rates represent an increase of approximately 1.2% as compared to the summer 2011 session. The impact of this tuition price increase is offset by an increase in the amount of scholarships awarded to DeVry University students.
· ~~Effective July 2012, Keller Graduate School of Management program tuition per course is $2,298. This represents a weighted average increase of 1.9% compared to the year-ago session.~~
· Effective July 2013, DeVry University is freezing both undergraduate and graduate tuition rates for the school year which ends in June 2014. Management believes this will increase interest from potential students and improve persistence among its current students.
· Management believes the decreases in enrollments were due to lower cyclical demand from the University’s target student segment driven by the prolonged economic downturn, persistent unemployment, negative perceptions of the value of a college degree and increased reluctance to take on debt, resulting in a reduction in interest from potential students. In addition, management believes heightened competition from both public-sector and private-sector education providers and issues with internal execution contributed to the decreases in DeVry University undergraduate and graduate enrollments. To regain enrollment growth at DeVry University, management’s plan includes channel-focused initiatives, technology improvements and brand awareness. In the high school channel, DeVry is leveraging its array of institutions beyond DeVry University to raise awareness of career paths. Technology-focused efforts include the development of a self-service portal that prospective students can use to streamline the application process. In addition, management made the decision to increase scholarships and grants to help DeVry University’s students achieve their academic goals. DeVry is also exploring methods to increase the flexibility of its programs in order to lower the overall cost of education to its students along with better educating prospective students on the value of a college degree.
Medical and Healthcare
Medical and Healthcare segment revenues increased ~~9.1%~~11.1% to ~~$175.1~~$175.9 million in the ~~third~~first quarter ~~and increased 8.6% to $501.2 million for the first nine months~~ of fiscal year ~~2013 as compared to the year-ago periods. For both the third quarter and first nine months of fiscal year 2013, higher~~2014. Higher total student enrollments at ~~Chamberlain~~all the institutions that comprise this segment (Chamberlain College of Nursing (“Chamberlain”) ~~and~~, DeVry Medical International (which is composed of Ross University ~~School~~Schools of Medicine ~~Ross University School of~~and Veterinary Medicine and American University of the Caribbean School of Medicine (“AUC”)) and Carrington College and Carrington College California (“Carrington”)) were the key drivers of the segment revenue growth. Carrington College and Carrington College California (collectively “Carrington”) experienced a decrease in total student enrollment in the June and September terms over the year-ago periods which negatively affected the first nine months of fiscal 2013 revenues; however, total enrollments for the December and March terms increased over the year-ago periods which resulted in higher revenue in the third quarter of fiscal 2013 compared to the year ago quarter. Also, AUC, which was acquired on August 3, 2011, contributed a full nine months of revenue in the current year period as opposed to the eight months contributed in the first nine months of fiscal year 2012. Key trends for DeVry Medical International, Chamberlain and Carrington are set forth below.
See discussion following the enrollment information for explanation of the trends.
DeVry Medical International new student enrollment by term:
· ~~Increased by 13.6% from May 2011 (566 students) to May 2012 (643 students);~~
· ~~Increased by 8.4% from September 2011 (853 students) to September 2012 (925 students); and~~
· ~~Increased by 0.3% from January 2012 (601 students) to January 2013 (603 students).~~
·  Decreased by 19.4% from May 2012 (643 students) to May 2013 (518 students); and
·  Increased by 5.7% from September 2012 (925 students) to September 2013 (978 students).
DeVry Medical International total student enrollment by term:
· ~~Increased by 1.0% from May 2011 (5,885 students) to May 2012 (5,944 students);~~
· ~~Increased by 2.1% from September 2011 (6,082 students) to September 2012 (6,209 students); and~~
· ~~Increased by 4.9% from January 2012 (6,024 students) to January 2013 (6,318 students).~~
·  Decreased by 2.5% from May 2012 (5,944 students) to May 2013 (5,800 students); and
·  Increased by 4.0% from September 2012 (6,209 students) to September 2013 (6,458 students).
Chamberlain College of Nursing new student enrollment by term:
· ~~Increased by 14.7% from July 2011 (1,721 students) to July 2012 (1,974 students);~~
· ~~Increased by 52.6% from September 2011 (1,065 students) to September 2012 (1,625 students);~~
· ~~Increased by 13.5% from November 2011 (1,868 students) to November 2012 (2,121 students);~~
· ~~Increased by 87.8% from January 2012 (1,129 students) to January 2013 (2,120 students); and~~
· ~~Decreased by 25.0% from March 2012 (1,801 students) to March 2013 (1,350 students).~~
31
·   Decreased by 34.9% from July 2012 (1,974 students) to July 2013 (1,285 students); and
·   Increased by 110.5% from September 2012 (1,606 students) to September 2013 (3,380 students).
Chamberlain College of Nursing total student enrollment by term:
· ~~Increased by 15.8% from July 2011 (9,374 students) to July 2012 10,852 students);~~
· ~~Increased by 20.2% from September 2011 (10,029 students) to September 2012 (12,050 students);~~
· ~~Increased by 15.3% from November 2011 (10,619 students) to November 2012 (12,245 students);~~
· ~~Increased by 26.0% from January 2012 (10,888 students) to January 2013 (13,714 students); and~~
· ~~Increased by 16.9% from March 2012 (11,321 students) to March 2013 (13,235 students).~~
·   Increased by 16.5% from July 2012 (10,852 students) to July 2013 (12,648 students); and
·   Increased by 30.2% from September 2012 (12,050 students) to September 2013 (15,690 students).
Carrington new student enrollment by term:
· ~~Decreased by 19.7% from June 2011 (2,033 students) to June 2012 (1,632 students);~~
· ~~Increased by 33.3% from September 2011 (2,548 students) to September 2012 (3,396 students);~~
· ~~Increased by 12.7% from December 2011 (1,565 students) to December 2012 (1,763 students); and~~
· ~~Increased by 17.5% from March 2012 (2,035 students) to March 2013 (2,391 students).~~
·   Decreased by 1.5% from June 2012 (1,632 students) to June 2013 (1,607 students); and
·   Decreased by 19.5% from September 2012 (3,396 students) to September 2013 (2,733 students).
Carrington total student enrollment by term:
·   Increased by 9.6% from June 2012 (6,486 students) to June 2013 (7,111 students); and
·   Increased by 1.0% from September 2012 (7,628 students) to September 2013 (7,706 students).
Tuition rates:
· ~~Decreased by 25.7% from June 2011 (8,728 students) to June 2012 (6,486 students);~~
· ~~Decreased by 8.3% from September 2011 (8,322 students) to September 2012 (7,628 students);~~
· ~~Increased by 0.4% from December 2011 (7,379 students) to December 2012 (7,405 students); and~~
· ~~Increased by 8.8% from March 2012 (7,309 students) to March 2013 (7,951 students).~~
~~Tuition rates:~~
·
Effective September ~~2012,~~2013, tuition and fees for the ~~beginning~~ basic sciences portion of the programs at the Ross University School of Medicine and Ross University School of Veterinary Medicine are ~~$17,675~~$18,825 and ~~$16,800,~~$17,725, respectively, per semester. Tuition and fees for the ~~final~~ clinical portion of the programs are ~~$19,500~~$20,775 per semester for the medical school, and ~~$21,100~~$22,250 per semester for the veterinary school. These tuition rates represent an increase from September ~~2011~~2012 rates of ~~6.6% and 7.1%~~6.5% for the medical school and ~~6.3%~~5.5% for the veterinary school. These amounts do not include the cost ~~course materials,~~of books, supplies, transportation, and living expenses.
·
Effective September ~~2012,~~2013, tuition and fees for the ~~beginning~~ basic sciences and ~~final~~ clinical rotation portions of AUC’s medical program are ~~$17,925~~$18,975 and ~~$20,050,~~$21,250, respectively, per semester. These tuition rates represent an increase from the September ~~2011~~2012 rates of ~~6.1%~~approximately 5.9%.
·
Effective July ~~2012,~~2013, tuition is $665 per credit hour for students enrolling in one to six credit hours per session in the Chamberlain Bachelor of Science in Nursing (BSN) (onsite), Associate Degree in Nursing (ADN) and Licensed Practical Nurse to Registered Nurse (LPN-to-RN) programs. This rate is unchanged as compared to the prior year. Tuition is ~~$100~~$200 per credit hour per session for each credit hour in excess of six credit hours. ~~These effective tuition rates are unchanged~~This excess credit hour rate represents a $100 increase as compared to the prior year. These amounts do not include the cost of ~~course materials~~books, supplies, transportation and ~~supplies.~~living expenses.
·
Effective July ~~2012,~~2013, tuition is $590 per credit hour for students enrolled in the Chamberlain ~~RN-to-BSN~~Registered Nurse to Bachelor of Science in Nursing (RN-to-BSN) online degree program. This tuition rate is unchanged from the July ~~2011~~2012 tuition rate. Tuition for students enrolled in the online Master of Science in Nursing (MSN) program is $650 per credit hour, which is unchanged from the prior year.
·
On a per credit hour basis, tuition for the Carrington College and Carrington College California programs ranges from $254 per credit hour to $1,651 per credit hour, ~~for non-general education courses,~~ with the wide range due to the nature of the programs. General Education courses are charged at $325 per credit hour at Carrington College, and $364 per credit hour at Carrington College California. Students are charged a non-refundable registration fee of $100, and they are also charged separately for books and special (program specific) supplies and/or testing. A student services fee ranging from $75 to $150 is charged at Carrington College and Carrington College California as well, depending on the program. Total program tuition at each institution ranges from approximately $13,000 for certificate programs to over $60,000 for some advanced programs.
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Continued demand for medical doctors and veterinarians positively influenced career decisions of new students towards these respective fields of study. Also, there currently exists a supply and demand imbalance in medical education. Over the past few sessions, DeVry Medical International new student enrollments were negatively impacted by a transition of key roles within marketing and enrollment management. Management believes that the historical enrollment increases at DeVry Medical International have resulted from the reputation of its academic programs and student outcomes, enhancements made to its marketing and recruiting functions, and steps taken to meet student demand such as adding faculty and ~~classrooms. Though management~~classrooms which reduced capacity constraints that existed in the prior fiscal year. Management expects ~~these~~positive enrollment trends to continue in the low single digits; however, heightened competition may adversely affect DeVry Medical International’s ability to continue to attract qualified students to its programs.
Continued demand for nurses positively influenced career decisions of new students towards this field of study. The ~~increase~~historical trend of increases in new student enrollments ~~in the July 2012, September 2012, November 2012 and January 2013 sessions at Chamberlain was~~is attributable to increased conversion rates for its RN-to-BSN online completion program, the addition of a several new campus locations, ~~in Indianapolis in March 2012~~capacity expansion and ~~Atlanta in May, 2012, along with~~ organic growth at existing ~~locations. The~~locations and the introduction of new ~~campuses are both co-located with DeVry University.~~graduate degree programs. New student enrollment at Chamberlain for the ~~March~~July 2013 term as compared to the ~~March~~July 2012 term was impacted by the realignment of the academic calendar, with September, January and May intakes. As a result there were no onsite enrollments for the ~~March~~July term.
These enrollments were shifted to the September 2013 term which partially accounts for the 110 percent increase in new student enrollments from September 2012.
Management believes the declines in total student enrollments experienced at Carrington ~~over the last two~~in previous fiscal years ~~are~~were the result of heightened competition, the prolonged economic downturn and persistent unemployment, which has resulted in reductions in the volume of inquiries from potential students. To address these issues, Carrington continues to execute a turnaround plan, which includes increasing its focus on building awareness of Carrington’s brand, optimizing its marketing approach to emphasize the development of internally-generated inquiries, improving its recruiting process through its new student contact center and narrowing its focus geographically and programmatically around Carrington’s core strengths in healthcare. Carrington ~~is also making~~continues to make targeted investments in enhancing its students’ academic experience.These initiatives contributed to the ~~33%~~33.0%, 12.7% and 17.5% growth in new student enrollments in the September 2012, December 2012 and March 2013 terms, respectively, as well as an increase in total student enrollment for four consecutive terms through September 2013. The decrease in new student enrollments in the ~~December 2012~~June 2013 term was the result of the decision to narrow Carrington’s program focus and ~~March~~suspend recruiting for certain non-core programs. The decrease in new student enrollments in the September 2013 ~~terms.~~
term was the result of the number of session starts in the current year period as compared to the year-ago period. During the first quarter of fiscal year 2014, Carrington had four session starts as compared to five in the year-ago period.
International ~~K-12~~ and Professional Education
International ~~K-12~~ and Professional Education segment revenues rose ~~23.3%~~18.3% to ~~$51.2~~$43.7 million in the ~~third~~first quarter ~~and increased 23.0% to $148.2 million for the first nine months~~ of fiscal year ~~2013~~2014 as compared to the ~~year-ago periods. For both the third quarter and first nine months of fiscal year 2013,~~prior year. DeVry Brasil was the primary driver of revenue growth in this segment primarily due to ~~new and total student enrollment growth as compared to the year-ago period. Revenue growth at DeVry Brasil was primarily the result of~~ the recent acquisitions of ~~FBV, which was acquired on February 29, 2012, and FAVIP,~~Favip, which was acquired on September 3, ~~2012. Revenue declined at Advanced Academics during the third quarter~~2012 and ~~first nine months of fiscal year 2013 primarily due to competitive pressures and continuing school district budget constraints.~~Facid, which was acquired on July 1, 2013. Becker Professional Education revenues increased driven primarily by the contribution of ~~Falcon Physician Reviews (“Falcon”) which was acquired in April, 2012.~~Becker physician review operations. Key enrollment trends for DeVry Brasil are set forth below.
DeVry Brasil new student enrollment by term:
· ~~Increased by 2.2% from September 2011 (4,090 students) to September 2012 (4,179 students); and~~
· ~~Increased by 2.0% from March 2012 (7,244 students) to March 2013 (7,390 students).~~
·   Decreased by 9.4% from September 2012 (4,179 students) to September 2013 (3,785 students). The acquisition of Facid accounted for 309 new students. Excluding the impact of the Facid acquisition, new student enrollments decreased by 16.8%.
DeVry Brasil total student enrollment by term:
·   Increased by 11.4% from September 2012 (26,343 students) to September 2013 (29,340 students). The acquisition of Facid accounted for 2,582 new students. Excluding the impact of the Facid acquisition, new student enrollments increased by 1.6%.
A large percentage of DeVry Brasil’s program offerings are subject to limitations by the Brazilian Ministry of Education as to the number of students who can be enrolled in the programs. The new student enrollment decline experienced in the September 2013 term was primarily the result of a temporary admissions restriction for three programs at one of its institutions, Area 1. Management has applied for approval to have these enrollment limitations removed and expects this to occur prior to the next semester start in March 2014.
·34 ~~Increased by 9.2% from September 2011 (24,135 students) to September 2012 (26,346 students); and~~

