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DEVRY EDUCATION GROUP INC. - 10-K - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

August 27, 2014

The following discussion of DeVry Group's results of operations and financial condition should be read in conjunction with the consolidated financial statements and the notes thereto appearing elsewhere in this report.

The seasonal pattern of DeVry Group'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. OVERVIEW

DeVry Group's financial results for the fiscal year 2014 reflect continued revenue decline within DeVry University, which resulted in decreased earnings as compared to the prior year. This decline was partially offset by continued growth from DeVry Group's healthcare, international and professional education program offerings. Management believes that it is making progress on DeVry University's turnaround and transformation plan, including reducing its cost structure while maintaining and enhancing service to students. Operational and financial highlights for the fiscal year include:



DeVry Group made progress in reducing its cost structure. DeVry University

realized $100 million in total expense savings in fiscal year 2014, where

reduced enrollment levels necessitated such realignment of expenses.



During the fourth quarter of fiscal year 2014, DeVry Group's revenues and net

income increased as compared to the year-ago quarter.



For the May 2014 session, total student enrollments at Chamberlain College of

Nursing ("Chamberlain") increased 35.7% to a record 18,929 students as compared

to the same term last year. For the fiscal 2014, total new student enrollments

increased 33.8% as compared to fiscal year 2013. Chamberlain continues to

invest in its programs, student services and campus locations.

During fiscal year 2014, management made progress on the Carrington College

("Carrington") turnaround plan. As of June 30, 2014, total student enrollment

increased 3.4 percent to 7,353 as compared to 7,111 total students in the prior

year. The improving enrollments resulted in a 2.8 percent increase in total

Carrington revenue in fiscal 2014 as compared to the prior year.



During the fourth quarter of fiscal year 2014, DeVry Group recorded pre-tax

restructuring charges of approximately $16.4 million. This is in addition to

the $16.3 million of pre-tax restructuring charges recorded in the first three

quarters of fiscal 2014. Of these charges, $14.0 million relates to severance

for workforce reductions and $18.7 million relates to real estate

consolidations. These restructuring actions were made to align our cost

structure with enrollments primarily at DeVry University, Carrington and the

DeVry Group home office. During fiscal year 2015, DeVry Group expects to

continue restructuring efforts including further workforce reductions and real

estate consolidations. Expense reductions of approximately $70 million are

expected related to restructuring and other cost saving initiatives, primarily

within DeVry University. 57



The assets of Advanced Academics Inc. ("AAI") were divested in December 2013

and the operating results for AAI are disclosed as "discontinued operations" in

the Consolidated Statements of Income. The fiscal year 2014 pre-tax loss on

discontinued operations includes asset impairment charges of $13.5 million

related to the write down of AAI net assets to their fair market value.



During the third quarter of fiscal year 2014, Unifavip, a DeVry Brasil

institution, received official notice that Brazil'sMinistry of Education (the

"Ministry") had granted the institution Centro Universitario status. As a

result, the institution's name has been changed from Favip to Unifavip. This

new status is a marker of quality and enables DeVry Brasil to meet student

demand for career-oriented education. Also during fiscal 2014, DeVry Brasil

received approval to offer nine new degree programs from the Ministry across

our DeVry Brasil institutions. These programs cover many high demand career

fields such as industrial, electrical and environmental engineering as well as

building construction and business administration.



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 33,000 students in thirteen campuses

across Northeastern Brazil.



On July 3, 2014, Carrington College Group obtained final approval from the

Accrediting Commission for Community and Junior Colleges, Western Association

of Schools and Colleges ("ACCJC/WASC") to consolidate 10 locations operating as

Carrington College into Carrington College California's accreditation and

network of campuses. Before joining ACCJC/WASC, those locations operated under

the Accrediting Council for Independent Colleges and Schools (ACICS). Bringing

the two colleges together allows more efficient operations and it provides more

resources to support academic quality.



The American Institute of Certified Public Accountants released its 2013 Elijah

Watt Sells Award winners, honoring the candidates with the highest scores on

the CPA exam. More than 90 percent of the recipients prepared for the exam

using Becker Professional Education's industry-leading CPA review materials.

DeVry Group's financial position remained strong, generating $266.1 million of

operating cash flow during fiscal year 2014. As of June 30, 2014, cash and cash

equivalents totaled $358.2 million and there were no outstanding borrowings.

58



USE OF NON-GAAP FINANCIAL INFORMATION AND SUPPLEMENTAL RECONCILIATION SCHEDULE

DeVry Group recorded restructuring expenses related to workforce reductions and real estate consolidations to align its cost structure with enrollments at DeVry University, Carrington College, Chamberlain College of Nursing and the DeVry Group home office in fiscal years 2014, 2013 and 2012. Additionally, in fiscal years 2014, 2013 and 2012, DeVry Group recorded the operating results of its Advanced Academics Inc. reporting unit as discontinued operations. In fiscal year 2014, DeVry Group also recorded a gain from the sale of a former DeVry University campus in Decatur, Georgia. During fiscal year 2013, DeVry Group reversed an earn-out accrual recorded in relation to an acquisition which management determined will not likely be payable. During fiscal years 2013 and 2012, DeVry Group recorded impairment charges related to its Carrington College reporting unit. In addition, in fiscal year 2012, DeVry Group recorded a gain from the sale of Becker's Stalla CFA review operations. The following table illustrates the effects of the restructuring expense, discontinued operations, impairment charges, gains on the sales of assets and earn-out reversal on DeVry Group'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 Group'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 Group 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 Group'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): Fiscal Year 2014 2013 2012 Net Income $ 134,032$ 106,786$ 141,565 Earnings per Share (diluted) $ 2.07$ 1.65$ 2.09

Discontinued Operations (net of tax) $ 16,957$ 16,902$ 27,541 Earnings per Share (diluted) $ 0.26$ 0.26$ 0.41 Restructuring Charges (net of tax) $ 20,160$ 16,240$ 4,334 Effect on Earnings per Share (diluted) $ 0.31$ 0.25$ 0.06 Earn-out Accrual Adjustment (net of tax) $ - $ (4,381 ) $ - Effect on Earnings per Share (diluted) $ - $ (0.07 ) $ - Impairment Charges (net of tax) $ - $ 49,448$ 55,751 Effect on Earnings per Share (diluted) $ - $ 0.77$ 0.82 Gain on Sale of Assets (net of tax) $ (1,167 ) $ - $ (2,216 ) Effect on Earnings per Share (diluted) $ (0.02 ) $ - $ (0.03 ) Net Income from Continuing Operations Excluding the Restructuring Expenses and Gain on Sale of Assets (net of tax) $ 169,982$ 184,995$ 226,975 Earnings per Share from Continuing Operations Excluding the Restructuring Expenses and Gain on Sale of Assets (net of tax) $ 2.62$ 2.86$ 3.35 Shares used in diluted EPS calculation 64,853 64,611

67,705 59 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 current and prior two fiscal years. Percentages may not add because of rounding. Fiscal Year 2014 2013 2012 Revenues 100.0 % 100.0 % 100.0 % Cost of Educational Services 51.1 % 49.0 % 46.4 %

Student Services and Administrative Expense 37.8 % 38.5

% 38.1 % Gain on Sale of Assets (0.1 )% 0.0 % 0.0 % Restructuring Expenses 1.7 % 1.3 % 0.3 % Earn-out Accrual Adjustment 0.0 % (0.2 )% 0.0 % Asset Impairment Charge 0.0 % 2.9 % 3.6 %

Total Operating Costs and Expense 90.6 % 91.5 % 88.5 % Operating Income from Continuing Operations 9.4 % 8.5 % 11.5 % Net Interest (Expense) Income (0.1 )% (0.1 )% 0.1 % Income From Continuing Operations Before Non-controlling Interest and Income Taxes 9.3 % 8.4 % 11.6 % Income Tax Provision (1.4 )% (2.0 )% (3.4 )% Income From Continuing Operations Before Non-controlling Interest 7.9 % 6.4 % 8.2 % Loss on Discontinued Operations, Net of Tax (0.9 )% (0.9 )% (1.3 )% Net Income 7.0 % 5.5 % 6.9 % Net Income Attributable to Non-controlling Interest (0.0 )% (0.1



)% (0.0 )% Net Income Attributable to DeVry Education Group 7.0 % 5.4 % 6.8 %

FISCAL YEAR ENDED JUNE 30, 2014 VS. FISCAL YEAR ENDED JUNE 30, 2013 All discussions of the results of operations exclude the results of Advanced Academics, Inc. ("AAI") which are now included in the discontinued operations section of the Consolidated Statements of Income for all periods presented.

REVENUES Total consolidated revenues for fiscal year 2014 of $1,923.4 million decreased $41.0 million, or 2.1%, as compared to last fiscal year. Revenues decreased 15.2% within the Business, Technology and Management segment as a result of a decline in student enrollments and an increase in scholarships. This decrease was partially offset by revenue increases of 14.4% within the Medical and Healthcare segment and 16.0% in the International Professional Education segment as a result of growth in total student enrollments and tuition price increases. In addition, the two most recent additions to DeVry Brasil, Unifavip which was acquired on September 3, 2012, and Facid which was acquired on July 1, 2013 (combined effect of $23.9 million increase in revenue), along with revenue growth at the existing DeVry Brasil institutions, contributed to offsetting the revenue decline during fiscal year 2014. Management expects that total revenues will increase slightly in the first quarter of fiscal year 2015 as compared to first quarter of fiscal year 2014, driven by anticipated revenue growth within all of DeVry Group's educational institutions except DeVry University. These increased revenues are expected to be partially offset by DeVry University's continuing revenue declines resulting from the impact of the declines in new and total student enrollments experienced in previous fiscal years and which have continued into fiscal year 2015. 60 Medical and Healthcare Medical and Healthcare segment revenues increased 14.4% to $769.1 million in fiscal year 2014 as compared to the prior year. Higher total student enrollments at the institutions that comprise this segment (DeVry Medical International (which is composed of American University of the Caribbean School of Medicine ("AUC"), Ross University School of Medicine ("RUSM") and Ross University School of Veterinary Medicine ("RUSVM"), Chamberlain and Carrington) were the key drivers of the segment revenue growth. 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 DeVry Medical International Student DeVry Medical International Student Enrollment Fiscal Year 2014 Enrollment Fiscal Year 2013 Term Sept. 2013 Jan. 2014 May 2014 Sept. 2012 Jan. 2013 May 2013 New Students 978 582 555 925 603 518 % Change from Prior Year 5.7 % (3.5 )% 7.1 % 8.4 % 0.3 % (19.4 )% Total Students 6,458 6,673 5,925 6,209 6,318 5,800 % Change from Prior Year 4.0 % 5.6 % 2.2 % 2.1 % 4.9 % (2.4 )% Tuition Rates:



Effective for semesters beginning in September 2013, tuition and fees for the

basic sciences and clinical rotation portions of AUC's medical program were

$18,975 and $21,250, respectively, per semester. These tuition rates represent

an increase from the September 2012 rates of approximately 5.9%.



