AMERICAN PUBLIC EDUCATION INC - Annual Report: 2013 (Form 10-K)

 

Delaware	01-0724376
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Title of each class		Name of each exchange on which registered
Common Stock, $.01 par Value		The NASDAQ Stock Market

 

 

Large accelerated filer  þ	Accelerated filer  o	Non-accelerated filer  o	Smaller reporting company  o
		(Do not check if a smaller reporting company)

The total number of shares of common stock outstanding as of February 25, 2014, was 17,634,582.

 

 

 

		Page
PART I
Item 1	Business	1
Item 1A	Risk Factors	30
Item 1B	Unresolved Staff Comments	54
Item 2	Properties	54
Item 3	Legal Proceedings	55
Item 4	Mine Safety Disclosures
PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	56
Item 6	Selected Financial Data	58
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	60
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	74
Item 8	Financial Statements and Supplementary Data	75
Item 9	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	97
Item 9A	Controls and Procedures	97
Item 9B	Other Information	100
PART III
Item 10	Directors, Executive Officers, and Corporate Governance	101
Item 11	Executive Compensation	101
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	101
Item 13	Certain Relationships and Related Transactions, and Director Independence	101
Item 14	Principal Accounting Fees and Services	101
PART IV
Item 15	Exhibits and Financial Statement Schedule	102

 

 

 

 

 

•	the pace of growth of our student enrollment and changes in the composition of our student body;

 

•	our ability to maintain, develop and grow our technology infrastructure to support a larger student body;

 

•	our conversion of prospective students to enrolled students and our retention of active students;

 

•	our ability to update and expand the content of existing programs and the development of new programs in a cost-effective manner or on a timely basis;

 

•	our ability to integrate National Education Seminars, Inc., operating as Hondros College, Nursing Programs, into our operations and to use that acquisition to diversify and expand our programs;

 

•	our ability to leverage our investments in New Horizons Worldwide, Inc. and Fidelis Education, Inc. to provide international students with greater access to our programs and to provide our students with new supportive technologies, respectively;

 

•	our maintenance and expansion of our relationships and partnerships with the United States Armed Forces, corporations and other organizations and the development of new relationships and partnerships;

 

•	actions by the Department of Defense or branches of the United States Armed Forces:

 

•	federal appropriations and other budgetary matters that affect the ability of our students to finance their education through programs administered by the Department of Education, the Department of Defense and the Department of Veterans Affairs;

 

•	our ability to comply with the extensive regulatory framework applicable to our industry, including Title IV of the Higher Education Act of 1965, as amended, and the regulations thereunder, as well as state law and regulations and accrediting agency requirements;

 

•	the competitive environment in which we operate;

 

•	our cash needs and expectations regarding cash flow from operations;

 

•	our ability to manage and grow our business and execution of our business and growth strategies; and

 

•	our financial performance generally.

 

 

 

 

•

American Public Education.  This segment reflects the historical operations of APEI prior to the acquisition of HCON and reflects operational activities at APUS and other corporate activities.  APUS offers 91 degree programs and 92 certificate programs in fields of study related to national security, military studies, intelligence, homeland security, criminal justice, technology, business administration, education, health science, and liberal arts. These programs are offered exclusively online through AMU, which is designed to appeal to military students, and APU, which is designed to appeal non-military students. APUS currently serves approximately 112,400 students living in all 50 states and the District of Columbia in the United States, as well as in various international locations. APUS is regionally accredited by the Higher Learning Commission and is a member of the North Central Association of Colleges and Schools.

•

Hondros College, Nursing Programs. HCON offers a Diploma in Practical Nursing and an Associate Degree in Nursing at four campuses in Ohio, which are located in the suburban areas of Cincinnati, Columbus, Dayton and Cleveland. HCON also offers an online registered nurse to Bachelor of Science in Nursing completion program, which we refer to as the RN-to-BSN program, predominantly to students in Ohio. These programs are offered to approximately 1,330 students. HCON is nationally accredited by the Accrediting Council of Independent Colleges and Schools and the RN-to-BSN program is accredited by the Commission on Collegiate Nursing Education.  HCON’s locations, and programs are approved by the Ohio State Board of Career Colleges and Schools and the RN-to-BSN program is approved by the Ohio Board of Regents.  In addition, the Diploma in Practical Nursing and Associate Degree in Nursing programs are approved by the Ohio Board of Nursing.