· ~~Increased by 7.2% from March 2012 (27,133 students) to March 2013 (29,083 students).~~

COSTS AND EXPENSES
Cost of Educational Services
The largest component of Cost of Educational Services is the cost of faculty and staff who support educational operations. This expense category also includes the costs of facilities, adjunct faculty, supplies, bookstore and other educational materials, student education-related support activities, and the provision for uncollectible student accounts.
DeVry’s Cost of Educational Services ~~decreased 1.3%~~increased 1.0% to ~~$241.0 million during the third quarter and grew 0.5% to $727.0~~$241.7 million during the first ~~nine months~~quarter of fiscal year ~~2013~~2014 as compared to the ~~respective~~ year-ago ~~periods. For the third quarter, lower~~quarter. Lower Costs of Educational Services within DeVry University and Carrington ~~Colleges~~ as a result of savings from cost reduction measures ~~more than~~were offset by the increase in costs necessary to support the operations of the growth institutions and from the acquisitions of FBV, which was acquired on February 29, 2012, Falcon, which was acquired on April 3, 2012 and FAVIP, which was acquired on September 3, 2012. These acquisitions also accounted for most of the costinstitutions. This increase ~~during the first nine months of fiscal year 2013. In addition, cost increases~~includes costs that were ~~also~~ incurred ~~in both the third quarter and first nine months of fiscal 2013 in~~to support ~~of operating~~ a higher number of ~~campus locations~~total student enrollments for Chamberlain as compared to the prior year and the need to support continued growth at DeVry Medical International and DeVry Brasil.
The costs at DeVry Brasil include the full quarter’s effect of expense from the acquisition of Favip, which was acquired on August 29, 2012, compared to one month of expense in fiscal year 2013, along with the expenses of Facid, which was acquired on July 1, 2013.
As a percentage of revenue, Cost of Educational Services increased to ~~47.4%~~53.6% in the ~~third~~first quarter of fiscal year ~~2013~~2014 from ~~45.2% during the prior year period. For the first nine months of fiscal year 2013, Cost of Educational Services increased to 48.6% from 45.7%~~49.9% during the prior year period. The increase was the result of decreased operating leverage as a result of revenue declines primarily at DeVry ~~University and Carrington.~~
University.
Student Services and Administrative Expense
This expense category includes student admissions, marketing and advertising costs, general and administrative costs, expenses associated with curriculum development, and the amortization expense of finite-lived intangible assets related to acquisitions of businesses.
Student Services and Administrative Expense declined ~~4.5%~~1.0% to ~~$192.1~~$189.2 million during the ~~third~~first quarter of fiscal year ~~2013 and decreased 3.9% to $573.0 million during the first nine months of fiscal 2013~~2014 as compared to the year-ago ~~periods.~~quarter. The decrease in expenses reflects savings from cost reduction measures (workforce reductions and reduced project spending) ~~and deferred advertising spending.~~. These reductions more than offset the expense growth from the most recent acquisitions of ~~FBV, Falcon,~~Favip and ~~FAVIP~~Facid and the increase in costs necessary to support the operations of the growth institutions (DeVry Medical International, Chamberlain College of Nursing, DeVry Brasil, and Becker Professional Education). Amortization of finite-lived intangible assets in connection with acquisitions of businesses ~~declined slightly~~decreased by $0.6 million during the ~~third~~first quarter ~~and first nine months~~ of fiscal year ~~2013~~2014 as compared to the year-ago period. Amortization expense is included entirely in the Student Services and Administrative Expense category.
As a percentage of revenue, Student Services and Administrative Expense increased to ~~37.8%~~41.9% in the ~~third~~first quarter of fiscal year 2013 ~~as compared to 37.2% in~~from 39.8% during the year-ago quarter. ~~For the first nine months of fiscal year 2013, Student Services and Administrative Expense increased to 38.3% from 37.6% during the prior year period.~~ The increase ~~in the third quarter and first nine months of fiscal 2013~~ was the result of decreased operating leverage ~~as a result of revenue declines~~from declining revenues primarily at DeVry ~~University and Carrington~~University.
.
~~Restructuring Expenses~~Gain on the Sale of Assets
DeVry made decisions to consolidate facilities at its Carrington and DeVry University educational institutions. This resulted in pre-tax charges of $1.4 million and $3.0 million for the third quarter and first nine months of fiscal 2013, respectively.
During the ~~second~~first quarter of fiscal year ~~2013,~~2014, management completed the sale of the former DeVry ~~consolidated its administrative offices~~University campus in Decatur, GA, which was vacated a number of years ago. The net proceeds on this sale were approximately $6.7 million which resulted in the ~~Chicagoland area. As~~recording of a ~~result, a DeVry owned facility in Wood Dale, Illinois was closed in December 2012, and employees were re-located to other facilities~~pre-tax gain of $1.9 million in the ~~area. The Wood Dale facility is held as available for sale.~~quarter.
Restructuring Expenses
During the first quarter of fiscal year 2014, DeVry implemented a Voluntary Separation Plan (VSP) that reduced its workforce by 66 positions across DeVry University and DeVry Inc. Home Office. This resulted in a pre-tax charge of ~~$7.9~~$10.4 million in the ~~first nine months~~quarter that represented severance pay and benefits for these employees. In addition, charges related to real estate consolidation of ~~fiscal 2013 for a write-down of assets to fair market value and an expected loss on this asset sale. Also, during~~$1.3 million were recorded in the ~~third~~first quarter of fiscal ~~2013, a decision was made~~year 2014. These restructuring costs were allocated to ~~restructure positions at~~ the segments as follows: $8.0 million to Business Technology and Management, $0.7 million to Medical and Healthcare, $3.0 million to DeVry ~~Medical International. This resulted~~home office which is classified as “Depreciation and Other” in ~~a pre-tax charge~~“Note 13- Segment Information” to the consolidated financial statements of this Form 10-Q.
Cash payments for these charges were approximately $0.6 ~~million. DeVry expects~~million for the quarter ended September 30, 2013. The remaining accrual for these charges is $10.4 as of September 30, 2013. The balance is expected to ~~save approximately $3 million annually as a result~~be paid by the end of ~~these actions.~~
fiscal year 2015.
35

