Subsequent Events

9 Months Ended

Sep. 30, 2013

10.	Subsequent Events

In October 2013, the Company began to implement cost reduction initiatives to better align the Company’s resources with its current student enrollments. These cost reduction initiatives, which will occur primarily in the fourth quarter of 2013, include the closing of approximately 20 physical locations, subject to regulatory approvals, and reductions in the number of campus-based and corporate employees. The Company estimates that during the three months ended December 31, 2013, it will incur a total of between $45-55 million in one-time charges to implement these initiatives. Of this amount, approximately $30-40 million is related to the closing of the physical locations for net lease and related facility costs, including the noncash write-down of assets to net realizable value. In addition, the Company estimates it will incur up to approximately $15 million of charges related to workforce reductions. Severance costs will be paid primarily on or before December 31, 2013. The Company estimates that approximately $10 million of the charge will reduce cash flow from operating activities in the fourth quarter of 2013. These estimates are preliminary and are subject to change as the Company finalizes the terms of its campus closings and severance arrangements.