##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
     Form 10-K
      þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal
    year ended June 30, 2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   Commission File No:
    333-137605
      EDUCATION MANAGEMENT
    LLC
 (Exact name of registrant as
    specified in its charter)
      Delaware

20-4506022(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)c/o Education
    Management Corporation
    210 Sixth Avenue, Pittsburgh, PA,
    33rd

    Floor

15222(Zip Code)(Address of principal executive
    offices)   Registrants telephone number, including area code:
 (412) 562-0900
      Securities registered pursuant to Section 12(b) of the
    Act:
 None
  Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  þ o
  þ o
  o o
  Form 10-K Form 10-K. þ
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer þ
    Smaller
    reporting
    company o   Rule 12b-2 o þ




---



##### 





Table of
    Contents
  INDEX
   
 PagePART I ITEM 1





BUSINESS


5ITEM 1A





RISK FACTORS


33ITEM 1B





UNRESOLVED STAFF COMMENTS


47ITEM 2





PROPERTIES


47ITEM 3





LEGAL PROCEEDINGS


47ITEM 4





SUBMISSION OF MATTERS TO A VOTE OF SECURITY
    HOLDERS


48PART II ITEM 5





MARKET FOR REGISTRANTS COMMON EQUITY,
    RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES


48ITEM 6





SELECTED FINANCIAL DATA


49ITEM 7





MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


51ITEM 7A





QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


69ITEM 8





FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


71ITEM 9





CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE


109ITEM 9A





CONTROLS AND PROCEDURES


109ITEM 9B





OTHER INFORMATION


109PART III ITEM 10





DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
    GOVERNANCE


110ITEM 11





EXECUTIVE COMPENSATION


114ITEM 12





SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


135ITEM 13





CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    AND DIRECTOR INDEPENDENCE


137ITEM 14





PRINCIPAL ACCOUNTANT FEES AND SERVICES


139PART IV ITEM 15





EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


139EX-10.14EX-12.1EX-21.1EX-31.1EX-31.2EX-32.1EX-32.2   2




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FORWARD-LOOKING
    STATEMENTS
  Form 10-K Form 10-K) Form 10-K, Form 10-K. Form 10-K.
  
    compliance with extensive federal, state and accrediting agency
    regulations and requirements;
    our ability to maintain eligibility to participate in
    Title IV programs;
    government and regulatory changes including revised
    interpretations of regulatory requirements that affect the
    post-secondary education industry;
    regulatory and accrediting agency approval of transactions
    involving a change of ownership or control or a change in our
    corporate structure;
    damage to our reputation or our regulatory environment caused by
    actions of other for-profit institutions;
    availability of private loans for our students;
    our introduction of the Education Finance Loan program with a
    private lender;
    effects of a general economic slowdown or recession in the
    United States or abroad;
    disruptions in the credit and equity markets worldwide;
    difficulty in opening additional schools and expanding online
    academic programs;
    our ability to improve existing academic programs or to develop
    new programs on a timely basis and in a cost-effective manner;
    failure to effectively market and advertise to new students;
    decline in the overall growth of enrollment in post-secondary
    institutions;
    our ability to manage our substantial leverage;
    compliance with restrictions and other terms in our debt
    agreements, some of which are beyond our control;
    our ability to keep pace with changing market needs and
    technology;
    our ability to raise additional capital in the future in light
    of our substantial leverage;
    our ability to effectively manage our growth;
    increases to our administrative costs and delays to the receipt
    of federal loan proceeds that we may experience if we are
    required to process all or a substantial portion of our
    students federal loans through the Direct Loan Program; 3




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
    capacity constraints or system disruptions to our online
    computer networks;
    the vulnerability of our online computer networks to security
    risks;
    failure to attract, retain and integrate qualified management
    personnel;
    our ability to integrate acquired schools;
    inability to operate schools due to a natural disaster;
    competitors with greater resources;
    risks inherent in non-domestic operations; and
    the other factors set forth under Risk Factors.  Form 10-K
 4




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PART I  ITEM 1.
    BUSINESS  Business
    Overview
      35-year
   5




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
    The Art Institutes.  The Art Institutes focus
    on applied arts in creative professions such as graphic design,
    interior design, web design and interactive media, digital
    filmmaking, media arts and animation, game art and design,
    fashion design and marketing and culinary arts. The Art
    Institutes offer Associates, Bachelors and
    Masters degree programs, as well as selective non-degree
    diploma programs. Students pursue their degrees through local
    campuses, fully online programs through The Art Institute of
    Pittsburgh, Online Division and blended formats, which combine
    on campus and online education. There are 44 Art Institutes
    campuses in 23 U.S. states and in Canada. As of October
    2008, students enrolled at The Art Institutes represented
    approximately 60.9% of our total enrollments.
    Argosy University.  Argosy University offers
    academic programs in psychology and behavioral sciences,
    education, business and health sciences disciplines. Argosy
    offers Doctoral, Masters and undergraduate degrees.
    Argosys academic programs focus on graduate students
    seeking advanced credentials as a prerequisite to initial
    licensing, career advancement
    and/or
    structured pay increases. Students pursue their degrees through
    local campuses, fully online programs and blended formats. There
    are 19 Argosy University campuses in 13 U.S. states. As of
    October 2008, students enrolled at Argosy University represented
    approximately 16.7% of our total enrollments.
    Brown Mackie Colleges.  Brown Mackie Colleges
    offer flexible Associates and non-degree diploma programs
    that enable students to develop skills for entry-level positions
    in high demand vocational specialties and Bachelors degree
    programs that assist students to advance within the workplace.
    Brown Mackie Colleges offer programs in growing fields such as
    nursing, medical assisting, business, criminal justice, legal
    support and information technology. There are 22 Brown Mackie
    College campuses in 11 U.S. states. As of October
    2008, students enrolled at Brown Mackie Colleges represented
    approximately 12.2% of our total enrollments.
    South University.  South University offers
    academic programs in health sciences and business disciplines,
    including business administration, health services management,
    nursing, pharmacy, medical assisting, criminal justice and
    information technology. South University offers Doctoral,
    Masters, Bachelors and Associates degrees
    through local campuses, fully online programs and blended
    formats. There are six South University campuses in five
    U.S. states As of October 2008, students enrolled at South
    University represented approximately 10.2% of our total
    enrollments.    
    History of consistent enrollment
    growth.  During the period from October 1998
    through October 2008, we experienced a compounded annual
    enrollment growth rate of 18.0%. During the same time period,
    the schools that we have owned or operated for one year or more
    experienced a compounded annual enrollment growth rate of 12.0%.
    We generally achieve growth through a number of independent
    sources, including continued investment in existing schools, the
    addition of schools (organically or through acquisition) and new
    delivery channels, such as online. The significant investments
    we have made since the Transaction in numerous areas of our
    workforce, including marketing and admissions, new campuses and
    online education and infrastructure, are designed to support
    future enrollment.
    High visibility into operational
    performance.  We believe that we benefit from a
    business model with good insight into future revenue and
    earnings, given the length of our academic programs.
    Approximately 64% of our students as of October 2008 were
    enrolled in Doctorate, Masters and Bachelors degree
    programs, which are typically multi-year programs that
    contribute to the overall stability of our student population. 6




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
    Opportunity for future profit margin
    expansion.  Our business model benefits from scale
    and permits us to leverage fixed costs across our delivery
    platforms. Since the Transaction in June 2006, and
    notwithstanding the increase in interest expense resulting from
    the indebtedness that we incurred in connection with the
    Transaction and the resulting adverse effect on our net income,
    we have made significant investments in numerous areas of our
    workforce in order to support future enrollment growth and
    enhance the student experience. We expect that our business
    model, along with the anticipated benefits of these investments,
    will enable us over time to leverage our fixed costs as we add
    new locations and expand our existing locations. With respect to
    our online programs, we have built sufficient presence to enable
    us over time to utilize shared technology and infrastructure. We
    believe that our continued focus on information systems,
    operating processes and key performance indicators will permit
    us to enhance our educational quality, growth and profitability
    over time, although we expect that expenses incurred with
    respect to student financial aid initiatives will negatively
    impact our profitability.
    Strong operating cash flow generation.  We
    historically have generated strong cash flows. We benefit from
    investments with attractive returns on capital and favorable
    working capital balances due to advance payment of tuition and
    fees. Since the Transaction, we have made significant
    investments to support growth while simultaneously upgrading the
    infrastructure required to leverage our delivery platforms. In
    fiscal 2009, we generated cash flows from operations of
    $293.0 million.    Industry
    Overview
       7




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Our
    Competitive Strengths
    
    Commitment to offering quality academic programs and
    student and graduate success    
    Recognized brands aligned with specific fields of study
    and degree offerings    
    Diverse program offerings and broad degree
    capabilities   8




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
    National platform of schools and integrated online
    learning platform    100-mile
    
    Strong management team with a focus on long-term
    performance    Our
    Growth Strategy
    
    Introduce new and existing academic programs across our
    national platform of schools   9




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
    Increase enrollments in online distance learning and
    blended-format programs    
    Develop new school locations in attractive markets      Student
    Recruitment and Marketing
       10




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##### Table of Contents



Student
    Admissions and Retention
        Education
    Programs
      2008


2007Bachelors degrees


49.5
%


48.8
%Associates degrees


27.3
%


26.2
%Diploma and Certificates


8.7
%


10.3
%Doctorate degrees


7.9
%


8.4
%Masters degrees


6.6
%


6.3
%    11




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##### Table of Contents



The Art Institutes.
  The School of DesignAssociates DegreeGraphic DesignIndustrial Design TechnologyInterior DesignMasters DegreeGraphic DesignInterior Design

Bachelors DegreeAdvertising
    Design Management
    Graphic Design
    Illustration & Design
    Interior Design
    Visual Communications   The School of FashionAssociates DegreeFashion Design
    Fashion Marketing
    Fashion Merchandising

Bachelors DegreeApparel Design
    Fashion Design
    Fashion Marketing & Management
    Fashion Marketing
    Fashion Merchandising
    Fashion & Retail Management   The School of Media ArtsAssociates DegreeAnimation
    Animation Art & Design
    Audio Production
    Broadcasting
    Computer Animation
    Digital Arts
    Digital Filmmaking & Video Production
    Digital Photography
    Photography
    Photographic Imaging
    Video Production
    Web Design & Interactive Media Design

Bachelors DegreeAudio Production
    Digital Filmmaking & Video Production
    Digital Media Production
    Film & Digital Production
    Game Art & Design
    Media Arts & Animation
    Photography
    Visual Effects & Motion Graphics
    Visual & Game Programming
    Web Design & Interactive Media Design   The School of Culinary ArtsAssociates DegreeBaking and Pastry
    Culinary Arts
    Restaurant & Catering Management

Bachelors DegreeCulinary Management
    Culinary Arts Management
    Culinary Arts
    Food & Beverage Management
    Hospitality Management  12




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Argosy University.
  School of Undergraduate StudiesBachelor of ArtsPsychology
    Liberal Arts

Bachelor of ScienceBusiness Administration
    Criminal Justice   Psychology and Behavioral SciencesMaster of ArtsClinical PsychologyCounseling PsychologyCommunity CounselingForensic PsychologyIndustrial Organizational PsychologyMarriage and Family TherapyMental Health CounselingPsychopharmacologySport-Exercise Psychology

Doctor of PsychologyClinical PsychologyMarriage & Family TherapyDoctor of EducationCounselor Education and SupervisionCounseling PsychologyPastoral Community Counseling   Health SciencesAssociate of Applied ScienceDiagnostic Medical SonographyHistotechnologyMedical AssistingRadiologic TechnologyVeterinary TechnologyBachelor of ScienceMedical Technology (degree completion)

Associate of ScienceDental HygieneMedical Laboratory TechnologyRadiation TherapyMaster of ScienceHealth Services Management   EducationEducational SpecialistInstructional LeadershipEducational LeadershipEducational Leadership Principal CertificationMaster of Arts in EducationAdult Education & TrainingInstructional LeadershipEducational LeadershipEducational Leadership Principal CertificationSchool CounselingSchool Psychology

Doctor of EducationInstructional Leadership
    Educational Leadership
    Community College Executive Leadership
    Educational Leadership Principal Certification
    School Psychology   BusinessMaster of ScienceManagement
    Master of Business Administration

Doctor of Business AdministrationDoctorate of Education in Organizational Leadership  13




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Brown Mackie Colleges.
  Health SciencesAssociates DegreesDietetics Technology
    Health & Fitness Training
    Health & Therapeutic Massage
    Healthcare Administration
    Medical Assisting
    Nursing
    Occupational Therapy Assistant
    Pharmacy Technology
    Physical Therapist Assistant
    Surgical Technology
    Veterinary Technology

Bachelors DegreesHealthcare Management   EducationAssociates DegreeEarly Childhood Education   Legal StudiesAssociates DegreesCriminal Justice
    Paralegal

Bachelors DegreesCriminal Justice
    Legal Studies   BusinessAssociates DegreesAccounting Technology
    Business Management
    Office Management

Bachelors DegreesBusiness Administration   Information TechnologyAssociates DegreesBiomedical Equipment Technology
    Electronics
    Computer Networking and Applications
    Information Technology

Bachelors DegreesInformation Technology   Design TechnologiesAssociates DegreesArchitectural Drafting & Design Technology
    Computer Aided Design & Drafting Technology  14




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South University.
  College of Arts and SciencesAssociates DegreesGraphic Design
    Paralegal Studies

Masters DegreesCriminal Justice
    Professional CounselingBachelors DegreesCriminal Justice
    Graphic Design
    Legal Studies
    Psychology   College of BusinessAssociates DegreesAccounting
    Business Administration
    Information Technology

Masters DegreesBusiness Administration
    Information Systems Technology
    Healthcare Administration
    LeadershipBachelors DegreesBusiness Administration
    Healthcare Management
    Information Technology

Public Administration   College of Health ProfessionsAssociates DegreesAllied Health Science
    Medical Assisting
    Physical Therapist Assisting

Masters DegreesAnesthesiologist Assistant
    Physician Assistant StudiesBachelors DegreesHealth Science   College of NursingBachelors DegreesHealth Sciences
    Nursing
    Nursing RN to BSN (degree completion)

Masters DegreesNursing   School of PharmacyDoctorate DegreesDoctor of Pharmacy     Graduate
    Employment
   15




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Form 10-K
  Accreditation
       16




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##### Table of Contents



Calendar


Fiscal YearYear


AcquiredSchool

Location

Established


or Opened


Accrediting AgencyThe Art InstitutesThe Art Institute of Atlanta

Atlanta, GA


1949



1971


Commission on Colleges of the Southern Association of Colleges
    and Schools (SACS)The Art Institute of Atlanta  Decatur

Decatur, GA


2007



2008


SACS (as an additional location of The Art Institute of Atlanta)The Art Institute of Austin

Austin, TX


2008



2008


SACS (as a branch of The Art Institute of Houston)The Art Institute of California  Hollywood (formerly
    California Design College)

Los Angeles, CA


1991



2003


Accrediting Council of Independent Colleges and Schools
    (ACICS)The Art Institute of California  Inland Empire

San Bernardino, CA


2006



2006


Accrediting Commission of Career Schools and Colleges of
    Technology (ACCSCT) (as a branch of The Art
    Institute of California  San Diego)The Art Institute of California  Los Angeles

Los Angeles, CA


1997



1998


ACICSThe Art Institute of California  Orange County

Orange County, CA


2000



2001


ACICS (as a branch of The Art Institute of
    California  Los Angeles)The Art Institute of California  Sacramento

Sacramento, CA


2007



2007


ACICS (as a branch of The Art Institute of
    California  Los Angeles)The Art Institute of California  San Diego

San Diego, CA


1981



2001


ACCSCTThe Art Institute of California  San Francisco

San Francisco, CA


1939



1998


ACICS (as a branch of The Art Institute of
    California  Los Angeles) 17




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##### Table of Contents



Calendar


Fiscal YearYear


AcquiredSchool

Location

Established


or Opened


Accrediting AgencyThe Art Institute of California  Sunnyvale

Sunnyvale, CA


2008



2008


ACICS (as a branch of The Art Institute of
    California  Hollywood)The Art Institute of Charleston

Charleston, SC


2007



2007


SACS (as a branch of The Art Institute of Atlanta)The Art Institute of Charlotte

Charlotte, NC


1973



2000


ACICSThe Art Institute of Colorado

Denver, CO


1952



1976


Higher Learning Commission (HLC) of the North
    Central AssociationThe Art Institute of Dallas

Dallas, TX


1964



1985


SACSThe Art Institute of Fort Lauderdale

Fort Lauderdale, FL


1968



1974


ACICSThe Art Institute of Houston

Houston, TX


1974



1979


SACSThe Art Institute of Houston  North

Houston, TX


2008



2009


SACS (as a branch of The Art Institute of Houston)The Art Institute of Indianapolis

Indianapolis, IN


2006



2006


ACCSCT (as a branch of The Art Institute of Las Vegas)The Art Institute of Jacksonville

Jacksonville, FL


2007



2007


SACS (as a branch of Miami International University of Art
    & Design)The Art Institute of Las Vegas

Las Vegas, NV


1983



2001


ACCSCTThe Art Institute of Michigan

Detroit, MI


2007



2008


HLC and ACCSCT (as a branch of The Illinois Institute of
    Art  Chicago)The Art Institute of Tennessee  Nashville

Nashville, TN


2006



2007


SACS (as a branch of The Art Institute of Atlanta)The Art Institute of
    New York City

New York, NY


1980



1997


ACICSThe Art Institute of
    Ohio  Cincinnati

Cincinnati, OH


2004



2005


HLC and ACCSCT (as a branch of The Illinois Institute of
    Art  Chicago)The Art Institute of Philadelphia