OPERATING INCOME
Total consolidated operating income from continuing operations for the ~~third~~first quarter of fiscal year ~~2013~~2014 of ~~$73.6~~$10.3 million decreased ~~22.9%~~79.2% as compared to the prior year quarter. ~~For the first nine months of fiscal year 2013, total consolidated~~The operating income ~~of $185.3 million decreased 2.0% as compared to~~decline was experienced at the ~~prior year period. Revenue declines at DeVry University for both reporting periods~~Business, Technology and Management and the International and Professional Education segments. The largest driver of ~~fiscal 2013 and at Carrington Colleges for the first nine months of fiscal 2013 contributed to~~ the decline in operating income ~~for those periods~~during fiscal year 2014 was the revenue decline at DeVry University and the restructuring expenses. This decline more than offset the increases in revenue and operating income resulting from recent acquisitions and growth in other institutions. The revenue decline was partially offset by the decrease in expenses from cost reduction measures, as discussed above. ~~The operating~~Operating income ~~decline was limited to the~~ also declined at DeVry Brasil primarily driven by investments for expansion and growth.
Business, Technology and Management ~~segment.~~
The decrease in operating income for the first nine months of fiscal year 2013 would have been greater without a $75.0 million non-cash asset impairment charge recorded in the first nine months of fiscal 2012. Excluding this charge, total consolidated operating income for the first nine months of fiscal year 2013 decreased 29.8% as compared to the prior year period.
34
~~Business, Technology and Management~~
Business, Technology and Management segment generated an operating ~~income decreased 46.8% to $34.4 million during~~loss in the ~~third~~first quarter of fiscal year ~~2013, and declined 46.2%~~2014 of $11.1 million compared to ~~$98.8~~operating income of $25.6 million during the first ~~nine months~~quarter of fiscal year ~~2013 as compared to the year-ago periods.~~2013. The decrease in operating income was the result of lower revenue and decreased operating ~~leverage.~~leverage and a restructuring charge of $8.0 million (as discussed earlier). Total segment expenses for the ~~third~~first quarter of fiscal ~~2013~~year 2014, excluding the restructuring charges and gain on the sale of assets decreased ~~9.1%~~8.4% as compared to the year-ago quarter, ~~and declined 8.4% in the first nine months of fiscal 2013 as compared to year ago period,~~ as a result of savings from cost reduction measures, as discussed above. Management continues to mitigate the effects of this challenging environment by ~~better~~ aligning its cost structure with student enrollments while also targeting investments in growth initiatives such as new programs.
Consolidations of DeVry University locations and further cost control measures will be necessary in fiscal year 2014 and beyond should enrollments continue to decline.
Medical and Healthcare
Medical and Healthcare segment operating income increased ~~33.4%~~1.3% to ~~$34.6~~$25.5 million during the ~~third~~first quarter of fiscal year ~~2013~~2014 as compared to the ~~prior year~~year-ago quarter. The increase in operating income was primarily the result of a decreased operating loss at Carrington which was partially offset by investments to drive future enrollment growth. The operating loss improvement at Carrington was a result of higher total student enrollments as compared to the year-ago quarter, and cost reduction measures, as discussed above.
International and Professional Education
For the first ~~nine months~~quarter of fiscal year ~~2013,~~2014, the ~~Medical~~International and ~~Healthcare~~Professional Education segment recorded operating income of ~~$86.5~~$1.1 million as compared to an operating ~~loss~~income of ~~$2.7~~$3.3 million in the year-ago ~~period.~~quarter. The ~~increase in~~decreased operating ~~income in the third quarter was~~results were primarily ~~the result of increased operating income at Chamberlain, Ross University Schools of Medicine~~driven by investments for expansion and Veterinary Medicine and American University of the Caribbean School of Medicine. The operating loss at Carrington also declined in the third quarter as compared to the year ago period. The largest single driver of the increase in operatinggrowth.
NET INTEREST (EXPENSE) INCOME
Interest income for the first nine months of fiscal year 2013 was the $75.0 million non-cash asset impairment charge recorded in the first nine months of fiscal 2012. Excluding this charge, total consolidated operating income for the first nine months of fiscal year 2013 increased 23% as compared to the prior year period. This increase in operating income in the first nine months of fiscal 2013 was primarily the result of increased operating income at Chamberlain, Ross University Schools of Medicine and Veterinary Medicine and American University of the Caribbean School of Medicine. The operating loss at Carrington also declined in the first nine months of fiscal 2013 as compared to the year ago period.
~~International, K-12 and Professional Education~~
~~International, K-12 and Professional Education segment operating income increased 19.0% to $8.6 million during the third~~ quarter of fiscal year ~~2013, and grew 54.5%~~2014 of $0.6 million was consistent with the year-ago quarter.
Interest expense decreased by $0.5 million to ~~$22.2~~$1.0 million during the first ~~nine months~~quarter of fiscal year ~~2013~~2014 as compared to the year-ago ~~periods.~~quarter. The ~~improved operating results were driven primarily by increased operating leverage within Professional Education and DeVry Brasil.~~
~~NET INTEREST AND OTHER INCOME (EXPENSE)~~
~~Interest income was relatively unchanged during the third quarter and first nine months of fiscal year 2013 as compared to the year-ago periods.~~
~~Interest expense increased slightly during the third quarter and first nine months of fiscal year 2013 as compared to the year-ago periods. The increase~~decrease in interest expense was attributable to lower interest ~~accreted~~rates at DeVry Brasil where interest is accrued on earn-outs and installment payments related to ~~the acquisition of FBV.~~
recent acquisitions, as discussed above.
INCOME TAXES
Taxes on income from continuing operations were ~~22.0%~~17.3% of pretax income for the ~~third~~first quarter ~~and 23.6% for the first nine months~~ of fiscal year ~~2013,~~2014, compared to ~~29.1%~~29.9% for the ~~third quarter and 30.1% for~~year-ago quarter. The lower effective tax rate in the first ~~nine months~~quarter of fiscal ~~2012. The decrease in the effective income tax rates for the periods ended March 31, 2013 relative to the prior~~ year 2014 resulted primarily from the jurisdictional mix of pre-tax earnings from U.S. operations versus the offshore operations of Ross University School of Medicine, Ross University School of Veterinary Medicine, AUC and DeVry Brasil as well as the favorable impacts of the American Tax Relief Act of 2012 signed into law on January 2, 2013, in which Congress enacted legislation extending the benefits of Internal Revenue Code Section 954(c)(6) (”CFC Look-through”) for a two year period for tax years beginning after January 1, 2012 through December 31, 2013.
DeVry’s effective income tax rate reflects benefits derived from significant operations outside the United States. Earnings of these international operations are not subject to U.S. federal or state income taxes, so long as such earnings are not repatriated, as discussed below. Four of DeVry’s subsidiaries, Ross University School of Medicine (the Medical School) incorporated under the laws of the Commonwealth of Dominica, Ross University School of Veterinary Medicine (the Veterinary School) incorporated under the laws of the Federation of St. Christopher, Nevis, St. Kitts in the West Indies, AUC ~~School of Medicine BV (AUC)~~ incorporated under the laws of St. Maarten, and DeVry Brasil incorporated under the laws of Brazil all benefit from local tax incentives. The Medical School and Veterinary Schools have agreements with the respective governments that exempt them from local income taxation. Both of these agreements have been extended to provide, ~~(in~~in the case of the Medical ~~School),~~School, an indefinite period of exemption and, ~~(in~~in the case of ~~for~~ the Veterinary ~~School),~~School, exemption until 2037. DeVry Brasil’s effective tax rate reflects benefits derived from its participation in PROUNI, a Brazilian program for providing scholarships to a portion of its undergraduate students. AUC’s effective tax rate reflects benefits derived from investment incentives.
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DeVry intends to indefinitely reinvest international earnings and cash flow to improve and expand facilities and operations at ~~the Medical and~~Ross University School of Medicine, Ross University School of Veterinary ~~schools,~~Medicine, AUC and DeVry Brasil, and pursue other business opportunities outside the United States. Accordingly, DeVry has not recorded a provision for the payment of U.S. income taxes on these earnings.
DISCONTINUED OPERATIONS
In the fourth quarter of fiscal year 2013, management determined that the operations of Advanced Academics, Inc. (“AAI”) no longer aligned with the strategic direction of DeVry. At that time, management committed to divest the AAI business.  As a result, it was determined that the net assets of AAI would be classified as “held for sale” in the Consolidated Balance Sheets and the results of operations of AAI would be classified in the Consolidated Statements of Income and Consolidated Statements of Cash Flows as discontinued operations retroactive to full fiscal year 2013.
The reported loss on discontinued operations in the first quarter of fiscal year 2014 is comprised of $2.8 million in operating losses and a pre-tax impairment charge of $13.5 million for a fair market write-down of AAI’s net assets. As a result of its review of the preliminary purchase offers for the assets of the business, management determined that the market value of this business had been significantly diminished.
See “Note 3 – Assets and Liabilities of Business Held for Sale and Discontinued Operations” to the Consolidated Financial Statements for additional disclosures.
LIQUIDITY AND CAPITAL RESOURCES
Student Payments
DeVry’s primary source of liquidity is the cash received from payments for student tuition, ~~course materials,~~books, other educational materials and fees. These payments include funds originating as financial aid from various federal ~~state~~ and ~~provincial~~state loan and grant programs; student and family educational loans (“private loans”); employer educational reimbursements; and student and family financial resources. Private loans as a percentage of DeVry’s total revenue are relatively small. DeVry continues to pursue ~~all~~ available financing options for its students, including DeVry’s institutional loan programs.
The following table summarizes DeVry’s cash receipts from tuition and related fee payments by fund source as a percentage of total revenue for the fiscal years 2012 and 2011, respectively.
Fiscal Year
2012 2011
Funding Source:
Federal Assistance (Title IV) Program Funding (Grants and Loans) 69 % 73 %
State Grants 1 % 2 %
Private Loans 1 % 1 %
Student accounts, cash payments, private scholarships, employer and military provided tuition assistance and other 29 % 24 %
Total 100 % 100 %
Final data for fiscal year 2013 are not yet available.
Fiscal Year
2012 2011
Funding Source:
Federal Assistance (Title IV) Program Funding (Grants and Loans) 69 % 73 %
State Grants 1 % 2 %
Private Loans 1 % 1 %
Student accounts, cash payments, private scholarships,
    employer and military provided tuition assistance and other 29 % 24 %
Total 100 % 100 %
The pattern of cash receipts during the year is somewhat seasonal. DeVry’s accounts receivable peak immediately after ~~tuition~~ bills are issued ~~at the beginning of~~ each ~~academic period.~~session. Historically, accounts receivable reach their lowest level at the end of each ~~academic term,~~semester/session, dropping to their lowest point during the year at the end of June.
At ~~March 31,~~September 30, 2013, total accounts receivable, net of related reserves, ~~were $194.4~~was $183.5 million compared to ~~$254.7~~$167.0 million at ~~March 31,~~September 30, 2012. The ~~decrease~~increase in net accounts receivable ~~was attributable~~is due to the impact of revenue ~~declines~~growth across the institutions in the Medical and Healthcare segment and at DeVry ~~University and Carrington. This decrease was partially offset with increases in net accounts receivable from~~Brasil as compared to the ~~acquisitions of FBV and FAVIP.~~
year-ago period.
Financial Aid
Like other higher education institutions, DeVry is highly dependent upon the timely receipt of federal financial aid funds. ~~Financial~~All financial aid and assistance programs are subject to political and governmental budgetary considerations. In the United States, the Higher Education Act (“HEA”) ~~provides the authority for~~guides the federal government’s support of postsecondary education. If there are changes to financial aid programs that restrict student eligibility or reduce funding levels, DeVry’s financial condition and cash flows could be materially and adversely affected. Please see ~~“Item 1A.~~Item 1A Risk ~~Factors”~~Factors in ~~DeVry’s~~the Annual Report on Form 10-K, ~~for the fiscal year ended June 30, 2012~~ for a discussion of student financial aid related risks.
In addition, please see Item 1A Risk Factors in this Quarterly Report on Form 10-Q for a discussion of the U.S. Department of Education negotiated rule making committee process on Gainful Employment.
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In addition, government-funded financial assistance programs are governed by extensive and complex regulations in both the United States, Brazil and ~~Brazil.~~Canada. Like any other educational institution, DeVry’s administration of these programs is periodically reviewed by various regulatory agencies and is subject to audit or investigation by other governmental authorities. Any violation could be the basis for penalties or other disciplinary action, including initiation of a suspension, limitation or termination proceeding. Previous Department of Education and state regulatory agency program reviews have not resulted in material findings or adjustments against DeVry.
A comprehensive program review of DeVry University’s administration of the Title IV programs, initiated in May 2011, was completed in September 2013, with no material adverse findings.
A U.S. Department of Education regulation known as the “90/10 Rule” affects only proprietary postsecondary institutions, such as DeVry University, Ross University School of Medicine, Ross University School of Veterinary Medicine, ~~American University of the Caribbean,~~AUC, Chamberlain, Carrington College and Carrington College California. Under this regulation, an institution that derives more than 90% of its revenues from Title IV student financial assistance programs in any ~~two consecutive years~~year may not participate in these programs infor the ~~year~~ following ~~that period.~~
year.
The following table details the percentage of revenue from federal financial assistance programs for each of DeVry’s Title IV eligible institutions for fiscal years 2012 and 2011, respectively.
Fiscal Year
2012 2011
DeVry University:
Undergraduate 75 % 81 %
Graduate 73 % 81 %
Ross University School of Medicine 80 % 81 %
Ross University School of Veterinary Medicine 89 % 89 %
Chamberlain College of Nursing 66 % 71 %
Carrington College 80 % 82 %
Carrington College California 81 % 85 %
American University of the Caribbean School of Medicine 81 % 81 %
Final data for fiscal year 2013 is not yet available.
Fiscal Year
2012 2011
DeVry University:
Undergraduate 75 % 81 %
Graduate 73 % 81 %
Ross University School of Medicine 80 % 81 %
Ross University School of Veterinary Medicine 89 % 89 %
Chamberlain College of Nursing 66 % 71 %
Carrington College 80 % 82 %
Carrington College California 81 % 85 %
American University of the Caribbean 81 % 81 %
Under the terms of DeVry’s participation in financial aid programs, certain cash received from state governments and the U.S. Department of Education is maintained in restricted bank accounts. ~~Once~~DeVry receives these funds either after the financial aid authorization and disbursement process for the benefit of the student is completed, or just prior to that authorization. Once the authorization and disbursement process for a particular student is completed, the ~~restricted~~ funds may be transferred to unrestricted accounts and become available for DeVry to use in ~~current~~ operations. This process generally occurs during the academic term for which such funds have been authorized. At ~~March 31,~~September 30, 2013, cash in the amount of ~~$7.2~~$7.3 million was held in restricted bank accounts, compared to ~~$13.2~~$4.5 million at ~~March 31,~~September 30, 2012. This decrease is a result in a change in the timing of the receipt of financial aid due to the move to a new student centric academic calendar at DeVry University and Chamberlain where students may start an academic term at any of six times during the year.
~~As described in more detail in “Item 1. Business” in DeVry’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012, institutions must meet a~~
A separate financial responsibility test ~~if their~~for continued participation by an institution’s students in federal financial assistance programs is based upon a composite score of three ratios: an equity ratio that measures the institution’s capital resources; a primary reserve ratio that measures an institution’s ability to fund its operations from current resources; and a net income ratio that measures an institution’s ability to operate profitably. A minimum score of 1.5 is necessary to meet the Department of Education’s financial standards. Institutions with scores of less than 1.5 but greater than or equal to 1.0 are considered financially responsible, but require additional oversight. These schools are subject to cash monitoring and other participation requirements. An institution with a score less than 1.0 is considered not financially responsible. However, a school with a score less than 1.0 may continue to participate in the Title IV programs under provisional certification. In addition, this lower score typically requires that the school be subject to cash monitoring requirements and post a letter of credit (equal to a minimum of 10 percent of the Title IV aid it received in the institution's most recent fiscal year).
