Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Jan. 31, 2014 | Jun. 28, 2013 |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'STRAYER EDUCATION INC | ' | ' |
Entity Central Index Key | '0001013934 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Public Float | ' | ' | $506 |
Entity Common Stock, Shares Outstanding | ' | 10,797,237 | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $94,760 | $47,517 |
Tuition receivable, net | 15,842 | 23,262 |
Income taxes receivable | ' | 4,454 |
Other current assets | 16,738 | 14,422 |
Total current assets | 127,340 | 89,655 |
Property and equipment, net | 94,421 | 121,520 |
Deferred income taxes | 17,129 | 3,279 |
Goodwill | 6,800 | 6,800 |
Other assets | 8,576 | 6,538 |
Total assets | 254,266 | 227,792 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 38,527 | 39,124 |
Income taxes payable | 2,569 | ' |
Unearned tuition | 656 | 494 |
Other current liabilities | 281 | 281 |
Current portion of term loan | 3,125 | 3,125 |
Total current liabilities | 45,158 | 43,024 |
Term loan, less current portion | 118,750 | 121,875 |
Other long-term liabilities | 51,456 | 21,905 |
Total liabilities | 215,364 | 186,804 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock, par value $.01; 20,000,000 shares authorized; 11,387,299 and 10,797,464 shares issued and outstanding at December 31, 2012 and 2013, respectively | 108 | 114 |
Additional paid-in capital | 7,137 | 299 |
Retained earnings | 31,629 | 41,311 |
Accumulated other comprehensive income (loss) | 28 | -736 |
Total stockholders' equity | 38,902 | 40,988 |
Total liabilities and stockholders' equity | $254,266 | $227,792 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Balance Sheets [Abstract] | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 10,797,464 | 11,387,299 |
Common stock, shares outstanding | 10,797,464 | 11,387,299 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statements of Income [Abstract] | ' | ' | ' |
Revenues | $503,600 | $561,979 | $627,434 |
Costs and expenses: | ' | ' | ' |
Instruction and educational support | 310,446 | 300,098 | 292,003 |
Marketing | 75,426 | 71,864 | 74,293 |
Admissions advisory | 20,390 | 26,374 | 26,531 |
General and administration | 64,637 | 50,056 | 55,464 |
Total costs and expenses | 470,899 | 448,392 | 448,291 |
Income from operations | 32,701 | 113,587 | 179,143 |
Investment income | 2 | 4 | 152 |
Interest expense | 5,419 | 4,616 | 3,773 |
Income before income taxes | 27,284 | 108,975 | 175,522 |
Provision for income taxes | 10,859 | 43,045 | 69,478 |
Net income | $16,425 | $65,930 | $106,044 |
Earnings per share: | ' | ' | ' |
Basic | $1.55 | $5.79 | $8.91 |
Diluted | $1.55 | $5.76 | $8.88 |
Weighted average shares outstanding: | ' | ' | ' |
Basic | 10,584 | 11,390 | 11,906 |
Diluted | 10,624 | 11,440 | 11,943 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statements of Comprehensive Income [Abstract] | ' | ' | ' |
Net income | $16,425 | $65,930 | $106,044 |
Other comprehensive income: | ' | ' | ' |
Change in fair value of derivative instrument, net of income tax | 764 | -125 | -611 |
Unrealized gain (loss) on investment, net of income tax | ' | ' | -40 |
Comprehensive income | $17,189 | $65,805 | $105,393 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income |
In Thousands, except Share data | |||||
Beginning balance at Dec. 31, 2010 | $176,004 | $133 | $1,206 | $174,625 | $40 |
Beginning Balance, shares at Dec. 31, 2010 | ' | 13,316,822 | ' | ' | ' |
Tax shortfall associated with stock-based compensation arrangements | -569 | ' | -569 | ' | ' |
Repurchase of common stock | -202,664 | -16 | -13,575 | -189,073 | ' |
Repurchase of common stock, shares | ' | -1,581,444 | ' | ' | ' |
Restricted stock forfeitures and cancellations, net of grants | ' | 1 | -1 | ' | ' |
Restricted stock forfeitures and cancellations, net of grants, shares | ' | 57,078 | ' | ' | ' |
Stock-based compensation | 13,234 | ' | 13,234 | ' | ' |
Common stock dividends | -49,105 | ' | ' | -49,105 | ' |
Change in net unrealized gains and losses on marketable securities, net of income tax | -40 | ' | ' | ' | -40 |
Change in fair value of derivative instrument, net of income tax | -611 | ' | ' | ' | -611 |
Net income | 106,044 | ' | ' | 106,044 | ' |
Balance at Dec. 31, 2011 | 42,293 | 118 | 295 | 42,491 | -611 |
Balance, shares at Dec. 31, 2011 | ' | 11,792,456 | ' | ' | ' |
Tax shortfall associated with stock-based compensation arrangements | -245 | ' | -245 | ' | ' |
Repurchase of common stock | -25,001 | -5 | -5,214 | -19,782 | ' |
Repurchase of common stock, shares | ' | -484,841 | ' | ' | ' |
Restricted stock forfeitures and cancellations, net of grants | ' | 1 | -1 | ' | ' |
Restricted stock forfeitures and cancellations, net of grants, shares | ' | 79,684 | ' | ' | ' |
Stock-based compensation | 5,464 | ' | 5,464 | ' | ' |
Common stock dividends | -47,328 | ' | ' | -47,328 | ' |
Change in fair value of derivative instrument, net of income tax | -125 | ' | ' | ' | -125 |
Net income | 65,930 | ' | ' | 65,930 | ' |
Balance at Dec. 31, 2012 | 40,988 | 114 | 299 | 41,311 | -736 |
Balance, shares at Dec. 31, 2012 | ' | 11,387,299 | ' | ' | ' |
Tax shortfall associated with stock-based compensation arrangements | -3,567 | ' | -702 | -2,865 | ' |
Repurchase of common stock | -24,999 | -5 | -1,752 | -23,242 | ' |
Repurchase of common stock, shares | ' | -495,085 | ' | ' | ' |
Restricted stock forfeitures and cancellations, net of grants | ' | -1 | 1 | ' | ' |
Restricted stock forfeitures and cancellations, net of grants, shares | ' | -94,750 | ' | ' | ' |
Stock-based compensation | 9,291 | ' | 9,291 | ' | ' |
Change in fair value of derivative instrument, net of income tax | 764 | ' | ' | ' | 764 |
Net income | 16,425 | ' | ' | 16,425 | ' |
Balance at Dec. 31, 2013 | $38,902 | $108 | $7,137 | $31,629 | $28 |
Balance, shares at Dec. 31, 2013 | ' | 10,797,464 | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net income | $16,425 | $65,930 | $106,044 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Amortization of gain on sale of assets | -281 | -281 | -281 |
Amortization of deferred rent | -462 | 323 | 1,177 |
Gain on sale of marketable securities | ' | ' | -66 |
Amortization of deferred financing costs | 780 | 795 | 663 |
Depreciation and amortization | 35,563 | 23,973 | 21,525 |
Deferred income taxes | -23,435 | -38 | 3,722 |
Stock-based compensation | 9,291 | 5,464 | 13,234 |
Changes in assets and liabilities: | ' | ' | ' |
Tuition receivable, net | 4,024 | 1,744 | -2,995 |
Other current assets | 2,434 | -2,130 | -768 |
Other assets | 494 | -135 | 102 |
Accounts payable and accrued expenses | -116 | 5,673 | -3,360 |
Income taxes payable and income taxes receivable | 7,799 | -4,306 | -1,279 |
Unearned tuition | 2,059 | -14,870 | 11,841 |
Other long-term liabilities | 29,518 | -80 | 4,804 |
Net cash provided by operating activities | 84,093 | 82,062 | 154,363 |
Cash flows from investing activities: | ' | ' | ' |
Purchases of property and equipment | -8,726 | -24,733 | -29,991 |
Purchases of marketable securities | ' | ' | -2 |
Proceeds from the sale of marketable securities | ' | ' | 12,388 |
Acquisition of assets | ' | ' | -7,000 |
Net cash used in investing activities | -8,726 | -24,733 | -24,605 |
Cash flows from financing activities: | ' | ' | ' |
Repurchase of common stock | -24,999 | -25,001 | -202,664 |
Payments on term loan | -3,125 | -20,000 | -2,500 |
Proceeds from term loan | ' | 47,500 | 100,000 |
Payments on revolving credit facility | ' | -83,000 | -100,000 |
Proceeds from revolving credit facility | ' | 63,000 | 120,000 |
Common dividends paid | ' | -47,328 | -49,105 |
Payment of deferred financing costs | ' | -2,120 | -2,459 |
Net cash used in financing activities | -28,124 | -66,949 | -136,728 |
Net (decrease) increase in cash and cash equivalents | 47,243 | -9,620 | -6,970 |
Cash and cash equivalents - beginning of year | 47,517 | 57,137 | 64,107 |
Cash and cash equivalents - end of year | 94,760 | 47,517 | 57,137 |
Non-cash transactions: | ' | ' | ' |
Purchases of property and equipment included in accounts payable | $47 | $529 | $1,115 |
Nature_of_Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2013 | |
Nature of Operations [Abstract] | ' |
Nature of Operations | ' |
1. Nature of Operations | |
Strayer Education, Inc. (the “Company”), a Maryland corporation, conducts its operations through its wholly owned subsidiary, Strayer University (the “University”). The University is an accredited institution of higher education that provides undergraduate and graduate degrees in various fields of study through physical campuses, predominantly located in the Eastern United States, and online. With the Company’s focus on the student, regardless of whether he or she chooses to take classes at a physical campus or online, it has only one reporting segment. |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Significant Accounting Policies [Abstract] | ' | ||||||||||||
Significant Accounting Policies | ' | ||||||||||||
2. Significant Accounting Policies | |||||||||||||
Financial statement presentation | |||||||||||||
The consolidated financial statements include the accounts of the Company and its only subsidiary, the University. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. | |||||||||||||
Revenue Recognition | |||||||||||||
The Company’s educational programs are offered on a quarterly basis and such periods coincide with the Company's quarterly financial reporting periods. Approximately 96% of the Company’s revenues during the year ended December 31, 2013, consisted of tuition revenue. Tuition revenue is recognized in the quarter of instruction. Tuition revenue is shown net of any refunds, withdrawals, corporate discounts, scholarships and employee tuition discounts. At the start of each academic term, a liability (unearned tuition) is recorded for academic services to be provided and a tuition receivable is recorded for the portion of the tuition not paid upfront in cash. Any cash received prior to the start of an academic term is recorded as unearned tuition. The estimated value of scholarship awards which will be realized in the future is based on historical experience of students who are expected to realize scholarship awards earned as courses are successfully completed. Unearned tuition is recorded as a current or long-term liability in the consolidated balance sheets based on when the benefit is expected to be realized. Revenues also include textbook-related income, application fees, technology fees, placement test fees, withdrawal fees, certificate revenue, and other income, which are recognized when earned. | |||||||||||||
Cash and Cash Equivalents | |||||||||||||
Cash and cash equivalents consist of cash maintained in mostly FDIC-insured bank accounts and cash invested in bank overnight deposits and money market mutual funds. The Company places its cash and temporary cash investments with various financial institutions. The Company considers all highly liquid instruments purchased with a maturity of three months or less at the date of purchase to be cash equivalents. | |||||||||||||
Concentration of Credit Risk | |||||||||||||
The Company places its cash and temporary cash investments in bank overnight deposits and money market mutual funds with various financial institutions. Cash and cash equivalent balances are in excess of the FDIC insurance limit. The Company has not experienced any losses on its cash and cash equivalents. | |||||||||||||
Tuition Receivable and Allowance for Doubtful Accounts | |||||||||||||
The Company records tuition receivable and unearned tuition for its students upon the start of the academic term. Therefore, at the end of the quarter (and academic term), tuition receivable represents amounts due from students for educational services already provided and unearned tuition represents advance payments from students for academic services to be provided in the future. Tuition receivables are not collateralized; however, credit risk is minimized as a result of the diverse nature of the University’s student base. The University establishes an allowance for doubtful accounts primarily based upon historical collection rates by age of receivable (net of recoveries). The Company periodically assesses its methodologies for estimating bad debts in consideration of actual experience. The Company’s tuition receivable and allowance for doubtful accounts were as follows: | |||||||||||||
December 31, | |||||||||||||
($ in thousands) | 2012 | 2013 | |||||||||||
Tuition receivable | $ | 29,858 | $ | 26,145 | |||||||||
Allowance for doubtful accounts | (6,596 | ) | (10,303 | ) | |||||||||
Tuition receivable, net | $ | 23,262 | $ | 15,842 | |||||||||
Approximately $3.4 million of tuition receivable is included in "Other assets" in the accompanying Consolidated Balance Sheets as of December 31, 2013, because these amounts are expected to be collected after 12 months. | |||||||||||||
The following table illustrates changes in the Company’s allowance for doubtful accounts for each of the past three years: | |||||||||||||
Year Ended December 31, | |||||||||||||
($ in thousands) | 2011 | 2012 | 2013 | ||||||||||
Beginning allowance for doubtful accounts | $ | 7,935 | $ | 7,279 | $ | 6,596 | |||||||
Additions charged to expense | 24,877 | 23,728 | 22,225 | ||||||||||
Write-offs, net of recoveries | (25,533 | ) | (24,411 | ) | (18,518 | ) | |||||||
Ending allowance for doubtful accounts | $ | 7,279 | $ | 6,596 | $ | 10,303 | |||||||
Property and Equipment | |||||||||||||
Property and equipment are stated at cost less accumulated depreciation and amortization. In accordance with the Property, Plant and Equipment Topic, ASC 360, the carrying values of the Company’s assets are re-evaluated when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined that an impairment loss has occurred based on expected undiscounted future cash flows, then a loss is recognized using a fair-value based model. Through 2013, no such impairment loss had occurred. Depreciation and amortization of property and equipment is calculated using the straight-line method over the estimated useful lives ranging from 3 to 40 years. Depreciation and amortization amounted to $21.5 million, $24.0 and $35.6 million for the years ended December 31, 2011, 2012, and 2013, respectively. | |||||||||||||
Construction in progress includes costs of computer software developed for internal use, and is accounted for in accordance with the Internal-Use Software Topic, ASC 350-40. Computer software development costs that are incurred in the preliminary project stage are expensed as incurred. During the development stage direct consulting costs, payroll and payroll-related costs for employees that are directly associated with the project are capitalized and will be amortized over the estimated useful life of the software once placed into operation. Purchases of property and equipment and changes in accounts payable for each of the three years in the period ended December 31, 2013 in the Consolidated Statements of Cash Flows have been adjusted to exclude non-cash purchases of property and equipment transactions during that period. | |||||||||||||