Philadelphia, PA


1971



1980


ACICSThe Art Institute of Phoenix

Phoenix, AZ


1995



1996


ACICS 18




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##### Table of Contents



Calendar


Fiscal YearYear


AcquiredSchool

Location

Established


or Opened


Accrediting AgencyThe Art Institute of Pittsburgh

Pittsburgh, PA


1921



1970


Middle States Association of Colleges & Schools of the
    Commission on Higher EducationThe Art Institute of Portland

Portland, OR


1963



1998


Northwest Commission on Colleges and Schools Universities
    (NWCCU)The Art Institute of Raleigh-Durham

Durham, NC


2008



2008


ACICS (as a branch of The Art Institute of Charlotte)The Art Institute of Salt Lake City

Salt Lake City, UT


2007



2007


ACCSCT (as a branch of The Art Institute of Las Vegas)The Art Institute of Seattle

Seattle, WA


1946



1982


NWCCUThe Art Institute of Tampa

Tampa, FL


2004



2004


SACS (as a branch of the Miami International University of Art
    & Design)The Art Institute of Tucson

Tucson, AZ


2002



2007


ACICSThe Art Institute of Vancouver

Vancouver, BC


1979



2003


Private Career Training Institutions Agency of British ColumbiaThe Art Institute of Washington

Arlington, VA


2000



2001


SACS (as a branch of The Art Institute of Atlanta)The Art Institute of Washington  Northern Virginia(1)

Sterling, VA


2009



2009


SACS (as a branch of The Art Institute of Atlanta)The Art Institute of York  Pennsylvania

York, PA


1952



2004


ACCSCTThe Art Institutes International  Kansas City

Kansas City, KS


2008



2008


ACICS (as a branch of The Art Institute of Phoenix)The Art Institutes International Minnesota

Minneapolis, MN


1964



1997


ACICSThe Illinois Institute of Art  Chicago

Chicago, IL


1916



1996


HLC and ACCSCTThe Illinois Institute of Art  Schaumburg

Schaumburg, IL


1983



1996


HLC and ACCSCT (as a branch of The Illinois Institute of
    Art  Chicago) 19




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##### Table of Contents



Calendar


Fiscal YearYear


AcquiredSchool

Location

Established


or Opened


Accrediting AgencyMiami International University of Art & Design

Miami, FL


1965



2002


SACSThe New England Institute of Art

Boston, MA


1988



2000


New England Association of Schools and CollegesArgosy University











HLC (all locations)Argosy University, Atlanta

Atlanta, GA


1990



2002Argosy University, Chicago

Chicago, IL


1976



2002Argosy University, Dallas

Dallas, TX


2002



2002Argosy University, Denver

Denver, CO


2006



2006Argosy University, Honolulu

Honolulu, HI


1979



2002Argosy University, Inland Empire

San Bernadino, CA


2006



2006Argosy University, Nashville

Nashville, TN


2001



2001Argosy University, Orange County

Orange, CA


1999



2002Argosy University, Phoenix

Phoenix, AZ


1997



2002Argosy University, Salt Lake City

Salt Lake City, UT


2008



2008Argosy University, San Diego

San Diego, CA


2006



2006Argosy University, San Francisco

Point Richmond, CA


1998



2002Argosy University, Santa Monica

Santa Monica, CA


2006



2006Argosy University, Sarasota

Sarasota, FL


1969



2002Argosy University, Schaumburg

Schaumburg, IL


1979



2002Argosy University, Seattle

Seattle, WA


1997



2002Argosy University, Tampa

Tampa, FL


1997



2002Argosy University, Twin Cities

Eagan, MN


1961



2002Argosy University, Washington D.C.

Arlington, VA


1994



2002South University











SACS (all locations)South University/ Savannah

Savannah, GA


1899



2004 20




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##### Table of Contents



Calendar


Fiscal YearYear


AcquiredSchool

Location

Established


or Opened


Accrediting AgencySouth University/ Montgomery

Montgomery, AL


1997



2004South University/ West Palm Beach

West Palm Beach, FL


1974



2004South University/ Columbia

Columbia, SC


1935



2004South University/ Tampa

Tampa, FL


2006



2006South University/ Richmond(1)(2)

Richmond, VA


2009



2009The Brown Mackie CollegesBrown Mackie College  Akron

Akron, OH


1980



2004


ACICS (as a branch of Brown Mackie College 
    Cincinnati)Brown Mackie College  Cincinnati

Cincinnati, OH


1927



2004


ACICSBrown Mackie College  Findlay

Findlay, OH


1986



2004


ACICSBrown Mackie College  Northern Kentucky

Ft. Mitchell, KY


1927



2004


ACICS (as a branch of Brown Mackie College 
    Cincinnati)Brown Mackie College  North Canton

North Canton, OH


1984



2004


ACICS (as a branch of Brown Mackie College  Tucson)Brown Mackie College  Atlanta

Norcross, GA


1969



2004


ACICS (as a branch of The Art Institute of CharlotteBrown Mackie College  Lenexa

Lenexa, KS


1984



2004


HLC (as a branch of Brown Mackie College  Salina)Brown Mackie College  Salina

Salina, KS


1892



2004


HLCBrown Mackie College  Merrillville

Merrillville, IN


1984



2004


ACICS (as a branch of Brown Mackie College 
    Cincinnati)Brown Mackie College  Michigan City

Michigan City, IN


1890



2004


ACICS (as a branch of Brown Mackie College 
    Cincinnati)Brown Mackie College  Moline

Moline, IL


1985



2004


ACICS (as a branch of Brown Mackie College 
    Cincinnati) 21




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##### Table of Contents



Calendar


Fiscal YearYear


AcquiredSchool

Location

Established


or Opened


Accrediting AgencyBrown Mackie College  Fort Wayne

Fort Wayne, IN


1991



2004


ACICS (as a branch of Brown Mackie College  South
    Bend)Brown Mackie College  South Bend

South Bend, IN


1882



2004


ACICSBrown Mackie College  Louisville

Louisville, KY


1935



2004


ACICS (as a branch of Brown Mackie College  Findlay)Brown Mackie College  Hopkinsville

Hopkinsville, KY


1995



2004


ACICS (as a branch of Brown Mackie College  Findlay)Brown Mackie College  Miami

Miami, FL


2004



2005


ACICS (as a branch of Brown Mackie College 
    Cincinnati)Brown Mackie College  Tucson

Tucson, AZ


1972



2007


ACICSBrown Mackie College  Indianapolis

Indianapolis, IN


2007



2008


ACICS (as a branch of Brown Mackie College  Findlay)Brown Mackie College  Boise

Boise, ID


2008



2008


ACICS (as a branch of Brown Mackie College  South
    Bend)Brown Mackie College  Tulsa

Tulsa, OK


2008



2009


ACICS (as a branch of Brown Mackie College  South
    Bend)Brown Mackie College  Phoenix

Phoenix, AZ


2009



2009


ACICS (as a branch of Brown Mackie College  Tucson)Brown Mackie College  Greenville(1)

Greenville, SC


2009



2009


ACICS (as a branch of Brown Mackie College  Tucson)Western State University College of Law

Fullerton, CA


1966



2002


Commission on Colleges of the Western Association of Schools and
    Colleges; American Bar Association     (1)
    
    First class of students scheduled to start in October 2009.(2)
    
    Application for state license pending with the State Council of
    Higher Education for Virginia.   22




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Student
    Financial Assistance
      
    if our schools fail to comply with extensive regulations, we
    could be subject to financial penalties, restrictions on our
    operations or loss of external financial aid funding for our
    students;
    the provinces or national government may change the law or
    reduce funding for student financial aid programs, which could
    harm our student population and revenue;
    if our schools do not maintain their approvals, they may not
    operate or participate in federal student financial aid
    programs; and
    government and regulatory agencies may conduct compliance
    reviews, bring claims or initiate litigation against us.   23




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##### Table of Contents



Fiscal 2009


Fiscal 2008Gross Cash


% of Gross


% of Net


Gross Cash


% of Gross


% of NetReceipts(1)


Receipts


Revenue


Receipts(1)


Receipts


RevenueFederal Title IV Aid(2):FFEL  Stafford Loans(3)

$
1,201.4



50.1
%


59.7
%

$
838.2



42.2
%


49.8
%FFEL  PLUS Loans(3)


204.8



8.6
%


10.2
%


175.5



8.9
%


10.4
%Pell Grants


188.2



7.9
%


9.4
%


131.4



6.6
%


7.8
%Grad Plus Loans


25.2



1.1
%


1.3
%


16.1



0.8
%


1.0
%FSEOG Awards


12.2



0.5
%


0.6
%


11.5



0.6
%


0.7
%Perkins Loans


5.0



0.2
%


0.2
%


7.4



0.4
%


0.4
%Other Title IV Aid(4)


2.8



0.1
%


0.1
%


2.1



0.1
%


0.1
%Total Federal Title IV Aid


1,639.6



68.5
%


81.5
%


1,182.2



59.6
%


70.2
%Private Loans


263.6



11.0
%


13.1
%


374.8



18.9
%


22.3
%Education Finance Loan Program


19.2



0.8
%


1.0
%










Cash Payments


410.2



17.1
%


20.4
%


368.0



18.6
%


21.8
%State Grants


52.7



2.2
%


2.6
%


48.2



2.4
%


2.9
%Canadian Financial Aid


8.5



0.4
%


0.4
%


9.1



0.5
%


0.5
%Total Cash Receipts(5)

$
2,393.8



100.0
%


119.0
%

$
1,982.3



100.0
%


117.7
%Net Revenue(6)









$
2,011.5










$
1,684.2     (1)
    
    Cash receipts are net of the return to the federal student
    financial aid programs of all unearned funds from students who
    withdraw from a program of study.(2)
    
    Equals Title IV financial aid received by students
    attending (i) The Art Institutes during quarters starting
    during the fiscal year except for The New England Institute of
    Art, where the summer semester beginning in May was included in
    the following fiscal year; (ii) Argosy University during
    the summer semester that began in May prior to the beginning of
    the fiscal year and the fall and winter semesters that began
    during the fiscal year; (iii) South University during the
    quarters starting during the fiscal year, except that campus
    based students attending the summer quarter beginning at the end
    of June and fully online students attending the quarter
    beginning in May were included in the following fiscal year;
    (iv) Brown Mackie Colleges during quarters starting during
    the fiscal year; and (v) Western States University during
    semesters starting during the fiscal year.(3)
    
    Includes loans received by students under the Direct Loan
    program.(4)
    
    Includes receipts from the Academic Competitive Grant program
    and the National SMART Grant program.(5)
    
    Total cash receipts include stipends, or financing received by
    students in excess of the tuition and fees that they pay to our
    schools, which we receive from financing sources on behalf of
    students. Stipends are generally used by students to fund living
    expenses while attending school. Total stipends paid to students
    during fiscal 2009 and 2008 were $403.0 million and
    $340.9 million, respectively. Aid received from the Federal
    Work Study program is excluded from total cash receipts along
    with institutional aid, employee reimbursement of tuition
    payments and institutional scholarships.(6)
    
    The difference between net revenue and gross cash receipts paid
    by students to attend our post-secondary institutions primarily
    relates to stipends received on behalf of students and the
    effect of timing differences between cash-basis and
    accrual-basis accounting, including changes in student accounts
    receivable balances.  FFEL and Direct Loans.
 24




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Pell.
  FSEOG.
  Perkins.
  Federal Work-Study.
  New Title IV Programs.
 25




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##### Table of Contents



Legislative Action.
    Other
    Financial Assistance Sources
      and/or
 26




---



##### Table of Contents



Availability
    of Lenders
      Federal
    Oversight of Title IV Programs
         27




---



##### Table of Contents



Cohort Default Rates.
           28




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##### Table of Contents



Regulatory Oversight.
  Financial Responsibility Standards.
  Return of Title IV Funds.
  Administrative Capability
    Requirements.
 29




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##### Table of Contents



Restrictions on Operating Additional
    Schools.
  The 90/10 Rule. 90/10 90/10 90/10
    Restrictions on Payment of Bonuses, Commissions or Other
    Incentives.
 30




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##### Table of Contents



State
    Authorization and Accreditation Agencies
      and/or
    Canadian
    Regulation and Financial Aid
  and/or
   31




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##### Table of Contents



Employees
  term-to-term
  Competition
    Seasonality
    in Results of Operations
    Availability
    of Reports
  www.edmc.com Form 10-K Form 10-K, Form 10-Q, Form 8-K rd (412) 562-0900
 32




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##### Table of Contents



ITEM 1A.
    RISK
    FACTORS  The following risks comprise all the material risks of which
    we are aware; however, these risks and uncertainties may not be
    the only ones we face. Additional risks and uncertainties not
    presently known to us or that we currently deem immaterial may
    also adversely affect our business or financial performance. If
    any of the events or developments described below actually
    occurred, it could have a material adverse effect on our
    business, financial condition or results of operations.
  RISKS
    RELATED TO OUR HIGHLY REGULATED INDUSTRY
  Failure
    of our schools to comply with extensive regulations could result
    in monetary liabilities or assessments, restrictions on our
    operations, limitations on our growth or loss of external
    financial aid funding for our students.
      If we
    fail to obtain periodic recertifications for our schools to
    participate in Title IV programs, or if our certifications
    are withdrawn by the U.S. Department of Education prior to the
    next scheduled recertification, students at the affected schools
    would no longer be able to receive Title IV program
    funds.
   33




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##### Table of Contents



Congress
    may change eligibility standards or reduce funding for federal
    student financial aid programs, or other governmental or
    regulatory bodies may change similar laws or regulations
    relating to other student financial aid programs, which could
    reduce the growth of our student population and
    revenue.
        If we
    do not meet specific financial responsibility ratios and other
    compliance tests established by the U.S. Department of
    Education, our schools may lose eligibility to participate in
    federal student financial aid programs, which may result in a
    reduction in our student enrollment and an adverse effect on our
    results of operations.
     34




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##### Table of Contents



If any
    of our schools either fails to demonstrate administrative
    capability to the U.S. Department of Education or violates
    other requirements of Title IV programs, the U.S.
    Department of Education may impose sanctions or terminate that
    schools participation in Title IV
    programs.
    
    comply with all applicable federal student financial aid
    regulations;
    have capable and sufficient personnel to administer the federal
    student financial aid programs;
    have acceptable methods of defining and measuring the
    satisfactory academic progress of its students;
    provide financial aid counseling to its students; and
    submit all reports and financial statements required by the
    regulations. 35




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##### Table of Contents




    require the repayment of federal student financial aid funds
    improperly disbursed;
    transfer the institution from the advance system of
    payment of federal student financial aid funds to the
    reimbursement system of payment or cash
    monitoring;
    place the institution on provisional certification
    status; or
    commence a proceeding to impose a fine or to limit, suspend or
    terminate the participation of the institution in Title IV
    programs.    If our
    institutions do not comply with the 90/10 Rule, they will lose
    eligibility to participate in federal student financial aid
    programs.
  90/10 90/10
  Our
    failure to comply with various state regulations or to maintain
    any national, regional or programmatic accreditation could
    result in actions taken by those states or accrediting agencies
    that would have a material adverse effect on our student
    enrollment and results of operations.
   36




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##### Table of Contents



and/or
  Loss
    of or reductions in state financial aid programs for our
    students could negatively impact our revenues from
    students.
    If
    regulators do not approve transactions involving a change of
    control or change in our corporate structure, we may lose our
    ability to participate in federal student financial aid
    programs, which would result in declines in our student
    enrollment, and thereby adversely affect our results of
    operations.
   37




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##### Table of Contents



Government
    and regulatory and accrediting agencies may conduct compliance
    reviews, bring claims or initiate litigation against us, which
    may adversely impact our licensing or accreditation status, and
    thereby adversely affect our results of
    operations.
    Our
    regulatory environment and our reputation may be negatively
    influenced by the actions of other post-secondary education
    institutions.
    We do
    not have significant experience in processing student loans
    through the Direct Loan program and, if we are required to
    process all or a substantial portion of our students
    federal loans through this program, we could experience
    increases to our administrative costs and delays to the receipt
    of federal loan proceeds.
   38




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##### Table of Contents



RISKS
    RELATED TO OUR BUSINESS
  If our
    students were unable to obtain private loans from third party
    lenders, our business could be adversely affected given our
    reliance on such lenders as a source of net
    revenues.
    
    changes in overall economic conditions or overall uncertainty or
    disruption in capital markets, in either case causing lenders to
    cease making student loans, limit the volume or types of loans
    made or impose more stringent eligibility or underwriting
    standards;
    the financial condition and continued financial viability of
    student loan providers, including Sallie Mae;
    changes in applicable laws or regulations, such as provisions of
    the recently-enacted HEA reauthorization that impose new
    disclosure and certification requirements with respect to
    private educational loans, that could have the effect of
    reducing the availability of education financing, including as a
    result of any lenders choosing to provide fewer loans or to stop
    providing loans altogether in light of increased regulation, or
    which could increase the costs of student loans; or
    determinations by lenders to reduce the number of loans, or to
    cease making loans altogether, to students attending or planning
    to attend certain types of schools, particularly for-profit
    institutions.    and/or
  and/or
 39




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##### Table of Contents



We
    recently introduced the Education Finance Loan program, which
    could have a material adverse effect on our financial condition,
    results of operations and cash flows.
            Our
    business may be adversely affected by a general economic
    slowdown or recession in the U.S. or abroad.
   40




---



##### Table of Contents



90/10 rate.
  The
    current unprecedented disruptions in the credit and equity
    markets worldwide may impede or prevent our access to the
    capital markets for additional funding to expand or operate our
    business and may affect the availability or cost of borrowing
    under our existing credit facilities.
    We may
    have difficulty opening additional new schools and growing our
    online academic programs, and we may be unable to achieve the
    anticipated return on our investment.
      We may
    not be able to implement our growth strategy optimally if we are
    not able to improve the content of our existing academic
    programs or to develop new programs on a timely basis and in a
    cost-effective manner.
   41