For the past several years, DeVry’s composite score has exceeded the required minimum of 1.5. If DeVry were unable to meet requisite financial responsibility standards or otherwise demonstrate, within the regulations, its ability to continue to provide educational services, then DeVry could be subject to heightened monitoring or required to post a letter of credit to enable its students to continue to participate in federal financial assistance programs. The U.S. Department of Education relies on a test that considers Equity, Primary Reserve, and Net Income ratios, with a minimum required score of 1.5. Management has calculated DeVry’s composite score as 2.0 at June 30, 2012. Management believes DeVry will continue to demonstrate the required level of financial stability.
Cash from Operations
Cash generated from continuing operations in ~~the~~ first ~~nine months~~quarter of fiscal year ~~2013~~2014 was ~~$282.4~~$142.5 million, compared to ~~$355.1~~$165.2 million in the year-ago period. ~~Although~~This decrease in operating cash flows from continuing operations was primarily the result of a $25.8 million decrease from the prior year in net income ~~increased $6.3 million~~ from ~~the year-ago period,~~continuing operations. Also contributing to the decrease in cash ~~flow~~generated from continuing operations ~~occurred partially due to a $75.0 million non-cash asset impairment charge in the prior fiscal year. Also, the decrease in cash flow from operations was due in part to~~were changes in net accounts receivable, deferred tuition revenue, advanced tuition payments and restricted cash of $101.7 million as compared to the prior year. This decrease is a result in a change in the timing of student billing due to the move to a new student centric academic calendar at DeVry University and Chamberlain where students may start an academic term at any of six times during the year. These decreases in operating cash flows were partially offset by changes in levels of prepaid expenses, accounts payable and accrued expenses ~~which resulted in a $78.8~~that were $6.1 million ~~greater source of cash as compared to~~less than the ~~prior year.~~year-ago changes. Variations in the levels of accrued and prepaid expenses and accounts payable from period to period are caused, in part, by the timing of the period-end relative to DeVry’s payroll and bill payment cycles. ~~Finally, realized and unrealized gains and losses on~~Partially offsetting the ~~sale or disposal of assets increased~~decreases in operating cash ~~flow by $10.8~~flows were changes in net accounts receivable, deferred tuition revenue, advanced tuition payments and restricted cash of $17.5 million as compared to the prior year.
The receivables balance increased due to the impact of revenue growth in the Medical and Healthcare segment and at DeVry Brasil as compared to the year-ago period.
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Cash Used in Investing Activities
Capital expenditures for continuing operations in the first ~~nine months~~quarter of ~~fiscal~~ year ~~2013~~2014 were ~~$79.3~~$22.2 million compared to ~~$92.2~~$25.6 million in the year-ago ~~period.~~quarter. The decrease in capital spending was driven by a focus on prudent capital ~~deployment~~deployment. DeVry continues to invest capital in facility expansion at the Ross University School of Medicine and ~~a delay~~the Ross University School of Veterinary Medicine and AUC; spending for the new Chamberlain campuses and expanding existing facilities; and facility improvements at DeVry University and DeVry Brasil.
Capital spending for the remainder of fiscal year 2014 will support continued investment in ~~spending on projects.~~academic quality at Ross University School of Medicine, Ross University School of Veterinary Medicine and AUC; facility improvements and new locations for Chamberlain and DeVry Brasil. Management anticipates full year fiscal ~~2013~~2014 capital spending to be in the ~~range of~~$115 to $125 ~~to $135 million.~~
million range.
On ~~September 3, 2012,~~July 1, 2013, DeVry Educacional do Brasil S/A (f/k/a Fanor-Faculdades Nordeste S/A) (DeVry Brasil), a subsidiary of DeVry, acquired the stock of Faculdade ~~do Vale do Ipojuca~~Diferencial Integral (“~~FAVIP”~~Facid”). Under the terms of the agreement, DeVry Brasil paid approximately ~~$30.3~~$16.1 million in cash in exchange for the stock of ~~FAVIP.~~Facid. In addition, DeVry Brasil ~~will be~~is required to make an additional ~~payment~~payments of approximately ~~$3.9~~$9.0 million over the next ~~12 months should FAVIP receive university center status.~~
~~DeVry maintains an 83.5 percent ownership interest~~four years. Facid currently serves approximately 2,500 students at two campuses in the city of Teresina, and offers degree programs primarily in healthcare, including a Doctor of Medicine (M.D.) program. Facid joins DeVry Brasil, which now operates six institutions at 13 campuses in northeast Brazil. With the addition of Facid, these institutions provide education programs to nearly 30,000 students. Along with its M.D. program, Facid offers undergraduate degrees in other healthcare fields such as nursing, pharmacy, and dentistry, as well as a law program.
During the remaining 16.5 percent owned by the current DeVry Brasil management group. Beginning January 2013, DeVry has the right to exercise a call option and purchase any remaining DeVry Brasil stock from DeVry Brasil management. Likewise, DeVry Brasil management has the right to exercise a put option and sell its remaining ownership interest in DeVry Brasil to DeVry. DeVry intends on exercising its rights under this call option before the endfirst quarter of fiscal ~~2013.~~year 2014, management completed the sale of the former DeVry University campus in Decatur, GA, which was vacated a number of years ago. The ~~value~~net proceeds on this sale were approximately $6.7 million which resulted in the recording of ~~this call option is currently recorded at $9.0 million.~~
a pre-tax gain of $1.9 million in the quarter.
Cash Used in Financing Activities
During the first nine months of fiscal year 2013, DeVry repurchased a total of 2,016,998 shares of its stock, on the open market, for approximately $48.4 million under its share repurchase programs. As of March 31, 2013, the total remaining authorization under the eighth repurchase program was $85.3 million. This latest share repurchase program was authorized by the Board of Directors on August 29, 2012. It will allow DeVry to repurchase up to $100 million of its common stock through December 31, 2014. The timing and amount of any future repurchases will be determined based on evaluation of market conditions and other factors. These repurchases may be made through the open market, including block purchases, or in privately negotiated transactions, or otherwise. The buyback will be funded through available cash balances and/or borrowings under its revolving credit agreement and may be suspended or discontinued at any time.
DeVry’s Board of Directors declared a dividend on November 7, 2012 of $0.17 per share to common stockholders of record as of November 30, 2012. The total dividend of $10.9 million was paid on December 19, 2012.
DeVry’s consolidated cash balances of ~~$278.0~~$311.8 million at ~~March 31,~~September 30, 2013, included approximately ~~$129.0~~$169.3 million of cash attributableto DeVry’s international operations. It is DeVry’s intention to indefinitely reinvest this cash and subsequent earnings and cash flow to improve and expand facilities and operations of its international ~~institutions~~schools and pursue future business opportunities outside the United States. Therefore, cash held by international operations will not be available for domestic general corporate purposes. Management does not believe that this policy will adversely affect DeVry’s overall liquidity.
Historically, DeVry has produced positive domestic cash flows from operating activities sufficient to fund the delivery of its domestic educational programs and services as well as to fund capital investment and other activities including share repurchases and dividend payments. In addition, DeVry maintains a $400 million revolving line of credit which can be expanded with bank approval to $550 million at the option of DeVry. For the first ~~nine months~~quarter of fiscal year ~~2013,~~2014, cash flows from domestic operating activities were approximately ~~$194.2~~$95 million which when added to DeVry’s beginning of the year domestic cash balances, was sufficient to fund ~~$49.9~~$9.5 million of domestic capital investment ~~pay dividends of $20.7 million and fund $48.4 million of common stock repurchases,~~ in addition to funding other investment and financing activities.
Management believes that current balances of unrestricted cash, cash generated from operations and ~~the~~ revolving ~~loan~~credit facility will be sufficient to fund both DeVry’s current domestic and international operations and growth plans, and current share repurchase program, for the foreseeable future unless future significant investment opportunities should arise.
Revolving Credit Agreement
DeVry maintains a revolving credit facility which expires on May 5, 2016. This facility provides aggregate commitments including borrowings and letters of credit of up to $400 million and, at the request of DeVry, can be increased to $550 million. Borrowings under this agreement will bear interest at ~~the~~ prime rate ~~plus 0.75%~~ or at a LIBOR, ~~rate plus 1.75%,~~ at the option of ~~DeVry.~~DeVry, plus a pre-established margin. Outstanding letters of credit under the revolving credit agreement are charged a fee for the undrawn face amount of the letter of credit, payable quarterly. The agreement also requires payment of a commitment fee for the undrawn portion of the credit facility. The interest rate margin, letter of credit fees and commitment fees are adjustable quarterly, based upon DeVry’s achievement of certain financial ratios. ~~As of March 31, 2013, there were no outstanding borrowings under this agreement.~~ DeVry’s letters of credit outstanding under the revolving credit facility were approximately ~~$14.7~~$13.2 million as of ~~March 31,~~September 30, 2013.
The revolving credit agreement contains certain covenants that, among other things, require maintenance of ~~certain~~ financial ratios, as defined in the agreements. These financial ratios include a consolidated fixed charge coverage ratio, a consolidated leverage ratio and a composite Equity, Primary Reserve and Net Income Department of Education ~~Financial Responsibility Ratio (“DOE Ratio”).~~financial responsibility ratio. Failure to maintain any of these ratios or to comply with other covenants contained in the agreement will constitute an event of default and could result in termination of the agreements and require payment of all outstanding borrowings. DeVry was in compliance with all debt covenants as of ~~March 31,~~September 30, 2013.
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Other Contractual Arrangements
DeVry’s long-term contractual obligations consist of its $400 million revolving line of credit (discussed above), operating leases on facilities and equipment, and agreements for various services.
In addition, DeVry has recorded liabilities for deferred purchase price agreements with sellers related to the acquisitions of FBV, Favip and Facid (see “Note 7: Business Combinations” of the notes to the consolidated financial statements). This financing is in the form of hold backs of a portion of the purchase price of these acquisitions or installment payments. Payments are made under these agreements as various conditions of the purchase are met.
DeVry is not a party to any off-balance sheet financing or contingent payment arrangements, nor are there any unconsolidated subsidiaries. DeVry has not extended any loans to any officer, director or other affiliated person. DeVry has not entered into any synthetic leases, and there are no residual purchase or value commitments related to any facility lease. DeVry did not enter into any significant derivatives, swaps, futures contracts, calls, hedges or non-exchange traded contracts during the first ~~nine months~~quarter of fiscal year ~~2013.~~2014. DeVry had no open derivative positions at ~~March 31,~~September 30, 2013.
RECENT ACCOUNTING PRONOUNCEMENTS
In ~~April~~July 2013, the ~~FASB~~Financial Accounting Standards Board issued ~~authoritative~~Accounting Standards Update No. 2013-11: “Income Taxes (Topic 740): Presentation of Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. This guidance ~~updating disclosure requirements for Comprehensive Income. The amendments do~~requires an unrecognized tax benefit related to a net operating loss carryforward, a similar tax loss or a tax credit carryforward to be presented as a reduction to a deferred tax asset, unless the tax benefit is not ~~change~~available at the ~~current requirements for~~ reporting ~~net~~date to settle any additional income ~~or other comprehensive income in financial statements. However,~~taxes under the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the facetax law of the ~~statement where net income~~applicable tax jurisdiction. The guidance is ~~presented or~~effective for the fiscal years and interim periods beginning December 15, 2013 with early adoption permitted. Management is in the ~~notes, significant amounts reclassified out~~process of ~~accumulated other comprehensive income by~~evaluating the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. The guidance will be effective for our interim and annual reporting period beginning July 1, 2013. Applicationeffects of this guidance but does not believe it will ~~not~~ have a ~~material effect~~significant impact on DeVry’s consolidated financial statements.
ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK
DeVry is not dependent upon the price levels, nor affected by fluctuations in pricing, of any particular commodity or group of commodities. However, more than 50% of DeVry’s costs are in the form of employee wages and benefits. Changes in employment market conditions or escalations in employee benefit costs could cause DeVry to experience cost increases at levels beyond what it has historically experienced.
The financial position and results of operations of Ross University’s Caribbean operations as well as those of AUC are measured using the U.S. dollar as the functional currency. Substantially all Ross University and AUC financial transactions are denominated in the U.S. dollar.
The financial position and results of operations of DeVry’s Canadian educational programs are measured using the Canadian dollar as the functional currency. The Canadian operations have not entered into any material long-term contracts to purchase or sell goods and services. DeVry does not have any foreign exchange contracts or derivative financial instruments designed to mitigate changes in the value of the Canadian dollar. Because Canada-based assets and liabilities constitute less than 1.0% of DeVry’s overall assets and liabilities, changes in the value of Canada’s currency at rates experienced during the past several years are unlikely to have a material effect on DeVry’s results of operations or financial position. Based upon the current value of the net assets in the Canadian operations, a change of $0.01 in the value of the Canadian dollar relative to the U.S. dollar would result in a translation adjustment of less than $100,000.
The financial position and results of operations of DeVry’s investment in DeVry Brasil are measured using the Brazilian Real as the functional currency. DeVry Brasil has not entered into any material long-term contracts to purchase or sell goods and services, other than the lease agreements on teaching facilities and contingencies relating to prior acquisitions. Currently, DeVry does not have any foreign exchange contracts or derivative financial instruments designed to mitigate changes in the value of the Brazilian Real. Since Brazilian-based assets constitute approximately ~~8.0%~~8.7% of DeVry’s overall assets, and its Brazilian liabilities constitute approximately ~~6.0%~~7.0% of overall liabilities, and because there are very few transactions between DeVry Brasil and DeVry’s U.S. based subsidiaries, changes in the value of Brazil’s currency at rates experienced during the past several years are unlikely to have a material effect on DeVry’s results of operations; however, the volatility of the Brazilian Real ~~during fiscal 2012~~over the past 12 months resulted in a ~~$24~~$12 million charge to Accumulated Other Comprehensive Income ~~in fiscal 2012. A gain~~over that time period and a charge of ~~approximately $0.3~~$0.7 million ~~was recognized in Accumulated Other Comprehensive Income~~ for the first ~~nine months~~quarter of fiscal ~~2013.~~year 2014. Based upon the current value of the net assets in DeVry Brasil’s operations, a change of $0.01 in the value of the Brazilian Real relative to the U.S. dollar would result in a translation adjustment to Accumulated Other Comprehensive Income of approximately ~~$2.2~~$2.5 million.
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The interest rate on DeVry’s revolving credit facility is based upon ~~the~~ prime rate or LIBOR ~~interest rates~~ for periods typically ranging from one to three months. Based upon borrowings of $50 million, a 100 basis point increase in short-term interest rates would result in approximately $0.5 million of additional annual interest expense. At ~~March 31,~~September 30, 2013, DeVry had no outstanding borrowings under this facility. However, future investment opportunities and cash flow generated from operations may affect the level of outstanding borrowings and the effect of a change in interest rates.
DeVry’s customers are principally individual students enrolled in its various educational programs. Accordingly, concentration of accounts receivable credit risk is small relative to total revenues or accounts receivable.
DeVry’s cash is held in accounts at various large, financially secure depository institutions. Although the amount on deposit at a given institution typically will exceed amounts subject to guarantee, DeVry has not experienced any deposit losses to date, nor does management expect to incur such losses in the future.
ITEM 4 — CONTROLS AND PROCEDURES
Principal Executive and Principal Financial Officer Certificates
The required compliance certificates signed by the DeVry’s CEO and CFO are included as Exhibits 31 and 32 of this Quarterly Report on Form 10-Q.
Disclosure Controls and Procedures
Disclosure controls and procedures are designed to help ensure that all the information required to be disclosed in DeVry’s reports filed under the Securities Exchange Act of 1934 (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified by the applicable rules and forms.
DeVry’s Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this report, that DeVry’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) are effective to ensure that information required to be disclosed in the reports that DeVry files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) is accumulated and communicated to DeVry’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in internal control over financial reporting that occurred during the ~~third~~first quarter of fiscal year ~~2013~~2014 that materially affected, or are reasonably likely to materially affect, DeVry’s internal control over financial reporting.

