Pension Trust Fund For Operating Engineers v. DeVry Education Group, Inc. et al

Northern District of Illinois, ilnd-1:2016-cv-05198

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Case: 1:16-cv-05198 Document #: 93-15 Filed: 03/30/18 Page 1 of 6 PageID #:1754 EXHIBIT O Case: 1:16-cv-05198 Document #: 93-15 Filed: 03/30/18 Page 2 of 6 PageID #:1755 Table of Contents Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Washington, D.C. 20549 Form 10-K Form 10-K (Mark One) (Mark One) þ 121. ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ACT OF 1934 For the fiscal year ended: June 30, 2010 For the fiscal year ended: June 30, 2010 OR o ❑ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 EXCHANGE ACT OF 1934 For the transition period from to For the transition period from to Commission file number: 1-13988 Commission file number: 1-13988 DeVry Inc. DeVry Inc. (Exact name of registrant as specified in its charter) (Exact name ofregistrant as specified in its charter) DELAWARE 36-3150143 (State or other jurisdiction of (State or other jurisdiction of (I.R.S. Employer (LR.S. Employer incorporation or organization) incorporation or organization) Identification No.) Identification No.) 3005 HIGHLAND PARKWAY 3005 HIGHLAND PARKWAY DOWNERS GROVE, ILLINOIS DOWNERS GROVE, ILLINOIS 60515 (Address of principal executive offices) (Address ofprincipal executive offices) (Zip (Zip Code) Code) Registrant's telephone number; including area code: Registrant's telephone number; including area code: (630) 515-7700 (630) 515-7700 Securities registered pursuant to section 12(b) of the Act: Securities registered pursuant to section 12(b) of the Act: Title of Each Class Title of Each Class Name of Each Exchange on Which Registered: Name of Each Exchange on Which Registered: Common Stock $0.01 Par Value Common Stock $0.01 Par Value NYSE, CSE NYSE, CSE Common Stock Purchase Rights Common Stock Purchase Rights NYSE Securities registered pursuant to Section 12(g) of the Act: Securities registered pursuant to Section 12(g) of the Act: None by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes 0 No ❑ Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ❑ No 0 Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ Indicate Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. Yes 0 No ❑ such filing requirements for the past 90 days. Yes þ No o such Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such required to be submitted and posted pursuant to Rule 405 of Regulation S-T 232.405 of this chapter) during the preceding 12 months (or for such period that the registrant was required to submit and post such files). Yes ❑ No ❑ shorter period that the registrant was required to submit and post such files). Yes o No o shorter Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ❑ amendment to this Form 10-K. o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. See the defmitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer þ Large accelerated filer 0 Accelerated filer ❑ Accelerated filer o filer ❑ Non-accelerated filer o Non-accelerated Smaller reporting company ❑ Smaller reporting company o (Do not check if a smaller reporting company) (Do not check if a smaller reporting company) by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ❑ No 0 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ Indicate State the aggregate market value of the voting and non-voting common equity held by nonaffiliates computed by reference to the price at which the State the aggregate market value of the voting and non-voting common equity held by nonaffiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the Registrant's most common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the Registrant's most recently completed second fiscal quarter. Shares of common stock held directly or controlled by each director and executive officer have been recently completed second fiscal quarter. Shares of common stock held directly or controlled by each director and executive officer have been Case: 1:16-cv-05198 Document #: 93-15 Filed: 03/30/18 Page 3 of 6 PageID #:1756 excluded. December 31, 2009 — $3,965,876,075 December 31, 2009 — $3,965,876,075 Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. August 17, 2010 — 70,738,000 shares of Common Stock, $0.01 par value August 17, 2010 — 70,738,000 shares of Common Stock, $0.01 par value DOCUMENTS INCORPORATED BY REFERENCE DOCUMENTS INCORPORATED BY REFERENCE Certain portions of the Registrant's definitive Proxy Statement for the Annual Meeting of Stockholders to be held on November 10, 2010, are Certain portions of the Registrant's defmitive Proxy Statement for the Annual Meeting of Stockholders to be held on November 10, 2010, are incorporated into Part III of this Form 10-K to the extent stated herein. incorporated into Part III of this Form 10-K to the extent stated herein. Case: 1:16-cv-05198 Document #: 93-15 Filed: 03/30/18 Page 4 of 6 PageID #:1757 DeVry Inc. DeVry Inc. ANNUAL REPORT ON FORM 10-K ANNUAL REPORT ON FORM 10-K FISCAL YEAR ENDED JUNE 30, 2010 FISCAL YEAR ENDED JUNE 30, 2010 TABLE OF CONTENTS TABLE OF CONTENTS Page Page ## PART II PART Item 1 — Business Item 1 — Business 3 3 Item 1A — Risk Factors Item lA — Risk Factors 35 35 Item 1B — Unresolved Staff Comments Item 1B — Unresolved Staff Comments 39 39 Item 2 — Properties Item 2 — Properties 39 39 Item 3 — Legal Proceedings Item 3 — Legal Proceedings 41 41 Item 4 — (Removed and Reserved) Item 4 — (Removed and Reserved) 41 41 — Executive Officers — Executive Officers 41 41 PART II PART H Z & & -,.r. Item 5 — Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Item 5 — Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 43 Item 6 — Selected