The postsecondary education market consists of more than 4,000 U.S. colleges and universities serving traditional college-age students and adult students. Competition is highly fragmented and varies by geography, program offerings, delivery method, ownership, level of quality and selectivity of admissions. No single institution has a significant share of the total postsecondary market. 

Because of their limited schedules and geographic distribution, we believe that online instruction is particularly attractive to members of the United States Armed Forces. There are approximately 2.2 million active and reserve military service members, and nearly 300,000 new service members and reservists are enlisted or commissioned annually, although that number may decrease if proposed reductions to the military take effect. The military encourages service members to seek postsecondary education through its compensation, promotion, assignment and performance systems. Military leaders and policies encourage such education to prepare service members for their military and post-military careers. Service members also receive tuition assistance from their branch of service through the Uniform Tuition Assistance Program administered by the DoD, and certain service members and veterans may be eligible for additional education benefits administered by the Department of Veterans Affairs, or the VA. These DoD and VA programs are described more fully below in “Sources of Student Financing” and “Regulation of Our Business - Federal Support and Regulation of Higher Education.”

•

Commitment to Academic Excellence. We are committed to continuously improving the academic programs and services offered through all of our institutions. We have historically invested significant attention and resources in educational support at APUS, where the academic programs offered by APUS are overseen by a Board of Trustees that includes former college presidents, active accreditation evaluators, a former Commandant of the Marine Corps, and a former Department of the Army Inspector General.  Similarly, HCON focuses its attention on educational support by hiring experienced industry professionals while enhancing student services to assist students with courses, labs and clinical offerings.  HCON’s administration includes faculty with research and teaching experience, as well as nursing credentials.

•

Affordable Tuition. The combined tuition, fees and books at APUS are less for undergraduate and graduate students than the average in-state cost at a public university. APUS tuition was originally established so that DoD tuition assistance programs fully covered the cost of undergraduate course tuition and over 75% of the cost of graduate course tuition. Tuition, fees and books at HCON are also designed to be affordable and competitive with other similar institutions offering the same level of flexibility, accessibility and student experience.

•

Online Higher Education and a Diverse Array of Programs Offered by APUS. We have designed our APUS courses and programs specifically for online delivery, and we recruit and train APUS faculty exclusively for online instruction. Because APUS students are located around the globe, we focus our instruction on asynchronous, interactive instruction that provides these students with the flexibility to study and interact as their schedules permit. APUS offers 91 degree programs in fields ranging from homeland security, space studies, and emergency and disaster management to liberal arts and education. We believe HCON will expand our emphasis on health science programs and potentially serve as a platform for future healthcare school expansion.

•

Effective Student Support Systems and Data-Driven Decision-Making. APUS has developed proprietary information systems and processes to support what we refer to as Partnership At a Distance™, or PAD.  Through PAD, APUS students may access our admission, orientation, course registrations, tuition payments, book requests, grades, transcripts, degree progress, and various other services as their schedules permit. We also have created management tools based on the data from PAD that help us to improve continuously the academic quality, student support services, and marketing efficiency we offer through APUS.  In the future, we believe HCON may benefit from access to APUS educational technologies, student and library services, and other university resources.

 

•

New Horizons Worldwide, Inc. In September 2012, we made a $6.8 equity investment and a $6.0 million debt investment in a holding company that acquired New Horizons, a global IT training company operating over 300 locations around the world through franchise arrangements in 45 states and 70 countries. In connection with the investment, we are entitled to certain rights, including right to representation on the board of directors of the holding company.

 

•

Fidelis Education, Inc. In February 2013, we made a $4.0 million investment in preferred stock of Fidelis Education, representing approximately 21.6% of its fully diluted equity. Fidelis Education is developing a technology platform that will assist working adult students with education advising and career mentoring services as they pursue college degrees. In connection with the investment, APEI is entitled to certain rights, including right to representation on the board of directors of Fidelis Education.

•

Hondros College, Nursing Programs. In November 2013, we acquired all of the issued and outstanding capital stock of National Education Seminars, Inc., operating as Hondros College, Nursing Programs, or HCON, for an adjusted aggregate purchase price of $46.3 million. As described more fully elsewhere in this annual report. HCON offers a Diploma in Practical Nursing, an Associate Degree in Nursing, and an online registered nurse to Bachelor of Science in Nursing completion program.