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PART II – Other Information
ITEM 1 – LEGAL PROCEEDINGS
DeVry is subject to ~~occasional~~ lawsuits, administrative proceedings, regulatory reviews and investigations associated with financial assistance programs and other matters arising in the normal conduct of its business. The following is a description of pending litigation that may be considered other than ordinary and routine litigation that is incidental to the business.
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The Boca Raton Firefighters’ and Police Pension Fund filed an initial complaint (the “Shareholder Case”) in the United States District Court for the Northern District of Illinois on November 1, 2010 (Case No. 1:10-cv-07031). The initial complaint was filed on behalf of a putative class of persons who purchased DeVry common stock between October 25, 2007, and August 13, 2010. Plaintiff filed an amended complaint (the “First Amended Complaint”) on March 7, 2011 alleging the same categories of claims in the initial complaint. The plaintiff claimed in the First Amended Complaint that DeVry, Daniel Hamburger and Richard M. Gunst violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by failing to disclose abusive and fraudulent recruiting and financial aid lending practices, thereby increasing DeVry’s student enrollment and revenues and artificially inflating DeVry’s stock price during the class period. On March 27, 2012, Judge John F. Grady dismissed the First Amended Complaint without prejudice, granting plaintiff leave to file a second amended complaint by May 4, 2012.
On May 4, 2012, the plaintiff again amended its allegations in the Shareholder Case (the “Second Amended Complaint”). The Second Amended Complaint alleged a longer putative class period of October 27, 2007 to August 11, 2011, but narrowed the scope of the alleged fraud significantly as compared to the previous two complaints. Plaintiff focused exclusively on DeVry’s practices for compensating student Admissions Advisors, alleging DeVry misled the market by failing to disclose that its compensation practices violated federal law and by making affirmative misrepresentations that DeVry complied with compensation regulations. The Second Amended Complaint was subsequently corrected to add an additional plaintiff, West Palm Beach Firefighters’ Pension Fund, in response to DeVry’s challenge of plaintiff’s standing to complain about statements DeVry made after plaintiff had purchased its stock.
On July 10, 2012, DeVry filed a Motion to Dismiss the corrected Second Amended Complaint. On March 27, 2013, Judge Grady granted DeVry’s Motion to Dismiss and entered judgment in favor of DeVry and against plaintiffs. Judge Grady thereby dismissed the case with prejudice; however, he reserved jurisdiction to examine the question of whether sanctions should be imposed against plaintiffs and/or their counsel. On April 26, 2013, the plaintiffs filed a notice of appeal of Judge Grady’s order of dismissal; however, the appeal has been stayed pending Judge Grady’s resolution of the sanctions issue. The issue of sanctions ~~is being~~was fully briefed by the parties ~~and is expected to be complete by~~as of May 17, ~~2013. Once~~2013, and remains under consideration by Judge Grady.
DeVry was served on October 11, 2013, with a complaint in a qui tam action filed under the ~~issue~~federal False Claims Act and the Minnesota False Claims Act by two former employees of ~~sanctions is resolved,~~a customer of DeVry’s subsidiary, Advanced Academics, Inc. (“AAI”). The lawsuit, United States and the ~~March 27, 2013 judgment will be subject to appeal by plaintiffs if they decide to contest the judgment.~~
~~Three shareholder derivative cases similar to the Shareholder Case had been filed (“Derivative Actions”)~~State of Minnesota ex rel. Jill Bachmann and Shelley Madore v. Minnesota Transitions Charter Schools, Advanced Academics, Inc., ~~but each has been voluntarily dismissed by the plaintiffs who brought them. Two of the Derivative Actions were~~DeVry Inc., and MN Virtual High School, CA No. 12-cv-01359-DWF-JSM, was filed in the ~~Circuit~~United States District Court for the District of ~~Cook County, Illinois, Chancery Division: DeVry shareholder Timothy Hald~~Minnesota. The complaint was filed ~~a derivative complaint~~on June 6, 2012 but kept under seal in order for the federal and Minnesota state governments to investigate the allegations and determine if they wished to intervene in the action and pursue the alleged claims.   Both the federal and Minnesota state governments declined to intervene, thereby giving the plaintiffs the choice to pursue the alleged claims on behalf of ~~DeVry~~the state and federal governments. The complaint was unsealed and made public on ~~January 3, 2011 (Hald v. Hamburger et al., Case No. 11 CH 0087)~~June 6, 2013. The complaint relates to certain federal and ~~Matthew Green (also~~state funding received by Minnesota Transitions Charter Schools and MN Virtual High School. The complaint alleges that Minnesota Transitions Charter Schools and MN Virtual High School received certain state and federal funding, which depended on the accurate reporting of student enrollment data. The complaint alleges that Minnesota Transitions Charter Schools and MN Virtual High School received more funding from the federal and state governments for special education and other services than they should have received in 2008, 2009 and 2010 as a ~~DeVry shareholder) filed~~result of allegedly non-compliant practices arising from the reporting of student enrollment data. The complaint further alleges that all schools of defendant Minnesota Transitions Charter Schools received over $75 million in total state and federal funding during fiscal years 2008 to 2010, a ~~derivative~~portion of which related to the school for which AAI provided services; plaintiff does not quantify what portion of the $75 million was obtained as a result of the allegedly fraudulent practices. The complaint ~~on behalf of DeVry on January 7, 2011 (Green v. Hamburger et al., Case No. 11 CH 0770).~~alleges that AAI provided certain curriculum and other services to MN Virtual High School and operated the school. The Hald and Green cases (the “Illinois Consolidated Action”) were consolidated by court order dated February 9, 2011 but was voluntarily dismissed without prejudice by Order entered January 15, 2013. Maria Dotro, another DeVry shareholder, filed a third derivative complaint on DeVry’s behalf in the Delaware Court of Chancery on March 11, 2011 (Dotro v. Hamburger et al., Case No. 6263). In the wake of Judge Grady’s award of judgment in favor ofonly reference to DeVry in the ~~Shareholder Case, described above,~~complaint pertains to its status as the ~~Dotro shareholder case was voluntarily dismissed without prejudice as well.~~
parent corporation to AAI.
Although DeVry believes that each of the appeal of the dismissed Shareholder Case and the ~~related derivative actions are~~allegations of the above-described qui tam case is without merit, the ultimate outcome of pending litigation is difficult to predict. ~~In the event that the plaintiffs in the Shareholder Case decide to appeal the adverse judgment entered against them or the shareholders decide to re-file their related claims,~~ DeVry will vigorously defend any ~~forthcoming litigation based on~~appellate proceedings which may proceed in the ~~same or similar~~Shareholder Case as well as the allegations in the qui tam case. At this time, DeVry does not expect that the outcome of ~~any such matter~~either of these two matters or any other pending lawsuits will have a material effect on its cash flows, results of operations or financial position.
In April 2013, DeVry received a subpoena from the Office of the Attorney General of the State of Illinois and a Civil Investigative Demand issued by the Office of the Attorney General of the Commonwealth of Massachusetts. The Illinois subpoena concerns potential state law implications in the event violations of federal law took place. It was issued pursuant to the Illinois False Claims Act in connection with an investigation concerning whether the compensation practices of DeVry and certain of its affiliates are in compliance with the Incentive Compensation Ban of the Higher Education Act and requires DeVry to provide documents relating to these matters for periods on or after January 1, 2002. The Massachusetts demand was issued in connection with an investigation into whether DeVry caused false claims and/or false statements to be submitted to the Commonwealth of Massachusetts relating to student loans, guarantees, and grants provided to DeVry’s Massachusetts students and requires DeVry to answer interrogatories and to provide documents relating to periods on or after January 1, 2007. The timing or outcome of the investigations, or their possible impact on DeVry’s business, financial condition or results of operations, cannot be predicted at this time.
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ITEM 1A — RISK FACTORS
In addition to the other information set forth in this report, and the update to the risk factor described below, the factors discussed in Part I “Item 1A. Risk Factors” in DeVry’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2012,~~2013, which could materially affect DeVry’s business, financial condition or future results, should be carefully considered. Such risks are not the only risks facing ~~DeVry, additional~~DeVry. Additional risks and uncertainties not currently known to DeVry or that management currently deems to be immaterial also may materially adversely affect its business, financial condition and/or operating results.
DeVry’s goodwill and intangible assets could potentially be impaired if our business results and financial condition were materially and adversely impacted by the risks and uncertainties
At ~~March 31,~~September 30, 2013, intangible assets from business combinations totaled ~~$292.1~~$298.4 million, and goodwill totaled ~~$566.5~~$517.7 million. Together, these assets equaled approximately ~~43%~~40% of total assets as of such date. If DeVry’s or any of its subsidiaries’ business results and financial condition were materially and adversely impacted, then such goodwill and intangible assets could be impaired, requiring possible write-off of up to ~~$292.1~~$298.4 million of intangible assets and up to ~~$566.5~~$517.7 million of goodwill.
DeVry is subject to risks relating to regulatory matters. If DeVry fails to comply with the extensive regulatory requirements for its operations, DeVry could face fines and penalties, including loss of access to federal and state student financial aid for its students as well as significant civil liability.
As a provider of higher education, DeVry is subject to extensive regulation on both the federal and state levels. In particular, the Higher Education Act, as amended and reauthorized, (“the Higher Education Act”) subjects DeVry’s U.S. degree granting institutions (DeVry University, Chamberlain College of Nursing, Carrington College and Carrington College California) and all other higher education institutions, including DeVry’s Ross University School of Medicine, Ross University School of Veterinary Medicine and American University of the Caribbean School of Medicine, that participate in the various federal student financial aid programs under Title IV of the Higher Education Act (“Title IV”) to significant regulatory scrutiny.
To participate in Title IV, an institution must receive and maintain authorization by the appropriate state education agencies, be accredited by an accrediting commission recognized by the U.S. Department of Education (“ED”), and be certified by the ED as an eligible institution, which ultimately is accomplished through the execution of a Program Participation Agreement.
These regulatory requirements cover virtually all phases of DeVry’s U.S. operations, including educational program offerings, facilities, instructional and administrative staff, administrative procedures, marketing and recruiting, financial operations, payment of refunds to students who withdraw, acquisitions or openings of new schools or programs, addition of new educational programs and changes in DeVry’s corporate structure and ownership.
If DeVry is found to be in noncompliance with any of these regulations, standards or policies, any one of the relevant regulatory agencies could take action including:
⋅    Imposing monetary fines or penalties;
⋅    Requiring a posting of a letter of credit or bond
⋅    Restricting DeVry’s ability to offer new programs of study or imposition of enrollment caps;
⋅    Limiting or terminating DeVry’s operations or ability to grant degrees;
⋅    Restricting or revoking accreditation, licensure or other approval to operate;
⋅    Limiting, suspending, or terminating eligibility to participate in Title IV programs or state financial aid programs; and
⋅    Subjecting DeVry to other civil or criminal penalties, including those associated with filing a false claim, which may include requirements to repay one or more years receipt of Title IV aid and treble damages.
Any of the penalties, injunctions, restrictions or other forms of censure listed above could have a material adverse effect on DeVry’s business, results of operations, financial condition and cash flows. If DeVry were to lose its Title IV eligibility, DeVry would experience a dramatic and adverse decline in revenue and would be unable to continue business as it is currently conducted.
Many U.S. state governments also provide financial support to students enrolled in higher education programs in their state. These state government financial aid programs subject our schools to regulatory requirements, often similar to those governing federal Title IV programs. If any one of our U.S. degree granting institutions is found to be in noncompliance with regulations governing those programs, its students and prospective students may lose access to funds from the non-compliant program, which could negatively impact the financial condition, results of operations and cash flows of the affected institution. The institution could also be required to repay all or a portion of funds received for one or more years of noncompliant activity.
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In the fall of 2009, the ED initiated the process of negotiated rulemaking with respect to Program Integrity Issues to consider changes to certain provisions of the regulations governing the Title IV Programs.  The resulting program integrity rules promulgated in October 2010 and June 2011 address fourteen topics including Gainful Employment.
The ED published final program integrity regulations on October 29, 2010, with most of the final rules effective July 1, 2011. On June 13, 2011, the ED published final regulations on metrics for gainful employment programs effective July 1, 2012. While DeVry believes it is operating in compliance with these new reporting and disclosure requirements, non-compliance with these requirements, individually or in combination, may negatively impact the Title IV eligibility of DeVry’s academic programs and its student enrollments.
To be eligible for Title IV funding, most academic programs offered by private sector institutions of higher education must prepare students for gainful employment in a recognized occupation. Effective July 1, 2011, all private sector higher education institutions must provide prospective students with the types of employment associated with the program, total cost of the program, on-time completion rate, job placement rate, if applicable, and the median loan debt of program completers. Beginning October 1, 2011, institutions must annually submit information to the ED about students who complete a program leading to gainful employment in a recognized occupation, including the amount of debt incurred under private loans or institutional financing plans, matriculation information, and end of year enrollment information. Additionally, beginning July 1, 2011 the final regulations require institutions to notify the ED at least 90 days before the commencement of new educational programs leading to gainful employment in recognized occupations. This notification must include information on the demand for the program, any performed wage analysis, any external program review and approval, and a demonstration of accreditation.
An academic program is considered to lead to gainful employment if it meets at least one of the following three metrics:
⋅    at least 35% of former students are repaying their loans;
⋅    the estimated annual loan payment of a typical graduate does not exceed 30% of his or her discretionary income; or
⋅    the estimated annual loan payment of a typical graduate does not exceed 12% of his or her total earnings.
An academic program that passes any one standard is considered to be preparing students for gainful employment. If an academic program fails all three metrics, the institution will have the opportunity to improve the performance of that program. After one failure, the institution must disclose the amount by which the program missed minimal acceptable performance and the program's plan for improvement. After two failures within three years, the institution must inform students in the failing program that their debts may be unaffordable, that the program may lose eligibility, and what transfer options exist. After three failures within four years, the academic program loses eligibility to participate in Title IV programs for at least three years, although the program could be continued without federal student aid. If a particular program ceased to be eligible for Title IV funding, in most cases it would not be practical for DeVry to continue offering that program. These gainful employment standards are effective beginning with the Gainful Employment Measures for 2012, which will be published in 2013.
On June 30, 2012, the U.S. District Court for the District of Columbia, in the case captioned Association of Private Sector Colleges and Universities (APSCU) v. Duncan, issued a decision that vacated most of the gainful employment regulations that the ED published on October 29, 2010 and June 13, 2011 and remanded those regulations to the ED for further action. The Court left in place the gainful employment disclosure provisions that require institutions to disclose certain information on their web pages for each gainful employment program, including on time completion rates and information about tuition and costs. On June 12, 2013, the ED announced its intention to establish a negotiated rulemaking committee to negotiate the rules vacated by the Court. The negotiated rulemaking panel held its first meeting September 9-11, 2013. The second and final meeting is scheduled for November 18-20, 2013. During the second meeting, the panel will be asked to vote on final proposed rules. If the panel agrees without dissent, the ED must issue that rule as a proposed rule subject to public comment. If the panel fails to agree on a proposed rule, the ED is free to issue a proposed rule free of any of the recommendations agreed to within that rulemaking.  Any new rule must be published for comment and a final rule issued by October 31 of any year to be effective for the subsequent July 1. The eligibility to participate in Title IV for students enrolled in specific DeVry programs could be adversely impacted by changes to the vacated metrics or the implementation of new measures.
44