Financial Data Item 6 — Selected Financial Data 46 Item 7 — Management's Discussion and Analysis of Financial Condition and Results of Operations Item 7 — Management's Discussion and Analysis of Financial Condition and Results of Operations 46 Item 7A — Quantitative and Qualitative Disclosures about Market Risk Item 7A — Quantitative and Qualitative Disclosures about Market Risk 67 Item 8 — Financial Statements and Supplementary Data Item 8 — Financial Statements and Supplementary Data 68 Item 9 — Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9 — Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 68 Item 9A — Controls and Procedures Item 9A — Controls and Procedures 68 Z Item 9B — Other Information Item 9B — Other Information 69 PART III PART RI Item 10 — Directors, Executive Officers and Corporate Governance Item 10 — Directors, Executive Officers and Corporate Governance 104 104 Item 11 — Executive Compensation Item 11 — Executive Compensation 104 104 Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 104 104 Item 13 — Certain Relationships and Related Transactions, and Director Independence Item 13 — Certain Relationships and Related Transactions, and Director Independence 104 104 Item 14 — Principal Accountant Fees and Services Item 14 — Principal Accountant Fees and Services 104 104 PART IV PART IV Item 15 — Exhibits and Financial Statement Schedules Item 15 — Exhibits and Financial Statement Schedules 105 105 — Financial Statements — Financial Statements 105 105 — Financial Statement Schedules — Financial Statement Schedules 105 105 — — Exhibits Exhibits 105 105 SIGNATURES 108 108 EX-10.F EX-21 EX-23 EX-31 EX-32 Case: 1:16-cv-05198 Document #: 93-15 Filed: 03/30/18 Page 5 of 6 PageID #:1758 Table of Contents Table of Contents Beginning with the cohort default rate calculations for federal fiscal year 2009, the cohort default rate will be calculated by determining that rate at Beginning with the cohort default rate calculations for federal fiscal year 2009, the cohort default rate will be calculated by determining that rate at which borrowers who become subject to their repayment obligation in the relevant fiscal year, default by the end of the third federal fiscal year. The which borrowers who become subject to their repayment obligation in the relevant fiscal year, default by the end of the third federal fiscal year. The current method of calculating cohort default rates will remain in effect and will be used to determine institutional eligibility until three consecutive current method of calculating cohort default rates will remain in effect and will be used to determine institutional eligibility until three consecutive years of official cohort default rates calculated under the new formula are available. In addition, the cohort default rate threshold of 25% will be years of official cohort default rates calculated under the new formula are available. In addition, the cohort default rate threshold of 25% will be increased to 30% for purposes of certain sanctions and requirements related to cohort default rates. increased to 30% for purposes of certain sanctions and requirements related to cohort default rates. According to the U.S. Department of Education, the cohort default rate for all colleges and universities eligible for federal financial aid increased According to the U.S. Department of Education, the cohort default rate for all colleges and universities eligible for federal financial aid increased from 5.2% in fiscal year 2006 to 6.7% for fiscal year 2007 (the latest period for which data is available). from 5.2% in fiscal year 2006 to 6.7% for fiscal year 2007 (the latest period for which data is available). Default rates for DeVry University, Ross University, Chamberlain College of Nursing, Carrington College and Carrington College California students Default rates for DeVry University, Ross University, Chamberlain College of Nursing, Carrington College and Carrington College California students follow. The latest period for which final data is available is 2007. follow. The latest period for which final data is available is 2007. Cohort Default Rate Cohort Default Rate 2007 2006 2005 2004 DeVry University — Federal Family Education Loan Program DeVry University - Federal Family Education Loan Program 9.0% 7.3% 73% 6.6% 65% 6.5% DeVry University — Federal Perkins Loan Program DeVry University - Federal Perkins Loan Program 8.8% 6.6% 6.6% 6.9% 8.5% 85% DeVry University — Graduate Programs DeVry University - Graduate Programs 2.7% 1.4% 1.4% 1.7% 23% 2.3% Ross University — Medical School Ross University - Medical School 0.2% 0.1% 0.1% 0.0% 0.2% Ross University — Veterinary School Ross University - Veterinary School 0.0% 0.1% 0.1% 0.1% 0.4% Chamberlain College of Nursing Chamberlain College of Nursing 2.9% 1.8% 1.8% 0.5% 05% 0.7% Carrington College Carrington College 7.2% 7.5% 75% 4.8% 5.1% Carrington College California Carrington College California 10.2% 10.2% 9.6% 9.6% 10.3% 103% 15.1% 15.1% Under the Federal Perkins loan program, the institution is responsible for collecting outstanding loans. Any institution with a Perkins loan cohort Under the Federal Perkins loan program, the institution is responsible for collecting outstanding loans. Any institution with a Perkins loan cohort default rate exceeding 15% must establish a default reduction plan. DeVry has worked to reduce the default rate by implementing financial literacy default rate exceeding 15% must establish a default reduction plan. DeVry has worked to reduce the default rate by implementing fmancial literacy and student counseling programs and retaining outside loan service agencies to contact former students and inform them of their