Effective for semesters beginning in September 2013, tuition and fees for the

basic sciences portion of the programs at the Ross University School of

Medicine were $18,825 per semester. Tuition and fees for the clinical portion

of the program were $20,775 per semester. These tuition rates represent an

increase from the September 2012 rates of 6.5%. These amounts do not include

the cost of books, supplies, transportation, and living expenses.



Effective for semesters beginning in September 2013, tuition and fees for the

basic sciences portion of the programs at Ross University School of Veterinary

Medicine were $17,725 per semester. Tuition and fees for the clinical portion

of the program were $22,250 per semester. These tuition rates represent an

increase from the September 2012 rates of 5.5%. These amounts do not include

the cost of books, supplies, transportation, and living expenses. 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. Management believes that the historical enrollment increases at DeVry Medical International were a result of 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, which reduced capacity constraints that existed in the prior fiscal year. Management expects that future enrollment trends will produce growth 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.



Chamberlain College of Nursing

Chamberlain College of Nursing Undergraduate and Graduate Student Enrollment Fiscal Year 2014 Term July 2013 September 2013 November 2013 January 2014 March 2014 May 2014 New Students 1,285 3,380 1,952 3,501 2,092 3,142 % Change from Prior Year (34.9 )% 108.0 % (8.0 )% 65.1 % 55.0 % 37.6 % Total Students 12,648 15,690 15,732 18,136 18,185 18,929 % Change from Prior Year 16.5 % 30.2 % 28.5 % 32.2 % 37.4 % 35.7 % Chamberlain College of Nursing Undergraduate and Graduate Student Enrollment Fiscal Year 2013 Term July 2012 September 2012 November 2012 January 2013 March 2013 May 2013 New Students 1,974 1,625 2,121 2,120 1,350 2,283 % Change from Prior Year 14.7 % 52.6 % 13.5 % 87.8 % (25.0 )% 110.8 % Total Students 10,852 12,050 12,245 13,714 13,235 13,953 % Change from Prior Year 15.8 % 20.2 % 15.3 % 26.0 % 16.9 % 24.4 % 61 Tuition Rates:



Effective for sessions beginning in July 2013, tuition was $665 per credit hour

for students enrolling 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 was

$200 per credit hour per session for each credit hour in excess of six credit

hours. This excess credit hour rate represents a $100 increase as compared to

the prior year. These amounts do not include the cost of books, supplies,

transportation and living expenses.



Effective for sessions beginning in July 2013, tuition was $590 per credit hour

for students enrolled in the Chamberlain Registered Nurse to Bachelor of

Science in Nursing ("RN-to-BSN") online degree program. This tuition rate is

unchanged from the July 2012 tuition rate. Tuition for students enrolled in the

online Master of Science in Nursing ("MSN") program was $650 per credit hour,

which is unchanged from the prior year. The online Doctor of Nursing Practice

("DNP") program was offered at $750 per credit hour. Continued demand for nurses positively influenced career decisions of new students towards this field of study. The historical trend of increases in new student enrollments is attributable to increased demand for its RN-to-BSN online completion program, the addition of several new campus locations, capacity expansion and organic growth at existing locations and the introduction of new graduate and doctoral degree programs. New student enrollment at Chamberlain for the July 2013 and November 2013 terms as compared to the July 2012 and November 2012 terms were impacted by the realignment of the academic calendar, with September, January and May intakes. As a result there were no onsite enrollments for the July 2013 and November 2013 terms. These enrollments were shifted to the September 2013 and the January 2014 terms which partially accounts for the unusually large percentage increase in new student enrollments during these terms from the previous year. In the March 2014 and May 2014 terms, the new and total student enrollment growth continues to reflect the strong demand for its Family Nurse Practitioner, RN-to-BSN and DNP degree programs along with the increase in the number of campuses. Carrington College Carrington College Student Enrollment Fiscal Year 2014 September 2013 December 2013 March 2014 June 2014 New Students 2,733 1,706 2,247 1,766 % Change from Prior Year (19.5 )% (3.2 )% (6.0 )% 9.9 % Total Students 7,706 7,358 7,758 7,353 % Change from Prior Year 1.0 % (0.6 )% (2.4 )% 3.4 % Carrington College Student Enrollment Fiscal Year 2013 September 2012 December 2012 March 2013 June 2013 New Students 3,396 1,763 2,391 1,607

% Change from Prior Year 33.3 % 12.7 % 17.5 % (1.5 )% Total Students 7,628 7,405 7,951 7,111 % Change from Prior Year (8.3 )% 0.4 %

8.8 % 9.6 % Tuition rates:



On a per credit hour basis, tuition for Carrington College programs ranges from

$304 per credit hour to $1,684 per credit hour, with the wide range due to the

nature of the programs. General education courses are charged at $335 to $371

per credit hour. Students are charged a non-refundable registration fee of

$100, and they are also charged separately for books and program-specific

supplies and/or testing. A student services fee ranging from $75 to $150 is

charged as well, depending on the program. Total program tuition ranges from

approximately $12,000 to $15,000 for most certificate programs up to approximately $60,000 for a few advanced programs. 62

Management believes the previous declines in total student enrollments experienced at Carrington 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 initiated and 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 continues to make targeted investments in enhancing its students' academic experience. These initiatives contributed to growth in new student enrollments for several successive three month periods in fiscal year 2013, which resulted in an increase in total student enrollment for four consecutive three month periods through September 2013. In the June 2013 term, new student enrollments declined as a result of the decision to focus Carrington's program offerings and suspend recruiting for certain non-core programs. In the September 2013 term, new student enrollments also decreased as a 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. The decrease in new student enrollments for the three month periods ended December 31, 2013 and March 31, 2014 compared to the respective year-ago periods were a result of the narrowed program focus, market consolidations and program teach outs. Total student enrollments for the three month periods ended December 31, 2013 and March 31, 2014 decreased from the respective year-ago periods due to the trend of declines in new student enrollments for the past year caused by the decision to focus on Carrington's core strengths. For the three months ended June 30, 2014, new and total student enrollment increased 9.9 percent and 3.4 percent, respectively, from the year ago period as the results of the narrowed program focus began to show results.



International and Professional Education

International and Professional Education segment revenues rose 16.0% to $228.1 million in fiscal year 2014 as compared to the prior year. DeVry Brasil was the primary driver of revenue growth in this segment. In addition to revenue growth within existing institutions, the recent acquisitions of Unifavip, which was acquired on September 3, 2012 and Facid, which was acquired on July 1, 2013, contributed to this revenue growth (combined effect of $23.9 million increase in revenue or approximately 76 percent of the total increase in this segment). Becker Professional Education revenues grew, driven primarily by increases in Becker CPA self-study and the United States Medical Licensing Exam ("USMLE") review course revenues. Key enrollment trends for DeVry Brasil are set forth below. DeVry Brasil Student Enrollment Fiscal Year 2014 Fiscal Year 2013 Term September 2013 March 2014 September 2012 March 2013 New Students 3,785 8,845 3,975 7,390 % Change over Prior Year (4.8 )% 19.7 % 31.1 % 32.0 % Total Students 29,340 33,013 21,031 29,083 % Change over Prior Year 39.5 % 13.5 % 49.2 % 36.6 % A large percentage of DeVry Brasil's program offerings are subject to limitations by Brazil'sMinistry of Education ("MEC") 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 imposed by the MEC on three programs at one of its institutions, Area 1. As of December 31, 2013, the restriction to admit new students to the three programs was removed; however, other restrictions on the number of overall students and the ability to launch new programs are still in place. Management has applied for approval to have these limitations removed and expects this to occur within the first half of fiscal year 2015.The increase in new and total enrollment at DeVry Brasil for the March 2014 term was driven by the acquisition of Facid (467 new students and 2,773 total students) and growth at its existing institutions. 63



Business, Technology and Management

Revenues in DeVry Group's Business, Technology and Management segment, which is composed solely of DeVry University, decreased 15.2% to $929.9 million in fiscal year 2014 as compared to last year as a result of a decline in student enrollments and increased scholarships. This trend is expected to continue into fiscal year 2015 which will result in lower revenues. Key trends in enrollment and tuition pricing are set forth below. DeVry University



Undergraduate Student Enrollment Fiscal Year 2014

January Term July 2013 September 2013 November 2013 2014 March 2014 May 2014 New Students 5,674 6,589 4,824 4,911 5,018 4,388 % Change over Prior Year (24.7 )% 0.1 % (12.0 )% (7.9 )% (2.5 )% (4.9 )% Total Students 42,374 46,966 43,726 45,097 42,583 41,977 % Change over Prior Year (16.1 )% (16.3 )% (11.7 )% (15.1 )% (10.4 )% (14.1 )% DeVry University



Undergraduate Student Enrollment Fiscal Year 2013

January Term July 2012 September 2012 November 2012 2013 March 2013 May 2013 New Students 7,532 6,580 5,482 5,330 5,146 4,616 % Change over Prior Year (16.6 )% (8.6 )% (15.5 )% (4.7 )% (21.2 )% (19.4 )% Total Students 50,503 56,086 49,515 53,138 47,537 48,842 % Change over Prior Year (15.8 )% (14.9 )% (17.6 )% (14.9 )% (16.5 )% (18.7 )% DeVry University



Graduate Coursetakers Fiscal Year 2014

January Term July 2013 September 2013 November 2013 2014 March 2014 May 2014 Total Coursetakers 16,107 17,925 16,778 17,322 16,192 15,866 % Change from Prior Year (18.0 )% (18.8 )% (14.1 )% (18.0 )% (15.1 )% (15.8 )% DeVry University



Graduate Coursetakers Fiscal Year 2013

January Term July 2012 September 2012 November 2012 2013 March 2013 May 2013 Total Coursetakers 19,635 22,072 19,540 21,131 19,075 18,836 % Change from Prior Year (9.0 )% (7.8 )% (16.0 )% (12.1 )% (18.4 )% (17.1 )% Tuition rates:



In July 2013, DeVry University froze both undergraduate and graduate tuition

rates for the school year which ended in June 2014. This tuition freeze will

remain in effect in fiscal year 2015. Management believes this will increase

interest from potential students and positively impact persistence among its

current students.



For fiscal year 2014, DeVry University's U.S. undergraduate tuition was $609

per credit hour for students enrolling in one to six credit hours per session.

Tuition was $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 was $2,298.

Any tuition rate increases after July 2014 will apply only to newly enrolled

students. Existing students will pay the tuition they were paying at the time

DeVry University adopted its Fixed Tuition Promise or, if later, at the time of

their enrollment. To remain eligible for the Fixed Tuition Promise students may

not miss more than five sessions. 64

Management believes the decreases in enrollments were due to lower demand from DeVry University's target student segment driven by 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 continues to execute a turnaround and transformation

plan which includes:



Attracting the right students into strong programs;

Reducing DeVry University's cost structure, while maintaining and enhancing our

service to students;

Regaining DeVry University's technology edge; and

Developing and supporting the team to execute the strategy.