ITEM 2 —– UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity
Securities
Period Total Number of
Shares Purchased Average Price
Paid per Share Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs (1) Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under the
Plans or Programs
(1)
January 2013 121,548 $ 24.31 121,548 $ 92,086,620
February 2013 109,972 $ 29.59 109,972 88,832,826
March 2013 115,760 $ 30.90 115,760 85,255,994
Total 347,280 $ 28.18 347,280 $ 85,255,994
Period Total Number of Shares
Purchased Average Price Paid per
Share Total Number of Shares
Purchased as part of
Publically Announced
Plans or Programs (1) Approximate Dollar
Value of Share that
May yet be Purchased
Under the Plans or
Programs (1)
July 2013 - $ - - $ -
August 2013 - $ - - $ -
September 2013 - $ - - $ -
Total - $ - - $ 79,723,028
(1) On August 29, 2012, the Board of Directors authorized a share repurchase program to buy back up to $100 million of DeVry common stock through December 31, 2014.  The total remaining authorization under this share repurchase program was ~~$85,255,994~~$79,723,028 million as of ~~March 31,~~September 30, 2013.
DeVry suspended repurchases under this plan in May 2013.
Other Purchases of Equity Securities
Period Total Number of
Shares Purchased Average Price
Paid per Share Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs (2) Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under the
Plans or Programs
(2)
January 2013 - $ - N/A N/A
February 2013 4,291 $ 30.80 N/A N/A
March 2013 - $ - N/A N/A
Total 4,291 $ 30.80 N/A N/A
Period Total Number of Shares
Purchased (2) Average Price Paid per
Share Total Number of Shares
Purchased as part of
Publically Announced
Plans or Programs Approximate Dollar
Value of Share that
May yet be Purchased
Under the Plans or
Programs
July 2013 - $ - NA NA
August 2013 92,776 $ 29.55 NA NA
September 2013 - $ - NA NA
Total 92,776 $ 29.55 NA NA
(2) Represents shares delivered back to the issuer for payment of withholding taxes from employees for vesting restricted shares pursuant to the terms of DeVry’s stock incentive plans.
42
ITEM 4 —– MINE SAFETY DISCLOSURES
Not applicable.
ITEM 6 — EXHIBITS
~~The exhibits to this report are listed on the Exhibit Index included elsewhere herein.~~
Exhibit 3.1 Amended and Restated By-laws of DeVry Inc., as amended as of August 21, 2013 (incorporated by reference to the Registrant’s Current Report on Form 8-K dated August 21, 2013)
Exhibit 31 Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended
Exhibit 32 Certification Pursuant to Title 18 of the United States Code Section 1350
101.INS             XBRL Instance Document
101.SCH            XBRL Taxonomy Extension Schema Document
101.CAL            XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF            XBRL Taxonomy Extension Definition Linkbase Document
101.LAB            XBRL Taxonomy Extension Label Linkbase Document
101.PRE             XBRL Taxonomy Extension Presentation Linkbase Document
45