Fair Value | |||||||||||||
The Fair Value Measurement Topic, ASC 820-10 (“ASC 820-10”), establishes a framework for measuring fair value, establishes a fair value hierarchy based upon the observability of inputs used to measure fair value, and expands disclosures about fair value measurements. Assets and liabilities are classified in their entirety within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Under ASC 820-10, fair value of an investment is the price that would be received to sell an asset or to transfer a liability to an entity in an orderly transaction between market participants at the measurement date. The hierarchy gives the highest priority to assets and liabilities with readily available quoted prices in an active market and lowest priority to unobservable inputs which require a higher degree of judgment when measuring fair value, as follows: | |||||||||||||
· | Level 1 assets or liabilities use quoted prices in active markets for identical assets or liabilities as of the measurement date; | ||||||||||||
· | Level 2 assets or liabilities use observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities; and | ||||||||||||
· | Level 3 assets or liabilities use unobservable inputs that are supported by little or no market activity. | ||||||||||||
The Company’s assets and liabilities that are subject to fair value measurement are categorized in one of the three levels above. Fair values are based on the inputs available at the measurement dates, and may rely on certain assumptions that may affect the valuation of fair value for certain assets or liabilities. | |||||||||||||
Goodwill and Indefinite-Lived Intangible Assets | |||||||||||||
Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed. Indefinite-lived intangible assets, which include a trade name, are recorded at fair market value on their acquisition date. An indefinite life was assigned to the trade name because it has the continued ability to generate cash flows indefinitely. | |||||||||||||
Goodwill and the indefinite-lived intangible asset are assessed at least annually for impairment during the three-month period ending September 30, or more frequently if events occur or circumstances change between annual tests that would more likely than not reduce the fair value of the respective reporting unit below its carrying amount. Under Accounting Standards Update No. 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment , the Company is permitted, but not required, to first assess qualitative factors to determine whether it is necessary to perform the more thorough quantitative goodwill impairment test. Following its qualitative assessment, the Company determined it was not more likely than not that the fair value of its goodwill was less than the carrying amount and, accordingly, no impairment existed in 2013. | |||||||||||||
Long-Term Liabilities | |||||||||||||
Included in the Company’s long-term liabilities are the non-current portion of the Company’s borrowings under its term loan and revolving credit facility, liabilities related to the Company's operating leases, deferred payments related to an acquisition, fair value of the Company’s interest rate swap, and the non-current portion of unearned tuition. In conjunction with the opening of some campuses and other facilities, the Company was reimbursed by the lessors for improvements made to those leased properties. In accordance with the Operating Leases Subtopic, ASC 840-20 (“ASC 840-20”), these reimbursements were capitalized as leasehold improvements and a liability was established. The leasehold improvements and the liability are amortized on a straight-line basis over the corresponding lease terms, which generally range from five to ten years. In accordance with ASC 840-20, the Company records rent expense on a straight-line basis over the initial term of a lease. The cumulative difference between the rent payment and the straight-line rent expense is recorded as a liability. The Company also records the non-current portion of the gain related to the sale and lease back of a campus facility as a long-term liability. (See Note 10 below for more information.) | |||||||||||||
Accounting for Derivative Instruments and Hedging Activities | |||||||||||||
On the date that the Company enters into a derivative contract, it designates the derivative as a hedge of (a) a forecasted transaction or (b) the variability of cash flows that are to be received or paid in connection with a recognized asset or liability (a cash flow hedge). All derivatives are recognized in the balance sheet at their fair value. | |||||||||||||
Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash flow hedge, to the extent that the hedge is effective, are recorded, net of income tax, in other comprehensive income, until earnings are affected by the variability of cash flows of the hedged transaction (e.g., until periodic settlements of a variable-rate asset or liability are recorded in earnings). Any hedge ineffectiveness (which represents the amount by which the changes in the fair value of the derivative exceed the variability in the cash flows of the forecasted transaction) is recorded in current-period earnings. | |||||||||||||
The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. The Company also formally assesses (both at the hedge’s inception and on an ongoing basis) whether the derivatives that are used in hedging transactions have been highly effective in offsetting changes in the fair value or cash flows of hedged items and whether those derivatives may be expected to remain highly effective in future periods. When it is determined that a derivative is not (or has ceased to be) highly effective as a hedge, the Company discontinues hedge accounting prospectively. | |||||||||||||
Authorized Stock | |||||||||||||
The Company has authorized 20,000,000 shares of common stock, par value $.01, of which 11,387,299 and 10,797,464 shares were issued and outstanding as of December 31, 2012 and 2013, respectively. The Company also has authorized 8,000,000 shares of preferred stock, none of which has been issued or outstanding since 2004. Before any preferred stock may be issued in the future, the Board of Directors would need to establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, and the terms or conditions of the redemption of the preferred stock. | |||||||||||||
Advertising Costs | |||||||||||||
The Company expenses advertising costs in the quarter incurred, except for costs associated with the production of media commercials which are expensed when the commercial is first aired. | |||||||||||||
Stock-Based Compensation | |||||||||||||
As required by the Stock Compensation Topic, ASC 718, the Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors, including employee stock options, restricted stock, restricted stock units, and employee stock purchases related to the Company’s Employee Stock Purchase Plan, based on estimated fair values. Stock-based compensation expense recognized in the Consolidated Statements of Income for each of the three years in the period ended December 31, 2013, is based on awards ultimately expected to vest and, therefore, has been adjusted for estimated forfeitures. The Company is required to estimate forfeitures at the time of grant and revise, if necessary, the estimate in subsequent periods if actual forfeitures differ from those estimates. The forfeiture rate used is based on historical experience. The Company also assesses the likelihood that performance criteria associated with performance-based awards will be met. If it is determined that it is more likely than not that performance criteria will not be achieved, the Company revises its estimate of the number of shares it believes will ultimately vest. | |||||||||||||
Net Income Per Share | |||||||||||||
Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the periods. Diluted earnings per share reflects the potential dilution that could occur assuming conversion or exercise of all dilutive unexercised stock options, restricted stock and restricted stock units. The dilutive effect of stock awards was determined using the treasury stock method. Under the treasury stock method, all of the following are assumed to be used to repurchase shares of the Company’s common stock: (1) the proceeds received from the exercise of stock options, (2) the amount of compensation cost associated with the stock awards for future service not yet recognized by the Company, and (3) the amount of tax benefits that would be recorded in additional paid-in capital when the stock awards become deductible for income tax purposes. Stock options are not included in the computation of diluted earnings per share when the stock option exercise price of an individual grant exceeds the average market price for the period. During the year ended December 31, 2013, the Company had no issued and outstanding stock options that were included in the calculation. | |||||||||||||
Set forth below is a reconciliation of shares used to calculate basic and diluted earnings per share (in thousands): | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Weighted average shares outstanding used to compute basic earnings per share | 11,906 | 11,390 | 10,584 | ||||||||||
Incremental shares issuable upon the assumed exercise of stock options | 8 | – | – | ||||||||||
Unvested restricted stock and restricted stock units | 29 | 50 | 40 | ||||||||||
Shares used to compute diluted earnings per share | 11,943 | 11,440 | 10,624 | ||||||||||
Income Taxes | |||||||||||||
The Company provides for deferred income taxes based on temporary differences between financial statement and income tax bases of assets and liabilities using enacted tax rates in effect in the year in which the differences are expected to reverse. | |||||||||||||
The Income Taxes Topic, ASC 740 (“ASC 740”), requires the company to determine whether uncertain tax positions should be recognized within the Company’s financial statements. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. Uncertain tax positions are recognized when a tax position, based solely on its technical merits, is determined to be more likely than not to be sustained upon examination. Upon determination, uncertain tax positions are measured to determine the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. A tax position is derecognized if it no longer meets the more likely than not threshold of being sustained. | |||||||||||||
The tax years 2012 and 2013 remain open for Federal tax examination and the tax years 2009–2012 remain open to examination by state and local taxing jurisdictions in which the Company is subject. | |||||||||||||
Use of Estimates | |||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period reported. The most significant management estimates included allowances for doubtful accounts, the useful lives of property and equipment, fair value of future contractual operating lease obligations, potential sublease income and vacancy periods, accrued expenses, forfeiture rates and the likelihood of achieving performance criteria for stock-based awards, value of free courses earned by students that will be redeemed in the future, valuation of goodwill, intangible assets and the interest rate swap arrangement, and the provision for income taxes. Actual results could differ from those estimates. | |||||||||||||
Comprehensive Income | |||||||||||||
Comprehensive income consists of net income and unrealized gains or losses on investments in marketable securities, and the change in the fair value of the Company’s interest rate swap, net of income taxes. | |||||||||||||
Recent Accounting Pronouncements | |||||||||||||
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”), which provides guidance on disclosure requirements for items reclassified out of accumulated other comprehensive income. The standard requires entities to present (either on the face of the income statement or in the notes to the financial statements) the effects of amounts reclassified out of accumulated other comprehensive income on income statement line items. ASU 2013-02 was effective prospectively for reporting periods beginning after December 15, 2012. The adoption of ASU 2013-02 on January 1, 2013, did not have a material impact the Company’s disclosures. | |||||||||||||
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). The standard provides that a liability related to an unrecognized tax benefit would be offset against a deferred tax asset instead of presented gross for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. ASU 2013-11 is effective for fiscal years beginning after December 15, 2013. The Company believes adoption of ASU 2013-11 will not have a material impact on the Company’s financial position or results from operations. |
Restructuring_and_Related_Char
Restructuring and Related Charges | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
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 Company incurred the following charges associated with these activities in the fourth quarter of 2013, and recorded them in the following line items in the statement of operations below: | |||||||||||||
Year Ended December 31, 2013 | |||||||||||||
($ in thousands) | Lease | Severance | Total | ||||||||||
and Related | and Other | ||||||||||||
Costs, Net | Employee | ||||||||||||
Separation Costs | |||||||||||||
Instruction & educational support | $ | 30,612 | $ | 5,548 | $ | 36,160 | |||||||
Marketing | — | 120 | 120 | ||||||||||
Admissions advisory | — | 248 | 248 | ||||||||||
General & administration | 17,180 | 982 | 18,162 | ||||||||||
Total charges | $ | 47,792 | $ | 6,898 | $ | 54,690 | |||||||
The following details the changes in the Company’s restructuring liability by type of cost during the year ended December 31, 2013: | |||||||||||||
($ in thousands) | Lease | Severance | |||||||||||
and Related | and Other | Total | |||||||||||
Costs, Net | Employee | ||||||||||||
Separation Costs | |||||||||||||
Balance at December 31, 2012 | $ | — | $ | — | $ | — | |||||||
Restructuring and other charges (1) | 47,792 | 6,898 | 54,690 | ||||||||||
Non-cash adjustments(2) | (5,139 | ) | 1,438 | (3,701 | ) | ||||||||
Payments | (103 | ) | (6,120 | ) | (6,223 | ) | |||||||
Balance at December 31, 2013(1) | $ | 42,550 | $ | 2,216 | $ | 44,766 | |||||||
