XML 31 R17.htm IDEA: XBRL DOCUMENT
v3.20.4

Goodwill and Other Intangible Assets | 12 Months Ended
--- | ---
Dec. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | 10. GOODWILL AND OTHER INTANGIBLE ASSETS The carrying values of goodwill were $118.3 million and $87.4 million as of December 31, 2020 and 2019, respectively. A reconciliation of the changes in the carrying value of goodwill during the years ended December 31, 2020 and 2019 is as follows (dollars in thousands):
|  | As of December 31, |
|  | 2020 |  |  | 2019 |
|  | CTU |  |  | AIU |  |  | Total |  |  | CTU |  |  | AIU |  |  | Total |
Balance, beginning of year |  | $ | 45,938 |  |  | $ | 41,418 |  |  | $ | 87,356 |  |  | $ | 45,938 |  |  | $ | 41,418 |  |  | $ | 87,356 |
Business acquisition |  |  | - |  |  |  | 30,956 |  |  |  | 30,956 |  |  |  | - |  |  |  | - |  |  |  | - |
Balance, end of year |  | $ | 45,938 |  |  | $ | 72,374 |  |  | $ | 118,312 |  |  | $ | 45,938 |  |  | $ | 41,418 |  |  | $ | 87,356 |
We performed our annual impairment analysis of goodwill as of October 1, 2020 and determined that neither of our reporting units were impaired as of October 1, 2020. In assessing the fair value for CTU and AIU, we performed a quantitative assessment to determine if we believe it is more likely than not that our reporting unit’s carrying values exceed their respective fair values. In calculating the fair value for CTU and AIU, we performed a valuation analysis, utilizing both income and market approaches, in our goodwill assessment process. The following describes the valuation methodologies used to derive the fair value of our reporting units:
| • | Income Approach: To determine the estimated fair value of each reporting unit, we discount the expected cash flows which are developed by management. We estimate our future cash flows after considering current economic conditions and trends, estimated future operating results and capital investments, our views of growth rates and anticipated future economic and regulatory conditions. The discount rate used represents the estimated weighted average cost of capital, which reflects the overall level of inherent risk involved in our future expected cash flows and the rate of return an outside investor would expect to earn. To estimate cash flows beyond the final year of our models, we use a Gordon Growth Model and terminal value approach and incorporate the present value of the resulting terminal value into our estimate of fair value.
| • | Market-Based Approach: To corroborate the results of the income approach described above, we estimate the fair value of our reporting units using several market-based approaches, including the guideline company method, which focuses on comparing our risk profile and growth prospects to select reasonably similar for-profit postsecondary education publicly traded companies.
The determination of estimated fair value of each reporting unit requires significant estimates and assumptions, and as such, these fair value measurements are categorized as Level 3 per ASC Topic 820. These estimates and assumptions primarily include, but are not limited to, the discount rate, terminal growth rates, operating cash flow projections and capital expenditure forecasts. Due to the inherent uncertainty involved in deriving those estimates, actual results could differ from those estimates. We evaluate the merits of each significant assumption used, both individually and in the aggregate, to assess the fair value of each reporting unit for reasonableness. As of December 31, 2020 and 2019, the net book value of intangible assets other than goodwill are as follows (dollars in thousands):
|  | December 31, 2020 |  |  | December 31, 2019 |  |
|  | Cost |  |  | Accumulated Amortization |  |  | Net Book Value |  |  | Cost |  |  | Accumulated Amortization |  |  | Net Book Value |  |
Amortizable intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Course curriculum (1) |  | $ | 1,400 |  |  | $ | (389 | ) |  | $ | 1,011 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |
Student relationships (1) |  |  | 8,000 |  |  |  | (2,222 | ) |  |  | 5,778 |  |  |  | - |  |  |  | - |  |  |  | - |  |
Trade names (1) |  |  | 2,400 |  |  |  | (1,567 | ) |  |  | 833 |  |  |  | 1,400 |  |  |  | (1,400 | ) |  |  | - |  |
Net book value, non-amortizable intangible assets: |  | $ | 11,800 |  |  | $ | (4,178 | ) |  | $ | 7,622 |  |  | $ | 1,400 |  |  | $ | (1,400 | ) |  | $ | - |  |
Non-amortizable intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accreditation rights |  |  |  |  |  |  |  |  |  | $ | 1,000 |  |  |  |  |  |  |  |  |  |  | $ | 1,000 |  |
CTU trade name |  |  |  |  |  |  |  |  |  |  | 6,900 |  |  |  |  |  |  |  |  |  |  |  | 6,900 |  |
Non-amortizable intangible assets |  |  |  |  |  |  |  |  |  |  | 7,900 |  |  |  |  |  |  |  |  |  |  |  | 7,900 |  |
Intangible assets, net |  |  |  |  |  |  |  |  |  | $ | 15,522 |  |  |  |  |  |  |  |  |  |  | $ | 7,900 |  |
_____________________ (1) See Note 3 “Business Acquisition” for further details on acquired intangible assets. Amortizable intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from two to four years. Amortization expense from continuing operations was $2.8 million for the year ended December 31, 2020. We did not have any amortization expense for the years ended December 31, 2019 and 2018. As of December 31, 2020, net intangible assets include certain accreditation rights and trade names that are considered to have indefinite useful lives and, in accordance with FASB ASC Topic 350—Intangibles—Goodwill and Other, are not subject to amortization but rather reviewed for impairment on at least an annual basis by applying a fair-value-based test. We performed our annual impairment testing of other indefinite-lived intangible asset balances as of October 1, 2020 utilizing the qualitative assessment approach and concluded that no indicators existed that would suggest that it is more likely than not that the assets would be impaired. We monitor the operating results and revenue projections related to our CTU trade name and accreditation rights on a quarterly basis for signs of possible declines in estimated fair value. When performing the qualitative assessment, management considered events and circumstances that may affect the fair value of the intangible assets to determine whether it is necessary to perform the quantitative impairment test. These events and circumstances included, but were not limited to, financial performance, future expectations of financial performance, legal, regulatory, contractual, competitive, economic, political, business, and industry and market considerations. Management evaluate d these events and circumstances, including positive or mitigating factors, that could affect the significant inputs used to determine fair value.

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration