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DeVry Education Group Reports Third Quarter 2015 Results

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DeVry Education Group (NYSE:DV) , a global provider of educational services, today reported academic, operational and financial results for its fiscal 2015 third quarter ended March 31, 2015. DeVry Group also reported enrollment results at Chamberlain College of Nursing, Carrington College, DeVry Brasil, and DeVry University with its Keller Graduate School of Management.

Academic and operational accomplishments:

  • DeVry University announced a significant next phase in its transformation, relaunching its brand and repositioning the institution for long-term growth
  • Keller Graduate School of Management ranked among best business schools for military service members and veterans by Military Times
  • Chamberlain College of Nursing opened its fourth new campus in fiscal 2015 in North Brunswick, New Jersey, with classes beginning in May
  • DeVry Brasil continued its integrations of recently acquired Faci and Damasio
  • In 2015, Ross University School of Medicine and American University of the Caribbean School of Medicine current and prior graduates earned more than 1,050 residency positions at hospitals in the United States and Canada

Selected financial data for the three months ended March 31, 2015:

  • Total revenue decreased 1.3 percent to $489.8 million
  • Medical and Healthcare and International and Professional Education segment revenue grew 10.2 percent and 20.3 percent, respectively, while Business, Technology and Management revenue decreased 15.7 percent
  • Reported net income of $47.1 million, compared to $55.5 million last year; net income from continuing operations and excluding special items was $45.4 million
  • Reported diluted earnings per share of $0.72, compared to earnings per share of $0.86 last year; earnings per share from continuing operations and excluding special items was $0.70

Selected financial data for the nine months ended March 31, 2015:

  • Total revenue decreased 0.1 percent to $1,436.8 million
  • Medical and Healthcare and International and Professional Education segment revenue grew 13.1 percent and 12.6 percent respectively, while Business, Technology and Management revenue decreased 13.5 percent
  • Reported net income of $110.0 million, compared to $96.5 million last year; net income from continuing operations and excluding special items was $125.3 million, up 2.5 percent from prior year
  • Reported diluted earnings per share of $1.68, compared to earnings per share of $1.49 last year; earnings per share from continuing operations and excluding special items was $1.92, as compared to $1.89 last year
  • Operating cash flow of $209.4 million compared to $263.2 million last year
  • Cash and cash equivalents increased to $402.1 million as of March 31, 2015, from $396.8 million as of March 31, 2014
  • Organization on track to achieve more than $100 million in cost savings and value creation for fiscal 2015

The third quarter fiscal year 2015 results contained an after-tax charge of $3.9 million related to workforce reductions and real estate consolidations, primarily at DeVry University. In addition, the results included $5.6 million in income from discontinued operations related to Advanced Academics. (See “Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule”).

“Today we have announced the next phase of the significant transformation strategy underway at DeVry University to improve its competitive positioning and return the institution to growth,” said Daniel Hamburger, DeVry Group’s president and chief executive officer. “We are confident that this strategy, together with the sustained expansion of our healthcare, professional and international institutions will drive positive student outcomes and DeVry Group’s future growth.”

Operating Highlights

Medical and Healthcare Segment

For the third quarter, segment revenue of $225.4 million increased 10.2 percent compared to the prior year. For the nine-month period, revenue increased 13.1 percent to $645.4 million and segment operating income, excluding special charges, rose 11.9 percent to $122.3 million versus prior year.

DeVry Medical International

Revenue for the quarter at DeVry Medical International decreased 0.8 percent. In 2015, Ross University School of Medicine and American University of the Caribbean School of Medicine current and prior graduates earned more than 1,050 residency positions at hospitals in the United States and Canada. These graduates will continue their training in 47 U.S. states and three Canadian provinces, including such prestigious institutions as Cleveland Clinic Florida, Mt. Sinai Hospital in New York City, and Rush University Medical Center in Chicago.

