7. LEASES

We lease most of our administrative and educational facilities and certain equipment under non-cancelable operating leases expiring at various dates through 2023. Lease terms generally range from one to seven years with one to two renewal options for extended terms. In most cases, we are required to make additional payments under facility operating leases for taxes, insurance and other operating expenses incurred during the operating lease period.

Certain of our leases contain rent escalation clauses or lease incentives, including rent abatements and tenant improvement allowances. Rent escalation clauses and lease incentives are taken into account in determining total rent expense to be recognized during the term of the lease, which begins on the date we take control of the leased space. Renewal options are considered when determining the overall lease term. In accordance with FASB ASC Topic 840—Leases, differences between periodic rent expense and periodic cash rental payments, caused primarily by the recognition of rent expense on a straight-line basis and tenant improvement allowances due or received from lessors, are recorded as deferred rent obligations on our consolidated balance sheets.

Rent expense, including charges recorded for vacated space, exclusive of related taxes, insurance, and maintenance costs, for continuing operations totaled approximately $70.4 million, $64.3 million and $68.6 million for the years ended December 31, 2016, 2015 and 2014, respectively, and is reflected in educational services and facilities expense in our consolidated statements of (loss) income and comprehensive (loss) income. Rent expense for discontinued operations, which is included in loss from discontinued operations, was approximately $2.3 million and $14.4 million for the years ended December 31, 2016 and 2014, respectively. Rent expense for discontinued operations recorded during the year ended December 31, 2015 was a negative $2.4 million. This gain resulted from a change in estimate for remaining lease obligations recorded upon cease use date for certain real estate facilities related to expected terms of leases and estimated income from sublease arrangements.

Remaining Lease Obligations of Continuing Operations

We have recorded lease exit costs associated with the exit of real estate space for certain campuses related to our continuing operations. These costs are recorded within educational services and facilities expense on our consolidated statements of (loss) income and comprehensive (loss) income. The current portion of the liability for these charges is reflected within other accrued expenses under current liabilities and the long-term portion of these charges are included in other liabilities under the non-current liabilities section of our consolidated balance sheets. Changes in our future minimum lease obligations for exited space related to our continuing operations for the years ended December 31, 2016, 2015 and 2014 were as follows (dollars in thousands):

	Balance, Beginning of Period		Charges Incurred ⁽¹⁾		Net Cash Payments			Other ⁽²⁾		Balance, End of Period
For the year ended December 31, 2016	$	12,892	$	32,351	$	(16,413	)	$	7,984	$	36,814
For the year ended December 31, 2015	$	7,094	$	20,552	$	(18,817	)	$	4,063	$	12,892
For the year ended December 31, 2014	$	7,259	$	4,496	$	(5,475	)	$	814	$	7,094

(1)	Includes charges for newly vacated spaces and subsequent adjustments for accretion, revised estimates and variances between estimated and actual charges, net of any reversals for terminated lease obligations.

(2)	Includes existing prepaid rent and deferred rent liability balances for newly vacated spaces that offset the losses incurred in the period recorded.

As of December 31, 2016, future minimum lease payments under operating leases for continuing and discontinued operations are as follows (dollars in thousands):

	Operating Leases
	Continuing		Discontinued
	Operations		Operations		Total
2017 ⁽¹⁾	$	51,931	$	12,692	$	64,623
2018		40,579		6,152		46,731
2019		31,084		837		31,921
2020		21,193		-		21,193
2021 and thereafter		20,416		-		20,416
Total	$	165,203	$	19,681	$	184,884

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(1)

Amounts include costs associated with executed early termination of real estate leases.

Of the remaining $165.2 million of lease payments for continuing operations, $45.6 million relates to our Transitional Group leases and $60.8 million relates to Culinary Arts leases. See Note 17 “Discontinued Operations” and Note 9 “Restructuring Charges” for further discussion.

As of December 31, 2016, future minimum sublease rental income under operating leases, which will decrease our future minimum lease payments presented above, for continuing and discontinued operations is as follows (dollars in thousands):

	Operating Subleases
	Continuing		Discontinued
	Operations		Operations		Total
2017	$	3,585	$	5,098	$	8,683
2018		3,396		883		4,279
2019		2,412		5		2,417
2020		736		-		736
2021 and thereafter		229		-		229
Total	$	10,358	$	5,986	$	16,344