repayment and student counseling programs and retaining outside loan service agencies to contact former students and inform them of their repayment options. CAREER SERVICES CAREER SERVICES DeVry University DeVry University DeVry University believes that the employment of its graduates is essential to the achievement of its mission and the ability to attract and retain DeVry University believes that the employment of its graduates is essential to the achievement of its mission and the ability to attract and retain students. Career services professionals located at DeVry University undergraduate campuses work with students to choose careers, craft resumes, students. Career services professionals located at DeVry University undergraduate campuses work with students to choose careers, craft resumes, and prepare for job interviews. The staff also maintains contact with local and national employers to proactively identify job opportunities and and prepare for job interviews. The staff also maintains contact with local and national employers to proactively identify job opportunities and arrange interviews. In many cases, company hiring representatives conduct interviews at DeVry University campuses. arrange interviews. In many cases, company hiring representatives conduct interviews at DeVry University campuses. DeVry University attempts to gather accurate data to determine how many of its undergraduates, both at the associate and bachelor's degree DeVry University attempts to gather accurate data to determine how many of its undergraduates, both at the associate and bachelor's degree levels, are employed in positions related to their program of study within six months following graduation. To a large extent, the reliability of such levels, are employed in positions related to their program of study within six months following graduation. To a large extent, the reliability of such data depends on the quality of information that graduates self-report. data depends on the quality of information that graduates self-report. In the 10-year period ending October 2009, DeVry University's U.S. campuses graduated more than 70,000 students who were eligible for career In the 10-year period ending October 2009, DeVry University's U.S. campuses graduated more than 70,000 students who were eligible for career services assistance (this excludes graduates who continued their education, students from foreign countries not legally eligible to work in the services assistance (this excludes graduates who continued their education, students from foreign countries not legally eligible to work in the United States, and other categories of students who were not available for employment). More than 59,000 graduates during this 10-year period United States, and other categories of students who were not available for employment). More than 59,000 graduates during this 10-year period actively pursued employment or were already employed; 88.6% of those held positions related to their program of study within six months of actively pursued employment or were already employed; 88.6% of those held positions related to their program of study within six months of graduation. For the three undergraduate classes that ended in calendar year 2009, there were 6,561 graduates from DeVry University's U.S. undergraduate For the three undergraduate classes that ended in calendar year 2009, there were 6,561 graduates from DeVry University's U.S. undergraduate degree and diploma programs eligible for career service assistance, (this excludes students continuing their education, students from foreign degree and diploma programs eligible for career service assistance, (this excludes students continuing their education, students from foreign countries legally ineligible to work in the United States, and others ineligible for employment). From that pool of graduates, 5,680 actively pursued countries legally ineligible to work in the United States, and others ineligible for employment). From that pool of graduates, 5,680 actively pursued employment or were already employed. Within six months of graduation, 5,024, or 88.5% of those graduates were employed in positions related to employment or were already employed. Within six months of graduation, 5,024, or 88.5% of those graduates were employed in positions related to their program of study. This compares to 91.0% who were employed in positions related to their program of study for the three classes that ended in their program of study. This compares to 91.0% who were employed in positions related to their program of study for the three classes that ended in calendar year 2008, and 92.8% who were employed in positions related to their program of study for the three classes that ended in calendar year calendar year 2008, and 92.8% who were employed in positions related to their program of study for the three classes that ended in calendar year 2007. 