Chamberlain College of Nursing

For the third quarter, Chamberlain revenue increased 25.3 percent. For the March 2015 session, new students grew 3.5 percent to 2,166 students versus 2,092 in the prior year. Total students increased 27.1 percent to 23,108 versus 18,185 in the prior year.

During the quarter, Chamberlain opened locations in Troy, Michigan, and Las Vegas. It also began accepting applications for the May 2015 class at its new North Brunswick, New Jersey, location, which is co-located with DeVry University.

Carrington College

Revenue at Carrington College grew 2.8 percent during the quarter. For the three-month period ending March 31, 2015, new student enrollment decreased 2.7 percent to 2,187 versus 2,247 in the previous year. Total enrollment decreased 1.5 percent to 7,639 from 7,758 in the previous year. The declines were the result of fewer class starts in the third quarter compared to the prior year.

International and Professional Education Segment

Segment revenue increased 20.3 percent to $61.1 million in the third quarter compared to the prior year. Segment operating income decreased to $4.6 million versus $6.3 million in the previous year, largely due to the impact upon Becker Professional Education of fewer candidates taking this year’s CPA exam. For the nine-month period, revenue increased 12.6 percent to $175.5 million, while segment operating income decreased $2.5 million to $19.9 million versus prior year.

Becker Professional Education

During the quarter, revenue decreased 0.7 percent, which reflects a dip in demand for its CPA course. Year to date, Becker experienced growth in the United States Medical Licensing Exam and Continuing Professional Education markets.

DeVry Brasil

Revenue in the quarter grew 38.8 percent over the previous year. DeVry Brasil’s new student enrollment in the March term increased 105.5 percent to 18,173 compared to 8,845 in the prior year. Total student enrollment increased 77.9 percent to 58,724 students compared to 33,013 last year.

Business, Technology, and Management Segment

DeVry University

DeVry University announced the next phase of its strategy to return to growth and transform the institution through new, student-focused innovations. Near-term, the university is taking action to differentially invest in its strongest markets and programs; reduce its cost structure; and establish a distinct voice for its brand. In addition, DeVry University is implementing strategies to place it on a path for growth by enhancing the teaching and learning model, addressing affordability, and strengthening employer workforce solutions. Taken together, these actions are designed to maintain positive economics in fiscal 2016.

DeVry University recently relaunched its brand to emphasize what it is best known for, careers and care. To view the campaign, which illustrates how DeVry University is “Different. On Purpose” please click on this web link: http://bit.ly/1EdBznH.

For the third quarter, segment revenue of $203.8 million decreased 15.7 percent compared to the prior year. The segment generated $5.6 million of operating income during the quarter, excluding special items. For the nine-month period, revenue decreased 13.5 percent to $617.8 million, and the segment reported operating income of $16.8 million, excluding special items.

For the March session at DeVry University, new undergraduate enrollments decreased 17.2 percent to 4,156 compared to 5,018 the previous year. Total undergraduate students decreased 15.0 percent to 36,188 versus 42,583 for the session a year ago.

At the graduate level, including Keller Graduate School of Management, total coursetakers in the March session decreased 9.5 percent to 14,651 versus 16,192 for the same session a year ago.

Balance Sheet/Cash Flow

For the nine months ended March 31, 2015, DeVry Group generated $209.4 million of operating cash flow. As of March 31, 2015, cash and cash equivalents totaled $402.1 million.

New Credit Agreement

DeVry Group recently entered into a new, secured revolving credit agreement. The amount of borrowing capacity available under the credit agreement is $400 million. Subject to certain conditions set forth in the credit agreement, the aggregate commitment may be increased up to $550 million. The credit agreement has a five-year term ending May 2020 and replaces DeVry Group’s prior $400 million agreement that was set to expire in May 2016.

