111 west congress street
charles town, wv 25414
Phone: (304)724-3700
www.AmericanPublicEducation.com
2007 Annual Report
EducAting thosE who sERvE tM
Corporate Information
corporate headquarters
American Public Education, inc.
111 west congress street
charles town, wv 25414
Phone: (304)724-3700
Fax: (877) 468-6268
Administrative and Marketing offices
American Public university system, inc.
10110 Battleview Parkway, suite 200
Manassas, vA 20109
Phone: (703) 330-5398
Fax: (877) 468-6268
stock Exchange Listing
Listed on the nAsdAQ global Market under
Accountants
Mcgladrey & Pullen, LLP
8000 towers crescent drive, suite 500
vienna, vA 22182
Phone: (703)336-6400
transfer Agent
American stock transfer & trust company
59 Maiden Lane
new York, nY 10038
Attn: shareholder services
toll Free: (800) 937-5449
Legal
hogan & hartson LLP
Michael J. silver
the symbol “APEi”.
111 south calvert street, suite 1600
Annual shareholder Meeting
Baltimore, Md 21202
Phone: (410) 659-2700
the annual meeting of American Public
corporate website: www.hhlaw.com
Education shareholders will be held at the
westfields Marriott washington dulles,
14750 conference center drive, chantilly, vA 20151
online information
investor information
at 8 a.m. (Et) on May 16, 2008.
www.AmericanPublicEducation.com
investor Relations
chris symanoskie
director of investor Relations
American Public Education, inc.
111 west congress street
charles town, wv 25414
Phone: (703)334-3880
E-mail: csymanoskie@apus.edu
American Public university system
www.apus.edu
American Military university
www.amu.apus.edu
American Public university
www.apu.apus.edu
Our Mission
We educate the nation’s military and public service communities by providing
respected, relevant, affordable, and student-focused online programs that
prepare them for service and leadership in a diverse, global society.
Photo courtesy of DoD
American Public Education, Inc. (NASDAQ: APEI) is a
and American Public University (APU). Regionally
leading provider of online post-secondary education
and nationally accredited, APUS serves more than
focused primarily on serving the military and public
30,000 students worldwide; and offers over 50 degree
service communities. American Public University
programs in fields ranging from homeland security
System (APUS), wholly owned by APEI, comprises
and intelligence studies to business administration
two universities—American Military University (AMU)
and liberal arts. n
1
Wallace E. Boston, Jr., President and Chief Executive Officer
Wallace E. Boston, Jr., President and Chief Executive Officer
Dear Shareholders:
At American Public Education, Inc. (APEI), our success
undergraduate programs in the field of information
derives from three core strengths: dedication to our
technology. In addition, on November 8, 2007, American
academic mission, the ability to serve a broad spectrum
Public Education, Inc. (APEI) became a public company
of students in the military and public service sectors,
with a listing on the NASDAQ stock exchange.
and our financial well-being. Over the past year, we
Our initial public offering (IPO) was a tremendous
achieved a series of milestones that build on each of
success, ranking among the top three domestic IPOs for
these core strengths and stand to benefit all of our stake-
2007.* In preparation for going public, we made additional
holders—students, faculty, staff, and shareholders. In
investments in systems and processes that make us
2007, we experienced a greater interest in our programs
stronger, more efficient, and better able to serve the
and higher enrollment than ever before—which trans-
needs of our students. And, by going public, we further
lates into a broadening curriculum and
more opportunities for students. We
obtained regulatory approval from
our regional and national accrediting
agencies to offer seven new degree
programs—three master’s programs
in the field of education and four
Our success derives from
our three core strengths—
academic quality, a focus
on the military and public
service sectors, and
financial well-being.
strengthen our ability to fulfill our
mission through greater visibility and
increased transparency.
It’s been an exciting and busy
year for our organization, and I want
to thank our faculty and staff for their
hard work. Their efforts have directly
2
*Based on the price of the initial public offering and the price at year-end 2007.
American Public Education, Inc.
contributed to our success and have helped thousands of aspiring
Net Course Registrations
94,846
students reach their academic and lifetime goals.
54,828
37,506
32,558
25,567
2003
2004
2005
2006
2007
Net course registrations represent the aggregate
number of classes in which students remain
enrolled after the date by which they may drop
the course without financial penalty.
A Strong Performance
Our financial strength enables us to better serve our students and
to offer greater opportunities for advancement to our faculty and staff.
In 2007, net course registrations increased to 94,846, up 73% from
54,828 in 2006. Revenues increased by 73% to $69.1 million during the
year, while at the same time we became stronger and more efficient
with no increases in undergraduate tuition. It is also important to note
that, due to the affordability of our programs, we believe we have low
exposure to the risks related to tuition financing. While we do not
provide tuition financing to students, approximately 1% of our revenues
are related to student loans from private financial institutions, and
approximately 11% of our revenues are related to Federal Student Aid
(FSA). We are proud to end 2007 with no long-term debt and ample
Revenues (In millions)
cash to fund our current development plans for new degrees, programs,
$69.1
and student services. We strive to maintain the affordability of our
$40.0
$28.2
$23.1
$17.8
2003
2004
2005
2006
2007
Income from Continuing Operations before
Interest Income and Income Tax
(In millions)
$14.7
programs and provide textbook grants to most of our degree-seeking
undergraduate students—a unique proposition in the marketplace.