-1 | The current portion of restructuring liabilities was $10.4 million as of December 31, 2013, most of which are included in Accounts payable and accrued expenses, and the long-term portion is included in Other long-term liabilities in the Consolidated Balance Sheets. The gross obligation associated with restructuring liabilities as of December 31, 2013 is approximately $44.8 million, which principally represents non-cancelable leases that will be paid over the respective lease terms through 2022. | ||||||||||||
-2 | A total of $48.5 million of non-cash charges were incurred in connection with the restructuring. Non-cash adjustments for lease and related costs include $10.9 million of accelerated depreciation, partially offset by the release of certain deferred rent and leasehold incentive liabilities of approximately $5.7 million. Non-cash adjustments for severance and other employee separation costs represents share-based compensation. | ||||||||||||
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, partially offset by estimated future sublease rental income, which involves significant judgment. The Company’s estimate of the amount and timing of sublease rental income considers subleases that have been executed and subleases expect to be executed, based on current commercial real estate market data and conditions, and other qualitative factors specific to the facilities. The estimates will be subject to adjustment as market conditions change or as new information becomes available, including the execution of additional sublease agreements. | |||||||||||||
Lease and related costs, net also includes $10.9 million of accelerated depreciation during 2013. This depreciation resulted from revising the useful lives of the fixed assets at the facilities discussed above through their closure dates. Prior to revising the estimated useful lives, a recoverability analysis was performed for the facilities’ fixed assets and no material impairment charges were recorded during 2013. | |||||||||||||
Severance and Other Employee Separation Costs – 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 in the year ended December 31, 2013, of which approximately $6.1 million was paid in 2013. The majority of the remaining balance will be paid during the first three months of 2014. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Property and Equipment [Abstract] | ' | ||||||||||||
Property and Equipment | ' | ||||||||||||
4. Property and Equipment | |||||||||||||
The composition of property and equipment as of December 31, 2012 and 2013 is as follows (in thousands): | |||||||||||||
2012 | 2013 | Estimated | |||||||||||
useful life | |||||||||||||
(years) | |||||||||||||
Land | $ | 7,138 | $ | 7,138 | – | ||||||||
Buildings and improvements | 18,188 | 19,105 | May-40 | ||||||||||
Furniture, equipment, and computer hardware and software | 153,597 | 159,160 | 10-May | ||||||||||
Leasehold improvements | 38,362 | 39,299 | 10-Mar | ||||||||||
Construction in progress | 670 | 790 | – | ||||||||||
217,955 | 225,492 | ||||||||||||
Accumulated depreciation and amortization | (96,435 | ) | (131,071 | ) | |||||||||
$ | 121,520 | $ | 94,421 | ||||||||||
Construction in progress includes costs associated with the construction of new campuses and the development of information technology applications. In 2012 and 2013, the Company recorded leasehold improvements of $1.1 million and $0.3 million, respectively, which were reimbursed by lessors as lease incentives. In 2012 and 2013, the Company wrote off $12.5 million and $0.8 million, respectively, in fixed assets that were fully depreciated and no longer in service. |
Restricted_Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2013 | |
Restricted Cash [Abstract] | ' |
Restricted Cash | ' |
5. Restricted Cash | |
As part of commencing operations in Pennsylvania in 2003, the Company was required to maintain a “minimum protective endowment” of at least $500,000 in an interest-bearing account. These funds are required as long as the Company operates its campuses in the state. The Company accounts for these funds as a long-term asset. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2013 | |
Acquisition [Abstract] | ' |
Acquisition | ' |
6. Acquisition | |
On December 27, 2011, the Company completed an acquisition (the “Acquisition”) of certain assets which support the operations of the Jack Welch Management Institute (“JWMI”), an online leadership education program that offers a differentiated executive MBA degree and executive certificates. Simultaneous with the Acquisition, the Company entered into a License and Participation Agreement with Mr. Welch. The Company paid $7.0 million in the acquisition. The Company received $2.8 million from Mr. Welch representing his economic interest in JWMI, and the Company will make deferred payments to the sellers through 2021 valued at $2.1 million as of December 31, 2013. These amounts are included in other long-term liabilities in the Company’s consolidated balance sheets. The Company will make additional payments to Mr. Welch as he provides services to the Company on behalf of JWMI under the License and Participation Agreement. | |
In connection with the Acquisition, the Company acquired course content valued at $0.8 million which is being amortized over its estimated useful life of five years. The Company has also recorded indefinite-lived intangible assets of $1.6 million, which are included in other assets in the Company’s consolidated balance sheets. The Acquisition resulted in recording $6.8 million of goodwill, representing the excess of the purchase price over the fair value assigned to the underlying assets acquired. At December 31, 2013, the carrying amount of goodwill and the other assets acquired approximated the values at the acquisition date. | |
JWMI’s operating results are included in the consolidated financial statements from the date of the Acquisition. The results of operations of JWMI would not have had a material impact on the Company’s reported financial results if the Acquisition had been completed on January 1, 2011. |
Term_Loan_and_Revolving_Credit
Term Loan and Revolving Credit Facility | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Term Loan and Revolving Credit Facility [Abstract] | ' | ||||
Term Loan and Revolving Credit Facility | ' | ||||
7. Term Loan and Revolving Credit Facility | |||||
On November 8, 2012, the Company entered into a Second Amended and Restated Revolving Credit and Term Loan Agreement (the “Amended Credit Facility”), providing for a $100.0 million revolving credit facility and $125.0 million term loan facility, with an option, subject to obtaining additional loan commitments and the satisfaction of certain conditions, to increase the commitments under the Credit Facility by up to $50.0 million in the future. Each of the revolving portions of the Amended Credit Facility, which includes a letter of credit subfacility of $50.0 million, and the term loan portion of the Amended Credit Facility matures on December 31, 2016, and amends and refinances the Company’s original Credit Facility. The term loan portion of the Amended Credit Facility, also includes required quarterly amortization payments in the amount of $781,250 in the case of each payment made during calendar years 2013 and 2014, 0.625% of the aggregate original principal amount of the term loan facility, and $1,562,500 in the case of each payment made during calendar years 2015 and 2016, 1.25% of the aggregate original principal amount of the term loan facility. The Amended Credit Facility is guaranteed by the Company’s subsidiary and is secured by substantially all of the personal property and assets of the Company and the guarantor. | |||||
Borrowings under the Amended Credit Facility bear interest at LIBOR or a base rate plus a margin ranging from 2.00% to 2.50%, depending on the Company’s leverage ratio. For the $125.0 million term loan facility, the Company entered into an additional interest rate swap arrangement that fixes its interest rate on the entire term loan facility at an effective rate ranging from 2.85% to 3.35%, depending on the Company’s leverage ratio. In addition, an unused commitment fee ranging from 0.30% to 0.40%, depending on the Company’s leverage ratio, accrues on unused amounts under the revolving portion of the Amended Credit Facility. The Amended Credit Facility contains customary affirmative and negative covenants, representations, warranties, events of default and remedies upon default, including acceleration and rights to foreclose on the collateral securing the Amended Credit Facility. In addition, the Amended Credit Facility requires that the Company satisfy certain financial maintenance covenants, including: | |||||
· | a total leverage ratio of not greater than 2.00:1.00; | ||||
· | a coverage ratio of not less than 1.75:1.00; and | ||||
· | a Department of Education financial responsibility composite score of not less than 1.5. | ||||
The Company was in compliance with all the terms of the Amended Credit Facility at December 31, 2013. | |||||
During the year ended December 31, 2013, the Company paid cash interest of $4.6 million, and the Company’s average annual interest rate, including non-cash charges for the amortization of debt financing costs, was 4.4%. | |||||
As of December 31, 2013, the Company had $121.9 million outstanding under the term loan facility and no balance outstanding under the revolving credit facility. | |||||
Debt and short-term borrowings consist of the following as of December 31, 2013 (in thousands): | |||||
Term loan | $ | 121,875 | |||
Revolving credit facility | – | ||||
Total debt | 121,875 | ||||
Less: Current portion of long-term debt | 3,125 | ||||
Long-term debt | $ | 118,750 | |||
Aggregate debt maturities as of December 31, 2013 are as follows: | |||||
2014 | $ | 3,125 | |||
2015 | 6,250 | ||||
2016 | 112,500 | ||||
$ | 121,875 | ||||
Interest Rate Swaps | |||||
The Company was party to an interest rate swap on the outstanding balance of the Company’s existing Credit Facility. On November 8, 2012, the Company entered into an additional interest rate swap arrangement in order to minimize the interest rate exposure on the entire balance of the term loan facility (the “Swaps”, inclusive of the existing swap). The Swaps effectively fix the variable interest rate on the associated term loan at a rate ranging from 2.85% to 3.35%, depending on the Company’s leverage ratio, rather than being subject to fluctuations in the LIBOR rate. The terms of the Swaps effectively match the term of the underlying term loan facility. The Swaps have been designated as a cash flow hedge and have been deemed effective in accordance with the Derivatives and Hedging Topic, ASC 815. The Company expects the Swaps to continue to be deemed effective for the duration of the Swaps. The fair value of the Swaps is included in other long-term liabilities in the Company’s consolidated balance sheets. |
Fair_Value_Measurement
Fair Value Measurement | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Measurement [Abstract] | ' | ||||||||||||||||
Fair Value Measurement | ' | ||||||||||||||||
8. Fair Value Measurement | |||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2013 (in thousands): | |||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
December 31, | Quoted Prices in | Significant | Significant | ||||||||||||||
2013 | Active Markets for | Other | Unobservable | ||||||||||||||
Identical Assets/ | Observable | Inputs | |||||||||||||||
Liabilities | Inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Assets: | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 8,382 | $ | 8,382 | $ | – | $ | – | |||||||||
Interest rate swaps | 45 | – | 45 | – | |||||||||||||
Total assets at fair value on a recurring basis | $ | 8,427 | $ | 8,382 | $ | 45 | $ | – | |||||||||
Liabilities: | |||||||||||||||||
Other liabilities: | |||||||||||||||||
Deferred payments | $ | 2,115 | $ | – | $ | – | $ | 2,115 | |||||||||
Total liabilities at fair value on a recurring basis | $ | 2,115 | $ | – | $ | – | $ | 2,115 | |||||||||
Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2012 (in thousands): | |||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
December 31, | Quoted Prices in | Significant | Significant | ||||||||||||||
2012 | Active Markets for | Other | Unobservable | ||||||||||||||
Identical Assets/ | Observable | Inputs | |||||||||||||||
Liabilities | Inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Assets: | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 1,380 | $ | 1,380 | $ | – | $ | – | |||||||||
Total assets at fair value on a recurring basis | $ | 1,380 | $ | 1,380 | $ | – | $ | – | |||||||||
Liabilities: | |||||||||||||||||
Other liabilities: | |||||||||||||||||
Interest rate swaps | $ | 1,211 | $ | – | $ | 1, 211 | $ | – | |||||||||
Deferred payments | 2,119 | – | – | 2,119 | |||||||||||||
Total liabilities at fair value on a recurring basis | $ | 3,330 | $ | – | $ | 1, 211 | $ | 2,119 | |||||||||
The Company measures the above items on a recurring basis at fair value as follows: | |||||||||||||||||
· | Money market funds – Classified in Level 1 is excess cash the Company holds in both taxable and tax-exempt money market funds and are included in cash and cash equivalents in the accompanying Consolidated Balance Sheets. The Company records any net unrealized gains and losses for changes in fair value as a component of accumulated other comprehensive income in stockholders’ equity. Realized gains and losses from the sale of marketable securities are based on the specific identification method. The Company’s remaining cash and cash equivalents held at December 31, 2012 and 2013, approximate fair value and is not disclosed in the above tables because of the short-term nature of the financial instruments. | ||||||||||||||||
· | Interest rate swaps – The Company has two interest rate swaps with a notional amount of $121.9 million as of December 31, 2013, used to minimize the interest rate exposure on a portion of the Company’s variable rate debt. The interest rate swaps are used to fix the variable interest rate on the associated debt. The swaps are classified within Level 2 and are valued using readily available pricing sources which utilize market observable inputs including the current variable interest rate for similar types of instruments. | ||||||||||||||||
· | Deferred payments – Classified within Level 3 as there is no liquid market for similarly priced instruments, and valued using a discounted cash flow model that encompassed significant unobservable inputs to estimate the operating results of the Acquisition. The assumptions used to prepare the discounted cash flows include estimates for interest rates, enrollment growth, retention rates and pricing strategies. These assumptions are subject to change as the underlying data sources evolve and the program matures. | ||||||||||||||||
