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Segment Reporting
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Segment Reporting

12. SEGMENT REPORTING

Our segments are determined in accordance with FASB ASC Topic 280—Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a group of postsecondary education providers that offer a variety of degree and non-degree academic programs. These segments are organized by key market segments to enhance operational alignment and, for our two universities, to enhance brand focus within each segment to more effectively execute our strategic plan. As of September 30, 2016, our four segments are:

University Group:

 

☐

     Colorado Technical University (CTU) places a strong focus on providing industry-relevant degree programs to meet the needs of our students for employment and of employers for a well-educated workforce and offers academic programs in the career-oriented disciplines of business studies, information systems and technologies, criminal justice, computer science and engineering, and health sciences. Students pursue their degrees through fully-online programs through CTU Online, local campuses and blended formats, which combine campus-based and online education. As of September 30, 2016, students enrolled at CTU represented approximately 59% of our total enrollments. Approximately 93% of CTU’s enrollments are fully online.

 

 

☐

     American InterContinental University (AIU) focuses on helping busy professionals get the degree they need to move forward in their career as efficiently as possible and collectively offers academic programs in the career-oriented disciplines of business studies, information technologies, criminal justice and design technologies. Students pursue their degrees through fully-online programs through AIU Online, local campuses and blended formats, which combine campus-based and online education. As of September 30, 2016, students enrolled at AIU represented approximately 29% of our total enrollments. Approximately 93% of AIU’s enrollments are fully online.

Career Schools Group:

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

 

☐

     Culinary Arts includes our Le Cordon Bleu institutions in North America (“LCB”) which offer hands on educational programs in the career-oriented disciplines of culinary arts and patisserie and baking in the commercial-grade kitchens of Le Cordon Bleu. LCB also provides online programs in culinary arts and hotel and restaurant management. These campuses are all expected to complete their teach-out activities during 2017. As of September 30, 2016, students enrolled at LCB represented approximately 9% of our total enrollments.

 

 

☐

     Transitional Group includes our non-LCB campuses which are in teach-out or those which have been closed or sold subsequent to January 1, 2015. Our Transitional Group offers academic programs primarily in the career-oriented discipline of health education complemented by certain programs in business studies and information technology, as well as fashion design, film and video production, graphic design, interior design and visual communications. The campuses within the Transitional Group that have not yet ceased operations as of September 30, 2016 will complete their teach-outs on varying dates through 2018. As of September 30, 2016, students enrolled at the Transitional Group campuses represented approximately 3% of our total enrollments. During the third quarter of 2016, the Company completed the teach-out of five Transitional Group campuses: Sanford-Brown Atlanta, Sanford-Brown Dallas, Sanford-Brown Ft. Lauderdale, Sanford-Brown Iselin and International Academy of Design & Technology Detroit, which continue to be reported as part of the Transitional Group as of September 30, 2016.

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

 

 

 

For the Quarter Ended September 30,

 

 

 

Revenue

 

 

Operating (Loss) Income

 

 

 

2016

 

 

% of Total

 

 

2015

 

 

% of Total

 

 

2016

 

 

2015

 

CTU (1)

 

$

90,921

 

 

 

54.2

%

 

$

85,433

 

 

 

42.0

%

 

$

21,486

 

 

$

18,616

 

AIU (2)

 

 

48,542

 

 

 

29.0

%

 

 

50,688

 

 

 

24.9

%

 

 

291

 

 

 

1,695

 

Total University Group

 

 

139,463

 

 

 

83.2

%

 

 

136,121

 

 

 

66.9

%

 

 

21,777

 

 

 

20,311

 

Corporate and Other

 

 

-

 

 

NM

 

 

 

39

 

 

NM

 

 

 

(5,587

)

 

 

(8,040

)

Subtotal

 

 

139,463

 

 

 

83.2

%

 

 

136,160

 

 

 

66.9

%

 

 

16,190

 

 

 

12,271

 

Culinary Arts (3)

 

 

21,369

 

 

 

12.7

%

 

 

41,410

 

 

 

20.4

%

 

 

(1,801

)

 

 

(33,195

)

Transitional Group

 

 

6,793

 

 

 

4.1

%

 

 

25,914

 

 

 

12.7

%

 

 

(15,095

)

 

 

(23,065

)

Total

 

$

167,625

 

 

 

100.0

%

 

$

203,484

 

 

 

100.0

%

 

$

(706

)

 

$

(43,989

)

 

 

 

 

For the Year to Date Ended September 30,

 

 

 

Revenue

 

 

Operating (Loss) Income

 

 

 

2016

 

 

% of Total

 

 

2015

 

 

% of Total

 

 

2016

 

 

2015

 

CTU (1)

 

$

274,623

 

 

 

50.0

%

 

$

256,734

 

 

 

39.7

%

 

$

70,693

 

 

$

57,495

 

AIU (2)

 

 

152,123

 

 

 

27.7

%

 

 

155,778

 

 

 

24.1

%

 

 

9,036

 

 

 

3,982

 

Total University Group

 

 

426,746

 

 

 

77.7

%

 

 

412,512

 

 

 

63.7

%

 

 

79,729

 

 

 

61,477

 

Corporate and Other

 

 

-

 

 

NM

 

 

 

117

 

 

NM

 

 

 

(17,160

)

 

 

(20,936

)

Subtotal

 

 

426,746

 

 

 

77.7

%

 

 

412,629

 

 

 

63.7

%

 

 

62,569

 

 

 

40,541

 

Culinary Arts (3)

 

 

89,990

 

 

 

16.4

%

 

 

128,170

 

 

 

19.8

%

 

 

1,666

 

 

 

(43,512

)

Transitional Group

 

 

32,401

 

 

 

5.9

%

 

 

106,527

 

 

 

16.5

%

 

 

(40,672

)

 

 

(85,268

)

Total

 

$

549,137

 

 

 

100.0

%

 

$

647,326

 

 

 

100.0

%

 

$

23,563

 

 

$

(88,239

)

 

 

 

Total Assets as of  (4)

 

 

 

September 30, 2016

 

 

December 31, 2015

 

CTU

 

$

73,695

 

 

$

76,577

 

AIU

 

 

53,521

 

 

 

53,087

 

Total University Group

 

 

127,216

 

 

 

129,664

 

Corporate and Other

 

 

332,902

 

 

 

372,405

 

Subtotal

 

 

460,118

 

 

 

502,069

 

Culinary Arts

 

 

61,425

 

 

 

71,197

 

Transitional Group

 

 

21,120

 

 

 

28,584

 

Discontinued Operations

 

 

8,810

 

 

 

9,065

 

Total

 

$

551,473

 

 

$

610,915

 

 

(1)

Bad debt increased approximately 2.0% and 2.3% as a percentage of revenue for the quarter and year to date ended September 30, 2016 as compared to the respective prior periods, primarily driven by students who are experiencing a greater time lag while completing the financial aid application process due to increased verification procedures implemented by ED.

(2)

Bad debt remained relatively flat as a percentage of revenue for the quarter and increased approximately 1.1% as a percentage of revenue for the year to date ended September 30, 2016 as compared to the respective prior periods, primarily driven by students who are experiencing a greater time lag while completing the financial aid application process due to increased verification procedures implemented by ED.

(3)

The prior year quarter and year to date included $33.4 million and $43.1 million of asset impairment charges, respectively.

(4)

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