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DeVry Inc.

Date: ~~May 3,~~November 5, 2013 By /s/ Timothy J. Wiggins
Timothy J. Wiggins

Senior Vice President and Chief Financial Officer
(Principal Financial Officer) ~~and Treasurer~~

Date: ~~May 3,~~November 5, 2013 By /s/ Patrick J. Unzicker
Patrick J. Unzicker

Vice President, Finance and Chief Accounting
Officer ~~(Principal~~(Principal Accounting Officer)
~~INDEX TO EXHIBITS~~
~~Exhibit~~
~~Number~~
46
~~Exhibit~~
~~10.1~~ ~~Form of Stock Appreciation Rights Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated February 13, 2013)~~
~~10.2~~ ~~Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K dated February 13, 2013)~~
31 ~~Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended (filed herewith)~~
32 ~~Certification Pursuant to Title 18 of the United States Code Section 1350 (filed herewith)~~
~~101.INS~~ ~~XBRL Instance Document~~
~~101.SCH~~ ~~XBRL Taxonomy Extension Schema Document~~
~~101.CAL~~ ~~XBRL Taxonomy Extension Calculation Linkbase Document~~
~~101.DEF~~ ~~XBRL Taxonomy Extension Definition Linkbase Document~~
~~101.LAB~~ ~~XBRL Taxonomy Extension Label Linkbase Document~~
~~101.PRE~~ ~~XBRL Taxonomy Extension Presentation Linkbase Document~~
45

R	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended: September 30, 2013
	~~For the quarterly period ended: March 31, 2013~~
OR
OR

£ ¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to

	Large accelerated filer	R	Accelerated filer	£ ¨
	Non-accelerated filer	£ ~~(Do~~¨(Do not check if a smaller reporting company)	Smaller reporting company	£ ¨

	March 31,			June 30,			March 31,
	2013			2012			2012
	(Dollars in thousands)
ASSETS:
Current Assets:
Cash and Cash Equivalents	$	277,994		$	174,076		$	329,440
Marketable Securities and Investments		2,952			2,632			2,665
Restricted Cash		7,151			2,498			13,194
Accounts Receivable, Net		194,398			113,911			254,661
Deferred Income Taxes, Net		24,459			27,845			23,019
Refundable Income Taxes		657			40,278			8,212
Prepaid Expenses and Other		40,414			39,874			34,177
Total Current Assets		548,025			401,114			665,368
Land, Buildings and Equipment:
Land		66,063			65,172			66,019
Buildings		389,345			386,028			382,972
Equipment		485,570			433,949			422,271
Construction In Progress		64,412			61,752			50,192
		1,005,390			946,901			921,454
Accumulated Depreciation		(435,427	)		(387,924	)		(374,904	)
Land, Buildings and Equipment, Net		569,963			558,977			546,550
Other Assets:
Intangible Assets, Net		292,098			285,220			292,118
Goodwill		566,497			549,961			567,316
Perkins Program Fund, Net		13,450			13,450			13,450
Other Assets		27,953			29,894			27,400
Total Other Assets		899,998			878,525			900,284
TOTAL ASSETS	$	2,017,986		$	1,838,616		$	2,112,202

LIABILITIES:
Current Liabilities:
Accounts Payable	$	53,999		$	63,094		$	53,208
Accrued Salaries, Wages and Benefits		81,290			77,741			72,443
Accrued Expenses		76,442			76,243			56,328
Advance Tuition Payments		17,226			20,580			23,257
Deferred Tuition Revenue		180,498			77,551			349,200
Total Current Liabilities		409,455			315,209			554,436
Other Liabilities:
Deferred Income Taxes, Net		58,354			62,276			63,693
Deferred Rent and Other		92,037			96,496			91,415
Total Other Liabilities		150,391			158,772			155,108
TOTAL LIABILITIES		559,846			473,981			709,544

NON-CONTROLLING INTEREST		9,017			8,242			8,168
SHAREHOLDERS’ EQUITY:
Common Stock, $0.01 Par Value, 200,000,000 Shares Authorized; 62,989,000; 64,722,000 and 65,831,000 Shares Issued and Outstanding at March 31, 2013, June 30, 2012 and March 31, 2012, Respectively		744			741			741
Additional Paid-in Capital		285,242			272,962			267,285
Retained Earnings		1,616,850			1,488,988			1,490,371
Accumulated Other Comprehensive (Loss) Income		(5,934	)		(5,889	)		3,163
Treasury Stock, at Cost (11,409,000, 9,386,000 and 8,266,000 Shares, Respectively)		(447,779	)		(400,409	)		(367,070	)
TOTAL SHAREHOLDERS’ EQUITY		1,449,123			1,356,393			1,394,490
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,017,986		$	1,838,616		$	2,112,202

		September 30,			June 30,		September 30,
		2013			2013		2012
	(Dollars in thousands)
ASSETS:
Current Assets:
Cash and Cash Equivalents	$	308,544		$	196,576	$	247,572
Marketable Securities and Investments		3,104			2,975		2,750
Restricted Cash		7,251			7,019		4,546
Accounts Receivable, Net		183,487			139,778		167,045
Deferred Income Taxes, Net		33,336			29,758		25,078
Refundable Income Taxes		618			154		34,651
Prepaid Expenses and Other		51,083			49,685		35,983
Current Assets of Business Held for Sale		5,053			16,219		28,428
Total Current Assets		592,476			442,164		546,053
Land, Building and Equipment:
Land		67,101			71,122		65,249
Building		427,194			424,902		389,057
Equipment		471,905			475,656		458,340
Construction in Progress		44,226			33,724		35,931
		1,010,426			1,005,404		948,577
Accumulated Depreciation		(439,933)			(433,747)		(386,797)
Land, Building and Equipment of Business Held for Sale, Net		-			-		5,879
Land, Building and Equipment, Net		570,493	��		571,657		567,659
Other Assets:
Intangible Assets, Net		298,419			281,998		297,054
Goodwill		517,655			508,937		564,841
Perkins Program Fund, Net		13,450			13,450		13,450
Other Assets		32,805			33,025		31,263
Other Assets of Business Held for Sale		1,509			5,787		-
Total Other Assets		863,838			843,197		906,608
TOTAL ASSETS	$	2,026,807		$	1,857,018	$	2,020,320
LIABILITIES:
Current Liabilities:
Accounts Payable	$	57,798		$	55,131	$	61,543
Accrued Salaries, Wages and Benefits		96,100			88,444		83,242
Accrued Expenses		82,496			74,451		69,697
Deferred and Advance Tuition		243,353			97,478		255,222
Current Liabilities of Business Held for Sale		-			713		4,545
Total Current Liabilities		479,747			316,217		474,249
Other Liabilities:
Deferred Income Taxes, Net		63,850			60,103		67,286
Deferred Rent and Other		88,175			82,576		102,245
Total Other Liabilities		152,025			142,679		169,531
Other Liabilities of Business Held for Sale		-			112		144
TOTAL LIABILITIES		631,772			459,008		643,924
COMMITMENTS AND CONTINGENCIES (NOTE 12)
NON-CONTROLLING INTEREST		5,890			854		8,637
SHAREHOLDERS' EQUITY
Common Stock, $0.01 Par Value, 200,000,000 Shares Authorized: 63,198,000, 62,946,000 and 63,782,000 Shares Issued and Outstanding at September 30, 2013, June 30, 2013 and September 30, 2012, Respectively		751			745		743
Additional Paid-in Capital		298,386			291,269		278,144
Retained Earnings		1,562,662			1,575,009		1,520,415
Accumulated Other Comprehensive Loss		(17,605)			(17,101)		(5,412)
Treasury Stock, at Cost (11,662,000, 11,581,000 and 10,544,000 Shares, Respectively)		(455,049)			(452,766)		(426,131)
TOTAL SHAREHOLDERS' EQUITY		1,389,145			1,397,156		1,367,759
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	2,026,807		$	1,857,018	$	2,020,320

	For the Quarter Ended March 31,						For the Nine Months Ended March 31,
	2013			2012			2013			2012

REVENUES:
Tuition	$	472,239		$	505,651		$	1,400,199		$	1,488,432
Other Educational		36,513			35,156			96,533			95,462
Total Revenues		508,752			540,807			1,496,732			1,583,894
COSTS AND EXPENSES:
Cost of Educational Services		241,020			244,195			726,966			723,655
Student Services and Administrative Expense		192,100			201,158			572,955			596,125
Restructuring Expenses		2,029			-			11,513			-
Asset Impairment Charges		-			-		��	-			75,039
Total Operating Costs and Expenses		435,149			445,353			1,311,434			1,394,819
Operating Income		73,603			95,454			185,298			189,075
INTEREST AND OTHER (EXPENSE) INCOME:
Interest Income		415			110			1,206			520
Interest Expense		(756	)		(650	)		(3,006	)		(1,653	)
Net Gain on Sale of Assets		-			-			-			3,695
Net Interest and Other (Expense) Income		(341	)		(540	)		(1,800	)		2,562
Income Before Income Taxes		73,262			94,914			183,498			191,637
Income Tax Provision		16,102			27,610			43,292			57,741
NET INCOME		57,160			67,304			140,206			133,896
Net (Income) Loss Attributable to Non-controlling Interest		(339	)		(173	)		(1,110	)		(416	)
NET INCOME ATTRIBUTABLE TO DEVRY INC.	$	56,821		$	67,131		$	139,096		$	133,480