At December 31, 2013, the carrying value of the Company’s debt was $121.9 million. All of the Company’s debt is variable interest rate debt and the carrying amount approximates fair value. | |||||||||||||||||
The Company did not change its valuation techniques associated with recurring fair value measurements from prior periods, and no assets or liabilities were transferred between levels of the fair value hierarchy during the years ended December 31, 2012 or 2013. Assets measured at fair value on a non-recurring basis as of December 31, 2012 and 2013, include $6.8 million of goodwill and $1.6 million of other indefinite-lived intangible assets resulting from the Acquisition. The deferred payment liability was established at the time of the Acquisition on December 27, 2011, and changes in the fair value of the Company’s Level 3 liability that was outstanding throughout the year ended December 31, 2013 are as follows (in thousands): | |||||||||||||||||
Deferred | |||||||||||||||||
Payments | |||||||||||||||||
Balance at December 31, 2012 | $ | 2,119 | |||||||||||||||
Amounts earned | (311 | ) | |||||||||||||||
Adjustments to fair value | 307 | ||||||||||||||||
Transfers in or out of Level 3 | — | ||||||||||||||||
Balance at December 31, 2013 | $ | 2,115 |
Stock_Options_Restricted_Stock
Stock Options, Restricted Stock and Restricted Stock Units | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Stock Options, Restricted Stock and Restricted Stock Units [Abstract] | ' | ||||||||||||||||
Stock Options, Restricted Stock and Restricted Stock Units | ' | ||||||||||||||||
9. Stock Options, Restricted Stock and Restricted Stock Units | |||||||||||||||||
In April 2011, the Company’s stockholders approved the Strayer Education, Inc. 2011 Equity Compensation Plan (the “Plan”), which replaced the Company’s 1996 equity compensation plan (the “1996 Plan”) and made 300,000 new shares available for issuance as equity compensation. In addition, shares previously available for issuance under the 1996 Plan were effectively carried over and are available for issuance under the Plan, for a total of approximately 350,000 shares that were made available for issuance as equity compensation under the Plan. The Plan provides for the granting of restricted stock, restricted stock units, stock options intended to qualify as incentive stock options, options that do not qualify as incentive stock options, and other forms of equity compensation and performance-based awards to employees, officers and directors of the Company, or to a consultant or advisor to the Company, at the discretion of the Board of Directors. Vesting provisions are at the discretion of the Board of Directors. Options may be granted at option prices based at or above the fair market value of the shares at the date of grant. The maximum term of the awards granted under the Plan is ten years. | |||||||||||||||||
In February 2013, the Company’s Board of Directors approved grants of 165,712 shares of restricted stock to certain individuals. These shares, which vest over a three- to five-year period, were granted pursuant to the Plan. The Company’s stock price closed at $62.28 on the date of these restricted stock grants. In March 2013, outstanding awards of 200,000 restricted shares were converted to restricted stock units. In May 2013, the Company’s Board of Directors approved grants of 43,659 shares of restricted stock. These shares, which vest in their entirety four years from the date of grant, were granted pursuant to the Plan. The Company’s Board of Directors also approved grants of 16,370 shares of restricted stock. These shares, which vest over a three-year period, were awarded to non-employee members of the Company’s Board of Directors, as part of Company’s annual director compensation program. The Company’s stock price closed at $45.81 on the date these restricted stock grants were awarded. | |||||||||||||||||
Dividends paid on unvested restricted stock are reimbursed to the Company if the recipient forfeits his or her shares as a result of termination of employment prior to vesting in the award, unless waived by the Board of Directors. | |||||||||||||||||
Restricted Stock and Restricted Stock Units | |||||||||||||||||
The table below sets forth the restricted stock activity for the years ended December 31, 2011, 2012 and 2013: | |||||||||||||||||
Number of | Weighted- | ||||||||||||||||
shares | average | ||||||||||||||||
grant price | |||||||||||||||||
Balance, December 31, 2010 | 341,440 | $ | 204.89 | ||||||||||||||
Grants | 74,868 | 130.96 | |||||||||||||||
Vested shares | (17,574 | ) | 131.31 | ||||||||||||||
Forfeitures | (17,790 | ) | 155.01 | ||||||||||||||
Balance, December 31, 2011 | 380,944 | $ | 194.26 | ||||||||||||||
Grants | 82,741 | 111.44 | |||||||||||||||
Vested shares | (26,189 | ) | 195.58 | ||||||||||||||
Forfeitures | (3,057 | ) | 127.51 | ||||||||||||||
Balance, December 31, 2012 | 434,439 | $ | 178.88 | ||||||||||||||
Grants | 225,741 | 57.9 | |||||||||||||||
Vested shares | (51,916 | ) | 164.22 | ||||||||||||||
Forfeitures | (120,491 | ) | 140.3 | ||||||||||||||
Balance, December 31, 2013 | 487,773 | $ | 131.51 | ||||||||||||||
Stock Options | |||||||||||||||||
The table below sets forth the stock option activity for the years ended December 31, 2011, 2012 and 2013 and other stock option information at December 31, 2013: | |||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
shares | average | average | intrinsic | ||||||||||||||
exercise price | remaining | value(1) | |||||||||||||||
contractual | (in thousands) | ||||||||||||||||
life (years) | |||||||||||||||||
Balance, December 31, 2010 | 100,000 | $ | 107.28 | 2.1 | $ | 4,494 | |||||||||||
Grants | – | – | |||||||||||||||
Exercises | – | – | |||||||||||||||
Forfeitures | – | – | |||||||||||||||
Balance, December 31, 2011 | 100,000 | $ | 107.28 | 1.1 | $ | – | |||||||||||
Grants | – | – | |||||||||||||||
Exercises | – | – | |||||||||||||||
Forfeitures | – | – | |||||||||||||||
Balance, December 31, 2012 | 100,000 | $ | 107.28 | 0.1 | $ | – | |||||||||||
Grants | 100,000 | 51.95 | |||||||||||||||
Exercises | – | ||||||||||||||||
Forfeitures/Expirations | (100,000 | ) | 107.28 | ||||||||||||||
Balance, December 31, 2013 | 100,000 | $ | 51.95 | 7 | $ | – | |||||||||||
Exercisable, December 31, 2013 | – | $ | – | – | – | ||||||||||||
-1 | The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the respective trading day and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holder had all option been exercised on the respective trading day. The amount of intrinsic value will change based on the fair market value of the Company’s common stock. | ||||||||||||||||
The number of shares exercisable as of December 31, 2011, 2012 and 2013 are as follows: | |||||||||||||||||
Number of | Weighted- | ||||||||||||||||
shares | average | ||||||||||||||||
exercise price | |||||||||||||||||
Exercisable, December 31, 2011 | 100,000 | $ | 107.28 | ||||||||||||||
Exercisable, December 31, 2012 | 100,000 | $ | 107.28 | ||||||||||||||
Exercisable, December 31, 2013 | - | $ | 51.95 | ||||||||||||||
Valuation and Expense Information under Stock Compensation Topic ASC 718 | |||||||||||||||||
At December 31, 2013, total stock-based compensation cost which has not yet been recognized was $34.5 million for unvested restricted stock, restricted stock units, and stock option awards. This cost is expected to be recognized over the next 54 months on a weighted-average basis. Awards of approximately 351,000 shares of restricted stock and restricted stock units are subject to performance conditions. The accrual for stock-based compensation for performance awards is based on the Company’s estimates that such performance criteria are probable of being achieved. Such a determination involves significant judgment surrounding the Company’s ability to maintain regulatory compliance. If the performance targets are not reached during the vesting period, or it is determined it is more likely than not that the performance criteria will not be achieved, related compensation expense is adjusted. During 2012, the Company determined that it was more likely than not that certain performance criteria for 45,920 shares would not be met, and reduced stock-based compensation expense by approximately $7.0 million. | |||||||||||||||||
The following table sets forth the amount of stock-based compensation expense recorded in each of the expense line items (in thousands): | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Instruction and educational support | $ | 3,635 | $ | 3,273 | $ | 1,976 | |||||||||||
Marketing | 65 | – | – | ||||||||||||||
Admissions advisory | – | – | – | ||||||||||||||
General and administration | 9,534 | 2,191 | 7,315 | ||||||||||||||
Stock-based compensation expense included in operating expense | 13,234 | 5,464 | 9,291 | ||||||||||||||
Tax benefit | 5,245 | 2,158 | 3,698 | ||||||||||||||
Stock-based compensation expense, net of tax | $ | 7,989 | $ | 3,306 | $ | 5,593 | |||||||||||
The following table summarizes information regarding share-based payment arrangements for the years ended December 31, 2011, 2012 and 2013 (in thousands): | |||||||||||||||||
For the year ended | |||||||||||||||||
December 31, | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Proceeds from stock options exercised | $ | – | $ | – | $ | – | |||||||||||
Excess tax benefits (shortfall) related to share-based payment arrangements | $ | (569 | ) | $ | (245 | ) | $ | (3,567 | ) | ||||||||
Intrinsic value of stock options exercised(1) | $ | – | $ | – | $ | – | |||||||||||
-1 | Intrinsic value of stock options exercised is estimated by taking the difference between the Company’s closing stock price on the date of exercise and the exercise price, multiplied by the number of options exercised for each option holder and then aggregated. |
Other_LongTerm_Liabilities
Other Long-Term Liabilities | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Long-Term Liabilities [Abstract] | ' | ||||||||
Other Long-Term Liabilities | ' | ||||||||
10. Other Long-Term Liabilities | |||||||||
Other long-term liabilities consist of the following as of December 31, 2012 and 2013 (in thousands): | |||||||||
2012 | 2013 | ||||||||
Loss on facilities not in use | $ | – | $ | 34,339 | |||||
Deferred rent and other facility costs | 11,650 | 8,258 | |||||||
Deferred payments (see Note 6) | 4,919 | 4,915 | |||||||
Unearned tuition | – | 1,897 | |||||||
Lease incentives | 3,150 | 1,353 | |||||||
Deferred gain on sale of campus building | 975 | 694 | |||||||
Fair value of interest rate swap (see Note 7) | 1,211 | – | |||||||
$ | 21,905 | $ | 51,456 | ||||||
Loss on Facilities Not in Use and Deferred Rent and Other Facility Costs | |||||||||
The Company records lease costs of campuses and non-campus facilities that are not currently in use. In accordance with ASC 840-20, the Company records rent expense on a straight-line basis over the initial term of a lease. The difference between the rent payment and the straight-line rent expense is recorded as a liability. | |||||||||
Unearned Tuition | |||||||||
The Company offers certain scholarship and awards programs to students who earn the awards while they successfully complete course requirements. The long-term liability for unearned tuition represents the estimated value of these awards which the Company expects will be realized after one year. | |||||||||
Lease Incentives | |||||||||
In conjunction with the opening of new campuses, the Company, in some instances, was reimbursed by the lessors for improvements made to the leased properties. In accordance with ASC 840-20, these improvements were capitalized as leasehold improvements and a liability was established for the reimbursements. The leasehold improvements and the liability are amortized on a straight-line basis over the corresponding lease terms, which generally range from five to 10 years. | |||||||||
Deferred Gain on Sale of Campus Building | |||||||||
In June 2007, the Company sold one of its campus buildings for $5.8 million. The Company is leasing back most of the campus building over a 10-year period. In conjunction with this sale and lease back transaction, the Company realized a gain of $2.8 million before tax, which is deferred and recognized over the 10-year lease term. | |||||||||
Other_Employee_Benefit_Plans
Other Employee Benefit Plans | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Employee Benefit Plans [Abstract] | ' | ||||||||
Other Employee Benefit Plans | ' | ||||||||
11. Other Employee Benefit Plans | |||||||||
The Company has a 401(k) plan covering all eligible employees of the Company. Effective January 1, 2014, participants may contribute up to $17,500 of their base compensation annually. Employee contributions are voluntary. Discretionary contributions were made by the Company matching 50% of employee deferrals up to a maximum of 3% of the employee’s annual salary. The Company’s contributions, which vest immediately, totaled $2.7 million, $2.9 million and $1.1 million for the years ended December 31, 2011, 2012, and 2013, respectively. | |||||||||
In May 1998, the Company adopted the Strayer Education, Inc. Employee Stock Purchase Plan (“ESPP”). Under the ESPP, eligible employees may purchase shares of the Company’s common stock, subject to certain limitations, at 90% of its market value at the date of purchase. Purchases are limited to 10% of an employee’s eligible compensation. The aggregate number of shares of common stock that may be made available for purchase by participating employees under the ESPP is 2,500,000 shares. Shares purchased in the open market for employees for the years ended December 31, 2011, 2012, and 2013 were as follows: | |||||||||
Shares | Average price | ||||||||
purchased | per share | ||||||||
2011 | 6,636 | $ | 98.55 | ||||||
2012 | 6,549 | $ | 71.14 | ||||||
2013 | 8,911 | $ | 42.27 | ||||||
Stock_Repurchase_Plan
Stock Repurchase Plan | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Stock Repurchase Plan [Abstract] | ' | ||||||||||||
Stock Repurchase Plan | ' | ||||||||||||
12. Stock Repurchase Plan | |||||||||||||
As announced on November 3, 2003, the Company’s Board of Directors initially authorized the Company to repurchase up to an aggregate of $15 million in value of common stock through December 31, 2004 in open market purchases from time to time at the discretion of the Company’s management depending on market conditions and other corporate considerations. The Company’s Board of Directors amended the program on various dates, increasing the repurchase amount authorized and extending the expiration date. At December 31, 2013, approximately $70 million of the Company’s share repurchase authorization was remaining for repurchases through December 31, 2014. All of the Company’s share repurchases were effected in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. This stock repurchase plan may be modified, suspended or terminated at any time by the Company without notice. | |||||||||||||
