Item 7.01. Regulation FD Disclosure

Effective the fourth quarter of fiscal year 2012, we revised the classification of certain operating expenses. We believe these changes provide more meaningful insights into our operations and mirror industry practices. We have revised the classification of our previously reported Consolidated Statements of Income to conform to the current year presentation. These revised classifications had no effect on previously reported revenue, operating income, net income attributable to Capella Education Company or earnings per share. The primary changes include:
• Disaggregating admissions advisory expenses. These expenses were previously combined with marketing and promotional expenses and primarily relate to costs of our enrollment counselors and services that support the admissions process;

• Revising the classification of bad debt expense from general and administrative to instructional costs and services expense; and

• Revising the classification of human resources expense, which was allocated to each of instructional costs and services, marketing and promotional, and general and administrative, to now being allocated solely to general and administrative expense.

Financial information for each of the first three quarters for fiscal 2012, the four quarters for fiscal 2011, and annually for fiscal 2010 and 2011, as previously reported and as reclassified, is available on our website at www.capellaeducation.com in the investor relations section under financial tables.

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