 

Programs	Number
Master of Arts	18
Master of Business Administration	1
Master of Education	3
Master of Public Administration	1
Master of Public Health	1
Master of Science	6
Bachelor of Arts	25
Bachelor of Business Administration	1
Bachelor of Science	14
Associate of Arts	13
Associate of Science	8
Total Degree Programs:	91
Certificates	Number
Graduate	42
Undergraduate	50
Total Certificates:	92
TOTAL PROGRAMS AND CERTIFICATES	183

 

Master of Arts in: Criminal Justice Emergency Management and Disaster Management Entrepreneurship History Homeland Security Humanities Intelligence Studies International Relations and Conflict Resolution Legal Studies Management Military History Military Studies National Security Studies Political Science Psychology Reverse Logistics Management Security Management Transportation Management and Logistics

Master of Education in: Administration and Supervision Guidance Counseling Teaching   Master of Public Administration   Master of Public Health   Master of Science in: Accounting Environmental Policy and Management Information Technology Space Studies Sports and Health Sciences Sports Management

 

Bachelor of Arts in: Human Development and Family Studies Criminal Justice Emergency and Disaster Management Entrepreneurship English General Studies History Homeland Security Hospitality Management Intelligence Studies International Relations Management Marketing Middle Eastern Studies Military History Military Management and Program Acquisition Philosophy Political Science Psychology Religion Retail Management Reverse Logistics Management Security Management Sociology Transportation and Logistics Management   Bachelor of Business Administration   Bachelor of Science in: Accounting Criminal Justice Environmental Science Fire Science Management Information System Security Information Technology Information Technology Management

Legal Studies Mathematics Nursing Public Health Space Studies Sports and Health Sciences Sports Management   Sports Management Associate of Arts in: Business Administration Communication Counter-Terrorism Studies Criminal Justice Early Childhood Care and Education General Studies History Hospitality Management Military History Real Estate Studies Retail Management Weapons of Mass Destruction Preparedness   Associate of Science in: Accounting Computer Applications Database Application Development Explosive Ordnance Disposal Fire Science Paralegal Studies Public Health Web Publishing

 

 

 

 

 

 

Name		Age		Position
Dr. Wallace E. Boston		59		President, Chief Executive Officer and Director
Harry T. Wilkins		57		Executive Vice President, Chief Development Officer and Chief Executive Officer of HCON
Richard W. Sunderland, Jr.		53		Executive Vice President, Chief Financial Officer
Carol S. Gilbert		55		Executive Vice President, Marketing
Dr. Karan Powell		60		Executive Vice President, Provost of APUS
Dr. Sharon van Wyk		54		Executive Vice President, Chief Operations Officer
Peter W. Gibbons		61		Senior Vice President, Chief Administrative Officer

Sharon van Wyk, Ph.D. joined the Company in August 2009 as Executive Vice President, Chief Operations Officer. From March 2006 to April 2008, Dr. van Wyk served as Vice President of Process Excellence, Infrastructure & Online Customer Support at Intuit Inc. From 2001 to 2006, Dr. van Wyk served as Vice President of Process Excellence and New Market Development for Genworth Financial. From 1996 to 2001, Dr. van Wyk served as Manager, Global Risk Management and Six Sigma for GE Capital. From 1988 to 1996, Dr. van Wyk served as Associate Partner, Change Management for Accenture Consulting. Dr. van Wyk was an adjunct professor for the Executive MBA program at the University of Connecticut Business School and possesses several process improvement certifications including Master Black Belt and Six Sigma Instructor.

 

 

•

American Public University System, or APUS, is institutionally accredited by The Higher Learning Commission of the North Central Association of Colleges and Schools, or HLC, a regional accrediting agency.  In July 2011, HLC reaffirmed the accreditation status of APUS. The next comprehensive evaluation is scheduled for the 2020-2021 academic year, with an interim progress report on the development of a university system-wide coordination and improvement of graduate studies due in July 2015.

•

HCON is institutionally accredited by the Accrediting Council for Independent Colleges and Schools, or ACICS, a national accrediting agency recognized by the Secretary of Education. On August 13, 2013, ACICS acted to award HCON a new grant of accreditation through December 31, 2016. After consummation of our acquisition of HCON, ACICS acted to reinstate HCON’s accreditation through December 31, 2016, effective from the date of the acquisition. An on-site quality assurance visit must be completed by May 31, 2014.  For more information, see “Regulation of Our Business - Regulatory Actions and Restrictions on Operations - Change of Ownership Resulting in a Change of Control.” On August 20, 2013, ACICS acted to approve final inclusion of the HCON Independence, Ohio campus within the scope of HCON’s accreditation.