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##### Table of Contents



Our
    marketing and advertising programs may not be effective in
    attracting prospective students, current students or potential
    employers of our graduates.
  and/or
  A
    decline in the overall growth of enrollment in post-secondary
    institutions could cause us to experience lower enrollment at
    our schools, which would negatively impact our future
    growth.
  ten-year
  Our
    substantial leverage could adversely affect our ability to raise
    additional capital to fund our operations, limit our ability to
    react to changes in the economy or our industry and expose us to
    interest rate risk to the extent of our variable rate
    debt.
    Revolving credit facility(1)

$
100,000Senior secured term loan facility


1,126,82783/4% senior
    notes due 2014


375,000101/4% senior
    subordinated notes due 2016


385,000Capital leases


622Mortgage debt of consolidated entity


1,194Total

$
1,988,643  42




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##### Table of Contents



(1)
    
    Upon the closing of the Transaction, we entered into a
    $300.0 million revolving credit facility with a six-year
    maturity. The revolving credit facility was increased to
    $322.5 million in February 2008. As of June 30, 2009,
    we had an aggregate of $137.8 million in outstanding
    letters of credit, including $121.1 million of letters of
    credit issued to the U.S. Department of Education due primarily
    to our failure to satisfy certain regulatory financial ratios
    after giving effect to the Transaction. Outstanding letters of
    credit reduce the availability under our revolving credit
    facility.    
    making it more difficult for us to make payments on our
    indebtedness;
    increasing our vulnerability to general economic and industry
    conditions;
    requiring a substantial portion of cash flows from operations to
    be dedicated to the payment of principal and interest on our
    indebtedness, therefore reducing our ability to use our cash
    flows to fund our operations, capital expenditures and future
    business opportunities;
    increasing the likelihood of our not satisfying, on a
    consolidated basis, the U.S. Department of Educations
    annual responsibility requirements and subjecting us to letter
    of credit and provisional certification requirements for the
    foreseeable future;
    exposing us to the risk of increased interest rates as certain
    of our borrowings, including borrowings under our senior secured
    credit facilities, will bear interest at variable rates;
    restricting us from making strategic acquisitions or causing us
    to make non-strategic divestitures;
    limiting our ability to obtain additional financing for working
    capital, capital expenditures, program development, debt service
    requirements, acquisitions and general corporate or other
    purposes; and
    limiting our ability to adjust to changing market conditions and
    placing us at a competitive disadvantage compared to our
    competitors who are less highly leveraged.    We may
    not be able to generate sufficient cash to service all of our
    debt obligations and may be forced to take other actions in an
    effort to satisfy our obligations under such indebtedness, which
    may not be successful.
  Form 10-K,
  Our
    debt agreements contain restrictions that limit our flexibility
    in operating our business.
    
    incur additional indebtedness or issue certain preferred shares; 43




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##### Table of Contents




    pay dividends on, repurchase or make distributions in respect of
    capital stock or make other restricted payments;
    make certain investments, including capital expenditures;
    sell certain assets;
    create liens;
    consolidate, merge, sell or otherwise dispose of all or
    substantially all of our assets; and
    enter into certain transactions with affiliates.    Failure
    to keep pace with changing market needs and technology could
    harm our ability to attract students.
    Failure
    to obtain additional capital in the future could adversely
    effect our ability to grow.
    Failure
    to effectively manage our growth could harm our
    business.
   44




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##### Table of Contents



Capacity
    constraints or system disruptions to our online computer
    networks could have a material adverse effect on our ability to
    attract and retain students.
    The
    personal information that we collect may be vulnerable to
    breach, theft or loss that could adversely affect our reputation
    and operations.
      We may
    not be able to retain our key personnel or hire and retain
    additional personnel needed for us to sustain and grow our
    business as planned.
   45




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##### Table of Contents



If we
    are not able to integrate acquired schools, we may experience
    operational inefficiencies.
    
    inability to maintain uniform standards, controls, policies and
    procedures;
    distraction of managements attention from normal business
    operations during the integration process;
    expenses associated with the integration efforts; and
    unidentified issues not discovered in our due diligence process,
    including legal contingencies.  Our
    inability to operate one or more of our schools or locations due
    to a natural disaster, terrorist act or widespread epidemic or
    to restore a damaged school or location to its prior operational
    level could materially hurt our operating results.
      We
    operate in a highly competitive industry, and competitors with
    greater resources could harm our business.
    We
    could experience an event of default under our senior secured
    credit agreement if Goldman Sachs Capital Partners, Providence
    Equity Partners and Leeds Equity Partners (collectively, the
    Sponsors) cease to own an aggregate of at least 35%
    of the voting interests of EDMCs outstanding capital
    stock, and such an event of default could adversely effect our
    liquidity and financial position.
   46




---



##### Table of Contents



If we
    expand in the future into new markets outside the United States,
    we would be subject to risks inherent in non-domestic
    operations.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES        ITEM 3.
    LEGAL
    PROCEEDINGS   47




---



##### Table of Contents



ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART
    II  ITEM 5.
    MARKET
    FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER
    MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES   48




---



##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K. Form 10-K. Form 10-K.
  Predecessor



SuccessorPeriod from



Period fromYear


July 1, 2005



June 1, 2006Ended


through



throughJune 30,


May 31,



June 30,


Year Ended June 30,2005(1)


2006



2006


2007


2008


2009(in millions)Statement of Operations Data:Net revenues

$
1,019.3


$
1,095.8



$
74.4


$
1,363.7


$
1,684.2


$
2,011.5Costs and expenses:Educational services


564.2



590.9




59.0



729.9



901.3



1,067.7General and administrative


202.4



273.3




26.0



314.9



419.1



512.5Depreciation and amortization


84.1



62.9




7.4



90.5



100.3



112.3Total costs and expenses


850.7



927.1




92.4



1,135.3



1,420.7



1,692.5Income (loss) before interest and income taxes


168.6



168.7




(18.0
)


228.4



263.5



319.0Interest expense (income), net


(0.2
)


(5.3
)



14.1



169.1



157.7



153.6Income (loss) before income taxes


168.8



174.0




(32.1
)


59.3



105.8



165.4Provision for (benefit from) income taxes


67.2



73.6




(12.4
)


27.1



41.1



61.2Net income (loss)

$
101.6


$
100.4



$
(19.7
)

$
32.2


$
64.7


$
104.2Balance Sheet Data:Cash and cash equivalents (excludes restricted cash)

$
172.0







$
263.3


$
250.7


$
236.0


$
321.6Total assets


956.0








3,945.5



3,949.0



4,054.3



4,243.9Total debt, including current portion


70.4








2,110.0



2,030.0



2,021.4



1,988.6Total members equity


666.0








1,282.8



1,311.1



1,351.2



1,444.5Statement of Cash Flows Data:Net cash flows provided by (used in):Operating activities

$
192.5


$
301.7



$
(22.4
)

$
179.4


$
151.3


$
293.0Investing activities


(98.1
)


(56.4
)



(3,534.1
)


(110.8
)


(157.3
)


(173.1
)Financing activities


(39.0
)


(43.2
)



3,445.5



(80.8
)


(8.5
)


(33.7
)Other Data:EBITDA(2)

$
252.7


$
231.6



$
(10.6
)

$
318.9


$
363.8


$
431.3Capital expenditures for long lived assets

$
74.9


$
57.9



$
7.7


$
96.1


$
150.9


$
150.7Student enrollment at beginning of fall quarter


66,179



72,471








80,324



95,990



110,800Campus locations at period end(3)


70



71




71



78



88



92Ratio of earnings to fixed charges(4)


9.2
x


9.4
x







1.3
x


1.5
x


1.8
x  49




---



##### Table of Contents



(1)
    
    Fiscal 2005 results include a $19.5 million charge related
    to cumulative adjustments for changes in lease accounting
    recorded in depreciation and amortization expense in the
    consolidated statement of operations. This amount was
    substantially offset by a cumulative credit of
    $15.7 million related to the amortization of a deferred
    rent credit recorded in educational services expense in the
    consolidated statement of operations.(2)
    
    EBITDA, a measure used by management to measure operating
    performance, is defined as net income plus net interest expense
    (income), income taxes, depreciation and amortization. EBITDA is
    not a recognized term under GAAP and does not purport to be an
    alternative to net income as a measure of operating performance
    or to cash flows from operating activities as a measure of
    liquidity. Additionally, EBITDA is not intended to be a measure
    of free cash flow available for managements discretionary
    use, as it does not consider certain cash requirements such as
    interest payments, tax payments and debt service requirements.
    Our obligations to make interest payments and our other debt
    service obligations have increased substantially as a result of
    the indebtedness incurred to finance the Transaction and to pay
    related expenses in June 2006. Management believes EBITDA is
    helpful in highlighting trends because EBITDA excludes the
    results of decisions that are outside the control of operating
    management and can differ significantly from company to company
    depending on long-term strategic decisions regarding capital
    structure, the tax jurisdictions in which companies operate and
    capital investments. Further, until fiscal 2009 we used EBITDA
    less capital expenditures as a financial target for purposes of
    determining cash bonuses granted pursuant to our MICP, as
    described under Part III  Item 11,
    Executive Compensation  Compensation Discussion and
    Analysis  Cash Bonuses. In addition, management
    believes that EBITDA provides more comparability between the
    historical results of EDMC and results that reflect purchase
    accounting and the new capital structure. Management compensates
    for the limitations of using non-GAAP financial measures by
    using them to supplement GAAP results to provide a more complete
    understanding of the factors and trends affecting the business
    than GAAP results alone. Because not all companies use identical
    calculations, these presentations of EBITDA may not be
    comparable to other similarly titled measures of other
    companies. EBITDA is calculated as follows:  Predecessor



SuccessorPeriod from



Period fromYear


July 1, 2005



June 1, 2006Ended


through



throughJune 30,


May 31,



June 30,


Year Ended June 30,2005


2006



2006


2007


2008


2009Net income (loss)

$
101.6


$
100.4



$
(19.7
)

$
32.2


$
64.7


$
104.2Interest (income) expense, net


(0.2
)


(5.3
)



14.1



169.1



157.7



153.6Provision for (benefit from) income taxes


67.2



73.6




(12.4
)


27.1



41.1



61.2Depreciation and amortization(a)


84.1



62.9




7.4



90.5



100.3



112.3EBITDA(b)

$
252.7


$
231.6



$
(10.6
)

$
318.9


$
363.8


$
431.3   (a)
    
    Depreciation and amortization includes non-cash charges related
    to property, equipment and intangible asset impairments of
    $4.2 million in fiscal 2005 and $5.5 million in fiscal
    2008. Fiscal 2005 also includes a $19.5 million charge
    related to cumulative adjustments for changes in lease
    accounting.(b)
    
    EBITDA, as presented above, is different from Adjusted EBITDA
    calculated for the purpose of determining compliance with our
    senior secured credit agreement and the indentures governing our
    Notes. For an explanation of Adjusted EBITDA, see
    Management Discussion and Analysis of Financial Condition
    and Results of Operations  Liquidity and Capital
    Resources.  (3)
    
    The Art Institute of Toronto announced in June 2007 that it will
    no longer accept new students and that it will close after all
    current students complete their respective programs. Prior to
    announcing the closing, approximately 250 students attended The
    Art Institute of Toronto.(4)
    
    For purposes of calculating the ratio of earnings to fixed
    charges, earnings are defined as income before income taxes plus
    fixed charges. Fixed charges include interest expense, whether
    expensed or capitalized, amortization of debt issuance costs and
    the portion of rental expense representative of the interest
    factor.  Earnings were inadequate to cover fixed charges by
    $32.1 million for the period from June 1, 2006 through
    June 30, 2006. 50




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Overview
        point-of-sale
   51




---



##### Table of Contents



start-up
  , , 18-24 years ,
         52




---



##### Table of Contents



Results
    of Operations
    CONSOLIDATED
    STATEMENTS OF OPERATIONS
  For the Fiscal YearEnded June 30,2009


2008


2007Net revenues


100.0
%


100.0
%


100.0
%Costs and expenses:Educational services


53.1
%


53.5
%


53.5
%General and administrative


25.5
%


24.9
%


23.1
%Depreciation and amortization


5.6
%


6.0
%


6.6
%Total costs and expenses


84.2
%


84.4
%


83.2
%Income before interest and income taxes


15.8
%


15.6
%


16.8
%Interest expense, net


7.6
%


9.4
%


12.4
%Income before income taxes


8.2
%


6.2
%


4.4
%Provision for income taxes


3.0
%


2.4
%


2.0
%Net income


5.2
%


3.8
%


2.4
%   Year
    Ended June 30, 2009 (Fiscal 2009) Compared with the
    Year Ended June 30, 2008 (Fiscal 2008)
  All basis point changes are presented as a percentage of net
    revenues in each year of comparison.
  Net
    revenues
   53




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##### Table of Contents



Educational
    services expenses
  out-of-school
  General
    and administrative expenses
    Depreciation
    and amortization expense
    Interest
    expense, net
    Provision
    for income taxes
   54




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##### Table of Contents



Year
    Ended June 30, 2008 (Fiscal 2008) Compared with the
    Year Ended June 30, 2007 (Fiscal 2007)
  All basis point changes are presented as a change in the
    percentage of net revenues in each year of comparison.
  Net
    revenues
      Educational
    services expenses
    General
    and administrative expenses
    Depreciation
    and amortization expense
   55




---



##### Table of Contents



Interest
    expense, net
    Provision
    for income taxes
    Liquidity
    and Funds of Capital Resources
      Operating
    cash flows
           56




---



##### Table of Contents



Investing
    cash flows
    Financing
    cash flows
          Federal
    Family Education Loan Program and Private Student
    Loans
     57




---



##### Table of Contents



and/or
       58




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##### Table of Contents



Contractual
    obligations
    Payments Due by Fiscal YearTotal AmountsCommitted


2010


2011


2012


2013


2014


ThereafterRevolving credit loans(1)

$
100,000


$
100,000


$



$



$



$



$
Term loan, maturing on June 1, 2013


1,126,827



11,850



11,850



8,887



1,094,240







Senior notes, maturing on June 1, 2014


375,000



















375,000Senior subordinated notes, maturing on June 1, 2016


385,000























385,000Mortgage debt of consolidated entity, maturing on
    January 2, 2014


1,194



238



244



264



284



164



Capital leases


622



534



88















Total short-term and long-term debt


1,988,643



112,622



12,182



9,151



1,094,524



375,164



385,000Interest payments(2)


772,101



151,979



157,303



138,375



173,240



72,279



78,925Operating leases, extending through 2020


888,776



119,648



111,327



107,882



107,114



100,285



342,520Unconditional purchase obligations through 2014


46,364



29,467



12,813



3,366



445



273



Education finance loan program(3)


39,449



31,789



7,660















Total commitments

$
3,735,333


$
445,505


$
301,285


$
258,774


$
1,375,323


$
548,001


$
806,445     (1)
    
    Borrowings under our revolving credit facility, if any, mature
    on June 1, 2012. Since the $100.0 million of
    borrowings outstanding under our revolving credit facility as of
    June 30, 2009 were repaid on July 1, 2009, we have
    included these borrowings in the table above as a fiscal 2010
    repayment.(2)
    
    Interest payments are based on either the fixed rate or the
    variable rate as of June 30, 2009 and assume that
    repayments are in accordance with the loan agreements without
    giving effect to mandatory prepayments.(3)
    
    We are required to purchase loans originated by a private lender
    on behalf of our students under the Education Finance Loan
    program. There is typically a 10 month lag between the time
    a loan is originated by the private lender and when we purchase
    it.  Contingencies
    Off
    Balance Sheet Arrangements
    Indebtedness
   59




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##### Table of Contents



Form 10-K,
  Senior
    Secured Credit Facilities
  Overview. same-day
      Interest Rate and Fees. The Wall Street Journal
   60




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##### Table of Contents



Payments.
    Certain Covenants and Events of Default.
  
    incur additional indebtedness;
    make capital expenditures;
    create liens on assets;
    engage in mergers or consolidations;
    sell assets;
    pay dividends and distributions or repurchase our capital stock;
    make investments, loans or advances;
    prepay subordinated indebtedness (including our senior
    subordinated notes);
    make certain acquisitions;
    engage in certain transactions with affiliates;
    enter into certain restrictive agreements;
    amend agreements governing our subordinated indebtedness
    (including the senior subordinated notes) and our organizational
    documents;
    change the nature of our business; and
    change the status of Education Management Holdings LLC as a
    passive holding company.  Covenant Compliance
    Senior
    Notes and Senior Subordinated Notes
  3 4 1 4
 61




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##### Table of Contents




    incur additional indebtedness;
    pay dividends on or make other distributions or repurchase our
    capital stock;
    make certain investments, including capital expenditures;
    enter into certain types of transactions with affiliates;
    use assets as security in other transactions; and
    sell certain assets or merge with or into other companies.    Covenant
    Compliance
         62




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##### Table of Contents



For the Year EndedJune 30, 2009EBITDA

$
431.3Reversal of impact of unfavorable leases(1)


(1.4
)Transaction and advisory expense(2)


5.0Severance and relocation


4.9Capital taxes


1.2Other


1.5Adjusted EBITDA  Covenant Compliance

$
442.5     (1)
    
    Represents non-cash reduction to rent expense due to the
    amortization on $7.3 million of unfavorable lease
    liabilities resulting from fair value adjustments required under
    SFAS No. 141 as part of the Transaction.(2)
    
    Represents $5.0 million of advisory fees per annum
    beginning June 1, 2006 under the Sponsor Management
    Agreement.    Covenant


ActualSenior Secured Credit Facility

Requirements


RatiosAdjusted EBITDA to Consolidated Interest Expense ratio


Minimum of 1.70
x


2.88
xConsolidated Total Debt to Adjusted EBITDA ratio


Maximum of 6.75
x


3.77
x   Regulations
       63




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##### Table of Contents



Use of
    Estimates and Critical Accounting Policies
  General
  Form 10-K.
    Revenue
    Recognition and Receivables
     64




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##### Table of Contents



out-of-school) case-by-case
  Impairment
    of Property, Equipment and Finite-Lived Intangible
    Assets
    Impairment
    of Goodwill and Indefinite-Lived Intangible Assets
     65