The plan starts with our programmatic focus. This means ensuring our programs are designed to best meet the needs of our students and employers and better communicating the programs' value propositions to the market. DeVry Group is also exploring methods to increase the flexibility of its programs to lower the overall cost of education to its students. Near term the focus is on optimizing DeVry University's portfolio of programs, which could include the consolidation of some program offerings and enhancement of others. This programmatic focus is designed to improve student outcomes. Management is implementing a new organization structure to support the programmatic focus and increase decision-making speed. Four program verticals have been created: Engineering & Information Sciences; Undergraduate Business; Keller Graduate School of Management; and Health Sciences, Liberal Arts, and Media Arts. Each vertical will have a team which will have responsibility for enrollment, program quality and successful student outcomes. DeVry University is also increasing the emphasis on technology in its programs. This emphasis will enable students to gain an edge that will help them in today's technology-based careers. Also technology will be further embedded in the campuses and operational processes. DeVry University's enrollment strategy continues with optimizing pricing, with the goals of increasing new students, and encouraging persistence. A September 2013 "call to action event" included the new Career Catalyst Scholarship. Under the Career Catalyst Scholarship, DeVry University committed up to $20 million over the following three-year period to scholarships that will 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 will be 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. As a result of positive results from this program in attracting and retaining successful students, DeVry University also offered this Career Catalyst Program to qualifying students who enrolled in the March 2014 session. This program is being offered in the September 2014 session as well. In addition, scholarship programs at the graduate level will be enhanced. Tuition rates for fiscal year 2014 at DeVry University remain unchanged from those of fiscal year 2013 and will continue unchanged for fiscal 2015. Further, management implemented the DeVry University Fixed Tuition Promise. This is a guarantee to each DeVry University student that his or her tuition rate will not increase as for long as he or she is a continuing student. Also, beginning in July 2014, the number of credit hours a student must take per session to receive the full-time rate is increased from 7 hours to 8. Management is also finding ways to be more effective in marketing and recruiting efforts to reduce the total cost per new student. DeVry University's marketing strategy is shifting toward more digital and social channels and its website, and away from less effective inquiry vendors. In aligning the cost structure, management is focused on increasing efficiencies. Over the past year DeVry Group's institutions in transition (DeVry University and Carrington) have reduced costs through staffing adjustments; managing open positions; consolidating locations; optimizing course scheduling to better utilize classrooms; and lowering course materials costs. Management made the decision to close or consolidate certain DeVry University campuses while balancing the potential impact on enrollment and student satisfaction. In fiscal 2014, DeVry University closed 5 locations and reduced the square footage at an additional 19 locations resulting in a total reduction of nearly 183,000 square feet of space. Management anticipates additional consolidations in fiscal 2015. 65 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 Group's Cost of Educational Services increased 2.2% to $983.4 million during fiscal year 2014 as compared to the prior year. Costs of Educational Services within DeVry University were 7.6% lower than the prior year and, at Carrington, were 3.7% lower than the prior year. Both decreases were a result of savings from cost reduction measures. These lower costs were offset by the increase in costs necessary to support the operations of the growing institutions. This increase includes costs that were incurred to support a higher number of 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 for fiscal year 2014 include the full-year effect of expense from the acquisition of Unifavip, which was acquired on September 3, 2012, compared to ten months of expense during the same period in fiscal year 2013, along with the expenses of Facid, which was acquired on July 1, 2013 (combined effect of $17.2 million increase in Cost of Educational Services expense). As a percentage of revenue, Cost of Educational Services increased to 51.1% in fiscal year 2014 from 49.0% during the prior year. The increase was the result of decreased operating leverage as a result of revenue declines primarily at DeVry 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 decreased 3.8% to $727.9 million during fiscal year 2014 as compared to the prior year. The decrease in fiscal year 2014 was the result of cost reduction measures. Over the past year, DeVry Group has reduced costs through staffing adjustments primarily at DeVry University, Carrington and DeVry Group home office. Also, management is finding ways to be more effective in marketing and recruiting efforts. These reductions were partially offset by the expense growth necessary to support the operations of DeVry Group's growth institutions (DeVry Medical International, Chamberlain, DeVry Brasil, and Becker Professional Education) and costs from the most recent acquisitions of Unifavip and Facid (combined effect of $2.5 million increase in Student Services and Administrative Expense). Amortization of finite-lived intangible assets in connection with acquisitions of businesses decreased by $3.1 million during fiscal year 2014 as compared to the prior year. Amortization expense is included entirely in the Student Services and Administrative Expense category.



As a percentage of revenue, Student Services and Administrative Expense decreased to 37.8% in fiscal year 2014 from 38.5% in the prior year. The decrease was a result of the effectiveness of the cost reduction measures noted above.

Gain on the Sale of Assets During the first quarter of fiscal year 2014, management completed the sale of the former DeVry 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 recording of a pre-tax gain of $1.9 million. Restructuring Expenses

For fiscal year 2014, DeVry Group recorded pre-tax charges related to real estate consolidations of $18.7 million. Also, DeVry Group implemented reductions in its workforce that resulted in a pre-tax charge of $14.0 million that represented severance pay and benefits for these employees. These restructuring costs were allocated to the segments as follows: $7.9 million to Medical and Healthcare; $0.2 million to International and Professional Education; $21.7 million to Business Technology and Management; $2.9 million to the DeVry Group home office which is classified as "Depreciation and Other" in "Note 16 - Segment Information" to the Consolidated Financial Statements. In fiscal 2013, DeVry Group recorded charges related to real estate consolidations and other restructuring of $15.9 million. Also, DeVry Group implemented a Voluntary Separation Plan ("VSP") and other reductions in its workforce that resulted in a pre-tax charge of $10.3 million that represented severance pay and benefits for these employees. These restructuring costs were allocated to the segments as follows: $6.1 million to Medical and Healthcare; $0.6 million to International and Professional Education; $9.1 million to Business Technology and Management; $10.4 million to the DeVry Group home office which is classified as "Depreciation and Other" in "Note 16 - Segment Information" to the Consolidated Financial Statements. 66

Cash payments for the fiscal 2014 and 2013 charges were approximately $21.9 million for the year ended June 30, 2014. The remaining accrual for these charges is $21.3 million as of June 30, 2014. The balance is expected to be paid within the next 12 to 18 months. Additional restructuring expenses are expected to be recorded in fiscal 2015 as DeVry Group continues to reduce costs where enrollment levels necessitate such realignment of expenses. OPERATING INCOME Total consolidated operating income from continuing operations for fiscal year 2014 of $181.3 million increased 8.6% as compared to the prior year. The largest single driver of the increase was the absence of an Asset Impairment Charge in fiscal 2014 compared to a $57.0 million charge in the prior year. Excluding the effects of this charge, operating income declined 19.0 percent in fiscal 2014 compared to the prior year. Operating income declines were experienced at the Business, Technology and Management and the International and Professional Education segments. The declines in these segments were partially offset by the increase in operating income at the Medical & Healthcare segment. The largest driver of the decline in operating income during fiscal year 2014 was the revenue decline at DeVry University and the increase in restructuring expenses. This decline more than offset the increases in revenue and operating income resulting from recent acquisitions and growth in other institutions. The DeVry University revenue decline was partially offset by the decrease in expenses from cost reduction measures, as discussed above. Operating income declined at Becker Professional Education; however, this decline was primarily driven by the favorability in the prior year for an earn-out accrual reversal. Operating income also declined in fiscal 2014 at DeVry Brasil primarily driven by investments for expansion and growth. Medical and Healthcare

Medical and Healthcare segment operating income increased 158.3% to $139.7 million during fiscal year 2014, as compared to the prior year. The largest single driver of the increase was the absence of an Asset Impairment Charge in the fiscal 2014 compared to a $57.0 million charge at Carrington in the prior year. Excluding the effect of this charge and the increase in restructuring charges recorded primarily at Carrington, operating income increased 26.0% compared to the prior year. The increase in operating income was the result of increased operating income at DeVry Medical International and Chamberlain as a result of increased revenues which were partially offset by investments to drive future enrollment growth. Also, operating losses at Carrington decreased as compared to the prior year as a result of cost reduction measures, as discussed above.



International and Professional Education

International and Professional Education segment operating income decreased 10.1% to $45.5 million during the fiscal year 2014 as compared to the prior year. The decreased operating income was primarily driven by the favorable effect of $4.4 million in the prior year for an earn-out accrual reversal. Excluding the effect of this expense reversal and a decrease in restructuring charges, operating income decreased 2.6% compared to the prior year. This decline was the result of investments for expansion and growth.

Business, Technology and Management

Business, Technology and Management segment operating income decreased 88.0% to $10.8 million during fiscal year 2014 as compared to the prior year. The decrease in operating income was the result of lower revenue and decreased operating leverage and $12.6 million in higher restructuring charges recorded in fiscal year 2014 as compared to the prior year (as discussed earlier). Total segment expenses for the fiscal year, excluding the restructuring charges and gain on the sale of assets decreased 9.9% as compared to the prior year, as a result of savings from cost reduction measures, as discussed above. Excluding special charges and the gain on the sale of assets, the Business, Technology and Management segment generated operating income of $30.6 million during fiscal year 2014. Management continues to mitigate the effects of this challenging environment by aligning its cost structure with student enrollments. Management believes that consolidations of DeVry University locations and further cost control measures will be necessary in fiscal year 2015. NET INTEREST (EXPENSE) INCOME



Interest income for fiscal year 2014 of $1.7 million and interest expense of $3.6 million were unchanged as compared to the prior year.

67 INCOME TAXES

Taxes on income from continuing operations were 15.4% for fiscal year 2014, compared to 23.8% for fiscal year 2013. The lower effective tax rate in fiscal year 2014 resulted primarily from the jurisdictional mix of pre-tax earnings from U.S. operations versus the offshore operations of AUC, RUSM, RUSVM 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 Group's effective income tax rate reflects benefits derived from significant operations outside the United States. Earnings of these international operations are subject to local tax systems and 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 Group's operating units, AUC, which operates in St. Maarten, RUSM, which operates in the Commonwealth of Dominica, RUSVM, which operates in the Federation of St. Christopher, Nevis, St. Kitts in the West Indies, and DeVry Brasil, which operates in Brazil, all benefit from local tax programs. AUC's effective tax rate reflects benefits derived from local investment programs. RUSM and RUSVM have agreements with their respective domestic governments that exempt them from most local income taxation. Both of these agreements have been extended to provide, in the case of RUSM, an indefinite period of exemption and, in the case of RUSVM, 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. DeVry Group intends to indefinitely reinvest international earnings and cash flow to improve and expand facilities and operations at AUC, RUSM, RUSVM and DeVry Brasil, and pursue other business opportunities outside the United States. Accordingly, DeVry Group 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 Group. 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. In the first quarter of fiscal year 2014, management wrote down the net assets of AAI to their fair market value based on the estimated selling price of the assets as of September 30, 2013. 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. This resulted in a $13.5 million pre-tax impairment charge in the first quarter of fiscal year 2014. In December 2013, the assets of AAI were sold for $2.0 million which was approximately $0.4 million higher than the fair value of the net assets on the date of the sale. This gain on the sale was recorded in the second quarter of fiscal year 2014 and is included in the Loss from Operations of Divested Component in the Consolidated Statements of Income.