Conference Call and Webcast Information

DeVry Group will hold a conference call to discuss its fiscal 2015 third-quarter financial results on April 23, 2015 at 4 p.m. Central Time (5 p.m. Eastern Time). The conference call will be led by Daniel Hamburger, president and chief executive officer, Tim Wiggins, chief financial officer and Patrick Unzicker, chief accounting officer and treasurer.

For those wishing to participate by telephone, dial 877-506-6380 (domestic) or 412-902-6690 (international). Please say “DeVry Group Call”. DeVry Group will also broadcast the conference call via webcast. Interested parties may access the webcast through the Investor Relations section of DeVry Group’s website, or http://services.choruscall.com/links/dv150423.html.

Please access the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.

DeVry Group will archive a telephone replay of the call until May 9, 2015. To access the replay, dial 877-344-7529 (domestic) or 412-317-0088 (international), passcode 10062321. To access the webcast replay, please visit DeVry Group’s website, or http://services.choruscall.com/links/dv150423.html.

About DeVry Education Group

The purpose of DeVry Education Group is to empower its students to achieve their educational and career goals. DeVry Education Group Inc. (NYSE: DV; member S&P MidCap 400 Index) is a global provider of educational services and the parent organization of American University of the Caribbean School of Medicine, Becker Professional Education, Carrington College, Chamberlain College of Nursing, DeVry Brasil, DeVry University and its Keller Graduate School of Management, Ross University School of Medicine and Ross University School of Veterinary Medicine. These institutions offer a wide array of programs in healthcare, business, technology, accounting, finance, and law. For more information, please visit www.devryeducationgroup.com.

Certain statements contained in this release concerning DeVry Group’s future performance, including those statements concerning DeVry Group’s expectations or plans, may constitute forward-looking statements subject to the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as DeVry Group or its management “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates” or other words or phrases of similar import. Actual results may differ materially from those projected or implied by these forward-looking statements. Potential risks, uncertainties and other factors that could cause results to differ are described more fully in Item 1A, “Risk Factors,” in DeVry Group’s most recent Annual Report on Form 10-K for the year ending June 30, 2014 and filed with the Securities and Exchange Commission (SEC) on August 27, 2014 and its most recent Form 10-Q for the quarter ending December 31, 2014 and filed with the SEC on February 5, 2015.

Selected Operating Data (in thousands, except per share data)

Third Quarter
FY 2015 FY 2014 Change
Revenue $489,830 $496,117 -1.3%
Net Income $47,120 $55,525 -15.1%
Earnings per Share (diluted) $0.72 $0.86 -16.3%
Number of common shares (diluted) 65,265 64,841 +0.7%
Nine Months
FY 2015 FY 2014 Change
Revenue $1,436,754 $1,438,298 -0.1%
Net Income $109,973 $96,548 +13.9%
Earnings per Share (diluted) $1.68

$1.49

+12.8%
Number of common shares (diluted) 65,402 64,747 +1.0%

Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule

During the third quarter and first nine months of fiscal year 2015, DeVry Group recorded restructuring charges related to real estate consolidations and workforce reductions at DeVry University and real estate consolidations at Chamberlain College of Nursing and Carrington College in order to align its cost structure with enrollments. DeVry Group also recorded during the third quarter and first nine month of fiscal 2014, restructuring charges primarily related to workforce reductions and real estate consolidations at DeVry University, Carrington College and the DeVry Group home office. DeVry Group also recorded the operating results of its Advanced Academics reporting unit as discontinued operations. DeVry Group recorded a gain from the sale of a former DeVry University campus in Decatur, Georgia, during the first quarter of fiscal year 2014. The following table illustrates the effects of restructuring charges and gain on the sale of assets on DeVry Group’s operating income. Management believes that the non-GAAP disclosure of operating income excluding these special items 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 special 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):