A summary of the Company’s stock repurchase activity for the years ended December 31, 2011, 2012, and 2013, all of which was part of a publicly announced plan, is set forth in the table below: | |||||||||||||
Number of | Average price | Amount available | |||||||||||
shares | paid | for future | |||||||||||
repurchased | per share | repurchases | |||||||||||
(in millions) | |||||||||||||
2011 | 1,581,444 | $ | 128.15 | $ | 80 | ||||||||
2012 | 484,841 | $ | 51.56 | $ | 95 | ||||||||
2013 | 495,085 | $ | 50.49 | $ | 70 | ||||||||
Repurchases of common stock are recorded as a reduction to additional paid-in capital. To the extent additional paid-in capital had been reduced to zero through stock repurchases, retained earnings was then reduced. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies [Abstract] | ' | ||||
Commitments and Contingencies | ' | ||||
13. Commitments and Contingencies | |||||
The University participates in various federal student financial assistance programs which are subject to audit. Management believes that the potential effects of audit adjustments, if any, for the periods currently under audit will not have a material adverse effect, individually or in the aggregate, on the Company’s consolidated financial position, results of operations or cash flows. | |||||
As of December 31, 2013, the Company had 99 long-term, non-cancelable operating leases for campuses and other administrative facilities. Rent expense was $42.2 million, $46.5 million and $82.2 million for the years ended December 31, 2011, 2012, and 2013, respectively. Rent expense for 2013 includes approximately $36.0 in charges related to the closure of approximately 20 locations. The rents on the Company’s leases are subject to annual increases. The minimum rental commitments for the Company as of December 31, 2013 are as follows (in thousands): | |||||
Minimum | |||||
rental | |||||
commitments | |||||
2014 | $ | 41,975 | |||
2015 | 39,740 | ||||
2016 | 34,488 | ||||
2017 | 29,114 | ||||
2018 | 24,155 | ||||
Thereafter | 47,640 | ||||
Total | $ | 217,112 |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes [Abstract] | ' | ||||||||||||
Income Taxes | ' | ||||||||||||
14. Income Taxes | |||||||||||||
The income tax provision for the years ended December 31, 2011, 2012 and 2013 is summarized below (in thousands): | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Current: | |||||||||||||
Federal | $ | 53,344 | $ | 36,028 | $ | 26,390 | |||||||
State | 12,081 | 8,333 | 4,582 | ||||||||||
Total current | 65,425 | 44,361 | 30,972 | ||||||||||
Deferred: | |||||||||||||
Federal | 4,760 | (608 | ) | (18,387 | ) | ||||||||
State | (707 | ) | (708 | ) | (1,726 | ) | |||||||
Total deferred | 4,053 | (1,316 | ) | (20,113 | ) | ||||||||
Total provision for income taxes | $ | 69,478 | $ | 43,045 | $ | 10,859 | |||||||
The tax effects of the principal temporary differences that give rise to the Company’s deferred tax assets are as follows as of December 31, 2012 and 2013 (in thousands): | |||||||||||||
2012 | 2013 | ||||||||||||
Tuition receivable | $ | 4,215 | $ | 4,021 | |||||||||
Employee-related liabilities | 280 | 144 | |||||||||||
Other facility-related costs | 826 | 3,684 | |||||||||||
Current net deferred tax asset | 5,321 | 7,849 | |||||||||||
Property and equipment | (15,972 | ) | (13,091 | ) | |||||||||
Deferred leasing costs | 3,475 | 3,082 | |||||||||||
Stock-based compensation | 13,814 | 13,871 | |||||||||||
Other facility-related costs | 1,484 | 13,696 | |||||||||||
Interest rate swap | 474 | (18 | ) | ||||||||||
Other | 4 | (411 | ) | ||||||||||
Long-term net deferred tax asset | 3,279 | 17,129 | |||||||||||
Net deferred tax asset | $ | 8,600 | $ | 24,978 | |||||||||
The Company had $0.2 million of unrecognized tax benefits at December 31, 2013, all of which resulted from tax positions taken during the year ended December 31, 2013. A liability for uncertain tax positions of $2.2 million as of December 31, 2013, also for tax positions taken during the year ended December 31, 2013, is included in income taxes payable in the Consolidated Balance Sheets. | |||||||||||||
A reconciliation between the Company’s statutory tax rate and the effective tax rate for the years ended December 31, 2011, 2012, and 2013 is as follows: | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Statutory federal rate | 35 | % | 35 | % | 35 | % | |||||||
State income taxes, net of federal benefits | 4.3 | 4.3 | 4.6 | ||||||||||
Other | 0.3 | 0.2 | 0.2 | ||||||||||
Effective tax rate | 39.6 | % | 39.5 | % | 39.8 | % | |||||||
Cash payments for income taxes were $67.0 million in 2011, $47.4 million in 2012 and $26.5 million in 2013. |
Summarized_Quarterly_Financial
Summarized Quarterly Financial Data (Unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Summarized Quarterly Financial Data [Abstract] | ' | ||||||||||||||||
Summarized Quarterly Financial Data | ' | ||||||||||||||||
15. Summarized Quarterly Financial Data (Unaudited) | |||||||||||||||||
Quarterly financial information for 2012 and 2013 is as follows (in thousands except per share data): | |||||||||||||||||
Quarter | |||||||||||||||||
2012 | First | Second | Third | Fourth | |||||||||||||
Revenues | $ | 149,532 | $ | 146,254 | $ | 124,260 | $ | 141,933 | |||||||||
Income from operations | 40,858 | 36,168 | 7,836 | 28,725 | |||||||||||||
Net income | 23,989 | 21,212 | 4,103 | 16,627 | |||||||||||||
Net income per share: | |||||||||||||||||
Basic | $ | 2.1 | $ | 1.86 | $ | 0.36 | $ | 1.47 | |||||||||
Diluted | $ | 2.09 | $ | 1.85 | $ | 0.36 | $ | 1.47 | |||||||||
Quarter | |||||||||||||||||
2013 | First | Second | Third | Fourth | |||||||||||||
Revenues | $ | 137,506 | $ | 131,980 | $ | 110,031 | 124,083 | ||||||||||
Income (loss) from operations | 29,919 | 26,257 | 6,621 | (30,096 | ) | ||||||||||||
Net income (loss) | 17,231 | 15,002 | 3,149 | (18,957 | ) | ||||||||||||
Net income (loss) per share: | |||||||||||||||||
Basic | $ | 1.59 | $ | 1.43 | $ | 0.3 | $ | (1.80 | ) | ||||||||
Diluted | $ | 1.59 | $ | 1.42 | $ | 0.3 | $ | (1.80 | ) | ||||||||
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies [Abstract] | ' |
Litigation | ' |
16. Litigation | |
From time to time, the Company is involved in litigation and other legal proceedings arising out of the ordinary course of its business. There are no pending material legal proceedings to which the Company is subject or to which the Company's property is subject. |
Regulation
Regulation | 12 Months Ended |
Dec. 31, 2013 | |
Regulation [Abstract] | ' |
Regulation | ' |
17. Regulation | |
The Department of Education previously attempted to define “an eligible program of training to prepare students for gainful employment in a recognized occupation.” After a federal court invalidated the Department’s regulation, the Department established a negotiated rulemaking committee to consider the issue of gainful employment. The negotiations did not result in the required consensus, and the Department has indicated that it expects to issue a Notice of Proposed Rulemaking for public comment in early 2014. | |
Although it is not yet known what will be included in the Department’s Notice of Proposed Rulemaking, the most recent proposal by the Department put before the Committee included three metrics, as described in more detail in Part I, Item I, Regulation. The proposal included measurements of program cohort default rates (“pCDR”), annual debt-to-earnings, and discretionary debt-to-earnings. Under the proposal, a program would remain eligible for Title IV funding if it has a cohort default rate less than 30%, and the annual loan payment of a typical graduate of the program does not exceed 8% of the average or median annual earnings, or 20% of the average or median discretionary income. Under the annual and discretionary debt-to-earnings metrics, a program would become Title IV ineligible for three years if it fails either metric for two out of three years, or is in a warning zone for four consecutive years. Under the pCDR, a program would become Title IV ineligible for 3 years if the three-year default rate of three consecutive cohorts of students is greater than or equal to 30%. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Significant Accounting Policies [Abstract] | ' | ||||||||||||
Financial Statement Presentation | ' | ||||||||||||
Financial statement presentation | |||||||||||||
The consolidated financial statements include the accounts of the Company and its only subsidiary, the University. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. | |||||||||||||
Revenue Recognition | ' | ||||||||||||
Revenue Recognition | |||||||||||||
The Company’s educational programs are offered on a quarterly basis and such periods coincide with the Company's quarterly financial reporting periods. Approximately 96% of the Company’s revenues during the year ended December 31, 2013, consisted of tuition revenue. Tuition revenue is recognized in the quarter of instruction. Tuition revenue is shown net of any refunds, withdrawals, corporate discounts, scholarships and employee tuition discounts. At the start of each academic term, a liability (unearned tuition) is recorded for academic services to be provided and a tuition receivable is recorded for the portion of the tuition not paid upfront in cash. Any cash received prior to the start of an academic term is recorded as unearned tuition. The estimated value of scholarship awards which will be realized in the future is based on historical experience of students who are expected to realize scholarship awards earned as courses are successfully completed. Unearned tuition is recorded as a current or long-term liability in the consolidated balance sheets based on when the benefit is expected to be realized. Revenues also include textbook-related income, application fees, technology fees, placement test fees, withdrawal fees, certificate revenue, and other income, which are recognized when earned. | |||||||||||||
Cash and Cash Equivalents | ' | ||||||||||||
Cash and Cash Equivalents | |||||||||||||
Cash and cash equivalents consist of cash maintained in mostly FDIC-insured bank accounts and cash invested in bank overnight deposits and money market mutual funds. The Company places its cash and temporary cash investments with various financial institutions. The Company considers all highly liquid instruments purchased with a maturity of three months or less at the date of purchase to be cash equivalents. | |||||||||||||
Concentration of Credit Risk | ' | ||||||||||||
Concentration of Credit Risk | |||||||||||||
The Company places its cash and temporary cash investments in bank overnight deposits and money market mutual funds with various financial institutions. Cash and cash equivalent balances are in excess of the FDIC insurance limit. The Company has not experienced any losses on its cash and cash equivalents. | |||||||||||||
Tuition Receivable and Allowance for Doubtful Accounts | ' | ||||||||||||
Tuition Receivable and Allowance for Doubtful Accounts | |||||||||||||
The Company records tuition receivable and unearned tuition for its students upon the start of the academic term. Therefore, at the end of the quarter (and academic term), tuition receivable represents amounts due from students for educational services already provided and unearned tuition represents advance payments from students for academic services to be provided in the future. Tuition receivables are not collateralized; however, credit risk is minimized as a result of the diverse nature of the University’s student base. The University establishes an allowance for doubtful accounts primarily based upon historical collection rates by age of receivable (net of recoveries). The Company periodically assesses its methodologies for estimating bad debts in consideration of actual experience. The Company’s tuition receivable and allowance for doubtful accounts were as follows: | |||||||||||||
December 31, | |||||||||||||
($ in thousands) | 2012 | 2013 | |||||||||||
Tuition receivable | $ | 29,858 | $ | 26,145 | |||||||||
Allowance for doubtful accounts | (6,596 | ) | (10,303 | ) | |||||||||
Tuition receivable, net | $ | 23,262 | $ | 15,842 | |||||||||
Approximately $3.4 million of tuition receivable is included in "Other assets" in the accompanying Consolidated Balance Sheets as of December 31, 2013, because these amounts are expected to be collected after 12 months. | |||||||||||||
The following table illustrates changes in the Company’s allowance for doubtful accounts for each of the past three years: | |||||||||||||
Year Ended December 31, | |||||||||||||
($ in thousands) | 2011 | 2012 | 2013 | ||||||||||
Beginning allowance for doubtful accounts | $ | 7,935 | $ | 7,279 | $ | 6,596 | |||||||
Additions charged to expense | 24,877 | 23,728 | 22,225 | ||||||||||
Write-offs, net of recoveries | (25,533 | ) | (24,411 | ) | (18,518 | ) | |||||||
Ending allowance for doubtful accounts | $ | 7,279 | $ | 6,596 | $ | 10,303 | |||||||
Property and Equipment | ' | ||||||||||||
Property and Equipment | |||||||||||||
Property and equipment are stated at cost less accumulated depreciation and amortization. In accordance with the Property, Plant and Equipment Topic, ASC 360, the carrying values of the Company’s assets are re-evaluated when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined that an impairment loss has occurred based on expected undiscounted future cash flows, then a loss is recognized using a fair-value based model. Through 2013, no such impairment loss had occurred. Depreciation and amortization of property and equipment is calculated using the straight-line method over the estimated useful lives ranging from 3 to 40 years. Depreciation and amortization amounted to $21.5 million, $24.0 and $35.6 million for the years ended December 31, 2011, 2012, and 2013 respectively. | |||||||||||||
Construction in progress includes costs of computer software developed for internal use, and is accounted for in accordance with the Internal-Use Software Topic, ASC 350-40. Computer software development costs that are incurred in the preliminary project stage are expensed as incurred. During the development stage direct consulting costs, payroll and payroll-related costs for employees that are directly associated with the project are capitalized and will be amortized over the estimated useful life of the software once placed into operation. Purchases of property and equipment and changes in accounts payable for each of the three years in the period ended December 31, 2013 in the Consolidated Statements of Cash Flows have been adjusted to exclude non-cash purchases of property and equipment transactions during that period. | |||||||||||||