The reported loss on discontinued operations in fiscal year 2014 is comprised of $5.3 million in operating losses, and a pre-tax impairment charge of $13.5 million for the net fair market write-down of AAI's net assets.

See "Note 2 - Assets and Liabilities of Divested Component and Discontinued Operations" to the Consolidated Financial Statements for additional disclosures.

FISCAL YEAR ENDED JUNE 30, 2013 VS. FISCAL YEAR ENDED JUNE 30, 2012 All discussions of the results of operations exclude the results of Advanced Academics, Inc. ("AAI") which are now included in the discontinued operations section of the Consolidated Income Statements for all periods presented. REVENUES Total consolidated revenues for fiscal year 2013 of $1,964.4 million decreased $107.4 million, or 5.2%, as compared to the prior year. Revenues decreased within DeVry Group's Business, Technology and Management segment as a result of a decline in student enrollments and an increase in scholarships due to the challenging economic environment, persistent high levels of unemployment, negative perceptions of the value of a college degree, increased reluctance to take on debt and heightened competition. This decrease was partially offset by revenue increases within DeVry Group's Medical and Healthcare and International and Professional Education segments as a result of growth in total student enrollments, improved student retention 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 Unifavip, which was acquired on September 3, 2012, contributed to offsetting the revenue decline during

fiscal year 2013. 68 Medical and Healthcare DeVry Medical International

Medical and Healthcare segment revenues increased 9.9% to $672.6 million in fiscal year 2013 as compared to the prior year. Higher total student enrollments at Chamberlain and DeVry Medical International were the key drivers of the segment revenue growth. Carrington experienced an increase in total student enrollments in the second half of fiscal year 2013 as compared to the year ago period. Total year 2013 Carrington revenues declined 2.2% from total year 2012. Also, AUC, which was acquired on August 3, 2011, contributed a full year of revenue during fiscal year 2013 as opposed to the eleven months contributed in fiscal year 2012. Key trends for DeVry Medical International, Chamberlain and Carrington are set forth below. DeVry Medical International Student DeVry Medical International Student Enrollment Fiscal Year 2013 Enrollment Fiscal Year 2012 Term Sept. 2012 Jan. 2013 May 2013 Sept. 2011 Jan. 2012 May 2012 New Students 925 603 518 853 601 643 % Change from Prior Year 8.4 % 0.3 % (19.4 )% 22.9 % (20.5 )% 13.6 Total Students 6,209 6,318 5,800 6,082 6,024 5,944 % Change from Prior Year 2.1 % 4.9 % (2.4 )% 6.3 % 1.0 % 1.0 % Tuition rates:



Effective for semesters beginning in September 2012, 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 were $17,675 and

$16,800, respectively, per semester. Tuition and fees for the final clinical

portion of the programs were $19,500 per semester for the medical school, and

$21,100 per semester for the veterinary school. These tuition rates represented

an increase from September 2011 rates of 6.6% and 7.1% for the medical school

and 6.3% for the veterinary school. These amounts do not include the cost

course materials, supplies, transportation, and living expenses.



Effective for semesters beginning in September 2012, tuition and fees for the

beginning basic sciences and final clinical rotation portions of AUC's medical

program were $17,925 and $20,050, respectively, per semester. These tuition

rates represented an increase from the September 2011 rates of 6.1%. Continued demand for medical doctors and veterinarians positively influenced career decisions of new students towards these respective fields of study. May 2013 enrollments were negatively impacted by a transition of key roles within the marketing and enrollment management areas, which have now been completed.



Chamberlain College of Nursing

Chamberlain College of Nursing Undergraduate and Graduate Student Enrollment Fiscal Year 2013 Term July 2012 September 2012 November 2012 January 2013 March 2013 May 2013 New Students 1,974 1,625 2,121 2,120 1,350 2,283

% Change from Prior Year 14.7 % 52.6 % 13.5 % 87.8 % (25.0 )% 110.8 % Total Students 10,852 12,050 12,245 13,714 13,235 13,953

% Change from Prior Year 15.8 % 20.2 % 15.3 % 26.0 % 16.9 % 24.4 % Chamberlain College of Nursing Undergraduate and Graduate Student Enrollment Fiscal Year 2012 Term July 2011 September 2011 November 2011 January 2012 March 2012 May 2012 New Students 1,721 1,065 1,868 1,129 1,801 1,083

% Change from Prior Year 10.7 % (6.0 )% 4.2 % (3.6 )% 6.1 % (0.8 )% Total Students 9,374 10,029 10,619 10,888 11,321 11,214

% Change from Prior Year 39.2 % 32.2 % 26.5 % 20.4 % 19.9 % 15.7 % 69 Tuition rates:



Effective for sessions beginning in July 2012, tuition was $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. Tuition was $100 per credit hour per session for each credit hour in

excess of six credit hours. These effective tuition rates were unchanged as

compared to the prior year. These amounts do not include the cost of course

materials and supplies.



Effective for sessions beginning in July 2012, tuition was $590 per credit hour

for students enrolled in the Chamberlain RN-to-BSN online degree program. This

tuition rate was unchanged from the July 2011 tuition rate. Tuition for

students enrolled in the online Master of Science in Nursing (MSN) program was

$650 per credit hour, which was unchanged from the prior year. The online DNP

program was offered at $750 per credit hour. Continued demand for nurses positively influenced career decisions of new students towards this field of study. The increase in new student enrollments in all sessions except that of March 2013 at Chamberlain was attributable to increased conversion rates for its RN-to-BSN online completion program, the addition of new locations in Indianapolis in March 2012, Atlanta in May, 2012 and Cleveland in January 2013, along with organic growth at existing locations. The new campuses in Indianapolis and Atlanta are both co-located with DeVry University. New student enrollment at Chamberlain for the March 2013 term as compared to the March 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 term. These enrollments were shifted to the May 2013 term which partially accounts for the 108 percent increase in new student enrollments from May 2012. Carrington CollegeCarrington College



Student Enrollment Fiscal Year 2013

September 2012 December 2012 March 2013 June 2013 New Students 3,396 1,763 2,391 1,607 % Change from Prior Year 33.3 % 12.7 % 17.5 % (1.5 )% Total Students 7,628 7,405 7,951 7,111 % Change from Prior Year (8.3 )% 0.4 % 8.8 % 9.6 % Carrington College



Student Enrollment Fiscal Year 2012

September 2011 December 2011 March 2012 June 2012 New Students 2,548 1,565 2,035 1,632 % Change from Prior Year (33.2 )% (34.2 )% (27.5 )% (19.7 )% Total Students 8,322 7,379 7,309 6,486 % Change from Prior Year (27.8 )%

(29.3 )% (28.4 )% (25.7 )% Tuition rates:



On a per credit hour basis, tuition for the Carrington College and Carrington

College California programs ranged from $254 per credit hour to $1,651 per

credit hour, with the wide range due to the nature of the programs. General

Education courses were 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 ranged from approximately $13,000 for certificate

programs to over $60,000 for some advanced programs. Management believes the declines in total student enrollments experienced at Carrington in previous fiscal years 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 continues to make targeted investments in enhancing its students' academic experience. These initiatives contributed to the 33%, 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 in the December 2012, March 2013 and June 2013 terms. 70



International and Professional Education

DeVry Brasil International and Professional Education segment revenues rose 25.8% to $196.6 million in fiscal year 2013 as compared to the prior year. DeVry Brasil was the primary driver of revenue growth in this segment 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 acquisitions of FBV, which was acquired on February 29, 2012, and Favip, which was acquired on September 3, 2012. Becker Professional Education revenues increased driven primarily by the contribution of Falcon Physician Reviews ("Falcon"), which was acquired in April, 2012 and contributed a full years of revenue in the fiscal year 2013 as opposed to the three months contributed in fiscal year 2012. Key enrollment trends for DeVry Brasil are set forth below. DeVry Brasil Student Enrollment Fiscal Year 2013 Fiscal Year 2012 Term September 2012 March 2013 September 2011 March 2012 New Students 3,975 7,390 3,033 5,599 % Change over Prior Year 31.1 % 32.0 % 29.2 % 46.1 % Total Students 21,031 29,083 14,099 21,297 % Change over Prior Year 49.2 % 36.6 % 17.8 % 55.6 % A large percentage of DeVry Brasil's program offerings are subject to limitations as to the number of students who can be enrolled in the programs. This resulted in the low new student enrollment growth experienced over the

last two terms.



Business, Technology and Management

During fiscal year 2013, Business, Technology and Management segment revenues decreased 15.9% to $1,096.7 million as compared to the prior year period as a result of a decline in undergraduate student enrollments and graduate coursetakers due to lower cyclical demand among 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, increased reluctance to take on debt and heightened competition. This trend continued into fiscal 2014 which resulted in lower revenues. In addition, an increase in scholarships also contributed to the decline in revenues as compared to the prior year period. The Business, Technology and Management segment is comprised solely of DeVry University. Key trends in enrollment and tuition pricing are set forth below. DeVry University Undergraduate Student Enrollment Fiscal Year 2013 Term July 2012 September 2012 November 2012 January 2013 March 2013 May 2013 New Students 7,532 6,580 5,482 5,330 5,146 4,616 % Change over Prior Year (16.6 )%

(8.6 )% (15.5 )% (4.7 )% (21.2 )% (19.4 )% Total Students 50,503 56,086 49,515 53,138 47,537 48,842 % Change over Prior Year (15.8 )% (14.9 )% (17.6 )% (14.9 )% (16.5 )% (18.7 )% DeVry University Undergraduate Student Enrollment Fiscal Year 2012 Term July 2011 September 2011 November 2011 January 2012 March 2012 May 2012 New Students 9,026 7,200 6,488 5,593 6,533 5,730 % Change over Prior Year (33.8 )%

(28.4 )% (19.8 )% (22.5 )% (17.3 )% (14.3 )% Total Students 59,966 65,933 60,103 62,435 56,958 60,044 % Change over Prior Year (6.5 )% (9.9 )% (13.3 )% (14.9 )% (15.5 )% (14.7 )% 71 DeVry University Graduate Coursetakers Fiscal Year 2013 Term July 2012 September 2012 November 2012 January 2013 March 2013 May 2013 Total Coursetakers 19,635 22,072 19,540 21,131 19,075 18,836 % Change from Prior Year (9.0 )% (7.8 )% (16.0 )% (12.1 )% (18.4 )% (17.1 )% DeVry University Graduate Coursetakers Fiscal Year 2012 Term July 2011 September 2011 November 2011 January 2012 March 2012 May 2012 Total Coursetakers 21,576 23,937 23,264 24,029 23,366 22,732 % Change from Prior Year 1.9 % 2.3 % 0.3 % (3.0 )% (4.3 )% (4.5 )% Tuition rates:



Effective July 2013, DeVry University froze both undergraduate and graduate

tuition rates for the school year which ended in June 2014.