Serving More Students
Enrollment at American Public University System is higher than
at any time in our history, reflecting the quality and affordability of
our programs, and our ability to expand into new civilian and public
service markets. In 2007, total student enrollment increased 68% to
more than 30,100 students. That growth means we’re helping more
students than ever achieve their dreams. Our success as an institu-
tion of higher learning depends upon the quality of our programs
and our ability to produce successful graduates—in this regard, we
are on the path to an exciting future.
Over the past year, we continued to experience high referral
rates and high levels of student satisfaction. More than 50% of our
new students were referred by others in 2007. We continue to work
$6.1(1)
to attract and reach new students. In 2007, we launched several new
$3.6
$1.8
$2.2
articulation agreements with community colleges, making it easier
to transfer credits to our institution. We also have developed strong
relationships with, and focused much attention on, each branch of
2003
2004
2005
2006
2007
the military and certain segments of the civilian marketplace. In 2008,
(1) Excludes a $3.1 million write-off of software development costs.
3
American Public University
System was provisionally
accepted into the Navy College
APUS enrollments are higher than at
any time in our history, reflecting the
quality and affordability of our pro-
develop doctoral programs in
key fields of study.
Partnership Distance Learning
grams, and our ability to expand into
Fulfilling Our Mission
Program (NCPDLP). Our partici-
new civilian and public service markets.
Academic quality is the
pation will significantly increase
our visibility within the U.S. Navy.
cornerstone of our success. We
have built a unique community
Today, we offer a wide range of academic programs
of like-minded learners, with a distinct public service-
that attract a mix of students, both military and civilian.
minded culture and programs that set us apart from other
As examples, we offer homeland security degrees to
institutions of higher learning. We’re able to keep class sizes
the intelligence community; national security degrees
small, promote interaction among faculty and students,
to those in the military; and emergency and disaster
and offer the courses and degree programs that our
management programs to first responders. As of year end
students want. Our faculty members have deep experience
2007, 53% of our students were enrolled in our School of
in the fields in which they now teach, and strong academic
Public Safety, National Security, and Homeland Security.
and professional backgrounds.
APUS has a promising future. Recruits across all
branches of the military are attracted by the educational
opportunities that military service offers. We will continue
to serve that market, which is 2.1 million strong, and focus
on expanding access to higher education for more service
members, even as we move into civilian markets that
complement our core mission.
Our 2007 graduating class was the largest in our
history, with 1,580 graduates, up 44% from the prior year.
In the years ahead, we will continue to serve our students
by building on our core strengths. Above all, that means
maintaining our emphasis on academic quality and
launching new programs that meet their unique needs
and exceed their expectations.
I look forward to reporting on our continued progress
in the year ahead. n
We are unique among distance learning institutions in
that we have a School of Arts and Sciences that offers 14
Sincerely,
liberal arts degrees. We are also expanding in the field of
education. In 2007, we introduced three master’s degree
programs in education and added four new degree
programs in information technology. In addition, many
of our graduates have told us they would like to return
Wallace E. Boston, Jr.
to pursue their doctoral studies. We have begun to
President and Chief Executive Officer
4
Providing access to opportunity
When Michael Liesmann contracted a severe eye infection during a
deployment to Iraq, he faced a long recovery. “I needed a purpose,
so I decided to immerse myself in my education at AMU,” he says.
Monthly class starts enabled him to adjust his workload throughout
his recovery, and to complete 27 credit hours in 12 months. An active
duty and reserve officer for 14 years, Liesmann now works daily with
the Counterterrorism Intelligence Group of the FBI’s Houston field
office, training local law enforcement on homeland security issues.
His goal: A career with the Houston Police Department’s Criminal
Intelligence Division. n
“When an eye injury put my career
plans in jeopardy, getting my degree
through AMU opened up new
opportunities for me.”
Capt. Michael Liesmann
Master’s Student,
Homeland Security
5
Placing specialized programs in reach
For Olga Mokrova, AMU offers affordable, specialized programs that
will enable her to advance in security management. Her courses cover
such issues as security design, risk and threat assessment, and crisis
management and prevention. A working mother who lives in New York
City, Mokrova is currently a security coordination officer at the United
Nations, where she plans to continue her career. AMU provides a
degree option that meets her academic needs, and accommodates her
schedule and her budget. “Since I’m paying for my degree and raising
two daughters,” she says, “AMU’s affordability and scheduled payment
options make continuing my education possible.” n
Olga Mokrova
Master’s Student,
Security Management
“The convenience and affordability
AMU offers has made it possible
for me to continue my education,
and advance my knowledge of
security issues.”