30 Case: 1:16-cv-05198 Document #: 93-15 Filed: 03/30/18 Page 6 of 6 PageID #:1759 Table of Contents Table of Contents DeVry University's 2009 graduates (associate and bachelor's degree programs) achieved reported annual compensation ranging from $30,746 to DeVry University's 2009 graduates (associate and bachelor's degree programs) achieved reported annual compensation ranging from $30,746 to $47,540 with an average compensation of $43,605. Individual compensation levels vary depending upon the graduate's previous employment $47,540 with an average compensation of $43,605. Individual compensation levels vary depending upon the graduate's previous employment experience, program of study, and geographic area of employment. experience, program of study, and geographic area of employment. DeVry University believes that no single employer has hired more than 5% of our graduates in recent years. Major employers of DeVry DeVry University believes that no single employer has hired more than 5% of our graduates in recent years. Major employers of DeVry undergraduates include Accenture, Boeing, Ericcson, GE Healthcare, IBM, Intel, J.P. Morgan Chase, Lockheed Martin, L-3 Communications, undergraduates include Accenture, Boeing, Ericcson, GE Healthcare, IBM, Intel, J.P. Morgan Chase, Lockheed Martin, L-3 Communications, Northrop Grumman, State Farm, Verizon Wireless, and UPS. Northrop Grumman, State Farm, Verizon Wireless, and UPS. Management considers its career services commitment an important element of its service to students. Over the past several years, DeVry Management considers its career services commitment an important element of its service to students. Over the past several years, DeVry University developed and implemented a student national job database, which allows students to log into one site to view, apply for, and learn more University developed and implemented a student national job database, which allows students to log into one site to view, apply for, and learn more about job leads appropriate to their experience and education level. For the upcoming year, this database will be further expanded for employer use. about job leads appropriate to their experience and education level. For the upcoming year, this database will be further expanded for employer use. In addition, management developed a preferred employer program. This program provides an avenue for businesses to easily partner with DeVry in In addition, management developed a preferred employer program. This program provides an avenue for businesses to easily partner with DeVry in areas such as career services, curriculum development, and continued employee education. areas such as career services, curriculum development, and continued employee education. Chamberlain College of Nursing Chamberlain College of Nursing Chamberlain College of Nursing initiated a career services program in fiscal year 2009 at its Columbus campus, which now extends to three Chamberlain College of Nursing initiated a career services program in fiscal year 2009 at its Columbus campus, which now extends to three campuses. The career services professionals work with students to craft resumes, prepare for job interviews, and target employment opportunities. campuses. The career services professionals work with students to craft resumes, prepare for job interviews, and target employment opportunities. The staff also maintains contact with local and national employers to proactively identify job opportunities and arrange interviews. In addition, the The staff also maintains contact with local and national employers to proactively identify job opportunities and arrange interviews. In addition, the career services personnel gather data regarding employment and compensation as well as alumni perception of educational preparation for the career services personnel gather data regarding employment and compensation as well as alumni perception of educational preparation for the workplace. Carrington Carrington provides career service support to students through dedicated employees at each campus location. The range of services provided Carrington provides career service support to students through dedicated employees at each campus location. The range of services provided includes: assistance in preparing resumes, coaching to define a job search strategy, coaching to improve interviewing skills, employer outreach includes: assistance in preparing resumes, coaching to define a job search strategy, coaching to improve interviewing skills, employer outreach initiatives to identify job opportunities, access to posted online job opportunities and guidance to help graduates obtain employment in their field initiatives to identify job opportunities, access to posted online job opportunities and guidance to help graduates obtain employment in their field of study. of study. SEASONALITY DeVry's quarterly revenue and net income fluctuate primarily as a result of the pattern of student enrollments. Generally, the schools' highest DeVry's quarterly revenue and net income fluctuate primarily as a result of the pattern of student enrollments. Generally, the schools' highest enrollment and revenues typically occur in the fall, which corresponds to the second and third quarters of DeVry's fiscal year. Enrollment is slightly enrollment and revenues typically occur in the fall, which corresponds to the second and third quarters of DeVry's fiscal year. Enrollment is slightly lower in the spring, and the lowest enrollment generally occurs during the summer months. DeVry's operating costs do not fluctuate as significantly lower in the spring, and the lowest enrollment generally occurs during the summer months. DeVry's operating costs do not fluctuate as significantly on a quarterly basis. on a quarterly basis. Results of operations reflect both this seasonal enrollment pattern and the pattern of student recruiting activity costs that precede the start of Results of operations reflect both this seasonal enrollment pattern and the pattern of student recruiting activity costs that precede the start of every term. Revenues, operating income, and net income by quarter for each of the past two fiscal years are included in Note 15 to the Consolidated every term. Revenues, operating income, and net income by quarter for each of the past two fiscal years are included in Note 15 to the Consolidated Financial Statements, "Quarterly Financial Data." Financial Statements, "Quarterly Financial Data." 31