XML 86 R10.htm IDEA: XBRL DOCUMENT v2.4.1.9
Restructuring and Related Charges
 12 Months Ended
Dec. 31, 2014
Restructuring and Related Charges [Abstract]  
Restructuring and Related Charges
3.
 Restructuring and Related Charges
 
In October 2013, the Company implemented a restructuring to better align the Company’s resources with its current student enrollments. This restructuring, which occurred primarily in the fourth quarter of 2013, included the closing of approximately 20 physical locations and reductions in the number of campus-based and corporate employees.
 
 
The following table sets forth the changes in the Company’s restructuring liability by type of cost during the year ended December 31, 2014:
 
 
($ in thousands)
     Lease
and Related
Costs, Net		   Severance
and Other
Employee
Separation Costs		   Total
Balance at December 31, 2013(1)
           $42,550       $2,216       $44,766  
Payments
             (12,418)         (2,138)         (14,556)  
Adjustments(2)
             (2,849)         (78)         (2,927)  
Balance at December 31, 2014(1)
           $27,283       $—        $27,283  
 
(1)
 The current portion of restructuring liabilities was $10.4 million and $6.0 million as of December 31, 2013 and December 31, 2014, respectively, which are included in Accounts payable and accrued expenses. The long-term portion is included in Other long-term liabilities.
 
(2)
 Adjustments for lease and related costs during the year ended December 31, 2014 primarily result from changes in the timing and expected income from settlements and executed sublease agreements signed during the period, which amounted to $4.1 million, partly offset by the accretion of interest on lease costs of approximately $1.3 million. Adjustments for severance and other employee separation costs primarily related to employees who were re-hired to other roles within the Company and were not paid severance.
 
Lease and Related Costs, Net — During the fourth quarter of 2013, the University implemented a plan to close approximately 20 of its campus locations. The Company recorded approximately $36.0 million of aggregate charges representing the estimated fair value of future contractual operating lease obligations, which were recorded in the periods the Company ceased using the respective facilities. Lease obligations, some of which continue through 2022, are measured at fair value using a discounted cash flow approach encompassing significant unobservable inputs (Level 3). The estimation of future cash flows includes non-cancelable contractual lease costs over the remaining terms of the leases discounted at the Company’s marginal borrowing rate of 4.5%, partially offset by estimated future sublease rental income discounted at credit-adjusted rates. The Company’s estimate of the amount and timing of sublease rental income considers

subleases that have been executed and subleases expected to be executed, based on current commercial real estate market data and conditions, and other qualitative factors specific to the facilities. The estimates are adjusted as market conditions change or as new information becomes available. Through December 31, 2014, adjustments to these reserves have related to settlements of leases with the landlords, execution of sublease agreements and accretion of interest.

Severance and Other Employee Separation Costs — During the fourth quarter of 2013, the Company implemented workforce reductions in order to better align its human capital resources with the evolving needs of students. A total of $6.9 million in severance and other employee separation costs were recorded at that time. The remaining liability at December 31, 2013 was paid in 2014.