6
Offering relevant programs for today’s challenges
A technician with the U.S. government in Washington, D.C. and former
U.S. Marine, Dwayne Locket’s job responsibilities include guarding
against enemy attacks. His AMU courses—from the psychology of
disaster to Arabic language courses—helped prepare him to fulfill that
mission. For example, in one AMU class, he worked with local emer-
gency planners to devise a warning system that integrates federal
procedures and the city’s resources. The father of three and first member
of his family to earn a college degree, Locket notes: “Being a citizen is
about being an active participant, not just a bystander.” n
“My AMU education gives me the
edge to meet the evolving homeland
security challenges I face every
day—and to fulfill my mission.”
Dwayne Locket
Bachelor’s Degree,
Homeland Security
7
Front Row, left to right: Mr. Philip A. McNair, Mr. James H. Herhusky, Mr. Mark L. Leuba, Mr. Peter W. Gibbons, Mr. James M. Sweizer, Mr. Wallace E. Boston, Jr.
Back Row, left to right: Dr. Karan H. Powell, Ms. Lisa G. Kessler, Ms. Carol S. Gilbert, Dr. Frank B. McCluskey, Ms. Lyn M. Geer, Mr. James H. Wilkinson, Mr. Harry T. Wilkins, CPA
Senior Management
Mr. Wallace E. Boston, Jr.*
President and Chief Executive Officer;
Member, Board of Trustees;
Member, Board of Directors
Mr. Harry T. Wilkins, CPA*
Executive Vice President
and Chief Financial Officer
Ms. Lyn M. Geer
Vice President, Student Services
and University Registrar
Mr. Peter W. Gibbons*
Senior Vice President,
Chief Administrative Officer
Ms. Carol S. Gilbert*
Senior Vice President,
Programs and Marketing
Mr. James H. Herhusky*
Executive Vice President,
Institutional Advancement
*Denotes our executive officers.
8
Ms. Lisa G. Kessler
Senior Vice President, Finance
Mr. Mark L. Leuba*
Senior Vice President,
Chief Information Officer
Dr. Frank B. McCluskey*
Executive Vice President and Provost
Mr. Philip A. McNair
Vice President, Academic Services
Dr. Karan H. Powell
Vice President and Academic Dean
Mr. James M. Sweizer
Vice President, Military Programs
Mr. James H. Wilkinson
Vice President, Operations
Board of Directors
Mr. Phillip A. Clough, Chairman
Managing General Partner,
ABS Capital Partners
Mr. Wallace E. Boston, Jr., Director
President and Chief Executive Officer,
American Public Education, Inc.
Mr. J. Christopher Everett, Director
Independent Consultant
Mr. F. David Fowler, Director
Director, Liquidity Services, Inc.
Ms. Jean C. Halle, Director
President and Chief Executive Officer,
Calvert Education Services
Mr. David L. Warnock, Director
Founding Partner, Camden Partners
Mr. Timothy T. Weglicki, Director
Founding Partner, ABS Capital Partners
Corporate Information
corporate headquarters
American Public Education, inc.
111 west congress street
charles town, wv 25414
Phone: (304)724-3700
Fax: (877) 468-6268
Administrative and Marketing offices
American Public university system, inc.
10110 Battleview Parkway, suite 200
Manassas, vA 20109
Phone: (703) 330-5398
Fax: (877) 468-6268
stock Exchange Listing
Listed on the nAsdAQ global Market under
Accountants
Mcgladrey & Pullen, LLP
8000 towers crescent drive, suite 500
vienna, vA 22182
Phone: (703)336-6400
transfer Agent
American stock transfer & trust company
59 Maiden Lane
new York, nY 10038
Attn: shareholder services
toll Free: (800) 937-5449
Legal
hogan & hartson LLP
Michael J. silver
the symbol “APEi”.
111 south calvert street, suite 1600
Annual shareholder Meeting
Baltimore, Md 21202
Phone: (410) 659-2700
the annual meeting of American Public
corporate website: www.hhlaw.com
Education shareholders will be held at the
westfields Marriott washington dulles,
14750 conference center drive, chantilly, vA 20151
online information
investor information
at 8 a.m. (Et) on May 16, 2008.
www.AmericanPublicEducation.com
investor Relations
chris symanoskie
director of investor Relations
American Public Education, inc.
111 west congress street
charles town, wv 25414
Phone: (703)334-3880
E-mail: csymanoskie@apus.edu
American Public university system
www.apus.edu
American Military university
www.amu.apus.edu
American Public university
www.apu.apus.edu
Our Mission
We educate the nation’s military and public service communities by providing
respected, relevant, affordable, and student-focused online programs that
prepare them for service and leadership in a diverse, global society.
111 west congress street
charles town, wv 25414
Phone: (304)724-3700
www.AmericanPublicEducation.com
2007 Annual Report
EducAting thosE who sERvE tM