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Financial Instruments | 9 Months Ended
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Sep. 30, 2016
Fair Value Disclosures [Abstract] |
Financial Instruments | 5. FINANCIAL INSTRUMENTS Investments consist of the following as of September 30, 2016 and December 31, 2015 (dollars in thousands):
|  | September 30, 2016 |
|  |  |  |  |  | Gross Unrealized |  |  |  |  |
|  | Cost |  |  | Gain |  |  | (Loss) |  |  | Fair Value |
Short-term investments (available for sale): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal bonds |  | $ | 2,250 |  |  | $ | - |  |  | $ | - |  |  | $ | 2,250 |
Non-governmental debt securities |  |  | 108,987 |  |  |  | 37 |  |  |  | (67 | ) |  |  | 108,957 |
Treasury and federal agencies |  |  | 39,946 |  |  |  | 23 |  |  |  | (23 | ) |  |  | 39,946 |
Total short-term investments |  |  | 151,183 |  |  |  | 60 |  |  |  | (90 | ) |  |  | 151,153 |
Restricted short-term investments (available for sale): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-governmental debt securities |  |  | 9,597 |  |  |  | - |  |  |  | - |  |  |  | 9,597 |
Total investments (available for sale) |  | $ | 160,780 |  |  | $ | 60 |  |  | $ | (90 | ) |  | $ | 160,750 |
|  | December 31, 2015 |
|  |  |  |  |  | Gross Unrealized |  |  |  |  |
|  | Cost |  |  | Gain |  |  | (Loss) |  |  | Fair Value |
Short-term investments (available for sale): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal bonds |  | $ | 1,500 |  |  | $ | - |  |  | $ | (11 | ) |  | $ | 1,489 |
Non-governmental debt securities |  |  | 76,999 |  |  |  | - |  |  |  | (242 | ) |  |  | 76,757 |
Treasury and federal agencies |  |  | 36,779 |  |  |  | 3 |  |  |  | (127 | ) |  |  | 36,655 |
Total short-term investments |  |  | 115,278 |  |  |  | 3 |  |  |  | (380 | ) |  |  | 114,901 |
Long-term investments (available for sale): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal bond |  |  | 7,850 |  |  |  | - |  |  |  | (476 | ) |  |  | 7,374 |
Total investments (available for sale) |  | $ | 123,128 |  |  | $ | 3 |  |  | $ | (856 | ) |  | $ | 122,275 |
In the table above, unrealized holding gains (losses) as of September 30, 2016 relate to short-term investments that have been in a continuous unrealized gain (loss) position for less than one year. Our unrestricted non-governmental debt securities primarily consist of corporate bonds and commercial paper. Our treasury and federal agencies primarily consist of U.S. Treasury bills and federal home loan debt securities. We do not intend to sell our investments in these securities and it is not likely that we will be required to sell these investments before recovery of the amortized cost basis. Our restricted short-term investments are comprised entirely of certificates of deposit, which secure our letters of credit. Prior to the second quarter of 2016, these funds were held as cash by the letter of credit issuer and reported by the Company as restricted cash on our condensed consolidated balance sheets. During the third quarter of 2016, our long-term municipal bond investment was called by the issuer at face value. The cumulative unrealized loss of $0.5 million was subsequently reversed out of accumulated other comprehensive loss, a component of stockholders’ equity during the current year quarter. Fair Value Measurements FASB ASC Topic 820 – Fair Value Measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. As of September 30, 2016, we held investments that are required to be measured at fair value on a recurring basis. These investments (available-for-sale) consist of municipal bonds, non-governmental debt securities, and treasury and federal agencies securities. Available for sale securities included in Level 1 are valued at quoted prices in active markets for identical assets and liabilities. Available for sale securities included in Level 2 are estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Investments measured at fair value on a recurring basis subject to the disclosure requirements of FASB ASC Topic 820 – Fair Value Measurements at September 30, 2016 and December 31, 2015 were as follows (dollars in thousands):
|  | As of September 30, 2016 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Municipal bonds |  | $ | - |  |  | $ | 2,250 |  |  | $ | - |  |  | $ | 2,250 |
Non-governmental debt securities |  |  | 35,368 |  |  |  | 83,186 |  |  |  | - |  |  |  | 118,554 |
Treasury and federal agencies |  |  | - |  |  |  | 39,946 |  |  |  | - |  |  |  | 39,946 |
Totals |  | $ | 35,368 |  |  | $ | 125,382 |  |  | $ | - |  |  | $ | 160,750 |
|  | As of December 31, 2015 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Municipal bonds |  | $ | - |  |  | $ | 1,489 |  |  | $ | 7,374 |  |  | $ | 8,863 |
Non-governmental debt securities |  |  | - |  |  |  | 76,757 |  |  |  | - |  |  |  | 76,757 |
Treasury and federal agencies |  |  | - |  |  |  | 36,655 |  |  |  | - |  |  |  | 36,655 |
Totals |  | $ | - |  |  | $ | 114,901 |  |  | $ | 7,374 |  |  | $ | 122,275 |
Equity Method Investment Our investment in an equity affiliate, which is recorded within other noncurrent assets on our condensed consolidated balance sheets, represents an international investment in a private company. As of September 30, 2016, our investment in an equity affiliate equated to a 30.7%, or $3.3 million, non-controlling interest in CCKF, a Dublin-based educational technology company providing intelligent adaptive systems to power the delivery of individualized and personalized learning. During the quarters ended September 30, 2016 and 2015, we recorded approximately $0.2 million and less than $0.1 million of loss, respectively, and during the years to date ended September 30, 2016 and September 30, 2015, we recorded approximately $1.0 million and $0.2 million of loss, respectively, related to our proportionate investment in CCKF within miscellaneous (expense) income on our unaudited condensed consolidated statements of (loss) income and comprehensive (loss) income. We make periodic operating maintenance payments for our use of intellipathTM. The total fees paid to CCKF for the quarters and years to date ended September 30, 2016 and 2015 were as follows (dollars in thousands):
| Maintenance Fee Payments |
For the quarter ended September 30, 2016 | $ | 340 |
For the quarter ended September 30, 2015 | $ | 337 |
For the year to date ended September 30, 2016 | $ | 1,027 |
For the year to date ended September 30, 2015 | $ | 1,036 |
Credit Agreement During the fourth quarter of 2015, the Company; its wholly-owned subsidiary, CEC Educational Services, LLC (“CEC-ES”); and the subsidiary guarantors thereunder entered into a Fourth Amendment to its Amended and Restated Credit Agreement dated as of December 30, 2013 (as amended, the “Credit Agreement”) with BMO Harris Bank N.A., in its capacities as the initial lender and letter of credit issuer thereunder and the administrative agent for the lenders which from time to time may be parties to the Credit Agreement, to among other things, decrease the revolving credit facility to $95.0 million and require pre-approval by the lenders for each credit extension (other than letter of credit extensions) occurring after December 31, 2015. The revolving credit facility under the Credit Agreement is scheduled to mature on December 31, 2018. The loans and letter of credit obligations under the Credit Agreement are required to be secured by 100% cash collateral. As of September 30, 2016, there were no outstanding borrowings under the revolving credit facility.

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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