Effective with the term that began in July 2012, DeVry University's U.S.

undergraduate tuition was $609 per credit hour for students enrolling in one to

six credit hours. Tuition was $365 per credit hour for each credit hour in

excess of six credit hours. These tuition rates represented an increase of

approximately 1.2% as compared to the summer 2011 term. These amounts do not

include the cost of books, supplies, transportation and living expenses.



Effective with the session that began in July 2012, Keller Graduate School of

Management program tuition per course was $2,298. This represented an expected

weighted average increase of 1.9% compared to the prior year session.

Management believes the decreases in enrollments were due to lower cyclical demand from the University's target student segment driven by the prolonged slow level of economic growth, persistent high 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. COSTS AND EXPENSES



Cost of Educational Services

The largest component of Cost of Educational Services is the cost of faculty and employees 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 Group's Cost of Educational Services increased 0.1% to $962.2 million during fiscal year 2013 as compared to fiscal year 2012. Lower Costs of Educational Services within DeVry University and Carrington Colleges as a result of savings from cost reduction measures were partially offset by the increase in costs necessary to support the operations of the growth institutions. This increase included costs that were incurred in fiscal year 2013 in support of operating a higher number of campus locations 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 included the full year effect of expense from the acquisitions of FBV, which was acquired on February 29, 2012, and Favip, which was acquired on September 3, 2012. Additional costs were also realized from the full year effect of the acquisition Falcon, which was acquired on April 3, 2012. As a percentage of revenue, Cost of Educational Services increased to 49.0% in fiscal year 2013 from 46.4% during the prior fiscal year. The increase was the result of decreased operating leverage as a result of revenue declines primarily at DeVry University and Carrington.



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. 72 Student Services and Administrative Expense decreased 4.2% to $756.4 million during fiscal year 2013 as compared to the prior fiscal year. The decrease in expenses reflects savings from cost reduction measures (workforce reductions and reduced project spending). These reductions more than offset the expense growth from the acquisitions of FBV, Falcon, and Favip and the increase in costs necessary to support the operations of the growth institutions. Amortization of finite-lived intangible assets in connection with acquisitions of businesses declined slightly during fiscal year 2013 as compared to the prior fiscal year. 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 38.5% in fiscal year 2013 from 38.1% during the prior fiscal year. The increase was the result of decreased operating leverage from declining revenues primarily at DeVry University and Carrington.

Asset Impairment Charge During the fourth quarter of fiscal year 2013, DeVry Group recorded a non-cash asset impairment charge of $57.0 million related to its Carrington reporting unit. In the fourth quarter of fiscal year 2013, management performed DeVry Group's annual valuation of goodwill and intangible assets based on the most recent revenue and operating income projections for fiscal 2014 and beyond. These projections were adjusted for an unexpected decline in new student enrollments realized during the fourth quarter of fiscal 2013 as well as revised projections of enrollments for fiscal 2014. During the fourth quarter of fiscal year 2013, revenues and operating results for DeVry Group's Carrington reporting unit were below management's expectations driven by lower than expected new student enrollments. New student enrollments in the fourth quarter of fiscal year 2013 declined 1.5% as compared to the prior year and fell short of planned enrollments. The shortfall to plan was due in part to the suspension of new student enrollments in pure online programs with the remaining variance attributable to a decline in demand for Carrington's onsite program offerings. The decline in new student enrollments reversed a trend of three consecutive quarters of new student enrollment growth (1Q13: 33.3%; 2Q13: 12.7%; and 3Q13: 17.5%). Through March 31, 2013, year-to-date revenues were slightly below plan, but operating income exceeded plan due to continued focus on cost control. During the fourth quarter of fiscal year 2013, management finalized its new online strategy, with Carrington expected to re-enter the 100% online certificate programs in fiscal year 2015. At the time the decision was made to temporarily suspend pure online enrollments, management anticipated starting the program back up in FY2014. However, based on other factors, it was decided that Carrington would not re-enter the 100% online market until FY2015. Accordingly, management revised its forecast and future cash flow projections for Carrington. To improve Carrington's financial results, management continues to execute a turn-around plan which includes increasing its focus on building Carrington's brand awareness, optimizing its marketing approach to emphasize the development of internally-generated inquiries, and 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. Though management believes actions will restore the positively trending growth in admissions there is increased uncertainty as to the when a period of significant growth will occur. Accordingly, management revised its forecast and future cash flow projections for Carrington, and performed an impairment analysis of Carrington's goodwill and indefinite-lived intangible assets. As a result, DeVry Group recorded a non-cash, pre-tax asset impairment charge of $57 million. The remaining goodwill and indefinite-lived intangible asset balances for this reporting unit are $98.8 million and $67.2, respectively. These amounts are subject to further write-down in subsequent periods should management's financial projections not be realized. Restructuring Expenses During fiscal year 2013, DeVry Group implemented a Voluntary Separation Plan (VSP), an involuntary reduction in force (RIF) and other staff reduction actions that will reduce its workforce by approximately 475 positions across all reporting units. This resulted in a pre-tax charge of approximately $10.3 million in fiscal 2013 that represented severance pay and benefits for these employees. This was allocated to the segments as follows: $7.7 million to Business Technology and Management, $1.0 million to Medical and Healthcare, $0.6 million to International and Professional Education and $1.0 million to DeVry Group home office which is classified as "Depreciation and Other" in "Note 16- Segment Information" to the consolidated financial statements of this Form

10-K. 73

DeVry Group made decisions to consolidate facilities at its Carrington and DeVry University educational institutions. This resulted in pre-tax charges of $6.3 in fiscal year 2013. Also during fiscal year 2013, DeVry Group consolidated its administrative offices in the Chicagoland area. As a result, a DeVry Group 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 was held as available for sale. This resulted in a pre-tax charge of $7.9 million in fiscal 2013 for a write-down of assets to fair market value and an expected loss on this asset sale. Other restructuring charges totaling $1.7 million were also expensed in fiscal 2013. These facility and other charges were allocated to the segments as follows: $1.4 million to Business Technology and Management, $5.1 million to Medical and Healthcare and $9.4 million to DeVry Group home office which is classified as "Depreciation and Other" in "Note 16- Segment Information" to the consolidated financial statements of this Form 10-K. Cash payments for these severance charges were approximately $3.3 million for the year ended June 30, 2013. The remaining accrual for these charges is $13.2 as of June 30, 2013. The balance is expected to be paid by the end of fiscal 2015. OPERATING INCOME Total consolidated operating income from continuing operations for fiscal year 2013 of $167.0 million decreased $72.0 million, or 30.1%, as compared to the prior year. The largest driver of the decline in operating income during fiscal year 2013 was the revenue decline at DeVry University. 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 income decline was limited to the Business, Technology

and Management segment. Medical and Healthcare Medical and Healthcare segment operating income increased 463.2% to $54.1 million during fiscal year 2013 as compared to the prior fiscal year. The increase in operating income was primarily the result of increased operating income at Chamberlain, American University of the Caribbean School of Medicine and Ross University Schools of Medicine and Veterinary Medicine . The operating loss at Carrington narrowed as compared to the prior fiscal year. The other factor contributing to the increase in operating income for fiscal year 2013 was a reduction in the combined amount of non-cash asset impairment charges and restructuring charges recorded fiscal 2013 compared to those recorded in fiscal year 2012. Excluding these charges in both years, total consolidated operating income for fiscal year 2013 increased 35.3% as compared to the prior year.



International and Professional Education

International and Professional Education segment operating income increased 32.5% to $50.6 million during fiscal year 2013 as compared to the prior year. The improved operating results were driven primarily by increased operating leverage within Professional Education and DeVry Brasil.

Business, Technology and Management

Business, Technology and Management segment operating income decreased 55.2% to $90.0 million during fiscal year 2013 as compared to the prior fiscal year. The decrease in operating income was the result of lower revenue and decreased operating leverage and a restructuring charge of $9.1 million (as discussed earlier) which was $4.1 million higher than the restructuring charge recorded in fiscal 2012. Total segment expenses for fiscal year 2013, excluding the restructuring charges decreased 9.1% as compared to the fiscal year 2012, as a result of savings from cost reduction measures, as discussed above. Management continues to mitigate the effects of this challenging environment by aligning its cost structure with student enrollments while also targeting investments in growth initiatives such as new programs.



NET INTEREST AND OTHER INCOME (EXPENSE)

Interest income increased approximately $0.8 million in fiscal 2013 as compared to the prior fiscal year. This interest was earned primarily at DeVry Brasil and was the result of higher investible cash balances at rates significantly higher than those in the United States. Interest expense increased slightly during fiscal year 2013 as compared to the prior fiscal year. The increase in interest expense was attributable to interest accreted on earn-outs and installment payments related to the acquisition of FBV. INCOME TAXES

Taxes on income from continuing operations were 23.8% of pretax income for fiscal year 2013, compared to 29.4% for the prior year. The lower effective tax rate in fiscal year 2013 resulted primarily from the jurisdictional mix of pre-tax earnings from U.S. operations versus the offshore operations of AUC, RUSM, RUSVM 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. 74 DeVry Group'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 Group's subsidiaries, AUC which operates in St. Maarten, RUSM which operates in the Commonwealth of Dominica, RUSVM which operates in the Federation of St. Christopher, Nevis, St. Kitts in the West Indies, and DeVry Brasil which operates in Brazil all benefit from local tax incentives. AUC's effective tax rate reflects benefits derived from investment incentives. RUSM and RUSVM each have agreements with their respective governments that exempt them from local income taxation. Both of these agreements have been extended to provide, in the case of RUSM, an indefinite period of exemption and, in the case of RUSVM, 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. DeVry Group intends to indefinitely reinvest international earnings and cash flow to improve and expand facilities and operations at AUC, RUSM, RUSVM and DeVry Brasil, and pursue other business opportunities outside the United States. Accordingly, DeVry Group 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 Group. At that time, management committed to divest the AAI business. Management engaged an investment banking firm to act as the exclusive financial advisor to DeVry Group with respect to the sale of AAI. DeVry Group authorized the investment banking firm to begin marketing AAI and it was determined that there was sufficient interest by potential buyers to pursue the sale of this 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 under the guidance for discontinued operations disclosure for fiscal year 2013. The reported loss on discontinued operations in fiscal year 2013 included a pre-tax impairment charge of $4.8 million for a fair market write-down of AAI's long-term assets. As a result of its review of projections of fiscal 2014 operating results and re-examination the potential long-term profitability of contract relationships during its annual fourth quarter planning process, management determined that the market value of this business had been significantly diminished. The reported loss on discontinued operations in fiscal year 2013 also included expense related to a fourth quarter increase in the reserve for doubtful accounts. As of June 30, 2013, management assessed the collectability of the amount due from a large customer. Based upon the claims analysis provided by outside counsel as well as management's internal review, management has concluded that the full amount of the gross receivable outstanding as of June 30, 2013 is valid and due to AAI. However, based on management's best estimate of the outcome of ongoing negotiations in resolving the outstanding balances a collectability reserve was established to account for a portion of the receivable which may be ultimately non-collectable given the current status of the collection negotiations with the customer.