Non-GAAP Earnings Disclosure
PRELIMINARY
For The Three Months For The Nine Months
Ended March 31, Ended March 31,
2015 2014 2015 2014
Net Income $ 47,120 $ 55,525 $ 109,973 $ 96,548
Earnings per Share (Diluted) $ 0.72 $ 0.86 $ 1.68 $ 1.49
Discontinued Operations (net of tax) $ (5,576 ) $ 607 $ (5,576 ) $ 16,855
Effect on Earnings per Share (Diluted) $ (0.08 ) $ 0.01 $ (0.08 ) $ 0.26
Restructuring Expenses (net of tax) $ 3,879 $ $ 20,868 $ 10,057
Effect on Earnings per Share (Diluted) $ 0.06 $ $ 0.32 $ 0.16
Gain on Sale of Assets (net of tax) $ $ $ $ (1,167 )
Effect on Earnings per Share (Diluted) $ $ $ $ (0.02 )
Net Income from Continuing Operations
Excluding the Restructuring Expense and
Gain on Sale of Assets (Diluted) $ 45,423 $ 56,132 $ 125,265 $ 122,293
Earnings per Share from Continuing Operations
Excluding the Restructuring Expense and
Gain on Sale of Assets (Diluted) $ 0.70 $ 0.87 $ 1.92 $ 1.89
Shares used in Diluted EPS Calculation 65,265 64,841 65,402 64,747

Enrollment Results

2015 2014 % Change
DeVry Education Group Postsecondary Enrollments(1)
New students 28,719 20,738 +40.9%
Total students 143,935 121,643 +18.3%
Chamberlain College of Nursing
March Session
New students (2) 2,166 2,092 +3.5%
Total students 23,108 18,185 +27.1%
Carrington College
3 months ending March 31, 2015
New students 2,187 2,247 -2.7%
Total students 7,639 7,758 -1.5%
DeVry Brasil (3)
March Term
New students 18,173 8,845 +105.5%
Total students 58,724 33,013 +77.9%
DeVry University
Undergraduate - March Session
New students 4,156 5,018 -17.2%
Total students 36,188 42,583 -15.0%
Graduate - March Session
Coursetakers(4) 14,651 16,192 -9.5%
1) Includes the most recently reported enrollments at DeVry Group’s degree-granting institutions; excluding the acquisitions of FMF, Faci and Damasio, new and total student enrollments increased 0.9% and 1.2%, respectively.
2) Post-licensure online programs only; pre-licensure campus-based programs start in September, January and May.
3) Excluding the acquisitions of FMF, Faci and Damasio, new and total student enrollments increased 13.3% and 14.7%, respectively.
4) The term “coursetaker” refers to the number of courses taken by a student. Thus one student taking two courses equals two coursetakers.

Chart 1: DeVry Education Group 2015 Announcements & Events

August 18, 2015 Fiscal 2015 Fourth Quarter/Year-End
October 22, 2015 Fiscal 2016 First Quarter Results and September Enrollment
November 5, 2015 Annual Shareholders’ Meeting
DEVRY EDUCATION GROUP INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)
PRELIMINARY
March 31, June 30, March 31,
2015 2014 2014
(Dollars in thousands, except for share and par value amounts)

ASSETS

Current Assets

Cash and Cash Equivalents $ 402,115 $ 358,188 $ 396,815
Marketable Securities and Investments 3,577 3,448 3,333
Restricted Cash 9,658 8,347 8,023
Accounts Receivable, Net 149,586 132,621 161,202
Deferred Income Taxes, Net 45,163 39,679 29,458
Prepaid Expenses and Other 57,822 34,808 39,665
Total Current Assets 667,921 577,091 638,496

Land, Buildings and Equipment

Land 63,282 68,185 66,775
Buildings 470,706 464,944 454,099
Equipment 500,902 488,322 476,688
Construction In Progress 32,292 17,405 19,957
1,067,182 1,038,856 1,017,519
Accumulated Depreciation (522,559 ) (483,019 ) (466,008 )
Land, Buildings and Equipment, Net 544,623 555,837 551,511

