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Welcome and thank you for your interest in DeVry. I’ll focus my opening remarks on 3 things: • The thesis on DeVry, which is Quality + Diversification = Growth, and

how that differentiates us from other investment options in the sector; • Second, I’ll review our financial results. • And third, I’ll cover our turnaround plan at DeVry University.

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But let me start with just a little about the DeVry education group for those of you who don’t know us. • DeVry has a hard-won reputation for quality, and is one of the most diversified education providers in the

private sector. • We serve over 110,000 degree-seeking students globally, across 3 segments: • Our Medical and Healthcare segment includes Ross University Schools of Medicine and Veterinary Medicine;

and American University of the Caribbean School of Medicine. • We’re the only publicly-held education provider who operates medical and veterinary schools. • In fact, we’re the #1 producer of new physicians to the US • Our Chamberlain College of Nursing has one of the largest pre-licensure nursing programs in the U.S.; with 13

campuses and over 13,000 students. • Carrington Colleges educate ancillary care and allied health professionals at 18 campuses. Carrington is making

good progress on its turnaround plan. • Our largest and best-known institution is DeVry University and its Keller Graduate School of Management. • DeVry University serves more than 60,000 students in career-oriented programs in business, technology, and

management. One competitive advantage here is blended learning, with a nation-wide campus network and a high-quality online platform.

• In our International, K through 12, and professional education segment, I would highlight, first: o DeVry Brasil, which offers Bachelor’s and Master’s programs in healthcare, business, law, and

engineering. We currently serve nearly 30,000 students across 5 cities. DeVry Brasil has grown over 60 percent this fiscal year. Recently, we announced our intent to acquire Faculdade Diferencial Integral, or Facid. Facid serves about 2,500 students primarily in healthcare. What’s interesting about Facid is that it will be our first medical school in Brazil. So we’re excited about the potential synergies and best practice sharing that will occur after we complete the transaction.

o And Becker Professional Education provides exam review and corporate training in accounting and finance, project management, and healthcare. Becker has educated more than half of all CPAs practicing today.

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The thesis on DeVry is the click quality of our programs and reputation, plus our diversification strategy, positions us for long-term growth. This formula also differentiates us from others in higher education. When we talk about academic quality, one of the best measures is the investments we’re making in academics, student services and educational technology. Last fiscal year, DeVry spent more than $900 million in academics and in our infrastructure to serve students.

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Examples of these investments include state-of-the-art patient simulators and labs at Chamberlain, Carrington, Ross and AUC. In fact, since we acquired Ross and AUC, we’ve invested more than $150 million in facilities, academic quality initiatives and student services.

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Here you see our latest expansion project at AUC, including a new state-of-the-art simulation center, labs, and testing center. We expect the project to be completed this fall.

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Last fiscal year we invested $25 million across all our institutions in curriculum improvement and faculty development. This is a picture from our annual faculty symposium. At DeVry University, roughly 40 percent of our professors hold doctoral degrees.

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Investments like these distinguish DeVry’s institutions from others, and they really pay off. We know there have been questions about accreditation. The Higher Learning Commission, or HLC, accredits DeVry University. • DeVry University recently completed its review with the HLC, and achieved a

reaffirmation of its accreditation through 2019. During a time when academic effectiveness is being challenged, DeVry University is proud to earn reaccreditation – as a testament to our integrity as a university and commitment to our students.

• Also, Ross University School of Medicine recently received five-year re-accreditation from its accreditor, the Dominica Medical Board.

It’s rewarding for us when accrediting bodies acknowledge our commitment to quality.

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The other measure of quality is successful student outcomes; let me share 3 examples: Last year, 94 percent of Chamberlain bachelor’s graduates across all our campuses passed the National Council Licensure Examination or NCLEX.

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At DeVry University, nearly 86 percent of graduates in the active job market were employed in their field of study within six months of graduation. These graduates earned an average salary of $43,000.

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Both Ross and AUC medical students achieved a 96 percent pass rate on Step 1 of the U.S. medical licensure exam.

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And at Becker, 37 of the 39 2012 Elijah Watt Sells Award recipients – that’s the highest scorers on the CPA exam - prepare with Becker’s CPA exam review.

Our formula is Quality PLUS Diversification; Diversification mitigates risk and it gives us more opportunities for growth. Our diversification strategy is working, with about a third of our enrollment in the growing field of healthcare education. We’re also diversified from a degree level perspective, from pre-baccalaureate to Bachelors, Master’s and doctoral level programs. And…geographically, with nearly a fifth of our revenues outside the U.S.

We’re also diversified across student segments, not overly-dependent on any one. We have traditional-aged students straight from high school, working adults, community college transfers, students from corporations, and the military.

Our diversification strategy adds value, as increasingly students are enrolling across our institutions. So we have Carrington grads going to Chamberlain to move to the bachelor’s level. Becker students dual-enrolling in Keller programs. Chamberlain students co-sitting in DeVry University classes. Diversification also makes us more attractive to the best talent, as our colleagues get promoted across our institutions. Now, let me comment on the state of the market for education, and why we’re confident in long-term growth for DeVry. The current economic environment is depressing demand in the overall education market in the US. For the first time in a generation, fewer Americans are going to college than the year before. Even enrollments in the heavily tax-subsidized and low tuition community colleges were down over three percent nationwide in 2012. So even community colleges aren’t immune from low consumer confidence and neither are we. However, I think it’s important to note that it’s not a seminal issue for DeVry or even private sector institutions, but a cyclical issue across higher education. And we’re confident in the growth opportunities over the long term for private-sector education in general, and for DeVry in particular, for 3 reasons: First, there’s a growing need for career-oriented education.