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##### Table of Contents



Step One Analysis:Deficit Caused by Hypothetical Reductions to Fair ValueGoodwill


5%


15%


25%


35%(In millions)The Art Institutes

$
1,982


$



$



$



$
Argosy University


219











(14
)


(54
)Brown Mackie Colleges


255











(2
)


(59
)South University


123















(27
)$
2,579


$



$



$
(16
)

$
(140
)     
    Discount rate  The discount rate is based on
    each reporting units estimated weighted average cost of
    capital (WACC). The cost of equity, cost of debt and capital
    structure are the three components of the WACC, each of which
    requires judgment by management to estimate. The cost of equity
    was developed using the Capital Asset Pricing Model (CAPM) which
    is comprised of a risk free rate, beta derived from comparable
    company betas, and an equity risk premium combined with other
    company-specific adjustments based on perceived risks and
    predictability of future cash flows. The equity risk premium,
    which utilizes the Morningstar 2008
    Ibbotson®

    and SBBI 2008 Valuation Workbook, is calculated by taking large
    company stock total returns minus long-term government bond
    income returns. The cost of debt component represents a market
    participants estimated cost of borrowing, which we
    estimated using an average of corporate bond yields as of the
    valuation date. The capital structure component is estimated
    based on the target capital structure ratios of our industry
    peer group as of the testing date.    
    Future cash flow assumptions  Our projections
    are based on organic growth and are derived from historical
    experience and assumptions on how growth and profitability will
    trend into the future. These projections also take into account
    the continuing growing demand for post-secondary education and
    the growth opportunities that exist in our markets. Our assumed
    period of cash flows was ten years with a terminal value
    determined using the Gordon Growth Model. For our 2009 annual
    impairment test, a decrease in the projected cash flows of 10%
    would not have resulted in the carrying value of any of our
    reporting units exceeding its fair value. 66




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##### Table of Contents




    $330.0 million related to The Art Institutes
    tradename; and
    $112.2 million related to our licensing, accreditation and
    Title IV program participation assets.      Income
    Taxes
     67




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##### Table of Contents



Share-Based
    Payment
      Valuation of
    Privately-Held-Company Equity Securities Issued as
    Compensation
          (i)
    Income method (DCF)   68




---



##### Table of Contents



(ii)
    Guideline Public Company method    (iii)
    Guideline Transactions method      
    the nature, history and growth opportunities of our business;
    the outlook for the general economy and for our industry;
    the book value of the securities and our financial condition;
    the historical trend of earnings and the future earnings and
    dividend-paying potential;
    market valuations of our publicly traded competitors, with
    particular attention given to the ratio of price to sales,
    equity and earnings; and
    the risk involved in the investment, as related to earnings
    stability, capital structure, competition and market potential.  Long-Term
    Incentive Compensation Plan
    New
    Accounting Standards
    ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   69




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70




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##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Report of Independent Registered Public
    Accounting Firm


72Managements Report on Internal Control over
    Financial Reporting


73Consolidated Balance Sheets


74Consolidated Statements of Operations


75Consolidated Statements of Cash Flows


76Consolidated Statements of Members
    Equity


78Notes to Consolidated Financial Statements


79Schedule II  Valuation and
    Qualifying Accounts


107Supplemental Quarterly Information


108  71




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm             ERNST &
    YOUNG LLP
    72




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##### Table of Contents



MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING  Rule 13a-15(f). Internal
    Control  Integrated Framework
  Form 10-K
  By: /s/ Todd S. Nelson

By: /s/ Edward H. WestTodd S.
    NelsonChief Executive Officer

Edward H.
    WestPresident and Chief Financial Officer  73




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##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS
  June 30,


June 30,2009


2008(Dollars in thousands)ASSETSCurrent assets:Cash and cash equivalents

$
321,557


$
236,027Restricted cash


10,372



13,822Total cash, cash equivalents and restricted cash


331,929



249,849Receivables, net of allowances of $83,691 and $52,270


122,272



86,580Notes, advances and other


13,673



11,339Inventories


9,355



8,490Deferred income taxes


45,164



25,352Other current assets


30,163



37,328Total current assets


552,556



418,938Property and equipment, net


580,965



504,560Other long-term assets


59,389



61,351Intangible assets, net


471,882



483,853Goodwill


2,579,131



2,585,581Total assets

$
4,243,923


$
4,054,283LIABILITIES AND MEMBERS EQUITYCurrent liabilities:Current portion of long-term debt

$
12,622


$
12,862Revolving credit facility


100,000



120,000Accounts payable


53,516



57,430Accrued liabilities


163,485



128,398Accrued income taxes


4,830



11,522Unearned tuition


118,741



69,154Advance payments


67,020



60,679Total current liabilities


520,214



460,045Long-term debt, less current portion


1,876,021



1,888,583Deferred income taxes


187,583



186,518Deferred rent


123,657



96,449Other long-term liabilities


91,933



71,473Members equity:Capital contribution from Education Management Holdings LLC


1,300,000



1,300,000Accumulated earnings


180,143



75,900Accumulated other comprehensive loss


(35,628
)


(24,685
)Total members equity


1,444,515



1,351,215Total liabilities and members equity

$
4,243,923


$
4,054,283    74




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##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS
  For the Fiscal YearEnded June 30,2009


2008


2007(Dollars in thousands)Net revenues

$
2,011,458


$
1,684,158


$
1,363,690Costs and expenses:Educational services


1,067,721



901,259



729,883General and administrative


512,448



419,054



314,868Depreciation and amortization


112,289



100,272



90,565Total costs and expenses


1,692,458



1,420,585



1,135,316Income before interest and income taxes


319,000



263,573



228,374Interest expense, net


153,569



157,724



169,053Income before income taxes


165,431



105,849



59,321Provision for income taxes


61,188



41,144



27,128Net income

$
104,243


$
64,705


$
32,193    75




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##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS
  For the Fiscal Year Ended June 30,2009


2008


2007(Dollars in thousands)Cash flows from operating activities:Net income

$
104,243


$
64,705


$
32,193Adjustments to reconcile net income to net cash flows
    provided by operating activities:Depreciation and amortization on property and equipment


95,582



80,848



71,258Amortization of intangible assets


16,707



19,424



19,307Amortization of debt issuance costs


7,763



7,690



7,662Reimbursements for tenant improvements


22,382



4,400



6,568Non-cash adjustments in deferred rent


(1,958
)


(2,620
)


(898
)Deferred income taxes


(8,179
)


(20,609
)


2,868Changes in assets and liabilities:Restricted cash


3,450



(3,514
)


(272
)Receivables


(35,692
)


(16,625
)


(18,965
)Inventories


(899
)


(1,502
)


(784
)Other assets


(18,981
)


(7,370
)


1,622Accounts payable


(5,137
)


6,025



4,856Accrued liabilities


57,424



21,059



72,338Unearned tuition


49,587



17,202



14,060Advance payments


6,740



(17,816
)


(32,403
)Total adjustments


188,789



86,592



147,217Net cash flows provided by operating activities


293,032



151,297



179,410Cash flows from investing activities:Acquisition of subsidiaries, net of cash acquired






(1,947
)


(8,543
)Expenditures for long-lived assets


(150,713
)


(150,908
)


(96,057
)Reimbursements for tenant improvements


(22,382
)


(4,400
)


(6,568
)Investment in marketable securities










(344,885
)Redemption of marketable securities










344,885Other items, net










387Net cash flows used in investing activities


(173,095
)


(157,255
)


(110,781
)Cash flows from financing activities:Borrowings on revolving credit facility


180,000



120,000



90,000Payments on revolving credit facility


(200,000
)


(90,000
)


(160,000
)Payments of debt


(12,802
)


(38,534
)


(9,986
)Debt issuance costs


(887
)






(833
)Net cash flows used in financing activities


(33,689
)


(8,534
)


(80,819
)Effect of exchange rate changes on cash and cash
    equivalents


(718
)


(204
)


(383
)Net change in cash and cash equivalents


85,530



(14,696
)


(12,573
)Cash and cash equivalents, beginning of year


236,027



250,723



263,296Cash and cash equivalents, end of year

$
321,557


$
236,027


$
250,723    76




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##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  For the Fiscal Year Ended June 30,2009


2008


2007(Dollars in thousands)Cash paid (received) during the period for:Interest (including swap settlement)

$
146,636


$
173,297


$
152,963Income taxes, net of refunds


76,173



48,179



(19,371
)Noncash investing activities:Capital expenditures in current liabilities

$
22,192


$
31,230


$
21,279    77




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##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF MEMBERS
    EQUITY
  AccumulatedAccumulated


OtherCapital


Earnings


Comprehensive


Total MembersContribution


(Deficit)


Income (Loss)


Equity(Dollars in thousands)Balance, June 30, 2006

$
1,300,000


$
(19,659
)

$
2,418


$
1,282,759Comprehensive income:Net income






32,193







32,193Foreign currency translation










(334
)


(334
)Unrealized loss on interest rate swaps, net of tax benefit of
    $2,772










(3,545
)


(3,545
)Comprehensive income














28,314Balance, June 30, 2007


1,300,000



12,534



(1,461
)


1,311,073Comprehensive income:Net income






64,705







64,705Foreign currency translation










68



68Unrealized loss on interest rate swaps, net of tax benefit of
    $13,609










(23,292
)


(23,292
)Comprehensive income














41,481Cumulative effect of adoption of FASB Interpretation No. 48
    (Note 9)






(1,339
)






(1,339
)Balance, June 30, 2008


1,300,000



75,900



(24,685
)(a)


1,351,215Comprehensive income:Net income






104,243







104,243Foreign currency translation










(1,147
)


(1,147
)Unrealized loss on interest rate swaps, net of tax benefit of
    $5,709










(9,796
)


(9,796
)Comprehensive income














93,300Balance, June 30, 2009

$
1,300,000


$
180,143


$
(35,628
)(a)

$
1,444,515     (a)
    
    The balance in accumulated other comprehensive loss at
    June 30, 2009 and 2008 is comprised of $34.2 million
    and $24.4 million of unrealized net losses on interest rate
    swaps, net of tax, respectively and $1.4 million and
    $0.3 million of cumulative foreign currency translation
    losses, respectively.   78




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##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    DESCRIPTION
    OF BUSINESS, GOVERNANCE AND CHANGE IN OWNERSHIP  Description
    of Business
  post-secondary
  Change
    in Ownership
      Government
    Regulations
    2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Basis
    of Consolidation
    Use of
    Estimates
   79




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##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Cash
    and Cash Equivalents and Restricted Cash
        Allowances
    for Doubtful Accounts
  out-of-school) out-of-school case-by-case
  Inventories
    Property
    and Equipment
    
    Buildings are depreciated over an estimated useful life of
    30 years using the straight-line method. 80




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##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    Leasehold improvements and capitalized lease costs are amortized
    using the straight-line method over the shorter of the original
    lease term, exclusive of any renewal periods, or their estimated
    useful lives, which is generally 7 to 15 years.
    The remainder of the Companys property and equipment is
    depreciated over estimated useful lives ranging from 3 to
    7 years using the straight-line method.    Leases
        Goodwill
    and Other Identifiable Intangible Assets
     81




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Income
    Taxes
      Derivative
    Financial Instruments
    Foreign
    Currency Translation
   82




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Revenue
    Recognition
          Costs
    and Expenses
        Share-Based
    Payment
   83




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Segment
    Reporting
    Contingencies
    Recent
    Accounting Pronouncements
  No. 157-2, No. 157-2,
     84




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      tm
  3.
    PROPERTY
    AND EQUIPMENT    Asset Class

2009


2008Land

$
17,805


$
17,805Buildings and improvements


74,171



73,428Leasehold improvements and capitalized lease costs


329,449



259,882Furniture and equipment


97,783



85,868Technology and other equipment


170,818



134,667Software


45,651



32,768Library books


29,778



24,348Construction in progress


43,470



31,250Total


808,925



660,016Less accumulated depreciation


227,960



155,456Property and equipment, net

$
580,965


$
504,560     4.
    GOODWILL
    AND INTANGIBLE ASSETS  Goodwill
   85




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Goodwill at June 30, 2007

$
2,576,055Adoption of FIN 48


9,441Other items, net


85Goodwill at June 30, 2008


2,585,581Reduction from release of deferred tax asset valuation
    allowances (Note 9)


(5,703
)Other tax items, net


(747
)Goodwill at June 30, 2009

$
2,579,131   Intangible
    Assets
    2009


2008Gross





GrossCarrying


Accumulated


Carrying


AccumulatedAmount


Amortization


Amount


AmortizationTradename-Art Institute

$
330,000


$



$
330,000


$
Tradename-Argosy University


3,000



(1,028
)


3,000



(694
)Licensing, accreditation and Title IV program participation


112,179







112,179



Curriculum and programs


27,974



(13,520
)


23,200



(8,989
)Student contracts, applications and relationships


39,511



(32,479
)


39,511



(23,325
)Favorable leases and other


16,351



(10,106
)


16,409



(7,438
)Total intangible assets

$
529,015


$
(57,133
)

$
524,299


$
(40,446
)        86




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##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    AmortizationFiscal Years

Expense2010

$
8,6172011


7,2842012


6,2192013


3,8722014


2,104Thereafter


1,607   5.
    ACCRUED
    LIABILITIES    2009


2008Payroll, bonus and related taxes

$
77,894


$
55,076Capital expenditures


8,032



18,359Advertising


25,192



11,770Interest


13,878



11,084Benefits


8,597



8,501Other


29,892



23,608Total accrued liabilities

$
163,485


$
128,398   6.
    SHORT-TERM
    AND LONG-TERM DEBT      Short-Term
    Debt:
   87




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##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Long-Term
    Debt:
    2009


2008Senior secured term loan facility due 2013

$
1,126,827


$
1,138,677Senior notes due 2014 at 8.75%


375,000



375,000Senior subordinated notes due 2016 at 10.25%


385,000



385,000Capital leases


622



1,364Mortgage debt of consolidated entity


1,194



1,404Total debt


1,888,643



1,901,445Less current portion


12,622



12,862Total long term debt, less current portion

$
1,876,021


$
1,888,583   Senior
    Secured Credit Facility
       88




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##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Senior
    Notes Due 2014 and Senior Subordinated Notes Due
    2016
           89




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##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal year:2010

$
12,6222011


12,1822012


9,1512013


1,094,5242014


375,164Thereafter


385,000Total

$
1,888,643   7.
    DERIVATIVE
    INSTRUMENTS  five-year
       90




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   8.
    FAIR
    VALUE OF FINANCIAL INSTRUMENTS    2009


2008Carrying


Fair


Carrying


FairValue


Value


Value


ValueFair value of interest rate swap liabilities

$
54,421


$
54,421


$
38,916


$
38,916Variable rate debt


1,126,827



1,031,047



1,138,677



1,058,970Fixed rate debt


761,816



738,916



762,768



710,555     9.
    INCOME
    TAXES    For the Fiscal Year Ended June 30,2009


2008


2007Income before taxes:Domestic

$
164,699


$
103,801


$
57,283Foreign


732



2,048



2,038$
165,431


$
105,849


$
59,321     For the Fiscal Year Ended June 30,2009


2008


2007Current taxes:Federal

$
61,229


$
51,406


$
16,741State and local


8,138



10,347



7,519Total current tax provision


69,367



61,753



24,260Deferred tax provision (benefit)


(8,179
)


(20,609
)


2,868Total provision for income taxes

$
61,188


$
41,144


$
27,128  91




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Fiscal Year Ended June 30,2009


2008


2007U.S. Federal statutory income tax rate


35.0
%


35.0
%


35.0
%State and local income taxes, net of U.S. federal income tax
    benefit


1.1
%


3.1
%


5.7
%Increase in valuation allowance


0.6
%


1.4
%


9.4
%Permanent items


(0.2
)%


(1.3
)%


(3.1
)%Effect of FIN 48


0.8
%


1.5
%


0.0
%Other items, net


(0.3
)%


(0.8
)%


(1.3
)%Effective income tax rate


37.0
%


38.9
%


45.7
%     2009


2008Current deferred tax assets:Allowance for doubtful accounts

$
34,136


$
20,938Accrued wages


11,706



4,942Other


3,488



1,652Gross current deferred tax assets


49,330



27,532Less valuation allowance


(4,166
)


(2,180
)Total current deferred tax assets

$
45,164


$
25,352Noncurrent deferred tax assets:Interest rate swap

$
23,680


$
16,965Deferred liabilities


14,466



11,089Foreign and state net operating losses


10,693



11,635Other


14,366



8,838Gross noncurrent deferred tax assets


63,205



48,527Less valuation allowance


(14,681
)


(20,297
)Total noncurrent deferred tax assets


48,524



28,230Noncurrent deferred tax liabilities:Intangible assets


218,141



210,845Property and equipment


16,496



932Other


1,470



2,971Total noncurrent deferred tax liabilities


236,107



214,748Total net noncurrent deferred tax liabilities

$
187,583


$
186,518    92




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
              2009


2008Unrecognized tax benefits, beginning of year

$
23,243


$
27,245Increase in prior year unrecognized tax benefits






762Decrease in prior year unrecognized tax benefits


(520
)


(3,031
)Increase in current year unrecognized tax benefits


692



92Decrease in unrecognized tax benefits due to the expiration of
    statutes of limitation


(776
)


(1,825
)Unrecognized tax benefits, end of year

$
22,639


$
23,243  93




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        10.
    SHARE-BASED
    PAYMENT  2006
    Stock Option Plan
       94




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2009


2008


2007Weighted average fair value of options

$
45.57


$
43.80


$
28.55Expected dividend yield


0.0
%


0.0
%


0.0
%Expected volatility


43.2
%


42.8
%


39.9
%Risk-free interest rate


3.2
%


3.6
%


4.6
%Expected forfeiture rate


12.4
%


12.4
%


12.4
%Expected term


6.5 years



6.5 years



6.5 years     WeightedAverage


AggregateWeighted


Remaining


IntrinsicAverage


Contractual


Value (InOptions


Exercise Price


Term (Yrs)