Institutional accreditation is an important attribute of our institutions. Colleges and universities depend, in part, on accreditation in evaluating transfers of credit and applications to graduate schools. Employers rely on the accredited status of institutions when evaluating a candidate’s credentials, and students, corporations, and government sponsors under tuition reimbursement programs look to accreditation for assurance that an institution maintains quality educational standards.

 

 

 

Hondros College, Nursing Programs

 

 

 

•	comply with all applicable Title IV program regulations;

•	have capable and sufficient personnel to administer Title IV programs;

•	have acceptable methods of defining and measuring the satisfactory academic progress of its students;

•	not have cohort default rates above specified levels;

•	have various procedures in place for safeguarding federal funds;

•	not be, and not have any principal or affiliate who is, debarred or suspended from federal contracting or engaging in activity that is cause for debarment or suspension;

 

 

•	provide financial aid counseling to its students;

•	refer to ED’s Office of Inspector General any credible information indicating that any applicant, student, employee or agent of the institution has been engaged in any fraud or other illegal conduct involving Title IV programs;

•	submit in a timely manner all reports and financial statements required by the regulations;

•	report annually to the Secretary of Education on any reasonable reimbursements paid or provided by a private education lender or group of lenders to any employee who is employed in the institution’s financial aid office or who otherwise has responsibilities with respect to education loans;

•	develop and apply an adequate system to identify and resolve discrepant information with respect to a student’s application for Title IV aid; and

•	not otherwise appear to lack administrative capability.

 

 

 

 

•	If an institution’s three-year cohort default rate is 30% or greater in a given fiscal year, the institution will be required to assemble a “default prevention task force” and submit to ED a default improvement plan.

•

If an institution’s three-year cohort default rate is 30% or greater for two consecutive years, the institution will be required to review, revise, and resubmit a default improvement plan, and ED may direct that such plan be amended to include actions, with measurable objectives, that it determines will promote loan repayment.

•	If an institution’s three-year cohort default rate is equal to or greater than 30% for each of the three most recent federal fiscal years for which data are available, the institution will be ineligible to participate in the FFEL Program, Direct Loan Program and Pell Grant Program.

 

 

 

Sequestration and Budgetary Matters

 

 

 

•	If the program’s cohort default rate is less than 30% for the most recent fiscal year; and

•	If the program’s graduates have an annual debt-to-earnings rate less than or equal to 8%, or a discretionary debt-to-earnings rate less than or equal to 20% in the third and fourth year after graduation.

 

 

 

 

   

•	difficulties in consolidating operations and in integrating information technology and other systems, as well as the inability to maintain uniform standards, controls, policies and procedures;

•	distraction of management’s attention from normal business operations during the integration process;

•	inability to obtain, or delay in obtaining, approval of the acquisition from the necessary regulatory agencies, or the imposition of operating restrictions or a letter of credit requirement on us or on the acquired school;

•	expenses associated with the integration efforts; and

•	unidentified issues not discovered in our due diligence process, including legal contingencies.

 

•	the emergence of more, and more successful, competitors;

•	factors related to our marketing, including the costs of internet advertising and multi-faceted interactive marketing campaigns;

•	limits on our ability to attract and retain effective employees because of the incentive payment rule, as described more fully below in “Risks Related to the Regulation of our Industry”

•	performance problems with our online systems;

•	our institutions’ failure to maintain accreditation, state authorization, eligibility for Title IV programs, or other approvals;

•	increased regulation of online education, including in states in which we do not have a physical presence;

•	regulatory investigations or litigation that may damage our reputation;

•	student dissatisfaction with our institutions’ services and programs;

•	failure to develop a message or image for APUS that resonates well with civilian students;

•	a dilution of our brand as a result of the HCON acquisition or other expansion;

•	adverse publicity regarding us, our competitors, or online or for-profit education generally;

•	adverse developments in our relationships with military officers and other leaders in the military community;

•	inability to integrate the HCON acquisition in an efficient and timely manner;

•	a decline in the acceptance of online education generally; and

•	a decrease in the perceived or actual economic benefits that students derive from our programs or programs provided by for-profit schools generally.

 

 

 

•	Tie access to federal financial aid to minimum student outcome thresholds.

•	Prohibit institutions from funding marketing, advertising and recruiting activities with federal financial aid dollars.

•	Expand the reporting period for cohort default rates beyond three years.

•	Require that for-profits receive 15% of revenues from non-federal sources.

