11. SEGMENT REPORTING

Our segments are determined in accordance with FASB ASC Topic 280—Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a group of postsecondary education providers that offer a variety of degree and non-degree academic programs. These segments are organized by key market segments to enhance operational alignment and, for our two universities, to enhance brand focus within each segment to more effectively execute our strategic plan. As of September 30, 2017, our four segments are:

University Group:

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Colorado Technical University (CTU) places a strong focus on providing industry-relevant degree programs to meet the needs of our students for career advancement and of employers for a well-educated workforce and offers academic programs in the career-oriented disciplines of business studies, nursing, computer science, engineering, information systems and technology, cybersecurity and healthcare management. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of September 30, 2017, students enrolled at CTU represented approximately 65% of our total enrollments. Approximately 93% of CTU’s enrollments are fully online.

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American InterContinental University (AIU) focuses on helping busy professionals get the degree they need to move forward in their career as efficiently as possible and collectively offers academic programs in the career-oriented disciplines of business studies, information technologies, education and criminal justice. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of September 30, 2017, students enrolled at AIU represented approximately 34% of our total enrollments. Approximately 93% of AIU’s enrollments are fully online.

Career Schools Group:

Campuses included in our Career School segments include those which are currently being taught out or those which have completed their teach-out activities or have been sold subsequent to January 1, 2015. As a result of a change in accounting guidance, campuses which have closed or have been sold subsequent to January 1, 2015 no longer meet the criteria for discontinued operations and remain reported within continuing operations on our consolidated financial statements. Campuses in teach-out employ a gradual teach-out process, enabling them to continue to operate while current students have a reasonable opportunity to complete their course of study; they no longer enroll new students.

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Culinary Arts includes our Le Cordon Bleu institutions in North America (“LCB”) which offer hands-on educational programs in the career-oriented disciplines of culinary arts and patisserie and baking in the commercial-grade kitchens of Le Cordon Bleu. During the third quarter of 2017, the Company completed the teach-out activities of all remaining 16 Le Cordon Bleu campuses.

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Transitional Group includes our non-LCB campuses which are in teach-out or those which have been closed or sold subsequent to January 1, 2015. Our Transitional Group offers academic programs in career-oriented disciplines complemented by certain programs in business studies and information technology. The campuses within the Transitional Group that have not yet ceased operations as of September 30, 2017 will complete their teach-outs on varying dates through 2018. As of September 30, 2017, students enrolled at the Transitional Group campuses represented approximately 1% of our total enrollments. During the third quarter of 2017, the Company completed the teach-out of 1 Transitional Group campus: Sanford-Brown Las Vegas, which continues to be reported as part of the Transitional Group as of September 30, 2017.

Summary financial information by reporting segment is as follows (dollars in thousands):

	For the Quarter Ended September 30,
	Revenue										Operating Income (Loss)
	2017		% of Total			2016		% of Total			2017			2016
CTU	$	91,319		63.0	%	$	90,921		54.2	%	$	27,565		$	21,486
AIU		50,150		34.6	%		48,542		29.0	%		2,256			291
Total University Group		141,469		97.6	%		139,463		83.2	%		29,821			21,777
Corporate and Other		-	NM				-	NM				(6,199	)		(5,587	)
Subtotal		141,469		97.6	%		139,463		83.2	%		23,622			16,190
Culinary Arts		2,367		1.6	%		21,369		12.7	%		(14,027	)		(1,801	)
Transitional Group		1,150		0.8	%		6,793		4.1	%		(5,056	)		(15,095	)
Total	$	144,986		100.0	%	$	167,625		100.0	%	$	4,539		$	(706	)

	For the Year to Date Ended September 30,
	Revenue										Operating Income (Loss)
	2017		% of Total			2016		% of Total			2017			2016
CTU	$	276,558		61.0	%	$	274,623		50.0	%	$	78,649		$	70,693
AIU		150,618		33.2	%		152,123		27.7	%		7,987			9,036
Total University Group		427,176		94.2	%		426,746		77.7	%		86,636			79,729
Corporate and Other		-	NM				-	NM				(16,595	)		(17,160	)
Subtotal		427,176		94.2	%		426,746		77.7	%		70,041			62,569
Culinary Arts		19,302		4.3	%		89,990		16.4	%		(25,039	)		1,666
Transitional Group		6,839		1.5	%		32,401		5.9	%		(21,578	)		(40,672	)
Total	$	453,317		100.0	%	$	549,137		100.0	%	$	23,424		$	23,563

	Total Assets as of⁽¹⁾
	September 30, 2017		December 31, 2016
CTU	$	72,589	$	76,143
AIU		65,275		66,081
Total University Group		137,864		142,224
Corporate and Other		292,929		334,945
Subtotal		430,793		477,169
Culinary Arts ⁽²⁾		48,995		57,443
Transitional Group ⁽²⁾		15,316		18,736
Discontinued Operations		6,093		6,253
Total	$	501,197	$	559,601

(1)	Total assets do not include intercompany receivable or payable activity between schools and corporate and investments in subsidiaries.

(2)	Assets are primarily composed of deferred tax assets that may be utilized for the consolidated company to reduce future tax liabilities.