Thousands)Outstanding at June 30, 2008


874,558


$
54.05Granted


30,800


$
96.00Exercised


(267
)

$
50.00Forfeited


(19,389
)

$
65.41Outstanding at June 30, 2009


885,702


$
55.27



7.6


$
46,706Exercisable at June 30, 2009


461,051


$
52.31



7.4


$
25,675     2009


2008


2007Weighted average fair value of options

$
33.16


$
22.81


$
10.27Expected dividend yield


0.0
%


0.0
%


0.0
%Expected volatility


42.8
%


39.5
%


37.2
%Risk-free interest rate


2.9
%


3.2
%


4.5
%Expected forfeiture rate


12.4
%


12.4
%


12.4
%Expected term


4.9 years



3.2 years



3.8 years     WeightedAverage


AggregateWeighted


Remaining


IntrinsicAverage


Contractual


Value (InOptions


Exercise Price


Term (Yrs)


Thousands)Outstanding at June 30, 2008


849,559


$
54.03Granted


30,800


$
96.00Exercised






Forfeited


(19,657
)

$
65.20Outstanding at June 30, 2009


860,702


$
55.27



7.6


$
45,030Exercisable at June 30, 2009














  95




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    time-based performance-based
  Long
    Term Incentive Compensation Plan
    11.
    OTHER
    EMPLOYEE BENEFIT PLANS    12.
    COMMITMENTS
    AND CONTINGENCIES   96




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2010

$
119,6482011


111,3272012


107,8822013


107,1142014


100,285Thereafter


342,520$
888,776             13.
    RELATED
    PARTY TRANSACTIONS     97




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        14.
    GUARANTOR
    SUBSIDIARIES FINANCIAL INFORMATION   98




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    CONDENSED
    CONSOLIDATED BALANCE SHEET
  June 30,
    2009 (In thousands)
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedAssetsCurrent:Cash and cash equivalents

$
15,789


$
481


$
305,287


$



$
321,557Restricted cash


789







9,583







10,372Notes, advances and trade receivables, net


172



35



135,738







135,945Inventories










9,355







9,355Other current assets


19,378



1,213



54,736







75,327Total current assets


36,128



1,729



514,699







552,556Property and equipment, net


52,537



6,137



522,291







580,965Intangible assets, net


3,119



61



468,702







471,882Goodwill


7,328







2,571,803







2,579,131Intercompany balances


1,883,346



(20,819
)


(1,862,527
)






Other long-term assets


48,447



9,764



1,178







59,389Investment in subsidiaries


1,590,364











(1,590,364
)


Total assets

$
3,621,269


$
(3,128
)

$
2,216,146


$
(1,590,364
)

$
4,243,923Liabilities and members equity (deficit)Current:Short-term and current portion of long-term debt

$
111,911


$



$
711


$



$
112,622Accounts payable, accrued and other current liabilities


114,771



4,739



288,082







407,592Total current liabilities


226,682



4,739



288,793







520,214Long-term debt, less current portion


1,874,921







1,100







1,876,021Other long-term liabilities


91,138



4,649



119,803







215,590Deferred income taxes


(15,987
)


72



203,498







187,583Total liabilities


2,176,754



9,460



613,194







2,799,408Total members equity (deficit)


1,444,515



(12,588
)


1,602,952



(1,590,364
)


1,444,515Total liabilities and members equity (deficit)

$
3,621,269


$
(3,128
)

$
2,216,146


$
(1,590,364
)

$
4,243,923  99




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  CONDENSED
    CONSOLIDATED BALANCE SHEET
  June 30,
    2008 (In thousands)
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedAssetsCurrent:Cash and cash equivalents

$
2,314


$
135


$
233,578


$



$
236,027Restricted cash


817







13,005







13,822Notes, advances and trade receivables, net


238



62



97,619







97,919Inventories










8,490







8,490Other current assets


15,392



700



46,588







62,680Total current assets


18,761



897



399,280







418,938Property and equipment, net


46,415



5,637



452,508







504,560Intangible assets, net


3,516



67



480,270







483,853Goodwill


9,447







2,576,134







2,585,581Intercompany balances


2,011,946



(13,911
)


(1,998,035
)






Other long-term assets


65,401







(4,050
)






61,351Investment in subsidiaries


1,391,255











(1,391,255
)


Total assets

$
3,546,741


$
(7,310
)

$
1,906,107


$
(1,391,255
)

$
4,054,283Liabilities and members equity (deficit)Current:Short-term and currentportion of long-term debt

$
131,911


$
1


$
950


$



$
132,862Accounts payable, accrued and other current liabilities


99,566



4,016



223,601







327,183Total current liabilities


231,477



4,017



224,551







460,045Long-term debt, less current portion


1,886,795







1,788







1,888,583Other long-term liabilities


76,146



44



91,732







167,922Deferred income taxes


1,108



72



185,338







186,518Total liabilities


2,195,526



4,133



503,409







2,703,068Total members equity (deficit)


1,351,215



(11,443
)


1,402,698



(1,391,255
)


1,351,215Total liabilities and members equity (deficit)

$
3,546,741


$
(7,310
)

$
1,906,107


$
(1,391,255
)

$
4,054,283  100




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  CONSOLIDATED
    STATEMENT OF OPERATIONS
  For the
    Fiscal Year Ended June 30, 2009 (In thousands)
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedNet revenues

$



$
4,716


$
2,006,742


$



$
2,011,458Costs and expenses:Educational services


52,855



3,378



1,011,488







1,067,721General and administrative


(68,794
)


2,975



578,267







512,448Depreciation and amortization


15,556



180



96,553







112,289Total costs and expenses


(383
)


6,533



1,686,308







1,692,458Income before interest and income taxes


383



(1,817
)


320,434







319,000Interest expense, net


150,933







2,636







153,569Equity in earnings of subsidiaries


(199,109
)










199,109



Income (loss) before income taxes


48,559



(1,817
)


317,798



(199,109
)


165,431Provision for (benefit from) income taxes


(55,684
)


(672
)


117,544







61,188Net income (loss)

$
104,243


$
(1,145
)

$
200,254


$
(199,109
)

$
104,243   CONSOLIDATED
    STATEMENT OF OPERATIONS
  For the
    Fiscal Year Ended June 30, 2008 (In thousands)
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedNet revenues

$



$
10,850


$
1,673,308


$



$
1,684,158Costs and expenses:Educational services


36,077



8,192



856,990







901,259General and administrative


(42,454
)


6,719



454,789







419,054Depreciation and amortization


9,622







90,650







100,272Total costs and expenses


3,245



14,911



1,402,429







1,420,585Income (loss) before interest and income taxes


(3,245
)


(4,061
)


270,879







263,573Interest expense, net


153,874







3,850







157,724Equity in earnings of subsidiaries


(160,752
)










160,752



Income (loss) before income taxes


3,633



(4,061
)


267,029



(160,752
)


105,849Provision for (benefit from) income taxes


(61,072
)


(1,579
)


103,795







41,144Net income (loss)

$
64,705


$
(2,482
)

$
163,234


$
(160,752
)

$
64,705  101




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  CONSOLIDATED
    STATEMENT OF OPERATIONS
  For the
    Fiscal Year Ended June 30, 2007 (In thousands)
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedNet revenues

$
1


$
9,904


$
1,353,785


$



$
1,363,690Costs and expenses:Educational services


29,909



6,819



693,155







729,883General and administrative


(46,653
)


9,311



352,210







314,868Depreciation and amortization


7,949







82,616







90,565Total costs and expenses


(8,795
)


16,130



1,127,981







1,135,316Income (loss) before interest and income taxes


8,796



(6,226
)


225,804







228,374Interest expense, net


166,310



2



2,741







169,053Equity in earnings of subsidiaries


(117,674
)










117,674



Income (loss) before income taxes


(39,840
)


(6,228
)


223,063



(117,674
)


59,321Provision for (benefit from) income taxes


(72,033
)


(2,848
)


102,009







27,128Net income (loss)

$
32,193


$
(3,380
)

$
121,054


$
(117,674
)

$
32,193  102




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  CONDENSED
    CONSOLIDATED STATEMENT OF CASH FLOWS
  For the
    Fiscal Year Ended June 30, 2009 (In thousands)
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedNet cash flows provided by (used in) operations

$
(26,524
)

$
(6,067
)

$
325,623






$
293,032Cash flows from investing activitiesExpenditures for long-lived assets


(13,629
)


(1,592
)


(135,492
)






(150,713
)Other investing activities










(22,382
)






(22,382
)Net cash flows used in investing activities


(13,629
)


(1,592
)


(157,874
)






(173,095
)Cash flows from financing activitiesNet repayments of debt and other


(32,761
)


(1
)


(927
)






(33,689
)Intercompany transactions


86,389



8,006



(94,395
)






Net cash flows provided by (used in) financing activities


53,628



8,005



(95,322
)






(33,689
)Effect of exchange rate changes on cash and cash
    equivalents










(718
)






(718
)Increase in cash and cash equivalents


13,475



346



71,709







85,530Beginning cash and cash equivalents


2,314



135



233,578







236,027Ending cash and cash equivalents

$
15,789


$
481


$
305,287


$



$
321,557  103




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  CONDENSED
    CONSOLIDATING STATEMENTS OF CASH FLOWS
  For the
    Fiscal Year Ended June 30, 2008
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Cash flow provided by (used in) operating activities


(49,045
)


(1,985
)


202,327







151,297Cash flows from investing activitiesCash paid for property, equipment and curriculum development


(10,561
)


(824
)


(139,523
)






(150,908
)Acquisition of subsidiaries, net of cash acquired


(1,947
)














(1,947
)Other investing activities










(4,400
)






(4,400
)Net cash flows used in investing activities


(12,508
)


(824
)


(143,923
)






(157,255
)Cash flows from financing activitiesNet repayments of debt


(7,460
)


(5
)


(1,069
)






(8,534
)Intercompany transactions


13,384



2,825



(16,209
)






Net cash flows used in financing activities


5,924



2,820



(17,278
)






(8,534
)Effect of exchange rate changes on cash and cash
    equivalents










(204
)






(204
)Increase (decrease) in cash and cash equivalents


(55,629
)


11



40,922







(14,696
)Beginning cash and cash equivalents


57,943



124



192,656







250,723Ending cash and cash equivalents

$
2,314


$
135


$
233,578


$



$
236,027  104




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  CONDENSED
    CONSOLIDATING STATEMENTS OF CASH FLOWS
  For the
    Fiscal Year Ended June 30, 2007
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Cash flow provided by (used in) operating activities


(13,354
)


(6,362
)


199,126







179,410Cash flows from investing activitiesCash paid for property, equipment and curriculum development


(6,722
)


(525
)


(88,810
)






(96,057
)Acquisition of subsidiaries, net of cash acquired


(8,543
)














(8,543
)Other investing activities


(2,300
)






(3,881
)






(6,181
)Net cash flows used in investing activities


(17,565
)


(525
)


(92,691
)






(110,781
)Cash flows from financing activitiesNet repayments of debt


(78,911
)


(9
)


(1,066
)






(79,986
)Intercompany transactions


163,053



7,236



(170,289
)






Other financing activities


(298
)


(386
)


(149
)






(833
)Net cash flows used in financing activities


83,844



6,841



(171,504
)






(80,819
)Effect of exchange rate changes on cash and cash
    equivalents










(383
)






(383
)Increase (decrease) in cash and cash equivalents


52,925



(46
)


(65,452
)






(12,573
)Beginning cash and cash equivalents


5,018



170



258,108







263,296Ending cash and cash equivalents

$
57,943


$
124


$
192,656


$



$
250,723  105




---



##### Table of Contents



EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   15.
    SUBSEQUENT
    EVENTS   106




---



##### Table of Contents



SCHEDULE II  EDUCATION
    MANAGEMENT LLC AND SUBSIDIARIES
    VALUATION AND QUALIFYING ACCOUNTS
  Balance at


Additions





Balance atBeginning


Charged to





End ofof Period


Expenses


Deductions


Period(Dollars in thousands)Allowance accounts for:Year ended June 30, 2007Uncollectable accounts receivable

$
35,392


$
27,930


$
25,320


$
38,002Estimated future loan losses


1,681



38







1,719Deferred tax asset valuation allowance


11,626



7,493







19,119Year ended June 30, 2008Uncollectable accounts receivable

$
38,002


$
42,201


$
27,933


$
52,270Estimated future loan losses


1,719











1,719Deferred tax asset valuation allowance


19,119



3,358







22,477Year ended June 30, 2009Uncollectable accounts receivable

$
52,270


$
67,049


$
35,628


$
83,691Estimated future loan losses


1,719



11,284







13,003Deferred tax asset valuation allowance


22,477



1,066



4,696



18,847  107




---



##### Table of Contents



SUPPLEMENTAL
    QUARTERLY INFORMATION (Unaudited)      Quarter EndedFiscal 2007

September 30


December 31


March 31


June 30Net revenues

$
290,515


$
358,786


$
366,721


$
347,668Income before interest and income taxes


28,089



84,477



74,271



41,537Income (loss) before income taxes


(15,900
)


41,377



32,779



1,065Net income (loss)


(9,747
)


25,364



17,615



(1,039
)   Quarter EndedFiscal 2008

September 30


December 31


March 31


June 30Net revenues

$
361,333


$
445,311


$
461,164


$
416,350Income before interest and income taxes


31,291



95,024



91,615



45,643Income (loss) before income taxes


(9,407
)


55,210



52,119



7,927Net income (loss)


(5,778
)


33,824



30,981



5,678   Quarter EndedFiscal 2009

September 30


December 31


March 31


June 30Net revenues

$
434,228


$
522,218


$
535,438


$
519,574Income before interest and income taxes


32,810



107,218



107,647



71,325Income (loss) before income taxes


(5,510
)


66,682



70,193



34,066Net income (loss)


(3,407
)


42,327



44,129



21,194  108




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##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURES    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rule 13a-15(e) Form 10-K.
  Changes
    in Internal Controls Over Financial Reporting.
  Form 10-K
  ITEM 9B.
    OTHER
    INFORMATION   109




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##### Table of Contents



PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    Name

Age

PositionTodd S. Nelson


50


Chief Executive Officer and DirectorRobert A. Carroll


44


Senior Vice President  Chief Information OfficerJoseph A. Charlson


39


Senior Vice President  Strategic OperationsAnthony F. Digiovanni


59


Senior Vice President  Chief Marketing OfficerDanny D. Finuf


49


President, Brown Mackie CollegesAnthony J. Guida


47


Senior Vice President  Regulatory Affairs and
    Strategic DevelopmentJohn R. Kline


46


President, EDMC Online Higher EducationJ. Devitt Kramer


45


Senior Vice President, General Counsel and SecretaryJohn M. Mazzoni


46


President, The Art InstitutesStacey R. Sauchuk


49


Senior Vice President  Academic Programs and Student
    AffairsJohn T. South, III


62


Senior Vice President, Chancellor, South University and Chairman
    of the Board of Directors of Argosy UniversityCraig D. Swenson


56


President, Argosy UniversityRoberta L. Troike


43


Senior Vice President  Human ResourcesEdward H. West


43


President and Chief Financial OfficerAdrian M. Jones


45


DirectorJeffrey T. Leeds


53


DirectorJohn R. McKernan, Jr.