See "Note 2 - Assets and Liabilities of Divested Component and Discontinued Operations" to the Consolidated Financial Statements for additional disclosures.

CRITICAL ACCOUNTING POLICIES Note 3, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements for the fiscal year ended June 30, 2014, describes the method of application of significant accounting policies and should be read in conjunction with the discussion below. 75 Revenue Recognition

DeVry University Carrington, Chamberlain and DeVry Brasil tuition revenues are recognized on a straight-line basis over the applicable academic term. In addition, American University of the Caribbean School of Medicine, Ross University School of Medicine and Ross University School of Veterinary Medicine basic science curriculum revenues are recognized on a straight-line basis over their respective academic terms. The clinical portion of the AUC, RUSM and RUSVM education programs are conducted under the supervision of U.S. teaching hospitals and veterinary schools. AUC, RUSM and RUSVM are responsible for the billing and collection of tuition from their 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 AUC, RUSM and RUSVM students are charged to expense on the same basis. Becker Professional Education ("Becker") live classroom and online tuition revenues are recognized on a straight-line basis over the applicable delivery period. 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 Group'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 Group 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 Group 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. 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. Expense Recognition Advertising costs are charged to expense in the period in which materials are purchased or services are rendered. Similarly, start-up expenses related to new operating locations and new curriculum development costs are charged to expense as incurred.



Allowance for Uncollectible Accounts

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. Management performs this analysis periodically throughout the year. Provisions required to maintain the allowance at appropriate levels are charged to expense in each period as required. Provisions for uncollectible accounts for fiscal years 2014 and 2013 were $52.4 million and $41.5 million, respectively. The increase in the provision was the result of a larger number of DeVry University undergraduate student accounts moving into inactive status. These accounts are reserved at a higher rate than active student accounts. If an additional allowance of 1% of total DeVry Group gross receivables as of June 30, 2014 was necessary, an additional provision of approximately $2.0 million would be required.



Internally Developed Software

Selected costs associated with developing DeVry Group's information technology systems have been capitalized in accordance with the rules on accounting for costs of computer software developed for internal use. Capitalized 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. Upon completion of the projects the costs are transferred to equipment and amortized using the straight-line method over the estimated useful lives of the software. Stock-Based Compensation Stock-based compensation is recorded as compensation expense over the vesting period.DeVry Group accounts for stock-based compensation 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 stock-based grants to retirement-eligible employees. For non-retirement-eligible employees, stock-based compensation cost is measured at grant date based on the fair value of the award, and is recognized as expense over the employee requisite service period, reduced by an estimated forfeiture rate. If factors change and different assumptions are utilized in future periods, the stock-based compensation expense that DeVry Group records may differ significantly from what was recorded in a prior period. 76 The fair value of share-based awards, including those with performance conditions, are -measured as of the grant date. The fair value of DeVry Group's stock-based option awards was estimated using a binomial model. This model uses historical cancellation and exercise experience of DeVry Group to determine the option value. It also takes into account the illiquid nature of employee options during the vesting period. Share-based compensation expense is amortized for the estimated number of shares expected to vest. The estimated number of shares that will vest is based on management's determination of the probable outcome of the performance conditions, which may require considerable judgment. DeVry Group records a cumulative adjustment to share-based compensation expense in periods when the estimate of the number of shares expected to vest changes. Expense is recognized to reflect the actual vested shares following the resolution of

the performance conditions.



Impairment of Goodwill and Other Intangible Assets

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, 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 on May 31, 2014. As of the May 31, 2014 impairment review, there was no impairment loss associated with recorded goodwill or indefinite-lived intangible assets for any reporting unit, as estimated fair values exceeded

the carrying amounts. Management 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 Group based on events specific to DeVry Group's operations. 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, among others. At no time during fiscal 2014 did management judge a triggering event had occurred. This interim triggering event analysis was based on the fact that the estimated fair values of DeVry Group'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 AUC and FBV indefinite-lived intangible assets would be expected considering the assets were acquired within two years of the fourth quarter of 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 turnaround plan that began in fiscal 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. These improvements resulted in increased revenues and improved operating results throughout fiscal 2014. Results exceeded internal operating plans for each interim reporting period. As a result, no interim impairment analysis was warranted in relation to Carrington. Though certain reporting units experienced a decline in operating results in fiscal year 2014 compared to the year-ago period, management did not believe business conditions had deteriorated in any of its reporting units such that it was more likely than not that the fair value was below carrying value for those reporting units or their associated indefinite-lived intangible assets during the year ended June 30, 2014. The revenue and operating results of DeVry Brasil exceeded internal plans for fiscal year 2014 and its revenues grew by more than 25% from last year. Operating earnings at both DeVry Brasil and Becker decreased slightly from the year-ago period reflecting investments for expansion and growth. At DeVry University, which carries a goodwill balance of $22.2 million and intangible assets of $1.6 million, revenue declined by approximately 15% from last year. The revenue decline at DeVry University was primarily the result of a decline in undergraduate student enrollments and graduate coursetakers due to lower demand among the university's target segment of students, believed to be driven by perceptions of the value of a college degree, increased reluctance to take on debt and heightened competition. To improve performance, management continues to execute a turnaround and transformation plan at DeVry University which includes: Attracting the right students into strong programs; Reducing DeVry University's cost structure, while maintaining and enhancing our service to students; Regaining DeVry University's technology edge; and Developing and supporting the team to execute the strategy. 77

The plan starts with our programmatic focus. This means ensuring our programs are designed to best meet the needs of our students and employers and better communicating the programs' value propositions to the market. DeVry Group is also exploring methods to increase the flexibility of its programs to lower the overall cost of education to its students. Near term, the focus is on optimizing DeVry University's portfolio of programs, which could include the consolidation of some program offerings and enhancement of others. This programmatic focus is designed to improve student l outcomes. Management is implementing a new organization structure to support the programmatic focus and increase decision-making speed. Four program verticals have been created: Engineering & Information Sciences; Undergraduate Business; Keller Graduate School of Management; and Health Sciences, Liberal Arts, and Media Arts. Each vertical will have a team which will have responsibility for enrollment, program quality and successful student outcomes. DeVry University is also increasing the emphasis on technology in its programs. This emphasis will enable students to gain an edge that will help them in today's technology-based careers. Also technology will be further embedded in the campuses and operational processes. DeVry University's enrollment strategy continues with optimizing pricing, with the goals of increasing new students, and encouraging persistence. A September 2013 "call to action event" included the new Career Catalyst Scholarship. Under the Career Catalyst Scholarship, DeVry University committed up to $20 million over the following three-year period to scholarships that will 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 will be 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. As a result of positive results from this program in attracting and retaining successful students, DeVry University also offered this Career Catalyst Program to qualifying students who enrolled in the March 2014 session. This program is being offered in the September 2014 session as well. In addition, scholarship programs at the graduate level will be enhanced. Tuition rates for fiscal year 2014 at DeVry University remain unchanged from those of fiscal year 2013 and will continue unchanged for fiscal 2015. Further, management implemented the DeVry University Fixed Tuition Promise. This is a guarantee to each DeVry University student that his or her tuition rate will not increase as for long as he or she is a continuing student. Also, beginning in July 2014, the number of credit hours a student must take per session to receive the full-time rate is increasing from 7 hours to 8. Management is also finding ways to be more effective in marketing and recruiting efforts to reduce the total cost per new student. DeVry University's marketing strategy is shifting toward more digital and social channels and its website, and away from less effective inquiry vendors. In aligning the cost structure, management is focused on increasing efficiencies. Over the past year DeVry Group's institutions in transition (DeVry University and Carrington) have reduced costs through staffing adjustments; managing open positions; consolidating locations; optimizing course scheduling to better utilize classrooms; and lowering course materials costs. Management made the decision to close or consolidate certain DeVry University campuses while balancing the potential impact on enrollment and student satisfaction. In fiscal 2014, DeVry University closed 5 locations and reduced the square footage at an additional 19 locations resulting in a total reduction of nearly 183,000 square feet of space. There are plans for additional consolidations in fiscal 2015. Management believes its planned operational strategies will stabilize the negative enrollment trends over the next several years. Cost reduction initiatives since fiscal year 2012 have reduced operating expenses and shifted costs to a more variable model. 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 2014 indicated the fair value exceeded the carrying value of the DeVry University reporting unit by 24%. Due to the effects of continually declining enrollment, this excess margin has been rapidly declining in recent periods. A 10% decrease in the fiscal year 2015 projected operating income used in this analysis would result in no less than a 21% premium of fair value over carrying value. Should business conditions at DeVry University deteriorate to the point where the carrying value of this reporting unit exceeds its fair value, then goodwill and intangible assets could be impaired. This could require a write-off of up to $23.8 million. 78 For goodwill, DeVry Group estimates the fair value of its reporting units primarily using a discounted cash flow model utilizing inputs which include projected operating results and cash flows from management's long term plan. If the carrying amount of the reporting unit containing the goodwill exceeds the fair value of that reporting unit, an impairment loss is recognized to the extent the "implied fair value" of the reporting unit goodwill is less than the carrying amount of the goodwill. DeVry Group had seven reporting units which contained goodwill as of the fourth quarter of fiscal year 2014 analysis. These reporting units constitute components for which discrete financial information is available and regularly reviewed by segment management. Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. The estimate of the fair value of each reporting unit is based on management's projection of revenues, gross margin, operating costs and cash flows considering planned business and operational strategies over a long-term planning horizon of five years along with a terminal value calculated based on discounted cash flows. These measures of business performance are similar to those management uses to evaluate the results of operations on a regular basis. The growth rates used to project cash flows, operating results and terminal values of reporting units are based upon an analysis of the economic environment in which the reporting units operate. The valuations employ present value techniques to estimate fair value and consider market factors. Management believes the assumptions used for the impairment testing are consistent with those that would be utilized by a market participant in performing similar valuations of its reporting units. Discount rates of 13% to 15% were utilized for the reporting units. The discount rate utilized by each unit takes into account management's assumptions on growth rates and risk, both organization specific and macro-economic, inherent in that reporting unit. 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 these estimates which could lead to additional impairments of goodwill. All of the reporting units' estimated fair values exceeded their carrying values as of the fourth quarter impairment analysis by at least 24% except for Carrington, where the excess was 5%. The fiscal year 2014 fair values of DeVry University, Becker, Chamberlain, RUSM and RUSVM declined from fiscal year 2013 values due to changes in expected growth rates; however, the results of this analysis indicate no impairment of goodwill existed as of June 30, 2014. An increase of 100 basis points in the discount rates used in this analysis would result in no less than an 18% premium of fair value over carrying value except for Carrington where fair value was less than carrying value. The smaller premium for the Carrington reporting unit fair value would be expected considering the assets were written down to fair value in the fourth quarter of fiscal year 2013 and there has been less time for these assets to appreciate in value. Carrington carries a goodwill balance of $98.8 million at June 30, 2014. Management considers the use of this level of sensitivity in the discount rate reasonable considering the strength of DeVry Group's sustained operations. If the impairment analysis resulted in any reporting unit's fair value being less than the carrying value, an additional step would be required to determine the implied fair value of goodwill associated with that reporting unit. The implied fair value of goodwill is determined by first allocating the fair value of the reporting unit to all its assets and liabilities and then computing the excess of the reporting unit's fair value over the amounts assigned to the assets and liabilities. If the carrying value of goodwill exceeds the implied fair value of goodwill, such excess represents the amount of goodwill impairment, and, accordingly such impairment is recognized. For indefinite-lived intangible assets, DeVry Group determines their fair value based on the nature of the asset using various valuation techniques including a royalty rate model for trade names, trademarks and intellectual property, a discounted income stream model for Title IV Eligibility and a discounted cash flow model for accreditation. The estimated fair values of these indefinite-lived intangible assets are based on management's projection of revenues, gross margin, operating costs and cash flows considering planned business and operational strategies over a long-term planning horizon of five years. The assumed royalty rates and the growth rates used to project cash flows and operating results are based upon historical results and analysis of the economic environment in which the reporting units that record indefinite-lived intangible assets operate. The valuations employ present value techniques to measure fair value and consider market factors. Management believes the assumptions used for the impairment testing are consistent with those that would be utilized by a market participant in performing similar valuations of its indefinite-lived intangible assets. The discount rates of 13% to 16% that were utilized in the valuations take into account management's assumptions on growth rates and risk, both company specific and macro-economic, inherent in each reporting unit that records indefinite-lived intangible assets. These intangible assets are closely tied to the overall risk of the reporting units in which they are recorded so management would expect the discount rates to also match those used for valuing these reporting units. All of the fair value estimates of indefinite-lived intangible assets exceed the carrying values of those assets as of the 2014 fourth quarter impairment analysis by no less than 13%. Since no fair values were estimated to be below carrying value, no impairment of intangible assets was recorded as of June 30, 2014, If the carrying amount of an indefinite-lived intangible asset exceeds the fair value, an impairment loss is recognized in an amount equal to that excess. 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 which could lead to additional impairments of intangible assets. 79 At June 30, 2014, intangible assets from business combinations totaled $294.9 million, and goodwill totaled $519.9 million. Together, these assets equaled approximately 41% of total assets as of such date, and any impairment could significantly affect future results of operations.