Fair Value | ' | ||||||||||||
Fair Value | |||||||||||||
The Fair Value Measurement Topic, ASC 820-10 (“ASC 820-10”), establishes a framework for measuring fair value, establishes a fair value hierarchy based upon the observability of inputs used to measure fair value, and expands disclosures about fair value measurements. Assets and liabilities are classified in their entirety within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Under ASC 820-10, fair value of an investment is the price that would be received to sell an asset or to transfer a liability to an entity in an orderly transaction between market participants at the measurement date. The hierarchy gives the highest priority to assets and liabilities with readily available quoted prices in an active market and lowest priority to unobservable inputs which require a higher degree of judgment when measuring fair value, as follows: | |||||||||||||
· | Level 1 assets or liabilities use quoted prices in active markets for identical assets or liabilities as of the measurement date; | ||||||||||||
· | Level 2 assets or liabilities use observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities; and | ||||||||||||
· | Level 3 assets or liabilities use unobservable inputs that are supported by little or no market activity. | ||||||||||||
The Company’s assets and liabilities that are subject to fair value measurement are categorized in one of the three levels above. Fair values are based on the inputs available at the measurement dates, and may rely on certain assumptions that may affect the valuation of fair value for certain assets or liabilities. | |||||||||||||
Goodwill and Indefinite-Lived Intangible Assets | ' | ||||||||||||
Goodwill and Indefinite-Lived Intangible Assets | |||||||||||||
Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed. Indefinite-lived intangible assets, which include a trade name, are recorded at fair market value on their acquisition date. An indefinite life was assigned to the trade name because it has the continued ability to generate cash flows indefinitely. | |||||||||||||
Goodwill and the indefinite-lived intangible asset are assessed at least annually for impairment during the three-month period ending September 30, or more frequently if events occur or circumstances change between annual tests that would more likely than not reduce the fair value of the respective reporting unit below its carrying amount. Under Accounting Standards Update No. 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment , the Company is permitted, but not required, to first assess qualitative factors to determine whether it is necessary to perform the more thorough quantitative goodwill impairment test. Following its qualitative assessment, the Company determined it was not more likely than not that the fair value of its goodwill was less than the carrying amount and, accordingly, no impairment existed in 2013. | |||||||||||||
Long-Term Liabilities | ' | ||||||||||||
Long-Term Liabilities | |||||||||||||
Included in the Company’s long-term liabilities are the non-current portion of the Company’s borrowings under its term loan and revolving credit facility, liabilities related to the Company's operating leases, deferred payments related to an acquisition, fair value of the Company’s interest rate swap, and the non-current portion of unearned tuition. In conjunction with the opening of some campuses and other facilities, the Company was reimbursed by the lessors for improvements made to those leased properties. In accordance with the Operating Leases Subtopic, ASC 840-20 (“ASC 840-20”), these reimbursements were capitalized as leasehold improvements and a liability was established. The leasehold improvements and the liability are amortized on a straight-line basis over the corresponding lease terms, which generally range from five to ten years. In accordance with ASC 840-20, the Company records rent expense on a straight-line basis over the initial term of a lease. The cumulative difference between the rent payment and the straight-line rent expense is recorded as a liability. The Company also records the non-current portion of the gain related to the sale and lease back of a campus facility as a long-term liability. (See Note 10 below for more information.) | |||||||||||||
Accounting for Derivative Instruments and Hedging Activities | ' | ||||||||||||
Accounting for Derivative Instruments and Hedging Activities | |||||||||||||
On the date that the Company enters into a derivative contract, it designates the derivative as a hedge of (a) a forecasted transaction or (b) the variability of cash flows that are to be received or paid in connection with a recognized asset or liability (a cash flow hedge). All derivatives are recognized in the balance sheet at their fair value. | |||||||||||||
Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash flow hedge, to the extent that the hedge is effective, are recorded, net of income tax, in other comprehensive income, until earnings are affected by the variability of cash flows of the hedged transaction (e.g., until periodic settlements of a variable-rate asset or liability are recorded in earnings). Any hedge ineffectiveness (which represents the amount by which the changes in the fair value of the derivative exceed the variability in the cash flows of the forecasted transaction) is recorded in current-period earnings. | |||||||||||||
The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. The Company also formally assesses (both at the hedge’s inception and on an ongoing basis) whether the derivatives that are used in hedging transactions have been highly effective in offsetting changes in the fair value or cash flows of hedged items and whether those derivatives may be expected to remain highly effective in future periods. When it is determined that a derivative is not (or has ceased to be) highly effective as a hedge, the Company discontinues hedge accounting prospectively. | |||||||||||||
Authorized Stock | ' | ||||||||||||
Authorized Stock | |||||||||||||
The Company has authorized 20,000,000 shares of common stock, par value $.01, of which 11,387,299 and 10,797,464 shares were issued and outstanding as of December 31, 2012 and 2013, respectively. The Company also has authorized 8,000,000 shares of preferred stock, none of which has been issued or outstanding since 2004. Before any preferred stock may be issued in the future, the Board of Directors would need to establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, and the terms or conditions of the redemption of the preferred stock. | |||||||||||||
Advertising Costs | ' | ||||||||||||
Advertising Costs | |||||||||||||
The Company expenses advertising costs in the quarter incurred, except for costs associated with the production of media commercials which are expensed when the commercial is first aired. | |||||||||||||
Stock-Based Compensation | ' | ||||||||||||
Stock-Based Compensation | |||||||||||||
As required by the Stock Compensation Topic, ASC 718, the Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors, including employee stock options, restricted stock, restricted stock units, and employee stock purchases related to the Company’s Employee Stock Purchase Plan, based on estimated fair values. Stock-based compensation expense recognized in the Consolidated Statements of Income for each of the three years in the period ended December 31 2013, is based on awards ultimately expected to vest and, therefore, has been adjusted for estimated forfeitures. The Company is required to estimate forfeitures at the time of grant and revise, if necessary, the estimate in subsequent periods if actual forfeitures differ from those estimates. The forfeiture rate used is based on historical experience. The Company also assesses the likelihood that performance criteria associated with performance-based awards will be met. If it is determined that it is more likely than not that performance criteria will not be achieved, the Company revises its estimate of the number of shares it believes will ultimately vest. | |||||||||||||
Net Income Per Share | ' | ||||||||||||
Net Income Per Share | |||||||||||||
Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the periods. Diluted earnings per share reflects the potential dilution that could occur assuming conversion or exercise of all dilutive unexercised stock options, restricted stock and restricted stock units. The dilutive effect of stock awards was determined using the treasury stock method. Under the treasury stock method, all of the following are assumed to be used to repurchase shares of the Company’s common stock: (1) the proceeds received from the exercise of stock options, (2) the amount of compensation cost associated with the stock awards for future service not yet recognized by the Company, and (3) the amount of tax benefits that would be recorded in additional paid-in capital when the stock awards become deductible for income tax purposes. Stock options are not included in the computation of diluted earnings per share when the stock option exercise price of an individual grant exceeds the average market price for the period. During the year ended December 31, 2013, the Company had no issued and outstanding stock options that were included in the calculation. | |||||||||||||
Set forth below is a reconciliation of shares used to calculate basic and diluted earnings per share (in thousands): | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Weighted average shares outstanding used to compute basic earnings per share | 11,906 | 11,390 | 10,584 | ||||||||||
Incremental shares issuable upon the assumed exercise of stock options | 8 | – | – | ||||||||||
Unvested restricted stock and restricted stock units | 29 | 50 | 40 | ||||||||||
Shares used to compute diluted earnings per share | 11,943 | 11,440 | 10,624 | ||||||||||
Income Taxes | ' | ||||||||||||
Income Taxes | |||||||||||||
The Company provides for deferred income taxes based on temporary differences between financial statement and income tax bases of assets and liabilities using enacted tax rates in effect in the year in which the differences are expected to reverse. | |||||||||||||
The Income Taxes Topic, ASC 740 (“ASC 740”), requires the company to determine whether uncertain tax positions should be recognized within the Company’s financial statements. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. Uncertain tax positions are recognized when a tax position, based solely on its technical merits, is determined to be more likely than not to be sustained upon examination. Upon determination, uncertain tax positions are measured to determine the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. A tax position is derecognized if it no longer meets the more likely than not threshold of being sustained. | |||||||||||||
The tax years 2012 and 2013 remain open for Federal tax examination and the tax years 2009–2012 remain open to examination by state and local taxing jurisdictions in which the Company is subject. | |||||||||||||
Use of Estimates | ' | ||||||||||||
Use of Estimates | |||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period reported. The most significant management estimates included allowances for doubtful accounts, the useful lives of property and equipment, fair value of future contractual operating lease obligations, potential sublease income and vacancy periods, accrued expenses, forfeiture rates and the likelihood of achieving performance criteria for stock-based awards, value of free courses earned by students that will be redeemed in the future, valuation of goodwill, intangible assets and the interest rate swap arrangement, and the provision for income taxes. Actual results could differ from those estimates. | |||||||||||||
Comprehensive Income | ' | ||||||||||||
Comprehensive Income | |||||||||||||
Comprehensive income consists of net income and unrealized gains or losses on investments in marketable securities, and the change in the fair value of the Company’s interest rate swap, net of income taxes. | |||||||||||||
Recent Accounting Pronouncements | ' | ||||||||||||
Recent Accounting Pronouncements | |||||||||||||
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”), which provides guidance on disclosure requirements for items reclassified out of accumulated other comprehensive income. The standard requires entities to present (either on the face of the income statement or in the notes to the financial statements) the effects of amounts reclassified out of accumulated other comprehensive income on income statement line items. ASU 2013-02 was effective prospectively for reporting periods beginning after December 15, 2012. The adoption of ASU 2013-02 on January 1, 2013, did not have a material impact the Company’s disclosures. | |||||||||||||
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). The standard provides that a liability related to an unrecognized tax benefit would be offset against a deferred tax asset instead of presented gross for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. ASU 2013-11 is effective for fiscal years beginning after December 15, 2013. The Company believes adoption of ASU 2013-11 will not have a material impact on the Company’s financial position or results from operations. |
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Significant Accounting Policies [Abstract] | ' | ||||||||||||
Schedule of tuition receivable and allowance for doubtful accounts | ' | ||||||||||||
December 31, | |||||||||||||
($ in thousands) | 2012 | 2013 | |||||||||||
Tuition receivable | $ | 29,858 | $ | 26,145 | |||||||||
Allowance for doubtful accounts | (6,596 | ) | (10,303 | ) | |||||||||
Tuition receivable, net | $ | 23,262 | $ | 15,842 | |||||||||
Schedule of allowance for doubtful accounts | ' | ||||||||||||
Year Ended December 31, | |||||||||||||
($ in thousands) | 2011 | 2012 | 2013 | ||||||||||
Beginning allowance for doubtful accounts | $ | 7,935 | $ | 7,279 | $ | 6,596 | |||||||
Additions charged to expense | 24,877 | 23,728 | 22,225 | ||||||||||
Write-offs, net of recoveries | (25,533 | ) | (24,411 | ) | (18,518 | ) | |||||||
Ending allowance for doubtful accounts | $ | 7,279 | $ | 6,596 | $ | 10,303 | |||||||
Schedule of reconciliation of shares used to calculate basic and diluted earnings per share | ' | ||||||||||||
2011 | 2012 | 2013 | |||||||||||
Weighted average shares outstanding used to compute basic earnings per share | 11,906 | 11,390 | 10,584 | ||||||||||
