XML 49 R14.htm IDEA: XBRL DOCUMENT

Leases

3 Months Ended

Mar. 31, 2020

8. LEASES

We lease most of our administrative and educational facilities under non-cancelable operating leases expiring at various dates through 2028. Lease terms generally range from five to ten years with one to four 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, which are typically variable in nature.

We determine if a contract contains a lease when the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Upon identification and commencement of a lease, we establish a right of use (“ROU”) asset and a lease liability.

Quantitative information related to leases is presented in the following table (dollars in thousands):

	For the Quarter Ended March 31, 2020			For the Quarter Ended March 31, 2019
Lease expenses ⁽¹⁾
Fixed lease expenses - operating	$	3,148		$	3,370
Variable lease expenses - operating		1,915			2,386
Sublease income		(788	)		(1,108	)
Total lease expenses	$	4,275		$	4,648

Other information
Gross operating cash flows for operating leases ⁽²⁾	$	(6,190	)	$	(10,100	)
Operating cash flows from subleases⁽²⁾	$	676		$	1,250
Weighted average remaining lease term (in months) – operating leases		74			70
Weighted average discount rate – operating leases		5.0	%		5.4	%

__________________

(1)

Lease expense and sublease income represent the amount recorded within our unaudited condensed consolidated statements of income and comprehensive income. Variable lease amounts represent expenses recognized as incurred which are not included in the lease liability. Fixed lease expenses and sublease income are recorded on a straight-line basis over the lease term and therefore are not necessarily representative of cash payments during the same period.

(2)

Cash flows are presented on a consolidated basis and represent cash payments for fixed and variable lease costs.

Subleases

For certain of our leased locations, primarily those related to our closed campuses, we have vacated the facility and have fully or partially subleased the space. For each sublease that has been entered into, we remain the guarantor under the lease and therefore become the intermediate lessor. We have six subleases within five leased facilities with terms ranging from one to three years. We

have recognized sublease income of $0.8 million and $1.1 million for the quarters ended March 31, 2020 and 2019, respectively, as an offset to lease expense on our unaudited condensed consolidated statements of income and comprehensive income.

During the first quarter of 2020, we recorded $0.6 million of asset impairment related to one of our previously vacated facilities as a result of non-payment from the sub-lessee. We determined that the right of use asset carrying value was not recoverable through the end of the lease for this facility.