Impairment of Long-Lived Assets

DeVry Group evaluates the carrying amount of its significant long-lived assets whenever changes in circumstances or events indicate that the value of such assets may not be fully recoverable. Events that may trigger an impairment analysis could include a decision by management to exit a market or a line of business or to consolidate operating locations. In fiscal years 2014 and 2013, management consolidated operations at several DeVry University and Carrington College locations. These decisions resulted in the write-off approximately $3.9 million and $10.1 million of leasehold improvements and equipment in fiscal years 2014 and 2013, respectively. These write-offs are included in Restructuring Expenses in the Consolidated Statements of Income (see "Note 10-Restructuring Charges"). Based on an analysis of the fair value of the assets of AAI in fiscal year 2013, management wrote-off AAI's $4.8 million balance of net Property, Plant and Equipment. This write-off is included in the Loss from Discontinued Operations in the Consolidated Statements of Income in fiscal year 2013 (see "Note 2-Assets and Liabilities of Divested Component and Discontinued Operations"). For a discussion of the impairment of goodwill and intangible assets see "Note 9-Intangible Assets" as well as section above. Income Taxes

DeVry Group accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. DeVry Group also recognizes future tax benefits associated with tax loss and credit carryforwards as deferred tax assets. DeVry Group's deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. DeVry Group measures deferred tax assets and liabilities using enacted tax rates in effect for the year in which DeVry Group expects to recover or settle the temporary differences. The effect of a change in tax rates on deferred taxes is recognized in the period that the change is enacted. DeVry Group reduces its net tax assets for the estimated additional tax and interest that may result from tax authorities disputing uncertain tax positions DeVry Group has taken. Estimates and Assumptions

DeVry Group's financial statements include estimates and assumptions about the reported amounts of assets, liabilities, revenues, and expenses whose exact amounts will not be known until future periods. Management has discussed with the Audit and Finance Committee of the Board of Directors the critical accounting policies discussed above and the significant estimates included in the financial statements in this report. Although management believes its assumptions and estimates are reasonable, actual amounts may differ from the estimates included in the financial statements thereby materially affecting results in the future.



DeVry Group's financial statements reflect the following significant estimates and assumptions:

the method of revenue recognition across academic periods;

the estimates and judgments used to record the provision for uncollectible

accounts receivable. DeVry Group believes that it has appropriately considered

known or expected outcomes of its students' ability to pay their outstanding

amounts due to DeVry Group. DeVry Group's greatest accounts receivable risk is

with its DeVry University undergraduate students. the useful lives of equipment

and facilities whose value is a significant portion of DeVry Group's total

assets;

the value and useful lives of acquired finite-lived intangible assets;

the value of goodwill and other indefinite-lived intangible assets;

the pattern of the amortization of finite-lived intangible assets over their

economic life;

the value of deferred tax assets and evaluation of uncertainties under

authoritative guidance;

costs associated with any settlement of claims and lawsuits in which DeVry

Group is a defendant;

health care reimbursement claims for medical services rendered but for which

claims have not yet been processed or paid; and

the value of stock-based compensation awards and related compensation expense.

The methodology management used to derive each of the above estimates for fiscal year 2014 is consistent with the manner in which such estimates were made in prior years, although management regularly analyzes the parameters used in setting the value of these estimates and may change those parameters as conditions warrant. Actual results could differ from those estimates. 80



Restructuring and Other Charges

DeVry Group's financial statements include charges related to the reduced enrollments at several of its institutions. Management is reducing DeVry Group's cost structure to align with these reduced enrollments. Such charges include severance and related benefits for reductions in staff and voluntary separation plans and real estate consolidation charges for early lease termination or cease-of-use costs and losses on disposals of property and equipment. CONTINGENCIES

DeVry Group is subject to 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 legal matters that may be considered other than ordinary, routine and incidental to the business. The Boca Raton Firefighters' and Police Pension Fund ("Boca Raton") 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 Group 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 Group, 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 Group's student enrollment and revenues and artificially inflating DeVry Group'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 Group's practices for compensating student Admissions Advisors, alleging DeVry Group misled the market by failing to disclose that its compensation practices violated federal law and by making affirmative misrepresentations that DeVry Group 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 Group's challenge of plaintiff's standing to complain about statements DeVry Group made after plaintiff had purchased its stock. On July 10, 2012, DeVry Group filed a Motion to Dismiss the corrected Second Amended Complaint. On March 27, 2013, Judge Grady granted DeVry Group's Motion to Dismiss and entered judgment in favor of DeVry Group 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 to the Seventh Circuit of the United States Court of Appeals. The appeal was stayed pending Judge Grady's resolution of the sanctions issue. On May 8, 2014, Judge Grady entered an Order finding that the DeVry Group defendants were presumptively entitled to their reasonable attorneys' fees and other expenses for the entire action and ordered DeVry Group to submit a fee petition. Thereafter, the parties agreed to resolve the matter on a confidential basis and the appeal was dismissed pursuant to an Order entered June 10, 2014 by the Seventh Circuit. DeVry Group was served on October 11, 2013, with a complaint in a qui tam action (the "Qui Tam Action") filed under the federal False Claims Act and the Minnesota False Claims Act by two former employees of a customer of DeVry Group's subsidiary, Advanced Academics, Inc. ("AAI"). The lawsuit, United States and the State of Minnesota ex rel. Jill Bachmann and Shelley Madore v. Minnesota Transitions Charter Schools, Advanced Academics, Inc., DeVry Education Group Inc., and MN Virtual High School, CA No. 12-cv-01359-DWF-JSM, was filed in the United States District Court for the District of Minnesota. The complaint was filed 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 the state and federal governments. The complaint was unsealed and made public on June 6, 2013. The complaint relates to certain federal and 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 MinnesotaTransitions 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 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 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 alleges that AAI provided certain curriculum and other services to MN Virtual High School and operated the school. The only reference to DeVry Group in the complaint pertains to its status as the parent corporation to AAI. After DeVry Group and AAI filed a motion to dismiss, the Qui Tam Action was dismissed without prejudice pursuant to stipulation by and between plaintiffs, on the one hand, and DeVry Group and AAI on the other. 81 In April 2013, DeVry Group received a subpoena from the Office of the Attorney General of the State of Illinois and a Civil Investigative Demand ("CID") 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 Group and certain of its affiliates are in compliance with the Incentive Compensation Ban of the Higher Education Act and requires DeVry Group 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 Group 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 Group'sMassachusetts students and requires DeVry Group 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 Group's business, financial condition or results of operations, cannot be predicted

at this time. On January 28, 2014, DeVry Group received a CID for information from the Federal Trade Commission ("FTC") relating to the advertising, marketing, or sale of secondary or postsecondary educational products or services, or educational accreditation products or services. The stated nature and scope of the CID was to determine whether unnamed persons and/or entities have violated Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45, as amended and, if so, whether further FTC action would be in the public interest. Since receiving the CID, DeVry Group has negotiated its scope with the FTC and has produced, and continues to produce, responsive information. The timing or outcome of this matter, or its possible impact on DeVry Group's business, financial condition or results of operations, cannot be predicted at this time. On July 15, 2014, DeVry Group received a letter dated July 9, 2014 from the New York Office of the Attorney General ("NYOAG"). The letter requested cooperation with the NYOAG's inquiry into whether recent television advertisements and website marketing regarding DeVry University may have violated federal and state laws prohibiting false advertising and deceptive practices. The letter requests relevant information from January 1, 2011, to the present to enable NYOAG to make a determination of what action, if any, is warranted. DeVry Group is cooperating with the request. The timing or outcome of this matter, or its possible impact on DeVry Group's business, financial condition or results of operations, cannot be predicted at this time.



LIQUIDITY AND CAPITAL RESOURCES

Student Payments DeVry Group's primary source of liquidity is the cash received from payments for student tuition, books, other educational materials and fees. These payments include funds originating as financial aid from various federal and 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 Group's total revenue is relatively small. DeVry Group continues to pursue available financing options for its students, including DeVry Group's institutional loan programs. 82

The following table summarizes DeVry Group's cash receipts from tuition and related fee payments by fund source as a percentage of total revenue for the fiscal years 2013 and 2012, respectively. Final data for fiscal year 2014 are not yet available. Fiscal Year 2013 2012 Funding Source: Federal Assistance (Title IV) Program Funding (Grants and Loans) 66 % 69 % State Grants 1 % 1 % Private Loans 1 % 1 % Student accounts, cash payments, private scholarships, employer and military provided tuition assistance and other 32 % 29 % Total 100 % 100 % The pattern of cash receipts during the year is seasonal. DeVry Group's accounts receivable peak immediately after bills are issued each semester/session. Accounts receivable reach their lowest level at the end of each semester/session, dropping to their lowest point during the year at the end

of December. At June 30, 2014, total accounts receivable, net of related reserves, was $132.6 million compared to $139.8 million at June 30, 2013. The decrease in net accounts receivable was attributable to a change in the timing in the receipt of federal financial aid in the prior fiscal year. This timing change moved receipt of these funds from late in fiscal year 2013 to early in fiscal year 2014. This decrease was partially offset by the impact of continued revenue growth at Chamberlain and DeVry Brasil. Financial Aid Like other higher education institutions, DeVry Group is highly dependent upon the timely receipt of federal financial aid funds. All financial aid and assistance programs are subject to political and governmental budgetary considerations. In the United States, the Higher Education Act ("HEA") 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 Group's financial condition and cash flows could be materially and adversely affected. Please see Item 1A Risk Factors in this Annual Report on Form 10-K, for a discussion of student financial aid related risks. In addition, government-funded financial assistance programs are governed by extensive and complex regulations in the United States, Brazil and Canada. Like any other educational institution, DeVry Group'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 any DeVry Group institution. A comprehensive program review of DeVry University's administration of the Title IV programs, initiated in May 2011 was closed in June 2014 with no material findings. Similar comprehensive program reviews of Carrington College-Phoenix, Ross University School of Medicine, Carrington College-California and DeVry University-Kansas City were initiated in April, May, June and August 2014, respectively, and remain open and ongoing. At this point, no material findings have been identified in any of these reviews. A U.S. Department of Education regulation known as the "90/10 Rule" affects only proprietary postsecondary institutions, such as AUC, Ross University School of Medicine, Ross University School of Veterinary Medicine, Chamberlain, Carrington College and DeVry University. Under this regulation, an institution that derives more than 90% of its revenues from Title IV student financial assistance programs in any year may not participate in these programs for the following year. 83 The following table details the percentage of revenue from federal financial assistance programs for each of DeVry Group's Title IV eligible institutions for fiscal years 2013 and 2012, respectively. Final data for fiscal year 2014 is not yet available. Fiscal Year 2013 2012



American University of the Caribbean School of Medicine 80 % 81 % Ross University School of Medicine

80 % 80 % Ross University School of Veterinary Medicine 87 % 89 % Chamberlain College of Nursing 66 % 66

% Carrington College: California 81 % 81 % Boise 74 % 72 % Portland 74 % 77 % Phoenix 82 % 83 % DeVry University: Undergraduate 72 % 75 % Graduate 70 % 73 %

Under the terms of DeVry Group institutions' participation in financial aid programs, certain cash received from state governments and the U.S. Department of Education is maintained in restricted bank accounts. DeVry Group 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 funds may be transferred to unrestricted accounts and become available for DeVry Group to use in operations. This process generally occurs during the academic term for which such funds have been authorized. At June 30, 2014, cash in the amount of $8.3 million was held in restricted bank accounts, compared to $7.0 million at June 30, 2013. A separate financial responsibility test for continued participation by an institution's students in U.S. 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 Group's composite score has exceeded the required minimum of 1.5. If DeVry Group were unable to meet requisite financial responsibility standards or otherwise demonstrate, within the regulations, its ability to continue to provide educational services, then DeVry Group could be subject to heightened monitoring or be required to post a letter of credit to enable its students to continue to participate in federal financial assistance programs. Cash from Operations Cash generated from continuing operations in fiscal year 2014 was $266.1 million, compared to $267.2 million in the prior year. Operating cash flows from continuing operations were impacted by changes in prepaid expenses, accounts payable and accrued expenses that were $9.4 million less than the 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 Group's payroll and bill payment cycles. These decreases in cash generated from operations were partially offset by the positive effect of the changes in net accounts receivable, deferred and advance tuition and restricted cash that were $54.1 million greater than prior year changes. The receivables balance decreased due to a change in the timing in the receipt of federal financial aid in the prior fiscal year. This timing change moved receipt of these funds from late in fiscal year 2013 to early in fiscal year 2014. The decline in accounts receivable was partially offset by the impact of revenue growth primarily at Chamberlain and DeVry Brasil, compared to the year-ago period. 84



Cash Used in Investing Activities

Capital expenditures for continuing operations in fiscal year 2014 were $79.4 million compared to $111.8 million in the prior year. The decrease in capital spending was driven by a focus on prudent capital deployment. DeVry Group continues to invest capital in facility expansion at AUC, Ross University School of Medicine and Ross University School of Veterinary Medicine; spending for the new Chamberlain campuses and expanding existing facilities; and facility improvements at DeVry University and DeVry Brasil.



Capital spending for fiscal year 2015 is expected to support continued investment at AUC, Ross University School of Medicine, and Ross University School of Veterinary Medicine; and facility improvements and planned new locations for Chamberlain and DeVry Brasil. Management anticipates full year fiscal year 2015 capital spending to be in the $100 to $110 million range.

On July 1, 2013, DeVry Brasil acquired the stock of Facid. Under the terms of the agreement, DeVry Brasil paid approximately $16.1 million in cash in exchange for the stock of Facid. In addition, DeVry Brasil is required to make additional payments of approximately $9.0 million over the next four years. On May 1, 2014, DeVry Brasil acquired the stock of an education institution with licenses to operate in the city of Joao Pessoa, State of Paraiba, Brazil. This institution has currently has no students and is not generating revenue. New programs will be offered by August 2014, under the name of Faculdade DeVry Joao Pessoa ("Joao Pessoa"). Under the terms of the agreement, DeVry Brasil paid approximately $1.2 million in cash in exchange for the stock. In addition, DeVry Brasil may be required to make additional payments of approximately $1.2 million over the next two years assuming certain contingencies are met. During the first quarter of fiscal year 2014, management completed the sale of the former DeVry 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 recording of a pre-tax gain of $1.9 million in the first nine months of fiscal year 2014.



Cash Used in Financing Activities

DeVry Group's consolidated cash balances of $358.2 million at June 30, 2014, included approximately $232.3 million of cash attributableto DeVry Group's international operations. It is DeVry Group's intention to indefinitely reinvest this cash and subsequent earnings and cash flow to improve and expand facilities and operations of its international 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 Group's overall liquidity. Should it be necessary to repatriate the international cash balances to the U.S., the repatriated cash would be subject to taxation at

U.S. tax rates. Historically, DeVry Group 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 Group maintains a $400 million revolving line of credit which can be expanded with bank approval to $550 million at the option of DeVry Group. For fiscal year 2014, cash flows from domestic operating activities were approximately $124 million which when added to DeVry Group's beginning of the year domestic cash balances, was sufficient to fund $43.1 million of domestic capital investment and pay dividends of $21.9 million in addition to funding other investment

and financing activities. Management believes that current balances of unrestricted cash, cash generated from operations and the revolving credit facility will be sufficient to fund both DeVry Group'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 Facility

DeVry Group maintains a revolving credit facility which expires on May 10, 2016. This facility provides aggregate commitments including borrowings and letters of credit of up to $400 million and, at the request of DeVry Group, can be increased, with bank approval, to $550 million. Borrowings under this agreement will bear interest at prime rate or at LIBOR, at the option of DeVry Group, 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 Group's achievement of certain financial ratios. DeVry Group's letters of credit outstanding under the revolving credit facility were approximately $7.8 million as of June 30, 2014. The revolving credit agreement contains certain covenants that, among other things, require maintenance of financial ratios, as defined in the agreement. Maintenance of these financial ratios could place restrictions on DeVry Group's ability to pay dividends. 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. 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 Group was in compliance with all debt covenants as of June 30, 2014. 85 DeVry Education Group Inc.$400 million, with options to increase Borrowing limit to $550 million Interest Rate At DeVry Group's discretion, either the prime rate plus 0.75%-1.50%, or a LIBOR rate plus 1.75%-2.50%, depending upon the achievement of certain financial ratios. Maturity May 10, 2016 Outstanding Borrowings at June 30, 2014$0 Interest Rate at June 30, 2014 N/A Outstanding Letters of Credit at June 30, 2014$7.8 million



Other Contractual Arrangements

DeVry Group'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 Group has recorded liabilities for deferred purchase price agreements with sellers related to the acquisitions of FBV, Unifavip, Facid and Joao Pessoa (see "Note 8: Business Combinations" of the notes to the Consolidated Financial Statements). This financing is in the form of holdbacks of a portion of the purchase price of these acquisitions or installment payments. Payments are made under these agreements based on payment schedules or as various conditions of the purchase are met. DeVry Group is not a party to any off-balance sheet financing or contingent payment arrangements, nor are there any unconsolidated subsidiaries. DeVry Group has not extended any loans to any officer, director or other affiliated person. DeVry Group has not entered into any synthetic leases, and there are no residual purchase or value commitments related to any facility lease. DeVry Group did not enter into any significant derivatives, swaps, futures contracts, calls, hedges or non-exchange traded contracts during fiscal year 2014. DeVry Group had no open derivative positions at June 30, 2014. Due In Less Than After All Total 1 Year 1-3 Years 4-5 Years 5 Years Other (Dollars in thousands) Operating Leases $ 717,423$ 100,212$ 263,145$ 131,488$ 222,578 $ - Deferred Purchase Price Agreements 18,441 6,311 12,130 - - - Employment Agreements 2,332 286 929 684 433 - Uncertain Tax Positions 9,100 1,710 - - - 7,390

Total Cash Obligation $ 747,296$ 108,519$ 276,204$ 132,172$ 223,011$ 7,390



RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09: "Revenue from Contracts with Customers (Topic 606)". This guidance was issued to clarify the principles for recognizing revenue and develop a common revenue standard for U.S. Generally Accepted Accounting Principles ("U.S. GAAP") and International Financial Reporting Standards ("IFRS"). The guidance is effective for the fiscal years and interim periods within those years beginning after December 15, 2016. Management is evaluating the impact the guidance will have on DeVry Group's consolidated financial statements.

86 In April 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-08: "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity". This guidance requires that only disposals representing a strategic shift in operations be presented as discontinued operations. Those strategic shifts should have a major effect on the organization's operations and financial results. The new standard is effective for the fiscal years and interim periods within those years beginning after December 15, 2014 with early adoption permitted. Management does not believe this guidance will have a significant impact on DeVry Group's consolidated financial statements. In July 2013, the Financial Accounting Standards Board issued 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 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 available at the reporting date to settle any additional income taxes under the tax law of the applicable tax jurisdiction. The guidance is effective for the fiscal years and interim periods within those years beginning after December 15, 2013 with early adoption permitted. Management does not believe the guidance will have a significant impact on DeVry Group's consolidated financial statements.


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