Other Assets

Intangible Assets, Net 325,000 294,932 294,497
Goodwill 561,406 519,879 517,065
Perkins Program Fund, Net 13,450 13,450 13,450
Other Assets 36,277 36,447 33,846
Total Other Assets 936,133 864,708 858,858
TOTAL ASSETS $ 2,148,677 $ 1,997,636 $ 2,048,865

LIABILITIES

Current Liabilities

Accounts Payable $ 58,531 $ 52,260 $ 54,594
Accrued Salaries, Wages and Benefits 90,503 94,501 91,811
Accrued Expenses 74,073 70,891 64,723
Deferred and Advance Tuition 176,451 99,160 194,560
Total Current Liabilities 399,558 316,812 405,688

Other Liabilities

Deferred Income Taxes, Net 71,153 47,921 54,574
Deferred Rent and Other 103,920 93,117 89,095
Total Other Liabilities 175,073 141,038 143,669
TOTAL LIABILITIES 574,631 457,850 549,357
NONCONTROLLING INTEREST 9,100 6,393 6,189

SHAREHOLDERS’ EQUITY

Common Stock, $0.01 par value, 200,000,000 Shares Authorized;
63,701,000, 63,624,000 and 63,465,000 Shares issued
and outstanding at March 31, 2015, June 30, 2014
and March 31, 2014, respectively. 769 753 754
Additional Paid-in Capital 343,339 320,703 311,851
Retained Earnings 1,778,239 1,682,071 1,655,283
Accumulated Other Comprehensive Loss (78,876 ) (15,394 ) (19,604 )
Treasury Stock, at Cost (12,208,000, 11,655,000 and 11,661,000
Shares, Respectively) (478,525 ) (454,740 ) (454,965 )
TOTAL SHAREHOLDERS’ EQUITY 1,564,946 1,533,393 1,493,319
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 2,148,677 $ 1,997,636 $ 2,048,865
DEVRY EDUCATION GROUP INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands Except for Per Share Amounts)
(Unaudited)
PRELIMINARY
For The Three Months For The Nine Months
Ended March 31, Ended March 31,
2015 2014 2015 2014
REVENUE:
Tuition $ 444,715 $ 455,422 $ 1,320,197 $ 1,332,627
Other Educational 45,115 40,695 116,557 105,671
Total Revenue 489,830 496,117 1,436,754 1,438,298
OPERATING COST AND EXPENSE:
Cost of Educational Services 253,186 242,631 750,326 727,363
Student Services and Administrative Expense 180,212 183,949 532,878 558,154
Loss on Sale of Assets (1,918 )
Restructuring Expense 6,982 30,487 16,329
Total Operating Cost and Expense 440,380 426,580 1,313,691 1,299,928
Operating Income 49,450 69,537 123,063 138,370
INTEREST:
Interest Income 1,318 605 2,015 1,498
Interest Expense (2,813 ) (1,073 ) (3,558 ) (3,125 )
Net Interest Expense (1,495 ) (468 ) (1,543 ) (1,627 )
Income from Continuing Operations Before Income Taxes 47,955 69,069 121,520 136,743
Income Tax Provision (6,327 ) (12,918 ) (16,653 ) (23,113 )
Income from Continuing Operations 41,628 56,151 104,867 113,630
DISCONTINUED OPERATIONS:
Income (Loss) from Operations of Divested Component 1,011 (934 ) 1,011 (18,645 )
Income Tax Benefit 4,565 327 4,565 1,790
Income (Loss) on Discontinued Operations 5,576 (607 ) 5,576 (16,855 )
NET INCOME 47,204 55,544 110,443 96,775
Net Income Attributable to Noncontrolling Interest (84 ) (19 ) (470 ) (227 )
NET INCOME ATTRIBUTABLE TO DEVRY EDUCATION GROUP $ 47,120 $ 55,525 $ 109,973 $ 96,548
AMOUNTS ATTRIBUTABLE TO DEVRY EDUCATION GROUP:
Income from Continuing Operations, Net of Income Taxes 41,544 56,132 104,397 113,403
Income (Loss) from Discontinued Operations, Net of Income Taxes 5,576 (607 ) 5,576 (16,855 )
NET INCOME ATTRIBUTABLE TO DEVRY EDUCATION GROUP $ 47,120 $ 55,525 $ 109,973 $ 96,548
EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE
TO DEVRY EDUCATION GROUP SHAREHOLDERS
Basic
Continuing Operations $ 0.65 $ 0.87 $ 1.62 $ 1.77
Discontinued Operations $ 0.08 (0.01 ) $ 0.08 (0.26 )
$ 0.73 $ 0.86 $ 1.70 $ 1.51
Diluted
Continuing Operations $ 0.64 $ 0.87 $ 1.60 $ 1.75
Discontinued Operations $ 0.08 (0.01 ) $ 0.08 (0.26 )
$ 0.72 $ 0.86 $ 1.68 $ 1.49
Cash Dividend Declared per Common Share $ $ $ 0.18 $ 0.17
DEVRY EDUCATION GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
PRELIMINARY
For The Nine Months
Ended March 31,
2015 2014
(Dollars in Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 110,443 $ 96,775
(Income) Loss from Discontinued Operations (5,576 ) 16,855
Adjustments to Reconcile Net Income to Net

