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Restructuring and Related Charges
 12 Months Ended
Dec. 31, 2016
Restructuring and Related Charges [Abstract]  
Restructuring and Related Charges

4.     Restructuring and Related Charges

 

In October 2013, the Company implemented a restructuring to better align the Company’s resources with student enrollments at the time. This restructuring included the closing of 20 physical locations and reductions in the number of campus-based and corporate employees. A liability for lease obligations, some of which continue through 2022, was recorded and is 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 estimates, which involve significant judgment, also consider the amount and timing of sublease rental income based on 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 subject to adjustment as market conditions change or as new information becomes available, including the execution of additional sublease agreements.

 

The following details the changes in the Company’s restructuring liability by type of cost during the three years ended December 31, 2016 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Severance

    

 

 

 

 

 

Lease

 

and Other

 

 

 

 

 

 

and Related

 

Employee

 

 

 

 

 

 

Costs, Net

 

Separation Costs

 

Total

 

Balance at December 31, 2013

 

$
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

 

Payments

 

 
(7,754)

 

 

 —

 

 
(7,754)

 

Adjustments(2)

 

 
526

 

 

 —

 

 
526

 

Balance at December 31, 2015(1)

 

 
20,055

 

 

 —

 

 
20,055

 

Payments

 

 
(6,438)

 

 

 —

 

 
(6,438)

 

Adjustments(2)

 

 
(1,632)

 

 

 —

 

 
(1,632)

 

Balance at December 31, 2016(1)

 

$
11,985

 

$

 —

 

$
11,985

 

(1)

The current portion of restructuring liabilities was $4.8 million and $4.2 million as of December 31, 2015 and December 31, 2016, respectively, which are included in accounts payable and accrued expenses. The long-term portion is included in other long-term liabilities.

(2)

Adjustments include accretion of interest on lease costs, offset by changes in the timing and expected income from sublease agreements.