Incremental shares issuable upon the assumed exercise of stock options | 8 | – | – | ||||||||||
Unvested restricted stock and restricted stock units | 29 | 50 | 40 | ||||||||||
Shares used to compute diluted earnings per share | 11,943 | 11,440 | 10,624 |
Restructuring_and_Related_Char1
Restructuring and Related Charges (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Restructuring and Related Charges [Abstract] | ' | ||||||||||||
Schedule of restructuring and related costs | ' | ||||||||||||
Year Ended December 31, 2013 | |||||||||||||
($ in thousands) | Lease | Severance | Total | ||||||||||
and Related | and Other | ||||||||||||
Costs, Net | Employee | ||||||||||||
Separation Costs | |||||||||||||
Instruction & educational support | $ | 30,612 | $ | 5,548 | $ | 36,160 | |||||||
Marketing | — | 120 | 120 | ||||||||||
Admissions advisory | — | 248 | 248 | ||||||||||
General & administration | 17,180 | 982 | 18,162 | ||||||||||
Total charges | $ | 47,792 | $ | 6,898 | $ | 54,690 | |||||||
Schedule of restructuring reserve by type of cost | ' | ||||||||||||
($ in thousands) | Lease | Severance | |||||||||||
and Related | and Other | Total | |||||||||||
Costs, Net | Employee | ||||||||||||
Separation Costs | |||||||||||||
Balance at December 31, 2012 | $ | — | $ | — | $ | — | |||||||
Restructuring and other charges (1) | 47,792 | 6,898 | 54,690 | ||||||||||
Non-cash adjustments(2) | (5,139 | ) | 1,438 | (3,701 | ) | ||||||||
Payments | (103 | ) | (6,120 | ) | (6,223 | ) | |||||||
Balance at December 31, 2013(1) | $ | 42,550 | $ | 2,216 | $ | 44,766 | |||||||
-1 | The current portion of restructuring liabilities was $10.4 million as of December 31, 2013, most of which are included in Accounts payable and accrued expenses, and the long-term portion is included in Other long-term liabilities in the Consolidated Balance Sheets. The gross obligation associated with restructuring liabilities as of December 31, 2013 is approximately $44.8 million, which principally represents non-cancelable leases that will be paid over the respective lease terms through 2022. | ||||||||||||
-2 | A total of $48.5 million of non-cash charges were incurred in connection with the restructuring. Non-cash adjustments for lease and related costs include $10.9 million of accelerated depreciation, partially offset by the release of certain deferred rent and leasehold incentive liabilities of approximately $5.7 million. Non-cash adjustments for severance and other employee separation costs represents share-based compensation. |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Property and Equipment [Abstract] | ' | ||||||||||||
Composition of property and equipment | ' | ||||||||||||
2012 | 2013 | Estimated | |||||||||||
useful life | |||||||||||||
(years) | |||||||||||||
Land | $ | 7,138 | $ | 7,138 | – | ||||||||
Buildings and improvements | 18,188 | 19,105 | May-40 | ||||||||||
Furniture, equipment, and computer hardware and software | 153,597 | 159,160 | 10-May | ||||||||||
Leasehold improvements | 38,362 | 39,299 | 10-Mar | ||||||||||
Construction in progress | 670 | 790 | – | ||||||||||
217,955 | 225,492 | ||||||||||||
Accumulated depreciation and amortization | (96,435 | ) | (131,071 | ) | |||||||||
$ | 121,520 | $ | 94,421 | ||||||||||
Term_Loan_and_Revolving_Credit1
Term Loan and Revolving Credit Facility (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Term Loan and Revolving Credit Facility [Abstract] | ' | ||||
Schedule of debt and short-term borrowings | ' | ||||
Term loan | $ | 121,875 | |||
Revolving credit facility | – | ||||
Total debt | 121,875 | ||||
Less: Current portion of long-term debt | 3,125 | ||||
Long-term debt | $ | 118,750 | |||
Schedule of aggregate debt maturities | ' | ||||
2014 | $ | 3,125 | |||
2015 | 6,250 | ||||
2016 | 112,500 | ||||
$ | 121,875 | ||||
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Measurement [Abstract] | ' | ||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | ' | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
December 31, | Quoted Prices in | Significant | Significant | ||||||||||||||
2013 | Active Markets for | Other | Unobservable | ||||||||||||||
Identical Assets/ | Observable | Inputs | |||||||||||||||
Liabilities | Inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Assets: | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 8,382 | $ | 8,382 | $ | – | $ | – | |||||||||
Interest rate swaps | 45 | – | 45 | – | |||||||||||||
Total assets at fair value on a recurring basis | $ | 8,427 | $ | 8,382 | $ | 45 | $ | – | |||||||||
Liabilities: | |||||||||||||||||
Other liabilities: | |||||||||||||||||
Deferred payments | $ | 2,115 | $ | – | $ | – | $ | 2,115 | |||||||||
Total liabilities at fair value on a recurring basis | $ | 2,115 | $ | – | $ | – | $ | 2,115 | |||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
December 31, | Quoted Prices in | Significant | Significant | ||||||||||||||
2012 | Active Markets for | Other | Unobservable | ||||||||||||||
Identical Assets/ | Observable | Inputs | |||||||||||||||
Liabilities | Inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Assets: | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 1,380 | $ | 1,380 | $ | – | $ | – | |||||||||
Total assets at fair value on a recurring basis | $ | 1,380 | $ | 1,380 | $ | – | $ | – | |||||||||
Liabilities: | |||||||||||||||||
Other liabilities: | |||||||||||||||||
Interest rate swaps | $ | 1,211 | $ | – | $ | 1, 211 | $ | – | |||||||||
Deferred payments | 2,119 | – | – | 2,119 | |||||||||||||
Total liabilities at fair value on a recurring basis | $ | 3,330 | $ | – | $ | 1, 211 | $ | 2,119 | |||||||||
Schedule of changes in fair value of level 3 liability | ' | ||||||||||||||||
Deferred | |||||||||||||||||
Payments | |||||||||||||||||
Balance at December 31, 2012 | $ | 2,119 | |||||||||||||||
Amounts earned | (311 | ) | |||||||||||||||
Adjustments to fair value | 307 | ||||||||||||||||
Transfers in or out of Level 3 | — | ||||||||||||||||
Balance at December 31, 2013 | $ | 2,115 | |||||||||||||||
Stock_Options_Restricted_Stock1
Stock Options, Restricted Stock and Restricted Stock Units (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Stock Options, Restricted Stock and Restricted Stock Units [Abstract] | ' | ||||||||||||||||
Schedule of restricted stock activity | ' | ||||||||||||||||
Number of | Weighted- | ||||||||||||||||
shares | average | ||||||||||||||||
grant price | |||||||||||||||||
Balance, December 31, 2010 | 341,440 | $ | 204.89 | ||||||||||||||
Grants | 74,868 | 130.96 | |||||||||||||||
Vested shares | (17,574 | ) | 131.31 | ||||||||||||||
Forfeitures | (17,790 | ) | 155.01 | ||||||||||||||
Balance, December 31, 2011 | 380,944 | $ | 194.26 | ||||||||||||||
Grants | 82,741 | 111.44 | |||||||||||||||
Vested shares | (26,189 | ) | 195.58 | ||||||||||||||
Forfeitures | (3,057 | ) | 127.51 | ||||||||||||||
Balance, December 31, 2012 | 434,439 | $ | 178.88 | ||||||||||||||
Grants | 225,741 | 57.9 | |||||||||||||||
Vested shares | (51,916 | ) | 164.22 | ||||||||||||||
Forfeitures | (120,491 | ) | 140.3 | ||||||||||||||
Balance, December 31, 2013 | 487,773 | $ | 131.51 | ||||||||||||||
Schedule of stock option activity | ' | ||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
shares | average | average | intrinsic | ||||||||||||||
exercise price | remaining | value(1) | |||||||||||||||
contractual | (in thousands) | ||||||||||||||||
life (years) | |||||||||||||||||
Balance, December 31, 2010 | 100,000 | $ | 107.28 | 2.1 | $ | 4,494 | |||||||||||
Grants | – | – | |||||||||||||||
Exercises | – | – | |||||||||||||||
Forfeitures | – | – | |||||||||||||||
Balance, December 31, 2011 | 100,000 | $ | 107.28 | 1.1 | $ | – | |||||||||||
Grants | – | – | |||||||||||||||
Exercises | – | – | |||||||||||||||
Forfeitures | – | – | |||||||||||||||
Balance, December 31, 2012 | 100,000 | $ | 107.28 | 0.1 | $ | – | |||||||||||
Grants | 100,000 | 51.95 | |||||||||||||||
Exercises | – | ||||||||||||||||
Forfeitures/Expirations | (100,000 | ) | 107.28 | ||||||||||||||
Balance, December 31, 2013 | 100,000 | $ | 51.95 | 7 | $ | – | |||||||||||
Exercisable, December 31, 2013 | – | $ | – | – | – | ||||||||||||
-1 | The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the respective trading day and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holder had all option been exercised on the respective trading day. The amount of intrinsic value will change based on the fair market value of the Company’s common stock. | ||||||||||||||||
Summary of number of shares exercisable | ' | ||||||||||||||||
Number of | Weighted- | ||||||||||||||||
shares | average | ||||||||||||||||
exercise price | |||||||||||||||||
Exercisable, December 31, 2011 | 100,000 | $ | 107.28 | ||||||||||||||
Exercisable, December 31, 2012 | 100,000 | $ | 107.28 | ||||||||||||||
Exercisable, December 31, 2013 | - | $ | 51.95 | ||||||||||||||
Schedule of stock-based compensation expense | ' | ||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Instruction and educational support | $ | 3,635 | $ | 3,273 | $ | 1,976 | |||||||||||
Marketing | 65 | – | – | ||||||||||||||
Admissions advisory | – | – | – | ||||||||||||||
General and administration | 9,534 | 2,191 | 7,315 | ||||||||||||||
Stock-based compensation expense included in operating expense | 13,234 | 5,464 | 9,291 | ||||||||||||||
Tax benefit | 5,245 | 2,158 | 3,698 | ||||||||||||||
Stock-based compensation expense, net of tax | $ | 7,989 | $ | 3,306 | $ | 5,593 | |||||||||||
Schedule of information regarding share-based payment arrangements | ' | ||||||||||||||||
For the year ended | |||||||||||||||||
December 31, | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Proceeds from stock options exercised | $ | – | $ | – | $ | – | |||||||||||
Excess tax benefits (shortfall) related to share-based payment arrangements | $ | (569 | ) | $ | (245 | ) | $ | (3,567 | ) | ||||||||
Intrinsic value of stock options exercised(1) | $ | – | $ | – | $ | – | |||||||||||
-1 | Intrinsic value of stock options exercised is estimated by taking the difference between the Company’s closing stock price on the date of exercise and the exercise price, multiplied by the number of options exercised for each option holder and then aggregated. | ||||||||||||||||
Other_LongTerm_Liabilities_Tab
Other Long-Term Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Long-Term Liabilities [Abstract] | ' | ||||||||
Schedule of noncurrent liabilities | ' | ||||||||
2012 | 2013 | ||||||||
Loss on facilities not in use | $ | – | $ | 34,339 | |||||
Deferred rent and other facility costs | 11,650 | 8,258 | |||||||
Deferred payments (see Note 6) | 4,919 | 4,915 | |||||||
Unearned tuition | – | 1,897 | |||||||
Lease incentives | 3,150 | 1,353 | |||||||
Deferred gain on sale of campus building | 975 | 694 | |||||||
Fair value of interest rate swap (see Note 7) | 1,211 | – | |||||||
$ | 21,905 | $ | 51,456 |
Other_Employee_Benefit_Plans_T
Other Employee Benefit Plans (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Employee Benefit Plans [Abstract] | ' | ||||||||
Schedule of shares purchased in the open market for employees | ' | ||||||||
Shares | Average price | ||||||||
purchased | per share | ||||||||
2011 | 6,636 | $ | 98.55 | ||||||
2012 | 6,549 | $ | 71.14 | ||||||
2013 | 8,911 | $ | 42.27 | ||||||
Stock_Repurchase_Plan_Tables
Stock Repurchase Plan (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Stock Repurchase Plan [Abstract] | ' | ||||||||||||
Schedule of stock repurchase activity | ' | ||||||||||||
Number of | Average price | Amount available | |||||||||||
shares | paid | for future | |||||||||||
repurchased | per share | repurchases | |||||||||||
(in millions) | |||||||||||||
2011 | 1,581,444 | $ | 128.15 | $ | 80 | ||||||||
2012 | 484,841 | $ | 51.56 | $ | 95 | ||||||||
2013 | 495,085 | $ | 50.49 | $ | 70 | ||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies [Abstract] | ' | ||||
Schedule of minimum rental commitments | ' | ||||
Minimum | |||||
rental | |||||
commitments | |||||
2014 | $ | 41,975 | |||
2015 | 39,740 | ||||
2016 | 34,488 | ||||
2017 | 29,114 | ||||
2018 | 24,155 | ||||
Thereafter | 47,640 | ||||
Total | $ | 217,112 | |||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes [Abstract] | ' | ||||||||||||
Schedule of income tax provision | ' | ||||||||||||
2011 | 2012 | 2013 | |||||||||||
Current: | |||||||||||||
Federal | $ | 53,344 | $ | 36,028 | $ | 26,390 | |||||||
State | 12,081 | 8,333 | 4,582 | ||||||||||
Total current | 65,425 | 44,361 | 30,972 | ||||||||||
Deferred: | |||||||||||||
Federal | 4,760 | (608 | ) | (18,387 | ) | ||||||||
State | (707 | ) | (708 | ) | (1,726 | ) | |||||||
Total deferred | 4,053 | (1,316 | ) | (20,113 | ) | ||||||||
Total provision for income taxes | $ | 69,478 | $ | 43,045 | $ | 10,859 | |||||||
Schedule of tax effects of principal temporary differences that give rise to deferred tax assets | ' | ||||||||||||
2012 | 2013 | ||||||||||||
Tuition receivable | $ | 4,215 | $ | 4,021 | |||||||||
Employee-related liabilities | 280 | 144 | |||||||||||
Other facility-related costs | 826 | 3,684 | |||||||||||
Current net deferred tax asset | 5,321 | 7,849 | |||||||||||
Property and equipment | (15,972 | ) | (13,091 | ) | |||||||||
Deferred leasing costs | 3,475 | 3,082 | |||||||||||
Stock-based compensation | 13,814 | 13,871 | |||||||||||
Other facility-related costs | 1,484 | 13,696 | |||||||||||
Interest rate swap | 474 | (18 | ) | ||||||||||
Other | 4 | (411 | ) | ||||||||||
Long-term net deferred tax asset | 3,279 | 17,129 | |||||||||||
Net deferred tax asset | $ | 8,600 | $ | 24,978 | |||||||||
Schedule of reconciliation between statutory tax rate and effective tax rate | ' | ||||||||||||
2011 | 2012 | 2013 | |||||||||||
Statutory federal rate | 35 | % | 35 | % | 35 | % | |||||||
State income taxes, net of federal benefits | 4.3 | 4.3 | 4.6 | ||||||||||
Other | 0.3 | 0.2 | 0.2 | ||||||||||
Effective tax rate | 39.6 | % | 39.5 | % | 39.8 | % |
Summarized_Quarterly_Financial1
Summarized Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Summarized Quarterly Financial Data [Abstract] | ' | ||||||||||||||||
Schedule of quarterly financial information | ' | ||||||||||||||||
Quarter | |||||||||||||||||
2012 | First | Second | Third | Fourth | |||||||||||||
Revenues | $ | 149,532 | $ | 146,254 | $ | 124,260 | $ | 141,933 | |||||||||
Income from operations | 40,858 | 36,168 | 7,836 | 28,725 | |||||||||||||
Net income | 23,989 | 21,212 | 4,103 | 16,627 | |||||||||||||
Net income per share: | |||||||||||||||||
Basic | $ | 2.1 | $ | 1.86 | $ | 0.36 | $ | 1.47 | |||||||||
Diluted | $ | 2.09 | $ | 1.85 | $ | 0.36 | $ | 1.47 | |||||||||
Quarter | |||||||||||||||||
2013 | First | Second | Third | Fourth | |||||||||||||
Revenues | $ | 137,506 | $ | 131,980 | $ | 110,031 | $ | 124,083 | |||||||||