•	Extend the ban on incentive compensation to include all employees of institutions of higher education, and clarify that this ban extends to numeric threshold or quota-based termination policies

•	price and volume fluctuations in the overall stock market from time to time;

•	significant volatility in the market price and trading volume of comparable companies;

•	actual or anticipated changes in our earnings, enrollments or net course registrations, or fluctuations in our operating results or in the expectations of securities analysts;

•	the actual, anticipated or perceived impact of changes in government policies, laws and regulations, or similar changes made by accrediting bodies;

•	the depth and liquidity of the market for our common stock;

•	general economic conditions and trends;

•	catastrophic events;

•	sales of large blocks of our stock; or

•	recruitment or departure of key personnel.

•

the ability of our board of directors to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the powers, preferences and rights of each series without stockholder approval, which may discourage unsolicited acquisition proposals or make it more difficult for a third party to gain control of our company;

•	a requirement that stockholders provide advance notice of their intention to nominate a director or to propose any other business at an annual meeting of stockholders;

•	a prohibition against stockholder action by means of written consent unless otherwise approved by our board of directors in advance; and

•

the application of Section 203 of the Delaware General Corporation Law, which generally prohibits us from engaging in mergers and other business combinations with stockholders that beneficially own 15% or more of our voting stock, or with their affiliates, unless our directors or stockholders approve the business combination in the prescribed manner.

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2012		Low				High
First Quarter 2012		$	36.87			$	46.96
Second Quarter 2012		$	26.85			$	39.90
Third Quarter 2012		$	24.88			$	39.16
Fourth Quarter 2012		$	29.94			$	38.81
Year Ended December 31, 2013
First Quarter 2013		$	30.10			$	41.49
Second Quarter 2013		$	32.08			$	39.80
Third Quarter 2013		$	37.33			$	40.94
Fourth Quarter 2013		$	35.48			$	45.76

 

As of February 25, 2014, there were approximately 476 holders of record of our common stock.

 

 

 

 

 

 

 

 

 

 

 

	Total Number of Shares Purchased		Average Price Paid Per Share			Total Number of Shares Purchased as Part of  Publicly Announced Plans or Programs		Maximum Number  (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (2)(3)
January 1, 2013	—		—			—		7,992,647
January 1, 2013 - January 31, 2013	3,638		$	34.79		3,638		7,866,068
February 1, 2013 - February 28, 2013	—		$	—		3,638		7,866,068
March 14, 2013	—		$	—		3,638		22,866,068
March 1, 2013 - March 31, 2013	150,587		$	32.30		154,225		18,001,740
April 1, 2013 - April 30, 2013	2,164		$	33.00		156,389		17,930,337
May 1, 2013 - May 31, 2013	60,000		$	32.55		216,389		15,977,321
June 1, 2013 - June 30, 2013	—		$	—		216,389		15,977,321
July 1, 2013 - July 31, 2013	—		$	—		216,389		15,977,321
August 1, 2013 - August 31, 2013	—		$	—		216,389		15,977,321
September 1, 2013 - September 30, 2013	10,000		$	37.91		226,389		15,598,221
October1, 2013 - October 31, 2013	167,675		$	36.86		394,064		9,417,721
November 1, 2013 - October 30, 2013	—		$	—		394,064		9,417,721
December 1, 2013 - December 31, 2013	—		$	—		394,064		9,417,721
Total	394,064		$	34.47		394,064		9,417,721

(1)

On December 9, 2011, our board of directors approved a stock repurchase program for its common stock, under which we may annually purchase up to the cumulative number of shares issued or deemed issued under our equity incentive and stock purchase plans.  Repurchases may be made from time to time in the open market at prevailing market prices or in privately negotiated transactions based on business and market conditions.  The stock repurchase program may be suspended or discontinued at any time, and will be funded using our available cash.

(2)

On May 14, 2012, our board of directors authorized a program to repurchase up to $20 million of shares of our common stock. On March 14, 2013, our board of directors increased this authorization by an additional $15 million of shares.  Subject to market conditions, applicable legal requirements and other factors, the repurchases may be made from time to time in open market transactions or privately negotiated transactions. The authorization does not obligate us to acquire any shares, and purchases may be commenced or suspended at any time based on market conditions and other factors that we deem appropriate.

(3)

During the twelve months ended  December 31, 2013, we were deemed to have repurchased 20,540 shares of common stock forfeited by employees to satisfy minimum tax-withholding requirements in connection with the vesting of restricted stock grants. These repurchases were not part of the authorized stock repurchase programs authorized by our board of directors.