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO DEVRY INC. SHAREHOLDERS:
Basic	$	0.89		$	1.01		$	2.16		$	1.97
Diluted	$	0.88		$	1.00		$	2.15		$	1.96

Cash Dividend Declared per Common Share	$	-		$	-		$	0.17		$	0.15

	For the Three Months Ended March 31,						For the Nine Months Ended March 31,
	2013			2012			2013			2012

NET INCOME	$	57,160		$	67,304		$	140,206		$	133,896
OTHER COMPREHENSIVE INCOME , NET OF TAX
Currency Translation Gain (Loss)		651			(1,392	)		(218	)		(12,581	)
Change in Fair Value of Available -For- Sale Securities		111			97			173			15
COMPREHENSIVE INCOME		57,922			66,009			140,161			121,330
COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST		(526	)		75			(1,164	)		1,833
COMPREHENSIVE INCOME ATTRIBUTABLE TO DEVRY INC.	$	57,396		$	66,084		$	138,997		$	123,163

	Three Months Ended March 31,					Nine Months Ended March 31,
	2013			2012		2013			2012
Balance at Beginning of period	$	8,901		$	7,632	$	8,242		$	6,755
Net Income Attributable to Non-controlling Interest		339			173		1,110			416
Accretion of Non-controlling Interest Put Option		(223	)		363		(335	)		997
Balance at End of period	$	9,017		$	8,168	$	9,017		$	8,168

	Three Months Ended September 30,
	2013		2012
Balance at Beginning of Period	$	854	$	8,242
Net Income Attributable to Non-controlling Interest		(45)		(167)
Accretion of Non-controlling Interest Put Option		5,081		562
Balance at End of Period	$	5,890	$	8,637

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Options			Exercise		Contractual		Value
	Outstanding			Price		Life in Years		($000)
Outstanding at July 1, 2012		2,939,772		$	36.37
Options Granted		860,610		$	18.63
Options Exercised		(93,341	)	$	18.99
Options Canceled		(183,111	)	$	38.80
Outstanding at March 31, 2013		3,523,930		$	32.37		6.17	$	18,612
Exercisable at March 31, 2013		2,095,453		$	35.07		4.43	$	7,808

	Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value ($000)
Outstanding at July 1, 2013	3,327,668	$	32.64
Options Granted	556,050	$	28.32
Options Exercised	(58,157)	$	21.79
Options Canceled and Forfeited	(30,629)	$	39.98
Outstanding at September 30, 2013	3,794,932	$	32.13	6.45	$	16,358
Exercisable at September 30, 2013	2,352,083	$	35.32	4.88	$	8,143

					Weighted
	Stock		Weighted		Average		Aggregate
	Appreciation		Average		Remaining		Intrinsic
	Rights		Exercise		Contractual		Value
	Outstanding		Price		Life in Years		($000)
Outstanding at July 1, 2012		-	$	-
Rights Granted		117,015	$	42.87
Rights Exercised		-	$	-
Rights Canceled		-	$	-
Outstanding at March 31, 2013		117,015	$	42.87		7.20	$	21
Exercisable at March 31, 2013		67,614	$	47.32		6.20	$	-

	Stock Appreciation Rights Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value ($000)
Outstanding at July 1, 2013	117,015	$	42.87
Rights Granted	1,050	$	28.32
Rights Exercised	-	$	-
Rights Canceled and Forfeited	-	$	-
Outstanding at September 30, 2013	118,065	$	42.74	6.45	$	3
Exercisable at September 30, 2013	85,855	$	45.25	5.45	$	-

	Fiscal Year
	2013			2012
Expected Life (in Years)		6.63			6.65
Expected Volatility		43.67	%		42.27	%
Risk-free Interest Rate		1.03	%		1.52	%
Dividend Yield		0.61	%		0.38	%
Pre-vesting Forfeiture Rate		3.00	%		5.00	%

				Weighted
	Restricted			Average
	Stock			Grant Date
	Outstanding			Fair Value
Nonvested at July 1, 2012		619,261		$	42.06
Units Granted		697,940		$	19.37
Units Vested		(198,230	)	$	45.51
Units Canceled		(48,632	)	$	33.37
Nonvested at March 31, 2013		1,070,339		$	27.02

	Restricted Stock Outstanding	Weighted Average Grant Date Fair Value
Nonvested at July 1, 2013	1,058,443	$	27.03
Shares Granted	399,860	$	28.32
Shares Vested	(269,543)	$	31.07
Shares Cancelled	(23,986)	$	27.89
Nonvested at September 30, 2013	1,164,774	$	26.52

	For the Three Months						For the Nine Months
	Ended March 31,						Ended March 31,
	2013			2012			2013			2012
Cost of Educational Services	$	1,190		$	1,292		$	3,869		$	4,125
Student Services and Administrative Expense		2,530			2,745			8,221			8,766
Income Tax Benefit		(1,281	)		(1,340	)		(3,976	)		(4,177	)
Net Stock-Based Compensation Expense	$	2,439		$	2,697		$	8,114		$	8,714

March 31, 2013	Level 1		Level 2		Level 3
Cash and Cash Equivalents	$	277,994	$	-	$	-
Available for Sale Investments:
Marketable Securities, short-term		2,952		-		-
ATC Earn-out Liability		-		-		4,428
FAVIP Contingent Consideration		-		-		2,769
Total Financial Assets and Liabilities at Fair Value	$	280,946	$	-	$	7,197

	Long-Term Liabilities
	Three Months Ended March 31, 2013			Nine Months Ended March 31, 2013

Balance at Beginning of Period	$	7,419		$	4,361
Total Realized Losses Included in Income:
Interest Expense- ATC Accretion		47			187
Foreign Currency Translation Loss		(269	)		(120	)
Transfers into Level 3:
FAVIP Contingent Consideration		-			2,769
Balance at March 31, 2013	$	7,197		$	7,197

	Accrued Expenses

Balance at Beginning of Period	$	2,509
Total Unrealized Gains (Losses) Included in AOCI:
Foreign Currency Translation Changes		10
Balance at September 30, 2013	$	2,519

	As of March 31,
	2013			2012
Gross Institutional Student Loans	$	58,003		$	53,486

Allowance for Credit Losses		(21,768	)		(20,940	)

Net Institutional Student Loans	$	36,235		$	32,546

	As of September 30,
	2013		2012
Gross Institutional Student Loans	$	64,023	$	56,106
Allowance for Credit Losses		(19,476)		(18,145)
Net Institutional Student Loans	$	44,547	$	37,961

	30-59 Days Past Due		60-89 Days Past Due		90-119 Days Past Due		Greater Than 120 Days Past Due		Total Past Due		Current		Total Institutional Student Loans
Institutional Student Loans:
March 31, 2013	$	3,838	$	1,214	$	783	$	15,458	$	21,293	$	36,710	$	58,003
March 31, 2012	$	3,551	$	1,241	$	1,127	$	13,499	$	19,418	$	34,068	$	53,486

Declaration Date	Record Date	Payment Date	Dividend Per Share		Total Dividend Amount (In Thousands)
November 2, 2011	December 8, 2011	January 10, 2012	$	0.15	$	10,039
May 14, 2012	June 21, 2012	July 12, 2012	$	0.15	$	9,794
November 8, 2012	November 30, 2012	December 19, 2012	$	0.17	$	10,913

Date Authorized	Shares Repurchased		Total Cost (millions)
November 15, 2006		908,399	$	35.0
May 13, 2008		1,027,417		50.0
November 11, 2009		972,205		50.0
August 11, 2010		1,103,628		50.0
November 10, 2010		968,105		50.0
May 20, 2011		2,396,143		100.0
November 2, 2011		3,478,299		100.0
August 29, 2012		544,072		14.7
Totals		11,398,268	$	449.7

	30-59 Days Past Due		60-89 Days Past Due		90-119 Days Past Due		Greater Than 120 Days Past Due		Total Past Due	Current		Total Institutional Student Loans
Institutional Student Loans:
September 30, 2013	$	4,283	$	1,725	$	2,068	$	16,353	24,429	$	39,594	$	64,023
September 30, 2012	$	3,876	$	1,579	$	1,330	$	14,098	20,883	$	35,223	$	56,106

	At September 3, 2012
Current Assets	$	4,414
Property and Equipment		2,897
Other Long-term Assets		844
Intangible Assets		13,571
Goodwill		16,120
Total Assets Acquired		37,846
Liabilities Assumed		5,677
Net Assets Acquired	$	32,169

	At July 1, 2013
Current Assets	$	4,699
Property and Equipment		2,037
Other Long-term Assets		167
Intangible Assets		17,723
Goodwill		8,238
Total Assets Acquired		32,864
Liabilities Assumed		16,801
Net Assets Acquired	$	16,063

	As of March 31, 2013
	Gross Carrying Amount		Accumulated Amortization			Weighted Avg. Amortization Period
Amortizable Intangible Assets:
Student Relationships	$	82,719	$	(73,818	)		(1	)
Customer Relationships		3,364		(600	)		12 years
Non-compete Agreements		2,505		(1,749	)		(2	)
Curriculum/Software		5,628		(4,087	)		5 years
Outplacement Relationships		3,900		(1,179	)		(3	)
Trade Names		6,074		(4,766	)		8.5 years
Total	$	104,190	$	(86,199	)
Indefinite-lived Intangible Assets:
Trade Names	$	39,238
Trademark		1,645
Ross Title IV Eligibility and Accreditations		14,100
Intellectual Property		13,940
Chamberlain Title IV Eligibility and Accreditations		1,200
Carrington Title IV Eligibility and Accreditations		71,100
AUC Title IV Eligibility and Accreditations		100,000
DeVry Brasil Accreditation		32,884
Total	$	274,107

	~~(1)~~18	The total weighted average estimated amortization period for Student Relationships is 5 years for DeVry Brasil (Fanor, Ruy Barbosa and AREA 1), 6 years for FBV, 5 years for FAVIP and 4 years for American University of the Caribbean School of Medicine ("AUC"). All other Student Relationships are fully amortized at March 31, 2013.

	As of March 31, 2012
	Gross Carrying Amount		Accumulated Amortization
Amortizable Intangible Assets:
Student Relationships	$	81,534	$	(66,683	)
Customer Relationships		3,121		(277	)
Customer Contracts		7,000		(5,921	)
License and Non-compete Agreements		2,775		(2,719	)
Curriculum/Software		4,775		(3,158	)
Outplacement Relationships		3,900		(919	)
Trade Names		6,327		(4,438	)
Total	$	109,432	$	(84,115	)
Indefinite-lived Intangible Assets:
Trade Names	$	39,667
Trademark		1,645
Ross Title IV Eligibility and Accreditations		14,100
Intellectual Property		13,940
Chamberlain Title IV Eligibility and Accreditations		1,200
Carrington Title IV Eligibility and Accreditations		71,100
AUC Title IV Eligibility and Accreditations		100,000
DeVry Brasil Accreditation		25,149
Total	$	266,801

At July 1, 2013

Value
Assigned

Estimated
Useful Life

Clinical Agreement