61


Chairman of the Board of DirectorsLeo F. Mullin


66


DirectorPaul J. Salem


45


DirectorPeter O. Wilde


41


Director   Todd S. Nelson
  Robert A. Carroll
  Joseph A. Charlson
 110




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##### Table of Contents



Anthony F. Digiovanni
  Danny D. Finuf
  Anthony J. Guida
  John R. Kline
  J. Devitt Kramer
  John M. Mazzoni
  Stacey R. Sauchuk
 111




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##### Table of Contents



John T. South, III,
  Craig D. Swenson
  Roberta L. Troike
  Edward H. West
  Adrian M. Jones
  Jeffrey T. Leeds
  John R. McKernan, Jr.
  Leo F. Mullin
 112




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##### Table of Contents



Paul J. Salem
  Peter O. Wilde
    In re Apollo Group, Inc. Securities
    Litigation
  Teamsters Local 617 Pension and Welfare
    Funds v. Apollo Group, Inc. et al Rule 10b-5
    Code of
    Ethics
    Audit
    Committee
   113




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##### Table of Contents



ITEM 11.
    EXECUTIVE
    COMPENSATION  Compensation
    Discussion and Analysis
  Overview
    Compensation
    Objectives
    
    to provide competitive compensation packages to attract and
    retain superior executive talent;
    to reward successful performance by the executive and the
    Company by linking a significant portion of compensation to our
    financial and business results; and
    to further align the interests of executive officers with those
    of EDMCs shareholders by providing long-term equity
    compensation and meaningful equity ownership.      Mix of
    Compensation Elements
  case-by-case
   114




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##### Table of Contents



Role
    of Outside Compensation Consultants
        Base
    Salary
     115




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##### Table of Contents



Cash
    Bonuses
      Financial/Operational Metric

WeightingEarnings before interest, depreciation, taxes and amortization
    (EBITDA)

60% for all non-Argosy University participants; 70% for  Argosy
    University participantsRevenue/Other Financial Metric/Specific Project

20%Persistence

10%Average Starting Salary

5% for all non-Argosy University participantsJob Placement Rate

5% for all non-Argosy University participants    116




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##### Table of Contents



Financial/Operational Metric

Adjustment Percentage

Maximum and Minimum ThresholdsEBITDA

4% increase or decrease for each 1% above or below plan

115.75% (or 113.75% for Argosy University employees) and 75%,
    respectively.Net revenues/Other Financial Metric/Specific Project

For net revenues and other financial metrics, 4% increase or
    decrease for each 1% above or below plan unless specific
    adjustment defined for other financial metric. For specific
    projects, 150% for early/exceeded, 125% for early/met, 100% for
    on time/met, 75% for incomplete

For net revenues and other financial metrics, 112.5% and 75%,
    respectively.  For specific projects, 150% and 75%, respectively.Persistence

4% increase or decrease for each 1% above or below plan

102.5% and 96%, respectively.Average Starting Salary

4% increase or decrease for each 1% above or below plan

102.5% and 96%, respectively.Job Placement Rate

4% increase or decrease for each 1% above or below plan

102.5% and 96%, respectively.     Position Classification

Results Used for MICP CalculationExecutive officers not responsible for an education system or
    online higher education

100% from our overall resultsExecutive officers responsible for an education system or online
    higher education

75% from education system or online results and 25% from our
    overall resultsParticipants responsible for a region within an education system

75% from region results and 25% from education system resultsExecutive committee members at an education system

100% from education system resultsParticipants at a campus or online higher education

100% from campus or online higher educationOther corporate officers

100% from our overall results     
    Corporate Executives.  The bonuses paid
    to Messrs. McKernan, Nelson and West were based on our
    overall financial and operating results because none of the
    executives is responsible for a specific education system. Our
    performance against the company-wide financial and operational
    targets during fiscal 2009 was as follows: (i) EBITDA
    achieved 114.0% of the target of $417.5 million;
    (ii) net revenues achieved 99.0% of the target of
    $2,032.0 million; (iii) persistence achieved 99.9% of
    the target of 66.5%; (iv) average starting salary achieved
    102.2% of the target of $29,600; and (v) the job placement
    rate achieved 99.7% of the target of 87.7%. For fiscal 2009,
    Messrs. McKernan, Nelson and West were paid bonuses under
    the MICP in the 117




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##### Table of Contents



amounts of $594,018, $1,188,036 and $1,000,432, respectively.
    These amounts were determined based on our overall performance
    against the MICP financial and operational targets and a 20%
    discretionary bonus for Messrs. Nelson and West, which was
    approved by our Board of Directors.  
    John M. Mazzoni.  As the President of
    The Art Institutes education system, Mr. Mazzoni receives
    75% of his bonus based on the financial and operational results
    of The Art Institutes and 25% based on our overall company
    results. In fiscal 2009, The Art Institutes performance
    against its financial and operational targets was as follows:
    (i) EBITDA achieved 110.0% of the target of
    $344.6 million; (ii) net revenues achieved 99.1% of
    the target of $1,251.5 million; (iii) persistence
    achieved 98.2% of the target of 70.4%; (iv) average
    starting salary achieved 100.1% of the target of $29,900; and
    (v) the job placement rate achieved 99.1% of the target of
    87.5%. For fiscal 2009, Mr. Mazzoni received a bonus under
    the MICP of $447,145 based on the results of the Company on an
    overall basis and The Art Institutes education system and a 20%
    discretionary bonus approved by our Board of Directors.
    John T. South, III.  As Chancellor
    of South University, Mr. South receives 75% of his bonus
    based on the financial and operational results of South
    University and 25% based on our overall company results. In
    fiscal 2009, South Universitys performance against its
    financial and operational targets was as follows:
    (i) EBITDA achieved 118.2% of the target of
    $25.1 million; (ii) net revenues achieved 100.9% of
    the target of $81.1 million; (iii) persistence
    achieved 99.7% of the target of 62.7%; (iv) average
    starting salary achieved 117.3% of the target of $35,867; and
    (v) the job placement rate achieved 101.8% of the target of
    89.0%. For fiscal 2009, Mr. South received a bonus under
    the MICP of $394,159 based on the results of the Company on an
    overall basis and the South University education system and a
    10% discretionary bonus approved by our Board of Directors.
    Stephen J. Weiss.  Mr. Weiss was
    the President of EDMC Online Higher Education through July 2009.
    In connection with the severance which he received in connection
    with his resignation, we agreed to pay him 150% of his MICP
    target bonus, or $496,500, based on the performance of EDMC
    Online Higher Education in fiscal 2009.  Long-Term
    Incentive Plans
    2006 Stock Option Plan.
   118




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LTIC Plan.
  Omnibus Long-Term Incentive Plan.
 119




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##### Table of Contents




    act in a manner that benefits the Companys long-term
    performance;
    further align their interests with that of other shareholders;
    focus on return on capital; and
    remain with the Company long-term.        Benefits
    and Perquisites
    gross-ups
  Compensation
    Committee Interlocks and Insider Participation
   120




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Compensation
    Committee Report
  Form 10-K.
           SUMMARY
    COMPENSATION TABLE
    Change inPensionValue andNon-Equity


Non-QualifiedOption


Incentive


DeferredFiscal








Stock


Award(s)


Plan


Compensation


All OtherYear


Salary


Bonus(1)


Award


(2)


Payments


Earnings


Compensation


TotalJohn R. McKernan, Jr.


2009


$
355,480


$











$
594,018






$
57,516
(3)

$
1,007,014Chairman(4)


2008



463,472



136,639











683,197







69,560



1,352,8682007



553,466



157,059











785,297







60,254



1,556,076Todd S. Nelson


2009



589,600



198,006











990,030







35,360
(5)


1,812,996Chief Executive Officer(6)


2008



568,192



170,799











853,996







82,794



1,675,7812007



177,692



65,442











327,208







31,838



602,180Edward H. West


2009



494,590



166,739











833,693







56,780
(7)


1,551,802President and


2008



464,192



139,745











698,724







108,909



1,411,570Chief Financial Officer(6)


2007



450,000



128,503











642,516







56,970



1,277,989John M. Mazzoni


2009



326,615



74,524











372,621







32,392
(8)


806,152President, The Art Institutes


2008



309,462



72,878











364,092







30,896



777,3282007



297,061



60,507











302,535







25,173



685,276John T. South, III


2009



322,000



35,833











358,326







38,180
(9)


754,339Senior Vice President, Chancellor


2008



309,462



28,794











287,939







13,912



640,107South University and Chairman,


2007



296,885



40,382











323,055







37,891



698,213Argosy University Board of TrusteesStephen J. Weiss


2009



326,615



496,500
(10)


















30,278
(11)


853,393President, EDMC Online


2008



308,262



67,220











336,102







34,944



746,528Higher Education(10)


2007



294,185



33,807











416,193







20,201



764,386     (1)
    
    Amounts in this column represent discretionary bonuses paid
    under the MICP.(2)
    
    The Company did not record any expense for options under
    SFAS No. 123R during fiscal 2009, due to restrictions
    on option holders ability to receive value on their stock
    option grants until certain performance conditions are achieved.
    If we had recorded option expense under SFAS No. 123R, we
    would have recorded expense for the time-vested options of
    $890,498 for Mr. McKernan, $1,834,621 for Mr. Nelson,
    $442,778 for Mr. West, $221,154 for Mr. Mazzoni and
    $916,237 for Mr. Weiss. A description of the Companys
    analysis of SFAS No. 123R expense is set forth in
    Note 10 to the accompanying audited consolidated financial
    statements. 121




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##### Table of Contents



(3)
    
    Represents the Companys match to Mr. McKernans
    401(k) contribution ($10,223), the amount paid to the
    Companys Deferred Compensation Plan on
    Mr. McKernans behalf due to a limitation on the
    Companys match to the 401(k) plan under Internal Revenue
    Code limitations ($42,714), compensation for declining the
    Companys health insurance benefit program and the dollar
    value of life insurance premiums we paid with respect to term
    life insurance for the benefit of Mr. McKernan.(4)
    
    Effective January 1, 2009, Mr. McKernan became
    non-executive Chairman. He served as Executive Chairman from
    March 2007 through December 2008.(5)
    
    Represents the reimbursement of travel to and from Pittsburgh,
    Pennsylvania ($34,374) including a tax
    gross-up of
    35% on the amount reimbursed and the dollar value of life
    insurance premiums we paid with respect to term life insurance
    for the benefit of Mr. Nelson.(6)
    
    Effective January 1, 2009, Mr. West was appointed
    President and Chief Financial Officer, with Mr. Nelson
    remaining as Chief Executive Officer.(7)
    
    Represents the Companys match to Mr. Wests
    401(k) contribution ($7,582), the amount paid to the
    Companys Deferred Compensation Plan on
    Mr. Wests behalf due to a limitation on the
    Companys match to the 401(k) plan under Internal Revenue
    Code limitations ($48,668), and the dollar value of life
    insurance premiums we paid with respect to term life insurance
    for the benefit of Mr. West.(8)
    
    Represents the Companys match to Mr. Mazzonis
    401(k) contribution ($7,472), the amount paid to the
    Companys Deferred Compensation Plan on
    Mr. Mazzonis behalf due to a limitation on the
    Companys match to the 401(k) plan under Internal Revenue
    Code limitations ($23,584), the dollar value of life insurance
    premiums we paid with respect to term life insurance for the
    benefit of Mr. Mazzoni and the amount contributed by
    Mr. Mazzoni to our flexible spending account for medical
    expenses not covered by our benefits policy.(9)
    
    Represents the Companys match to Mr. Souths
    401(k) contribution ($10,392), the amount paid to the
    Companys Deferred Compensation Plan on
    Mr. Souths behalf due to a limitation on the
    Companys match to the 401(k) plan under Internal Revenue
    Code limitations ($18,091), the dollar value of life insurance
    premiums we paid with respect to term life insurance for the
    benefit of Mr. South and the reimbursement for membership
    of several social clubs and business organizations.(10)
    
    Mr. Weiss announced his resignation as President of EDMC
    Online Higher Education in June 2009. In connection with
    his resignation, we agreed to pay him 150% of his MICP target
    bonus for fiscal 2009.(11)
    
    Includes the Companys match to Mr. Weiss 401(k)
    contribution ($7,467), the amount paid to the Companys
    Deferred Compensation Plan on Mr. Weisss behalf due
    to a limitation on the Companys match to the 401(k) plan
    under Internal Revenue Code limitations ($22,016), and the
    dollar value of life insurance premiums we paid with respect to
    term life insurance for the benefit of Mr. Weiss.  Grants of
    Plan-Based Awards
  Estimated Possible Payouts Under Non-Equity Incentive Plan
    Awards(1)Name

Grant Date


Threshold(2)


Target(3)


Maximum(4)John R. McKernan, Jr.


N/A



N/A


$
446,160


$
669,240Todd S. Nelson


N/A



N/A



743,600



1,115,400Edward H. West


N/A



N/A



626,177
(5)


939,266John M. Mazzoni


N/A



N/A



297,900



446,850John T. South, III


N/A



N/A



260,000



390,000Stephen J. Weiss


N/A



N/A



331,000



496,500     (1)
    
    Information in this table shows the target and
    maximum possible payouts that could have been
    achieved for the Named Executive Officers under the MICP for
    fiscal 2009. For actual payments made under the MICP for fiscal
    2009, see the columns of the Summary Compensation Table titled
    Bonus and Non-Equity Incentive Plan
    Payments and related footnotes.(2)
    
    There is no threshold under the MICP. 122




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##### Table of Contents



(3)
    
    The target payouts under the MICP are expressed as
    percentages of base salary. For fiscal 2009, target percentages
    of base salary for each of our Named Executive Officers were as
    follows: Messrs. McKernan, Nelson and West 125%,
    Mr. Mazzoni 90%, Mr. South 80% and Mr. Weiss 100%.(4)
    
    The maximum payout for any MICP participant is 150%
    of the participants target bonus plus a 20% discretionary
    bonus, which is considered to be a non-equity incentive plan
    award and is consequently not shown in this column.(5)
    
    MICP target adjusted for Mr. Wests salary increase
    from $486,720 to $511,100 in December 2008 when he was appointed
    as President and Chief Financial Officer.  Employment
    Agreements
    McKernan Employment Agreement.
     123




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##### Table of Contents



Nelson Employment Agreement.
        West Employment Agreement.
 124




---



##### Table of Contents



Other Executive Employment Agreements.
  
    A three-year term commencing December 7, 2006, with
    one-year automatic renewals unless terminated on 180 days
    advance notice, provided that if we terminate the agreement
    effective upon expiration of the term with timely notice to
    executive, and the executive elects to terminate his employment
    within 30 days after the end of the term, then such
    termination will be treated as a termination without cause under
    the employment agreement;
    An annual base salary which is reviewed annually and may be
    adjusted upward by the Board of Directors, plus a target bonus
    based on a percentage of the executives annual salary;
    Employee benefits under the various benefit plans and programs
    we maintain for our employees;
    Participation in the EDMC stock option plan; 125




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##### Table of Contents




    Monthly salary and bonus payments for 12 months
    (18 months in the case of Mr. Weiss) upon a
    termination without cause or a resignation for
    good reason, provided that the period of monthly
    payments increases to two years if the termination without cause
    or resignation for good reason if the date of termination is in
    anticipation of or within two years following a change of
    control, as defined in the 2006 Stock Option Plan;
    Cause means (i) the individuals willful and continued
    failure to use his best efforts to perform his reasonably
    assigned duties (other than on account of disability);
    (ii) the individual is indicted for, convicted of, or
    enters a plea of guilty or nolo contendere to, (x) a felony
    or (y) a misdemeanor involving moral turpitude;
    (iii) the individual engages in (x) gross negligence
    causing material harm to us or our business or reputation,
    (y) willful and material misconduct or (z) willful and
    material breach of fiduciary duty; or (iv) the individual
    willfully and materially breaches (x) the restrictive
    covenants described in his respective agreement or
    (y) certain material written policies, as in effect on the
    Effective Date;
    Good reason means the occurrence of any of the following events
    without either the individuals prior written consent or
    full cure within 30 days after he gives written notice to
    us describing the event and requesting cure: (i) the
    reassignment to the individual to a position that is not a
    corporate officer level position or the assignment to the
    individual of duties that are not consistent with such corporate
    officer level position; (ii) any relocation of the
    individuals principal place of employment; (iii) any
    material breach by us or any of our affiliates of any material
    obligation to the individual; (iv) any failure of us to
    obtain the assumption in writing of its obligation to perform
    his respective agreement by any successor to all or
    substantially all of our assets within 15 days after any
    merger, consolidation, sale or similar transaction, except where
    such assumption occurs by operation of law or, (v) solely
    with respect to Mr. South, a material diminution of his
    responsibilities with the Company, his removal as Chancellor of
    South University or the requirement that he work on a full-time
    basis at the Companys corporate offices or a more regular
    basis outside of Savannah, GA than he did prior to the execution
    of his employment agreement;
    Noncompetition, confidentiality and nonsolicitation restrictive
    covenants for a period of 12 months after termination of
    employment;
    In the event of the executives disability, continuation of
    all compensation and benefits through the earlier to occur of
    the next anniversary of the date of the employment agreement or
    the date of the executives death, provided that the
    obligation to pay the executives base salary will be
    reduced by the amounts paid to the executive under any long-term
    disability insurance plan that we sponsor or otherwise maintain
    and that in no event will our total annual obligation for base
    salary payments to the executive be greater than an amount equal
    to two-thirds of the executives base salary;
    In the event of the executives death, six months of
    salary, a pro-rata bonus for the year of death and six months of
    bonus payments based on the higher of (i) the average bonus
    paid to the executive in each of the last three years, and
    (ii) the bonus paid to the executive in the most recent
    12 month period (annualized for any partial year payments);
    and
    Solely with respect to Mr. South, reimbursement for up to
    $160,000 per fiscal year in expenses incurred in connection with
    the use of his personal airplane for business purposes and
    reimbursement for the fees and expenses associated with the
    membership of several social clubs and business organizations.     126




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Outstanding
    Equity Awards at Fiscal Year-End
    Option Awards


Stock AwardsEquityEquity


IncentiveEquity














Incentive


Plan Awards:Incentive














Plan Awards:


Market orPlan Awards:











Market


Number of


Payout ValueNumber of


Number of


Number of








Number of


Value of


Unearned


of UnearnedSecurities


Securities


Securities








Shares or


Shares or


Shares, Units


Shares, UnitsUnderlying


Underlying


Underlying








Units of


Units of


or Other


or OtherUnexercised


Unexercised


Unexercised


Option


Option


Stock That


Stock That


Rights That


Rights ThatOptions (#)


Options (#)


Unearned


Exercise


Expiration


Have Not


Have Not


Have Not


Have NotExercisable


Unexercisable


Options (#)(1)


Price ($)


Date


Vested (#)


Vested ($)


Vested (#)


Vested ($)John R. McKernan, Jr.


84,957
(2)


39,345
(2)





$
50.00



5/31/2016























124,299



50.00



5/31/2016















Todd S. Nelson


112,840
(3)


169,261
(3)






55.00



3/8/2017























282,102



55.00



3/8/2017















10,000
(4)


15,000
(4)






55.00



3/29/2017















Edward H. West


41,053
(5)


27,368
(5)






50.00



5/31/2016























68,421



50.00



5/31/2016















4,105
(6)


6,158
(6)






60.00



6/27/2017























10,263



60.00



6/27/2017















John M. Mazzoni


19,860
(5)


13,240
(5)






50.00



5/31/2016























33,100



50.00



5/31/2016















1,986
(6)


2,979
(6)






60.00



6/27/2017























4,965



60.00



6/27/2017















John T. South, III


13,380
(5)


8,920
(5)






50.00



5/31/2016















22,300



50.00



5/31/2016















1,338
(6)


2,007
(6)






60.00



6/27/2017















3,345



60.00



6/27/2017















Stephen J. Weiss


26,490
(5)


17,660
(5)






50.00



5/31/2016























44,150



50.00



5/31/2016















2,649
(6)


3,973
(6)






60.00



6/27/2017























6,623



60.00



6/27/2017















     (1)
    
    Represents performance-vested stock options that vest based on
    investment returns to the investment funds associated with the
    Principal Shareholders which invested in EDMC in connection with
    the Transaction.(2)
    
    Represents time-vested stock options that vest on a monthly
    basis over a five-year term which began on June 1, 2006.(3)
    
    Represents time-based stock options which vest over a five-year
    period, 20% of which vested on March 9, 2008, one year from
    the date of grant, and 20% of which vests on each of the next
    four anniversaries of the date of grant.(4)
    
    Represents time-based stock options which vest over a five-year
    period, 20% of which vested on March 30, 2008, one year
    from the date of grant, and 20% of which vests on each of the
    next four anniversaries of the date of grant.(5)
    
    Represents time-based stock options which vest over a five-year
    period, 20% of which vested on June 1, 2007 and 20% of
    which vests on June 1 of the next four years.(6)
    
    Represents time-based stock options which vest over a five-year
    period, 20% of which vested on June 28, 2008, one year from
    the date of grant, and 20% of which vests on each of the next
    four anniversaries of the date of grant.  Option
    Exercises and Stock Vested
   127




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##### Table of Contents



Pension
    Benefits
    Nonqualified
    Deferred Compensation
    Executive


Registrant


AggregateContributions


Contributions


Earnings


Aggregate


Aggregatein Fiscal


in Fiscal


in Fiscal


Withdrawals/


Balance at2009


2009*


2009


Distributions


6/30/09John R. McKernan, Jr.