Cash Provided by Operating Activities:

Stock-Based Compensation Expense 13,435 13,672
Depreciation 62,126 61,541
Amortization 3,818 5,349
Provision for Refunds and Uncollectible Accounts 68,479 58,923
Deferred Income Taxes 3,476 (1,385 )
Loss on Disposals of Land, Buildings and Equipment 6,312 3,261
Unrealized Loss on Assets Held for Sale 244
Realized Gain on Sale of Assets (1,918 )
Changes in Assets and Liabilities, Net of Effects from

Acquisitions and Divestitures of Businesses:

Restricted Cash (1,311 ) (1,004 )
Accounts Receivable (85,994 ) (81,588 )
Prepaid Expenses And Other (20,725 ) 10,103
Accounts Payable 6,278 (533 )
Accrued Salaries, Wages, Expenses and Benefits (28,178 ) (12,383 )
Deferred and Advance Tuition 76,944 96,101
Net Cash Provided by Operating Activities-Continuing Operations 209,527 264,013
Net Cash Provided by Operating Activities-Discontinued Operations (160 ) (804 )
NET CASH PROVIDED BY OPERATING ACTIVITIES 209,367 263,209
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (64,301 ) (47,609 )
Payment for Purchase of Business, Net of Cash Acquired (73,117 ) (12,343 )
Marketable Securities Purchased (147 ) (189 )
Cash Received from Sale of Assets 6,100 8,727
NET CASH USED IN INVESTING ACTIVITIES (131,465 ) (51,414 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Exercise of Stock Options 6,014 6,236
Proceeds from Stock issued Under Employee Stock Purchase Plan 866 1,009
Repurchase of Common Stock for Treasury (18,672 )
Cash Dividends Paid (11,639 ) (10,941 )
Payments of Seller Financed Obligations (5,978 ) (6,457 )
Payments of Debt Refinancing Fees (3,472 )
NET CASH USED IN FINANCING ACTIVITIES (32,881 ) (10,153 )
Effects of Exchange Rate Differences (1,094 ) (1,971 )
NET INCREASE IN CASH AND CASH EQUIVALENTS 43,927 199,671
Cash and Cash Equivalents at Beginning of Period 358,188 197,144
Cash and Cash Equivalents at End of Period $ 402,115 $ 396,815
DEVRY EDUCATION GROUP INC.