 

 

		Year Ended December 31,
		2009				2010				2011				2012				2013
		(In thousands, except per share and net registration data)
Statement of Operations Data:
Revenues		$	148,998			$	198,174			$	260,377			$	313,516			$	329,479
Costs and expenses:
Instructional costs and services		58,383				75,309				95,216				110,192				112,784
Selling and promotional		20,479				34,296				44,713				59,761				65,687
General and administrative		25,039				32,045				48,350				63,615				70,063
Depreciation and amortization		5,231				6,502				9,239				11,146				13,508
Total costs and expenses		109,132				148,152				197,518				244,714				262,042
Income from continuing operations before interest income and income taxes		39,866				50,022				62,859				68,802				67,437
Interest income, net		94				111				109				135				309
Income from continuing operations before income taxes		39,960				50,133				62,968				68,937				67,746
Income tax expense		16,017				20,265				22,211				26,528				25,645
Investment income (loss), net of taxes		—				—				—				(86		)		(67		)
Net income attributable to common stockholders		$	23,943			$	29,868			$	40,757			$	42,323			$	42,034
Net income attributable to common stockholders per common share:
Basic		$	1.32			$	1.63			$	2.28			$	2.38			$	2.38
Diluted		$	1.27			$	1.59			$	2.23			$	2.35			$	2.35
Weighted average number of shares outstanding:
Basic		18,167				18,281				17,877				17,772				17,656
Diluted		18,906				18,837				18,295				18,041				17,921
Other Data:
Net cash provided by operating activities		$	36,756			$	47,078			$	70,438			$	52,838			$	59,414
Capital expenditures		$	10,758			$	22,454			$	24,925			$	35,014			$	20,649
Stock-based compensation		$	2,223			$	2,805			$	3,189			$	3,818			$	4,024
Adjusted net/Net course registrations(1)		198,392				259,389				341,669				402,205				409,719

 

 

		As of December 31,
		2009				2010				2011				2012				2013
		(In thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents		$	74,866			$	81,352			$	119,006			$	114,901			$	94,820
Working capital(2)		$	59,419			$	60,417			$	82,034			$	86,004			$	62,327
Total assets		$	115,753			$	141,839			$	198,891			$	237,603			$	271,655
Stockholders’ equity		$	82,018			$	97,300			$	133,833			$	171,153			$	207,069
		As of December 31,
		2009				2010				2011				2012				2013
		(In thousands)
Net income attributable to common stockholders		$	23,943			$	29,868			$	40,757			$	42,323			$	42,034
Interest (income), net		(94		)		(111		)		(109		)		(135		)		(309		)
Income tax expense		16,017				20,265				22,211				26,528				25,645
Investment loss, net of taxes		—				—				—				86				67
Depreciation and amortization		5,231				6,502				9,239				11,146				13,508
EBITDA from continuing operations		$	45,097			$	56,524			$	72,098			$	79,948			$	80,945

 

(1)

Net course registrations represent the aggregate number of courses for which students remain enrolled after the date by which they may drop a course without financial penalty. For the years ended December 31, 2011, 2012 and 2013, one-credit lab courses were combined with their related three-credit courses.

 

(2)	Working capital is calculated by subtracting total current liabilities from total current assets.

 

 

 

 

 

•	Our American Public Education, Inc. segment, or APEI segment, which reflects the historical operations of APEI prior to the acquisition of HCON on November 1, 2013, operational activities at APUS and other corporate activities; and

 

•	Our Hondros College, Nursing Programs segment, or HCON segment, which reflects operational activities at HCON.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	8-Week Course - Tuition Refund Schedule
	Withdrawal Request	Date Tuition Refund Percentage
	Before or During Week 1	100%
	During Week 2	75%
	During Weeks 3 and 4	50%
	During Weeks 5 through 8	No Refund
	16-Week Course - Tuition Refund Schedule
	Withdrawal Request	Date Tuition Refund Percentage
	Before or During Week 1	100%
	During Week 2	100%
	During Weeks 3 and 4	75%
	During Weeks 5 through 8	50%
	During Weeks 9 through 16	No Refund

 

 

 

 

 

 

 

 

	Annual Impairment Test Date		Goodwill as of December 31,								Other Intangibles as of December 31,
($ in thousands)			2013				2012				2013				2012
American Public Education, Inc.	NA		$	—			$	—			$	—			$	—
Hondros College, Nursing Programs1	NA		38,148				—				8,082				—
Total			$	38,148			$	—			$	8,082			$	—