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According to Georgetown’s Center on Education and the Workforce, in 1973, only 1/3 of U.S. jobs required a college education. Most jobs only required a high school diploma. By 2008, that number had increased to about 2/3. Today, most good jobs do require a college education. And DeVry has a particularly strong presence in program areas where there’s high demand, such as technology and healthcare. Second, there’s a strong ROI from education, or as we refer to it – ROEI – return on educational investment.

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The U.S. Census Bureau recently released a report showing that the difference in lifetime earnings between a high school graduate and a college graduate was $1 million. The difference is even greater for college graduates in fields like engineering, computer science and healthcare.

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DeVry is focused on these types of high-ROEI programs. Shown on this chart is a sample of programs across our institutions that demonstrate this very high return for students. These rates of return are based on the increase in earnings of the graduates, versus the investment the student made in their education. So for example our bachelors in nursing graduates are achieving an ROEI of 46 percent. These very high rates of return demonstrate the value students receive from DeVry’s programs. And the third reason we’re confident in long-term growth is that the public sector, which provides most of higher education in the United States, is capacity-constrained.

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As an example, California has reduced the number of seats in the Cal State system by over 165,000 in the last few years because of state budget constraints. The private sector has stepped up to fill that gap, both here in the U.S., where it’s about 10 percent of college students in the private sector, and globally. In Brazil, where we have a strong and growing footprint, 70 percent of all college students are going to private sector universities.

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So we’re confident in long-term growth, given the growing need for career-oriented education, the public sector struggling to meet the demand, and the strong ROEI. We think prospective students understand the ROEI very well. But right now, many are waiting, not sure if this is the right time to commit to college. This leads us to believe that there may be pent-up demand building, to be released as the economy improves. Let me turn now to our financial performance…

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For the first nine months of fiscal 2013, total revenues of $1.5 billion, were down modestly year over year.

These results were driven by continued weakness at DeVry University, but offset by strong demand at our other institutions.

At all institutions other than DeVry University and Advanced Academics, revenues were up.

We’re managing aggressively in this environment and as a result, our…

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Net income was $139 million– up more than 4 percent from the prior year, including discrete items. Excluding these discrete items, net income was down almost 22 percent.

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We ended the first nine months with a solid cash position and no debt. In times of transition, we believe there’s a lot of value in maintaining a strong balance sheet. Our robust cash flow allows us to continue investments in academic quality, student service, and growth that will pay off in future years.

As I mentioned earlier… like many in higher education, we’ve faced headwinds caused by low consumer confidence as a result of continued weakness in the economy. click And at DeVry University, we’re executing a turnaround plan to improve our performance. The plan has five priorities: • Further improve academic quality • Align our cost structure with enrollment levels • Regain enrollment growth • Make targeted investments to drive future growth • Manage the change DeVry University is known for academic quality and career focus. We’re enhancing that further. The team is focused on improving persistence and raising graduation rates; upgrading our educational technology and electronic course materials; and increasing the mix of full-time faculty to improve the student experience.

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In terms of aligning costs: The entire organization is focused on increasing efficiencies. We started 2013 with a target of $50 million in savings and value creation opportunities – click I’m pleased to say we’ve now increased our target to $100 million to be delivered by the end of the fiscal year. We think about the strategy here as three overlapping layers. The first layer is near-term items such as staffing models and variable costs. That's what's driving a lot of the initial savings as we adjust our cost structure to enrollment volumes. The second layer comprises items that take a little longer to work through, things like our real estate footprint where we’ve been able to consolidate 7 facilities to date. For example, last quarter we delivered approximately $3 million in annual expected savings from consolidating an administrative office facility in Wood Dale, Illinois, as well as facilities at Carrington College and DeVry University. And in the third quarter, we consolidated Carrington’s Emeryville, California, campus. So you can see the entire organization, not just DeVry University, is focused on this turnaround. The third layer, which is in its early stage, focuses on process redesign and restructuring. These are longer-term initiatives, which not only reduce costs, but also improve service quality, and shift costs to a more variable model. This includes areas like student finance, which is currently spread out across individual institutions and campuses. So those are things that will take longer, and probably require some investment. Taken together, we think the combination of these three layers puts us in a position to reduce our cost structure, make it a more variable-cost model and allow for us to experience positive operating leverage when enrollment growth returns.

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To regain enrollment growth: Initiatives include: increasing our media investment from 20 weeks on TV to 37 weeks by reallocating a portion of our marketing budget We’re also improving our marketing approach to highlight our value proposition as THE career university; and we’re supporting specific program areas with strong career opportunities such as technology. We’re investing in our website and mobile platforms drive real time content customization for each visitor And we’re focused on getting the highest quality inquiries and optimizing the process for handling them. We’re addressing affordability by freezing tuition for fiscal 2014 and continuing the use of strategic scholarship programs

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In addition to reducing our cost structure and regaining enrollment growth, we’re making targeted investments to drive future growth. These investments include new programs.

We’re developing a shorter version of the MBA program offered through DeVry University’s Keller Graduate School of Management. This new “executive” MBA program requires 32 credits and would run in parallel to the standard 48 credit program. This shorter program is targeted toward an MBA student with more managerial and work experience.

We’re also developing a competency-based degree program, which eliminates redundant coursework and allows the student to complete more quickly and at a lower price.

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Point five of the plan focuses on managing all of the changes I just discussed. We’re implementing a comprehensive change management program to minimize execution risk to our operations as we intensely work our plan.

So that’s our turnaround plan to improve performance at DeVry University.

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Let me wrap up. Our formula of quality plus diversification equals growth is helping us as we work through the cyclical weakness. We have a strong turnaround plan in place at DeVry University. And we remain confident in the opportunities for long-term growth in this wonderful world of career-oriented education. Thank you for your interest in DeVry and I’m happy to take your questions.

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