$
81,984


$
42,714


$
(207,976
)





$
672,842Todd S. Nelson


















Edward H. West






48,668



13,607







103,689John M. Mazzoni


1,805



23,584



(20,143
)






139,105John T. South, III






18,091



837







84,277Stephen J. Weiss






22,016



(12,340
)






58,689     *
    
    The amounts in this column are reported as compensation in the
    All Other Compensation column of the Summary Compensation Table.    Potential
    Payments Upon Termination or
    Change-in-Control
       128




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##### Table of Contents



John R.
    McKernan, Jr.
      Todd S.
    Nelson
      Edward H.
    West
      Agreements
    with Messrs. Mazzoni, South and Weiss
   129




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##### Table of Contents



Table of
    Benefits Upon Termination Events
    John
    R. McKernan, Jr.
  Without Cause


For Cause oror for Good


Without Good


Change inReason


Reason


Control(1)


Disability


DeathCompensation:Base Salary and Target Bonus

$
1,204,632
(2)

$



$
2,409,264
(3)

$



$
Target Bonus in Year of Termination


446,160







446,160



446,160



446,160Stock Options(4)


7,209,516



4,927,506



7,209,516



4,927,506



4,927,506Benefits and Perquisites:Health and Welfare Benefits


















Outplacement Services


















Life Insurance Proceeds


















500,000Disability Benefits


















Accrued Vacation Pay


24,710



24,710



24,710



24,710



24,710Excise Tax and
    Gross-Up


















Total:

$
8,885,018


$
4,952,216


$
10,089,650


$
5,398,376


$
5,898,376     (1)
    
    Applicable if the executive is terminated without cause or
    terminates his employment for good reason in anticipation of or
    within two years after the occurrence of a change in control.(2)
    
    Consists of 1.5 times the sum of (i) fiscal 2009 base
    salary of $356,928 and (ii) fiscal 2009 target incentive
    bonus of $446,160. 130




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##### Table of Contents



(3)
    
    Consists of three times the sum of (i) fiscal 2009 base
    salary of $356,928 and (ii) fiscal 2009 target incentive
    bonus of $446,160.(4)
    
    Assumes fair market value of $108.00 per share. The
    executives time-vested stock options become fully vested
    upon a change in control of EDMC. In the event that
    Mr. McKernan is terminated other than for cause or
    terminates his employment for good reason, his time-vested stock
    options will continue to vest for an additional 24 months.
    In the event that the executive is terminated for cause, the
    executives right to exercise his stock options terminates
    upon the effectiveness of the termination while the executive
    may exercise any vested stock options during the
    30-day
    period following termination of employment by the executive
    without good reason. For purposes of the table, we have assumed
    that the executive exercises his vested stock options prior to a
    termination for cause or within 30 days after a termination
    by the executive without good reason. Amount does not include
    any vesting of performance-vested stock options because the
    vesting of such options is based on cash returns to the
    Principal Shareholders from sales of common stock they purchased
    in connection with the Transaction, none of which have occurred
    as of June 30, 2009. Does not include the impact of any
    repurchase rights held by EDMC upon exercise of the stock
    options under EDMCs Amended and Restated Shareholders
    Agreement.  Todd
    S. Nelson
  Without Cause


For Cause oror for Good


Without Good


Change inReason


Reason


Control(1)


Disability


DeathCompensation:Base Salary and Target Bonus

$
2,007,720
(2)

$



$
4,015,440
(3)

$



$
Target Bonus in Year of Termination


743,600







743,600



743,600



743,600Stock Options(4)


13,021,082



6,510,541



16,276,353



6,510,541



6,510,541Benefits and Perquisites:Health and Welfare Benefits(5)


10,345







10,345







Outplacement Services


















Life Insurance Proceeds


















500,000Disability Benefits


















Accrued Vacation Pay


45,760



45,760



45,760



45,760



45,760Excise Tax and
    Gross-Up


















Total:

$
15,828,507


$
6,556,301


$
21,091,498


$
7,299,901


$
7,799,901     (1)
    
    Applicable if the executive is terminated without cause or
    terminates his employment for good reason in anticipation of or
    within two years after the occurrence of a change in control.(2)
    
    Consists of 1.5 times the sum of (i) fiscal 2009 base
    salary of $594,880 and (ii) fiscal 2009 target incentive
    bonus of $743,600.(3)
    
    Consists of three times the sum of (i) fiscal 2009 base
    salary of $594,880 and (ii) fiscal 2009 target incentive
    bonus of $743,600.(4)
    
    Assumes fair market value of $108.00 per share. The
    executives time-vested stock options become fully vested
    upon a change in control of EDMC. In the event that
    Mr. Nelson is terminated other than for cause or terminates
    his employment for good reason, an additional 20% of his
    time-vested stock options will vest on each of the next two
    anniversaries of the date of grant. In the event that the
    executive is terminated for cause, the executives right to
    exercise his stock options terminates upon the effectiveness of
    the termination while the executive may exercise any vested
    stock options during the
    30-day
    period following termination of employment by the executive
    without good reason. For purposes of the table, we have assumed
    that the executive exercises his vested stock options prior to a
    termination for cause or within 30 days after a termination
    by the executive without good reason. Amount does not include
    any vesting of performance vested stock options because the
    vesting of such options is based on cash returns to the
    Principal Shareholders from sales of common stock they 131




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##### Table of Contents



purchased in connection with the Transaction, none of which have
    occurred as of June 30, 2009. Does not include the impact
    of any repurchase rights held by EDMC upon exercise of the stock
    options under EDMCs Amended and Restated Shareholders
    Agreement.(5)
    
    Amount equals the Companys estimated expense of providing
    the executive with COBRA health insurance benefits for
    18 months after termination.  Edward
    H. West
  Without Cause


For Cause oror for Good


Without Good


Change inReason


Reason


Control(1)


Disability


DeathCompensation:Base Salary and Target Bonus

$
1,705,916
(2)

$



$
2,274,554
(3)

$



$
Target Bonus in Year of Termination


626,177







626,177



626,177



626,177Stock Options(4)


3,568,834



2,578,100



4,461,042



2,578,100



2,578,100Benefits and Perquisites:Health and Welfare Benefits(5)


10,345







10,345







Outplacement Services


















Life Insurance Proceeds


















500,000Disability Benefits


















Accrued Vacation Pay


13,760



13,760



13,760



13,760



13,760Excise Tax and
    Gross-Up


















Total:

$
5,925,032


$
2,591,860


$
7,385,878


$
3,218,037


$
3,718,037     (1)
    
    Applicable if the executive is terminated without cause or
    terminates his employment for good reason in anticipation of or
    within two years after the occurrence of a change in control.(2)
    
    Consists of 1.5 times the sum of (i) base salary of
    $511,100 and (ii) fiscal 2009 target incentive bonus of
    $626,177.(3)
    
    Consists of two times the sum of (i) fiscal 2009 base
    salary of $511,100 and (ii) fiscal 2009 target incentive
    bonus of $626,177.(4)
    
    Assumes fair market value of $108.00 per share. The
    executives time-vested stock options become fully vested
    upon a change in control of EDMC. In the event that
    Mr. West is terminated other than for cause or terminates
    his employment for good reason, an additional 20% of his
    time-vested stock options will vest on the anniversary of the
    date of grant of his option dated August 1, 2006 and on
    each of the next two anniversaries of the date of grant of his
    option dated June 28, 2007. In the event that the executive
    is terminated for cause, the executives right to exercise
    his stock options terminates upon the effectiveness of the
    termination while the executive may exercise any vested stock
    options during the
    30-day
    period following termination of employment by the executive
    without good reason. For purposes of the table, we have assumed
    that the executive exercises his vested stock options prior to a
    termination for cause or within 30 days after a termination
    by the executive without good reason. Amount does not include
    any vesting of performance-vested stock options because the
    vesting of such options is based on cash returns to the
    Principal Shareholders from sales of common stock they purchased
    in connection with the Transaction, none of which have occurred
    as of June 30, 2009. Does not include the impact of any
    repurchase rights held by EDMC upon exercise of the stock
    options under EDMCs Amended and Restated Shareholders
    Agreement.(5)
    
    Amount equals the Companys estimated expense of providing
    the executive with COBRA health insurance benefits for
    18 months after termination. 132




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##### Table of Contents



John
    M. Mazzoni
  Without Cause


For Cause oror for Good


Without Good


Change inReason


Reason


Control(1)


Disability


DeathCompensation:Base Salary and Target Bonus

$
628,900
(2)

$



$
1,257,800
(3)

$
518,567
(4)

$
463,400
(5)Target Bonus in Year of Termination


297,900







297,900







182,985
(6)Stock Options(7)


1,678,832



1,247,208



2,158,120



1,247,208



1,247,208Benefits and Perquisites:Health and Welfare Benefits(8)


4,585







4,585



4,585



Outplacement Services(9)


25,000







25,000







Life Insurance Proceeds


















500,000Disability Benefits


















Accrued Vacation Pay


1,273



1,273



1,273



1,273



1,273Excise Tax and
    Gross-Up


















Total:

$
2,636,490


$
1,248,481


$
3,744,678


$
1,771,633


$
2,394,866     (1)
    
    Applicable if the executive is terminated without cause or
    terminates his employment for good reason in anticipation of or
    within two years after the occurrence of a change in control.(2)
    
    Consists of the sum of (i) fiscal 2009 base salary of
    $331,000 and (ii) fiscal 2009 target incentive bonus of
    $297,900.(3)
    
    Consists of two times the sum of (i) fiscal 2009 base
    salary of $331,000 and (ii) fiscal 2009 target incentive
    bonus of $297,900.(4)
    
    Consists of the sum of (i) two-thirds of the
    executives base salary for fiscal 2009 and
    (ii) fiscal 2009 target incentive bonus of $297,900.(5)
    
    Consists of the sum of (i) one-half of the executives
    fiscal 2009 base salary and (ii) fiscal 2009 target
    incentive bonus of $297,900.(6)
    
    Equals one-half of the average of the bonuses paid to the
    executive during the three most recent fiscal years.(7)
    
    Assumes fair market value of $108.00 per share. The
    executives time-vested stock options become fully vested
    upon a change in control of EDMC. In the event that
    Mr. Mazzoni is terminated other than for cause or
    terminates his employment for good reason, an additional 20% of
    his time-vested stock options will vest on the next anniversary
    of the date of grant. In the event that the executive is
    terminated for cause, the executives right to exercise his
    stock options terminates upon the effectiveness of the
    termination while the executive may exercise any vested stock
    options during the
    30-day
    period following termination of employment by the executive
    without good reason. For purposes of the table, we have assumed
    that the executive exercises his vested stock options prior to a
    termination for cause or within 30 days after a termination
    by the executive without good reason. Amount does not include
    any vesting of performance-vested stock options because the
    vesting of such options is based on cash returns to the
    Principal Shareholders from sales of common stock they purchased
    in connection with the Transaction, none of which have occurred
    as of June 30, 2009. Does not include the impact of any
    repurchase rights held by EDMC upon exercise of the stock
    options under EDMCs Amended and Restated Shareholders
    Agreement.(8)
    
    Amount equals the Companys estimated expense of providing
    the executive with health and welfare benefits for twelve months
    after termination.(9)
    
    Amount equals the Companys estimated expense of providing
    the executive with outplacement services upon termination. The
    executive may elect to receive a lump sum payment from the
    Company in lieu of receiving outplacement services. 133




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##### Table of Contents



John
    T. South, III
  Without Cause


For Cause oror for Good


Without Good


Change inReason


Reason


Control(1)


Disability


DeathCompensation:Base Salary and Target Bonus

$
585,000
(2)

$



$
1,170,000
(3)

$
476,667
(4)

$
422,500
(5)Target Bonus in Year of Termination


260,000







260,000







156,695
(6)Stock Options(7)


1,131,056



840,264



1,453,960



840,264



840,264Benefits and Perquisites:Health and Welfare Benefits(8)


10,005







10,005



10,005



Outplacement Services(9)


25,000







25,000







Life Insurance Proceeds


















500,000Disability Benefits


















Accrued Vacation Pay


21,250



21,250



21,250



21,250



21,250Excise Tax and
    Gross-Up


















Total:

$
2,032,311


$
861,514


$
2,940,215


$
1,348,186


$
1,940,709     (1)
    
    Applicable if the executive is terminated without cause or
    terminates his employment for good reason in anticipation of or
    within two years after the occurrence of a change in control.(2)
    
    Consists of the sum of (i) fiscal 2009 base salary of
    $325,000 and (ii) fiscal 2009 target incentive bonus of
    $260,000.(3)
    
    Consists of two times the sum of (i) fiscal 2009 base
    salary of $325,000 and (ii) fiscal 2009 target incentive
    bonus of $260,000.(4)
    
    Consists of the sum of (i) two-thirds of the
    executives base salary for fiscal 2009 and
    (ii) fiscal 2009 target incentive bonus of $260,000.(5)
    
    Consists of the sum of (i) one-half of the executives
    fiscal 2009 base salary and (ii) fiscal 2009 target
    incentive bonus of $260,000.(6)
    
    Equals one-half of the average of the bonuses paid to the
    executive during the three most recent fiscal years.(7)
    
    Assumes fair market value of $108.00 per share. The
    executives time-vested stock options become fully vested
    upon a change in control of EDMC. In the event that
    Mr. South is terminated other than for cause or terminates
    his employment for good reason, an additional 20% of his
    time-vested stock options will vest on the next anniversary of
    the date of grant. In the event that the executive is terminated
    for cause, the executives right to exercise his stock
    options terminates upon the effectiveness of the termination
    while the executive may exercise any vested stock options during
    the 30-day
    period following termination of employment by the executive
    without good reason. For purposes of the table, we have assumed
    that the executive exercises his vested stock options prior to a
    termination for cause or within 30 days after a termination
    by the executive without good reason. Amount does not include
    any vesting of performance-vested stock options because the
    vesting of such options is based on cash returns to the
    Principal Shareholders from sales of common stock they purchased
    in connection with the Transaction, none of which have occurred
    as of June 30, 2009. Does not include the impact of any
    repurchase rights held by EDMC upon exercise of the stock
    options under EDMCs Amended and Restated Shareholders
    Agreement.(8)
    
    Amount equals the Companys estimated expense of providing
    the executive with health and welfare benefits for twelve months
    after termination.(9)
    
    Amount equals the Companys estimated expense of providing
    the executive with outplacement services upon termination. The
    executive may elect to receive a lump sum payment from the
    Company in lieu of receiving outplacement services. 134




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##### Table of Contents



Stephen
    J. Weiss
    DIRECTOR
    COMPENSATION
    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    Percentage ofNumber of


OutstandingName and Address of Beneficial Owner(1)

Shares Owned


Shares OwnedProvidence Equity Funds(2)


9,130,608



34.1GS Limited Partnerships(3)(4)


9,130,608



34.1GS EDMC Investors, LP(4)


1,600,000



6.0GS Private Equity Partners Funds(5)


1,400,000



5.2Leeds Equity Partners(6)


2,213,417



8.3Adrian M. Jones(4)(5)


9,130,608



34.1Jeffrey T. Leeds(6)


2,213,417



8.3John M. Mazzoni(7)


29,846



*John R. McKernan, Jr.(8)


150,095



*Leo F. Mullin


10,000



*Todd S. Nelson(9)


304,659



1.1Paul J. Salem(2)


9,130,608



34.1John T. South, III(10)


64,718



*Stephen J. Weiss(11)


60,772



*Edward H. West(12)


55,158



*Peter O. Wilde(2)


9,130,608



34.1All executive officers and directors as a group
    (20 persons)(13)


21,193,555



79.2     *
    
    Less than 1%(1)
    
    The address of each listed shareholder, unless otherwise noted,
    is
    c/o Education
    Management Corporation, 210 Sixth Avenue, 33rd Floor,
    Pittsburgh, Pennsylvania 15222.(2)
    
    Consists of (i) 7,223,947 shares of common stock held
    by Providence Equity Partners V L.P. (PEP V), whose
    general partner is Providence Equity GP V L.P., whose general
    partner is Providence Equity Partners V L.L.C. (PEP V
    LLC); (ii) 1,141,053 shares of common stock held
    by Providence Equity Partners V-A L.P. 135