SEGMENT INFORMATION

(Dollars in Thousands)
(Unaudited)
PRELIMINARY
For The Three Months For The Nine Months
Ended March 31, Ended March 31,
Increase Increase
2015 2014 (Decrease) 2015 2014 (Decrease)
REVENUE:
Medical and Healthcare $ 225,427 $ 204,610 10.2 % $ 645,424 $ 570,913 13.1 %
International and Professional Education 61,112 50,782 20.3 % 175,539 155,933 12.6 %
Business, Technology and Management 203,832 241,896 -15.7 % 617,810 714,118 -13.5 %
Intersegment Elimination and Other (541 ) (1,171 ) NM (2,019 ) (2,666 ) NM
Total Consolidated Revenue 489,830 496,117 -1.3 % 1,436,754 1,438,298 -0.1 %
OPERATING INCOME (LOSS) (NOTE 1):
Medical and Healthcare 43,302 44,703 -3.1 % 117,807 103,687 13.6 %
International and Professional Education 4,629 6,330 -26.9 % 19,859 22,401 -11.3 %
Business, Technology and Management 1,146 22,517 -94.9 % (9,155 ) 21,403 NM
Reconciling Items:
Home Office and Other 373 (4,013 ) NM (5,448 ) (9,121 ) NM
Total Consolidated Operating Income 49,450 69,537 -28.9 % 123,063 138,370 -11.1 %
INTEREST:
Interest Income 1,318 605 117.9 % 2,015 1,498 34.5 %
Interest Expense (2,813 ) (1,073 ) 162.2 % (3,558 ) (3,125 ) 13.9 %
Net Interest Expense (1,495 ) (468 ) 219.4 % (1,543 ) (1,627 ) -5.2 %
Total Consolidated Income before Income Taxes
and Noncontrolling Interest $ 47,955 $ 69,069 -30.6 % $ 121,520 $ 136,743 -11.1 %
Note 1 - Segment Operating Income (Loss) has been adjusted in both periods to reflect intangible asset amortization expense at the segment level. This amortization expense had previously been disclosed as a Reconciling Item.

During the third quarter and first nine months of fiscal year 2015, DeVry Group recorded restructuring charges related to workforce reductions and real estate consolidations at DeVry University which is part of the Business, Technology and Management segment and real estate consolidations at Chamberlain College of Nursing and Carrington College which are part of the Medical and Healthcare segment in order to align its cost structure with enrollments. During the third quarter and first nine months of fiscal year 2014, DeVry Group recorded restructuring charges primarily related to workforce reductions and real estate consolidations at DeVry University, Carrington College and the DeVry Group home office in order to align its cost structure with enrollments. DeVry Group recorded a gain from the sale of a former DeVry University campus in Decatur, Georgia, during the first nine months of fiscal year 2014. The following table illustrates the effects of restructuring charges and gain on the sale of assets on DeVry Group’s operating income. Management believes that the non-GAAP disclosure of operating income excluding these special items 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 special 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):

For The Three Months For The Nine Months
Ended March 31, Ended March 31,
Increase Increase
2015 2014 (Decrease) 2015 2014 (Decrease)
Medical and Healthcare Operating Income $ 43,302 $ 44,703 -3.1 % $ 117,807 $ 103,687 13.6 %
Restructuring Charge 2,531 NM 4,448 5,522 -19.4 %
Medical and Healthcare Operating Income
Excluding Restructuring Charge $ 45,833 $ 44,703 2.5 % $ 122,255 $ 109,209 11.9 %
Business, Technology and Management Operating Income $ 1,146 $ 22,517 -94.9 % $ (9,155 ) $ 21,403 NM
Restructuring Charge 4,456 NM 25,974 7,910 228.4 %
Gain on Sale of Assets (1,918 ) NM
Business, Technology and Management Operating Income
Excluding Restructuring Charge and Gain on Sale of Assets $ 5,602 $ 22,517 -75.1 % $ 16,819 $ 27,395 -38.6 %

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