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##### Table of Contents



(PEP V-A), whose general partner is Providence
    Equity GP V L.P., whose general partner is PEP V LLC;
    (iii) 598,071 shares of common stock held by
    Providence Equity Partners IV L.P. (PEP IV),
    whose general partner is Providence Equity GP IV L.P., whose
    general partner is Providence Equity Partners IV L.L.C.
    (PEP IV LLC), (iv) 1,929 shares of common
    stock held by Providence Equity Operating Partners IV L.P.
    (PEOP IV) whose general partner is Providence Equity
    GP IV L.P., whose general partner is PEP IV LLC, and
    (v) 165,608 shares of common stock owned by PEP EDMC
    L.L.C. (collectively with PEOP IV, PEP IV, PEP V and PEP V-A,
    the Providence Equity Funds). PEP V LLC may be
    deemed to share beneficial ownership of the shares owned by PEP
    V and PEP V-A. PEP V LLC disclaims this beneficial ownership.
    PEP IV LLC may be deemed to share the beneficial ownership of
    PEP IV and PEOP IV. PEP IV LLC disclaims this beneficial
    ownership. Mr. Salem is a member of PEP V LLC and PEP IV
    LLC and may also be deemed to possess indirect beneficial
    ownership of the securities owned by the Providence Equity
    Funds, but disclaims such beneficial ownership. PEP EDMC L.L.C.
    may be deemed to share beneficial ownership with PEP V, PEP
    V-A, PEP IV and PEOP IV. PEP EDMC L.L.C. disclaims this
    beneficial ownership. Mr. Wilde is a limited partner of
    Providence Equity GP IV L.P. and Providence Equity Partners GP V
    L.P. and disclaims beneficial ownership of any securities owned
    by such limited partnerships. The address of Mr. Salem,
    Mr. Wilde and each of the entities listed in this footnote
    is
    c/o Providence
    Equity Partners Inc., 50 Kennedy Plaza, 18th Floor, Providence,
    Rhode Island 02903.(3)
    
    Consists of 4,720,611 shares owned by GS Capital Partners V
    Fund, L.P., 2,438,470 shares owned by GS Capital
    Partners V Offshore Fund, L.P., 1,618,762 shares owned
    by GS Capital Partners V Institutional, L.P.,
    187,157 shares owned by GS Capital Partners V
    GmbH & Co. KG, and 165,608 shares owned by GSCP V
    EDMC Holdings, L.P. (collectively, the Goldman Sachs
    Capital Partners Funds).(4)
    
    The Goldman Sachs Group, Inc. and certain affiliates, including
    Goldman, Sachs & Co., may be deemed to directly or
    indirectly own the 10,730,608 shares of common stock which
    are collectively owned directly or indirectly by the Goldman
    Sachs Capital Partners Funds and GS EDMC Investors, LP, of which
    affiliates of The Goldman Sachs Group, Inc. and Goldman,
    Sachs & Co. are the general partner, managing limited
    partner or the managing partner. Goldman, Sachs & Co.
    is the investment manager for certain of the Goldman Sachs
    Capital Partner Funds and GS EDMC Investors, LP. Goldman,
    Sachs & Co. is a direct and indirect wholly-owned
    subsidiary of The Goldman Sachs Group, Inc. The Goldman Sachs
    Group, Inc., Goldman, Sachs & Co. and the Goldman
    Sachs Capital Partner Funds and GS EDMC Investors, LP share
    voting power and investment power with certain of their
    respective affiliates. Adrian M. Jones is a managing director of
    Goldman, Sachs & Co. Each of Mr. Jones, The
    Goldman Sachs Group, Inc. and Goldman, Sachs & Co.
    disclaims beneficial ownership of the common shares owned
    directly or indirectly by the Goldman Sachs Capital Partners
    Funds and GS EDMC Investors, LP, except to the extent of their
    pecuniary interest therein, if any. The address of the Goldman
    Sachs Capital Partner Funds, The Goldman Sachs Group, Inc.,
    Goldman, Sachs & Co. and Mr. Jones is 85 Broad
    Street, 10th Floor, New York, New York 10004.(5)
    
    Consists of 427,926 shares owned by GS Private Equity
    Partners 2000, L.P., 150,626 shares owned by GS Private
    Equity Partners 2000 Offshore, L.P., 166,192 shares owned
    by GS Private Equity Partners 2000  Direct Investment
    Fund, L.P., 59,656 shares owned by GS Private Equity
    Partners 2002, L.P., 229,774 shares owned by GS Private
    Equity Partners 2002 Offshore, L.P., 51,850 shares owned by
    GS Private Equity Partners 2002  Direct Investment
    Fund, L.P., 26,380 shares owned by GS Private Equity
    Partners 2002 Employee Fund, L.P., 18,554 shares owned by
    GS Private Equity Partners 2004, L.P., 120,705 shares owned
    by GS Private Equity Partners 2004 Offshore, L.P.,
    34,596 shares owned by Multi-Strategy Holdings, LP,
    83,372 shares owned by GS Private Equity Partners
    2004  Direct Investment Fund, L.P. and
    30,369 shares owned by GS Private Equity Partners 2004
    Employee Fund, L.P. (collectively, the GS Private Equity
    Partners Funds). The Goldman Sachs Group, Inc., and
    certain of its affiliates, including Goldman Sachs Asset
    Management, L.P., may be deemed to directly or indirectly own
    the shares of common stock which are owned by the GS Private
    Equity Partners Funds, of which affiliates of The Goldman Sachs
    Group, Inc. and Goldman Sachs Asset Management, L.P. are the
    general partner, managing limited partner or the managing
    partner. Goldman Sachs Asset Management, L.P. is the investment
    manager for certain of the GS Private Equity Partners Funds.
    Goldman Sachs Asset Management, L.P. is a direct and indirect
    wholly-owned subsidiary of The Goldman Sachs Group, Inc. The
    Goldman Sachs Group, Inc., Goldman Sachs Asset Management, L.P.
    and the GS Private Equity Partners Funds share voting power and
    investment power with certain of their 136




---



##### Table of Contents



respective affiliates. Each of The Goldman Sachs Group, Inc. and
    Goldman Sachs Asset Management, L.P. disclaims beneficial
    ownership of the common shares owned directly or indirectly by
    the GS Private Equity Partners Funds except to the extent of
    their pecuniary interest therein, if any. The address of Goldman
    Sachs Asset Management, L.P. and the GS Private Equity Partner
    Funds is 32 Old Slip, 9th Floor, New York, New York 10004.(6)
    
    Consists of 2,078,645 shares owned by Leeds Equity Partners
    IV, L.P., 130,469 shares owned by Leeds Equity
    Partners IV Co-Investment Fund A, L.P., and
    4,303 shares owned by Leeds Equity Partners IV
    Co-Investment Fund B, L.P. (collectively, the Leeds
    Equity Partners IV Funds). The general partner of the
    Leeds Equity Partners IV Funds is Leeds Equity Associates
    IV, L.L.C. Jeffrey T. Leeds, a Director of the Company, is the
    Managing Member of Leeds Equity Associates IV, L.L.C.
    Mr. Leeds disclaims beneficial ownership of any securities
    owned by the Leeds Equity Partners IV Funds. The address of
    the Leeds Equity Partners IV Funds, Leeds Equity Associates
    IV, L.L.C. and Mr. Leeds is 350 Park Avenue,
    23rd

    Floor, New York, New York 10022.(7)
    
    Includes 21,846 shares of common stock receivable upon the
    exercise of options that are exercisable within 60 days of
    the date of the table set forth above.(8)
    
    Includes 90,095 shares of common stock receivable upon the
    exercise of options that are exercisable within 60 days of
    the date of the table set forth above.(9)
    
    Includes 122,840 shares of common stock receivable upon the
    exercise of options that are exercisable within 60 days of
    the date of the table set forth above.(10)
    
    Includes 50,000 shares of common stock held in a grantor
    retained annuity trust of which Mr. Souths spouse is
    the trustee and 14,718 shares of common stock receivable upon
    the exercise of options that are exercisable with 60 days
    of the date of the table set forth above. Mr. South
    disclaims beneficial ownership of the shares of common stock
    held by the grantor retained annuity trust.(11)
    
    Includes 50,772 shares of common stock receivable upon the
    exercise of options that are exercisable within 60 days of
    the date of the table set forth above.(12)
    
    Includes 45,158 shares of common stock receivable upon the
    exercise of options that are exercisable within 60 days of
    the date of the table set forth above.(13)
    
    Includes 373,104 shares of common stock receivable upon the
    exercise of options that are exercisable within 60 days of
    the date of the table set forth above.    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE  Approval
    of Transactions with Related Persons
    Shareholders
    Agreement
   137




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Sponsor
    Management Agreement
    out-of-pocket
      Other
    Relationships
       138




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##### Table of Contents



Board
    Independence
    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    2009


2008Audit Fees(1)

$
1,718,344


$
1,725,902Audit-Related Fees(2)


68,800



Tax Fees(3)


79,000



111,768All Other Fees






Total

$
1,866,144


$
1,837,670     (1)
    
    Audit Fees consist of the audit of the consolidated financial
    statements and quarterly reviews, technical assistance with
    SFAS No. 123R, procedures surrounding EDMCs
    filing of Amendments to its Form
    S-1 during
    each year, including consents and comfort letter procedures, and
    assistance with comment letters.(2)
    
    Audit-Related Fees consist of specific internal control
    procedures.(3)
    
    Tax Fees consist of FIN 48 technical assistance and tax
    planning in anticipation of matters surrounding an initial
    public offering of EDMCs common stock.  Pre-Approval
    Policies and Procedures
    PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Financial Statements.
    Financial Statement Schedules.
    Exhibits
     139




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##### Table of Contents



SIGNATURES
      
  Edward H. West
 President and Chief Financial Officer
      Signature

Title

Date/s/  Todd
    S. NelsonTodd
    S. Nelson

Chief Executive Officer
    and Director 
    (Principal Executive Officer)

August 26, 2009/s/  Randall
    J. KilleenRandall
    J. Killeen

Vice President, Controller and Principal Accounting Officer
    (Principal Accounting Officer)

August 26, 2009/s/  Edward
    H. WestEdward
    H. West

President
    and Chief Financial Officer 
    (Principal Financial Officer)

August 26, 2009/s/  John
    R. Mckernan, Jr.John
    R. McKernan, Jr.

Chairman of the Board of Directors

August 26, 2009/s/  Adrian
    M. JonesAdrian
    M. Jones

Director

August 26, 2009/s/  Leo
    F. MullinLeo
    F. Mullin

Director

August 26, 2009/s/  Paul
    J. SalemPaul
    J. Salem

Director

August 26, 2009/s/  Peter
    O. WildePeter
    O. Wilde

Director

August 26, 2009/s/  Jeffrey
    T. LeedsJeffrey
    T. Leeds

Director

August 26, 2009  140




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##### Table of Contents



ExhibitList3
.1

Certificate of Formation of Education Management LLC (previously
    filed as Exhibit 3.1 to the Registration Statement on Form S-4
    of Education Management LLC and Education Management Finance
    Corp. (File No. 333-137605) filed on September 27, 2006)3
.2

Limited Liability Company Agreement of Education Management LLC
    (previously filed as Exhibit 3.2 to the Registration Statement
    on Form S-4 of Education Management LLC and Education Management
    Finance Corp. (File No. 333-137605) filed on September 27, 2006)4
.1

Indenture, dated as of June 1, 2006, among Education Management
    LLC, Education Management Finance Corp., the Guarantors named
    therein and The Bank of New York, as Trustee, governing the
    83/4% Senior
    Notes due 2014 (previously filed as Exhibit 4.1 to Amendment No.
    1 to the Registration Statement on Form S-4/A of Education
    Management LLC and Education Management Finance Corp. (File No.
    333-137605) filed on November 8, 2006)4
.2

Indenture, dated as of June 1, 2006, among Education Management
    LLC, Education Management Finance Corp., the Guarantors named
    therein and The Bank of New York, as Trustee, governing the
    101/4% Senior
    Subordinated Notes due 2016 (previously filed as Exhibit 4.2 to
    Amendment No. 1 to the Registration Statement on Form S-4/A of
    Education Management LLC and Education Management Finance Corp.
    (File No. 333-137605) filed on November 8, 2006)10
.1

Amended and Restated Credit and Guaranty Agreement dated
    February 13, 2007 among Education Management LLC, Education
    Management Holdings LLC, certain Subsidiaries of Education
    Management Holdings LLC, the designated Subsidiary Borrowers
    referred to therein, each lender thereto, Credit Suisse
    Securities (USA) LLC, as Syndication Agent, and BNP Paribas, as
    Administrative Agent and Collateral Agent (previously filed as
    Exhibit 10.01 to the Current Report on Form 8-K filed on
    February 14, 2007).10
.2

First Amendment to Amended and Restated Credit and Guaranty
    Agreement dated March 23, 2009 by and among Education
    Management LLC, Education Management Holdings, LLC, Goldman
    Sachs Lending Partners LLC, J.P. Morgan Securities Inc. and BNP
    Paribas Securities Corp., as auction managers, BNP Paribas, as
    Administrative Agent and Issuing Bank, the guarantors listed on
    the signature papers thereto and the lenders listed on the
    signature papers thereto (previously filed as Exhibit 10.1
    to the Current Report on
    Form 8-K
    of Education Management LLC filed on March 26, 2009).10
.3

Employment Agreement dated February 8, 2007 among Education
    Management LLC, Education Management Corporation and Todd S.
    Nelson (previously filed as Exhibit 10.02 to the Current Report
    on Form 8-K filed on February 14, 2007).10
.4

Employment Agreement, dated as of December 7, 2006, between
    Education Management LLC and Joseph A. Charlson (previously
    filed as Exhibit 10.01 to the Current Report on Form 8-K filed
    on December 13, 2006)10
.5

Employment Agreement, dated as of December 7, 2006, between
    Education Management LLC and John M. Mazzoni (previously filed
    as Exhibit 10.02 to the Current Report on Form 8-K filed on
    December 13, 2006)10
.6

Employment Agreement, dated as of December 7, 2006, between
    Education Management LLC and Stacey R. Sauchuk (previously filed
    as Exhibit 10.03 to the Current Report on Form 8-K filed on
    December 13, 2006)10
.7

Employment Agreement, dated as of December 7, 2006, between
    Education Management LLC and John T. South, III (previously
    filed as Exhibit 10.04 to the Current Report on Form 8-K filed
    on December 13, 2006)10
.8

Letter Agreement, dated as of December 7, 2006, between
    Education Management LLC and John T. South, III (previously
    filed as Exhibit 10.05 to the Current Report on Form 8-K filed
    on December 13, 2006)10
.9

Letter Agreement, dated March 30, 2007, between Education
    Management LLC and John T. South, III (previously filed as
    Exhibit 10.03 to the Current Report on Form 8-K filed on April
    5, 2007)10
.10

Employment Agreement, dated as of June 1, 2006, between
    Education Management Corporation and John R. McKernan, Jr.
    (previously filed as Exhibit 10.15 to the Registration Statement
    on Form S-4 of Education Management LLC and Education Management
    Finance Corp. (File No. 333-137605) filed on
    September 24, 2006) 141




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##### Table of Contents



ExhibitList10
.11

Letter Agreement, dated February 13, 2007, between Education
    Management Corporation and John R. McKernan, Jr.
    (previously filed as Exhibit 10.03 to the Current Report on Form
    8-K filed on February 14, 2007)10
.12

Letter Agreement, dated June 28, 2007, between Education
    Management Corporation and John R. McKernan, Jr.
    (previously filed as Exhibit 10.02 to the Current Report on Form
    8-K filed on July 5, 2007)10
.13

Employment Agreement, dated as of December 7, 2006, between
    Education Management LLC and Stephen J. Weiss (previously filed
    as Exhibit 10.06 to the Current Report on Form 8-K filed on
    December 13, 2006)10
.14*

Waiver and Release of Claims dated July 10, 2009 among
    Stephen J. Weiss, Education Management LLC and Education
    Management Corporation.10
.15

Employment Agreement, dated as of June 1, 2006, between
    Education Management Corporation and Edward H. West (previously
    filed as Exhibit 10.16 to the Registration Statement on Form S-4
    of Education Management LLC and Education Management Finance
    Corp. (File No. 333-137605) filed on September 24, 2006)10
.16

Form of Executive Time Vested Stock Option Agreement (previously
    filed as Exhibit 10.07 to the Current Report on Form 8-K filed
    on December 13, 2006)10
.17

Form of Executive Performance Vested Stock Option Agreement
    (previously filed as Exhibit 10.08 to the Current Report on Form
    8-K filed on December 13, 2006)10
.18

Fiscal 2007 Management Incentive Stock Option Plan (previously
    filed as Exhibit 10.01 to the Current Report on Form 8-K filed
    on December 11, 2006)10
.19

EDMC Stock Option Plan, effective August 1, 2006, as amended
    (previously filed as Exhibit 10.9 to Amendment No. 1 to the
    Registration Statement on Form S-4 filed on November 8, 2006,
    amendments filed as Exhibit 10.01 to the Current Report on Form
    8- K filed on March 15, 2007, Exhibit 10.01 to the Current
    Report on Form 8-K filed on April 5, 2007 and Exhibit 10.01 to
    the Current Report on Form 8-K filed on July 5, 2007)10
.20

Education Management LLC Retirement Plan, as amended and
    restated as of January 1, 2006 (previously filed as Exhibit
    10.01 to the Current Report on Form 8-K filed on December 29,
    2006)10
.21

Education Management Corporation Long Term Incentive
    Compensation Plan (previously filed as Exhibit 10.01 to the
    Current Report on Form 8-K filed on March 2, 2007)10
.22

Amended and Restated Shareholders Agreement, dated as of
    October 30, 2006, between EDMC and each of the Shareholders
    named therein, as amended (previously filed as Exhibit 10.7 to
    Amendment No. 1 to the Registration Statement on Form S-4 filed
    on November 8, 2006, amendment filed as Exhibit 10.02 to the
    Current Report on Form 8-K filed on April 5, 2007)12
.1*

Statement re computation of ratios21
.1*

List of Subsidiaries31
.1*

Certification of Todd S. Nelson required by Rule 13a-14(a) or
    Rule 15d-14(a) and Section 302 of the Sarbanes-Oxley Act of 200231
.2*

Certification of Edward H. West required by Rule 13a-14(a) or
    Rule 15d-14(a) and Section 302 of the Sarbanes-Oxley Act of 200232
.1*

Certification of Todd S. Nelson required by Rule 13a-14(b) or
    Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 200232
.2*

Certification of Edward H. West required by Rule 13a-14(b) or
    Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002     *
    
    Filed herewith. All other exhibits were previously filed. 142