Income (loss) from operations | 29,919 | 26,257 | 6,621 | (30,096 | ) | ||||||||||||
Net income (loss) | 17,231 | 15,002 | 3,149 | (18,957 | ) | ||||||||||||
Net income (loss) per share: | |||||||||||||||||
Basic | $ | 1.59 | $ | 1.43 | $ | 0.3 | $ | (1.80 | ) | ||||||||
Diluted | $ | 1.59 | $ | 1.42 | $ | 0.3 | $ | (1.80 | ) | ||||||||
Nature_of_Operations_Details
Nature of Operations (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Segments | |
Nature of Operations [Abstract] | ' |
Number of reporting segments | 1 |
Significant_Accounting_Policie3
Significant Accounting Policies (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of tuition receivable and allowance for doubtful accounts | ' | ' |
Tuition receivable | $26,145 | $29,858 |
Allowances for doubtful accounts | -10,303 | -6,596 |
Tuition receivable, net | $15,842 | $23,262 |
Significant_Accounting_Policie4
Significant Accounting Policies (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of allowance for doubtful accounts | ' | ' | ' |
Beginning allowance for doubtful accounts | $6,596 | $7,279 | $7,935 |
Additions charged to expense | 22,225 | 23,728 | 24,877 |
Write-offs, net of recoveries | -18,518 | -24,411 | -25,533 |
Ending allowance for doubtful accounts | $10,303 | $6,596 | $7,279 |
Significant_Accounting_Policie5
Significant Accounting Policies (Details 2) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of reconciliation of shares used to calculate basic and diluted earnings per share | ' | ' | ' |
Weighted average shares outstanding used to compute basic earnings per share | 10,584 | 11,390 | 11,906 |
Incremental shares issuable upon the assumed exercise of stock options | ' | ' | 8 |
Unvested restricted stock and restricted stock units | 40 | 50 | 29 |
Shares used to compute diluted earnings per share | 10,624 | 11,440 | 11,943 |
Significant_Accounting_Policie6
Significant Accounting Policies (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Percentage of tuition revenue in total revenue | 96.00% | ' | ' |
Tuition receivable included in other assets | $3,400,000 | ' | ' |
Depreciation and amortization on property and equipment | $35,563,000 | $23,973,000 | $21,525,000 |
Common stock, shares authorized | 20,000,000 | 20,000,000 | ' |
Common stock, par value | $0.01 | $0.01 | ' |
Common stock, shares issued | 10,797,464 | 11,387,299 | ' |
Common stock, shares outstanding | 10,797,464 | 11,387,299 | ' |
Preferred stock, shares authorized | 8,000,000 | ' | ' |
Preferred stock, shares issued | ' | ' | ' |
Preferred stock, shares outstanding | ' | ' | ' |
Income tax description | 'Upon determination, uncertain tax positions are measured to determine the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. A tax position is derecognized if it no longer meets the more likely than not threshold of being sustained. | ' | ' |
Issued and outstanding of stock options | ' | ' | 8,000 |
Minimum [Member] | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Estimated useful life of property and equipment | '3 years | ' | ' |
Maximum [Member] | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Estimated useful life of property and equipment | '40 years | ' | ' |
Restructuring_and_Related_Char2
Restructuring and Related Charges (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cost Reduction Initiatives and Related Charges [Line Items] | ' | ' | ' |
Instruction and educational support | $310,446 | $300,098 | $292,003 |
Marketing | 75,426 | 71,864 | 74,293 |
Admissions advisory | 20,390 | 26,374 | 26,531 |
General & administration | 64,637 | 50,056 | 55,464 |
Total charges | 470,899 | 448,392 | 448,291 |
Restructuring and Related Charges [Member] | ' | ' | ' |
Cost Reduction Initiatives and Related Charges [Line Items] | ' | ' | ' |
Instruction and educational support | 36,160 | ' | ' |
Marketing | 120 | ' | ' |
Admissions advisory | 248 | ' | ' |
General & administration | 18,162 | ' | ' |
Total charges | 54,690 | ' | ' |
Lease and Related Costs [Member] | Restructuring and Related Charges [Member] | ' | ' | ' |
Cost Reduction Initiatives and Related Charges [Line Items] | ' | ' | ' |
Instruction and educational support | 30,612 | ' | ' |
Marketing | ' | ' | ' |
Admissions advisory | ' | ' | ' |
General & administration | 17,180 | ' | ' |
Total charges | 47,792 | ' | ' |
Severance and Other Employee Separation Costs [Member] | Restructuring and Related Charges [Member] | ' | ' | ' |
Cost Reduction Initiatives and Related Charges [Line Items] | ' | ' | ' |
Instruction and educational support | 5,548 | ' | ' |
Marketing | 120 | ' | ' |
Admissions advisory | 248 | ' | ' |
General & administration | 982 | ' | ' |
Total charges | $6,898 | ' | ' |
Restructuring_and_Related_Char3
Restructuring and Related Charges (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | |
Cost Reduction Initiatives and Related Charges [Line Items] | ' | |
Balance at December 31, 2012 | ' | |
Restructuring and other charges (1) | 54,690 | [1] |
Non-cash adjustments(2) | -3,701 | [2] |
Payments | -6,223 | |
Balance at December 31, 2013(1) | 44,766 | [1] |
Lease and Related Costs [Member] | ' | |
Cost Reduction Initiatives and Related Charges [Line Items] | ' | |
Balance at December 31, 2012 | ' | |
Restructuring and other charges (1) | 47,792 | [1] |
Non-cash adjustments(2) | -5,139 | [2] |
Payments | -103 | |
Balance at December 31, 2013(1) | 42,550 | [1] |
Severance and Other Employee Separation Costs [Member] | ' | |
Cost Reduction Initiatives and Related Charges [Line Items] | ' | |
Balance at December 31, 2012 | ' | |
Restructuring and other charges (1) | 6,898 | [1] |
Non-cash adjustments(2) | 1,438 | [2] |
Payments | -6,120 | |
Balance at December 31, 2013(1) | $2,216 | [1] |
[1] | The current portion of restructuring liabilities was $10.4 million as of December 31, 2013, most of which are included in Accounts payable and accrued expenses, and the long-term portion is included in Other long-term liabilities in the Consolidated Balance Sheets. The gross obligation associated with restructuring liabilities as of December 31, 2013 is approximately $44.8 million, which principally represents non-cancelable leases that will be paid over the respective lease terms through 2022. | |
[2] | A total of $48.5 million of non-cash charges were incurred in connection with the restructuring. Non-cash adjustments for lease and related costs include $10.9 million of accelerated depreciation, partially offset by the release of certain deferred rent and leasehold incentive liabilities of approximately $5.7 million. Non-cash adjustments for severance and other employee separation costs represents share-based compensation. |
Restructuring_and_Related_Char4
Restructuring and Related Charges (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | ||
Campus | |||
Restructuring and Related Charges [Abstract] | ' | ' | |
Restructuring liabilities | $10,400,000 | ' | |
Restructuring charges gross obligations liability | 44,766,000 | [1] | ' |
Lease term expire | '2022 | ' | |
Campus location closed | 20 | ' | |
Contractual obligation | 36,000,000 | ' | |
Severance and other employee separation costs | 6,900,000 | ' | |
Restructuring and related cost, accelerated depreciation | 10,900,000 | ' | |
Non-cash charges incurred with restructing | 48,500,000 | ' | |
Deferred rent and leasehold incentives | 5,700,000 | ' | |
Severance and other employee separation costs paid | $6,100,000 | ' | |
[1] | The current portion of restructuring liabilities was $10.4 million as of December 31, 2013, most of which are included in Accounts payable and accrued expenses, and the long-term portion is included in Other long-term liabilities in the Consolidated Balance Sheets. The gross obligation associated with restructuring liabilities as of December 31, 2013 is approximately $44.8 million, which principally represents non-cancelable leases that will be paid over the respective lease terms through 2022. |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | Land [Member] | Land [Member] | Buildings and improvements [Member] | Buildings and improvements [Member] | Buildings and improvements [Member] | Buildings and improvements [Member] | Furniture, equipment and computer hardware and software [Member] | Furniture, equipment and computer hardware and software [Member] | Furniture, equipment and computer hardware and software [Member] | Furniture, equipment and computer hardware and software [Member] | Leasehold improvements [Member] | Leasehold improvements [Member] | Leasehold improvements [Member] | Leasehold improvements [Member] | Construction in progress [Member] | Construction in progress [Member] | ||
Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | |||||||||||||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated useful life (years) | ' | ' | ' | ' | ' | ' | '5 years | '40 years | ' | ' | '5 years | '10 years | ' | ' | '3 years | '10 years | ' | ' |
Property and equipment, gross | $225,492 | $217,955 | $7,138 | $7,138 | $19,105 | $18,188 | ' | ' | $159,160 | $153,597 | ' | ' | $39,299 | $38,362 | ' | ' | $790 | $670 |
Accumulated depreciation and amortization | -131,071 | -96,435 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, net | $94,421 | $121,520 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property_and_Equipment_Details1
Property and Equipment (Details Textual) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Property and Equipment [Abstract] | ' | ' |
Leasehold improvements reimbursed by lessors as lease incentives | $0.30 | $1.10 |
Fixed assets written off | $0.80 | $12.50 |
Restricted_Cash_Details
Restricted Cash (Details) (USD $) | Dec. 31, 2013 |
Restricted Cash (Textual) | ' |
Minimum protective endowment | $500,000 |
Acquisition_Details
Acquisition (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 27, 2011 | Dec. 31, 2013 |
Certain assets of Jack Welch Management Institute [Member] | Certain assets of Jack Welch Management Institute [Member] | |||
Business Acquisition [Line Items] | ' | ' | ' | ' |
Purchase price paid for acquisition of certain assets of the Jack Welch Management Institute | ' | ' | $7,000,000 | ' |
Cash received form Mr. Welch representing his economic interest in JWMI | ' | ' | 2,800,000 | ' |
Deferred payments to the sellers | ' | ' | ' | 2,100,000 |
Value of acquired course content | ' | ' | 800,000 | ' |
Estimated useful life of course content | ' | ' | '5 years | ' |
Acquired indefinite-lived intangible assets | ' | ' | 1,600,000 | ' |
Goodwill | $6,800,000 | $6,800,000 | $6,800,000 | ' |
Term_Loan_and_Revolving_Credit2
Term Loan and Revolving Credit Facility (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of debt and short-term borrowings | ' | ' |
Total debt | $121,875 | ' |
Less: Current portion of long-term debt | 3,125 | 3,125 |
Long-term debt | 118,750 | 121,875 |
Term loan [Member] | ' | ' |
Schedule of debt and short-term borrowings | ' | ' |
Total debt | 121,875 | ' |
Revolving credit facility [Member] | ' | ' |
Schedule of debt and short-term borrowings | ' | ' |
Total debt | ' | ' |
Term_Loan_and_Revolving_Credit3
Term Loan and Revolving Credit Facility (Details 1) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Schedule of aggregate debt maturities | ' |
2014 | $3,125 |
2015 | 6,250 |
2016 | 112,500 |
Total debt | $121,875 |
Term_Loan_and_Revolving_Credit4
Term Loan and Revolving Credit Facility (Details Textual) (USD $) | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2012 | Dec. 31, 2013 | Nov. 08, 2012 | |
Term Loan and Revolving Credit Facility (Textual) | ' | ' | ' |
Maturity date | 31-Dec-16 | ' | ' |
Long term debt | ' | $121,875,000 | ' |
Term loan facility, quarterly amortization payments, during 2013 | ' | ' | 781,250 |
Term loan facility, quarterly amortization payments, during 2014 | ' | ' | 781,250 |
Term loan facility, quarterly amortization payments, during 2015 | ' | ' | 1,562,500 |
Term loan facility, quarterly amortization payments, during 2016 | ' | ' | 1,562,500 |
Quarterly payment percentage of aggregate original principal amount of term loan facility in year one and two | ' | ' | 0.63% |
Quarterly payment percentage of aggregate original principal amount of term loan facility in year three and four | ' | ' | 1.25% |
Cash interest paid | ' | 4,600,000 | ' |
Average annual interest rate | ' | 4.40% | ' |
Covenant terms required by credit facility | ' | '1) A total leverage ratio of not greater than 2.00:1.00; 2) A coverage ratio of not less than 1.75:1.00; 3) A Department of Education financial composite score of not less than 1.5. | ' |
Maximum total leverage ratio | ' | 2 | ' |
Minimum coverage ratio | ' | 1.75 | ' |
Minimum department of education financial composite score | ' | 1.5 | ' |
Revolving Credit Facility [Member] | ' | ' | ' |
Term Loan and Revolving Credit Facility (Textual) | ' | ' | ' |
Revolving credit facility, value | ' | ' | 100,000,000 |
Long term debt | ' | ' | ' |
Option to increase commitments under credit facility | ' | ' | 50,000,000 |
Revolving Credit Facility [Member] | Base Rate [Member] | ' | ' | ' |
Term Loan and Revolving Credit Facility (Textual) | ' | ' | ' |
Debt instrument description of variable rate basis | ' | 'base rate | ' |
Revolving Credit Facility [Member] | Base Rate [Member] | Minimum [Member] | ' | ' | ' |
Term Loan and Revolving Credit Facility (Textual) | ' | ' | ' |
Margin rate for interest if using base rate | ' | 2.00% | ' |
Revolving Credit Facility [Member] | Base Rate [Member] | Maximum [Member] | ' | ' | ' |
Term Loan and Revolving Credit Facility (Textual) | ' | ' | ' |
Margin rate for interest if using base rate | ' | 2.50% | ' |
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ' | ' | ' |
Term Loan and Revolving Credit Facility (Textual) | ' | ' | ' |
Debt instrument description of variable rate basis | ' | 'LIBOR | ' |
Revolving Credit Facility [Member] | Letter of Credit [Member] | ' | ' | ' |
Term Loan and Revolving Credit Facility (Textual) | ' | ' | ' |
Letter of credit subfacility | ' | ' | 50,000,000 |
Term Loan Facility [Member] | ' | ' | ' |
Term Loan and Revolving Credit Facility (Textual) | ' | ' | ' |
Revolving credit facility, value | ' | ' | 125,000,000 |
Long term debt | ' | $121,875,000 | ' |
Term Loan Facility [Member] | Minimum [Member] | ' | ' | ' |
Term Loan and Revolving Credit Facility (Textual) | ' | ' | ' |
Unused commitment fee | ' | 0.30% | ' |
Term Loan Facility [Member] | Maximum [Member] | ' | ' | ' |
Term Loan and Revolving Credit Facility (Textual) | ' | ' | ' |
Unused commitment fee | ' | 0.40% | ' |
Term Loan Facility [Member] | Interest Rate Swap [Member] | ' | ' | ' |
Term Loan and Revolving Credit Facility (Textual) | ' | ' | ' |
Interest rate swap, fixed rate minimum | ' | 2.85% | ' |
Interest rate swap, fixed rate maximum | ' | 3.35% | ' |
Fair_Value_Measurement_Details
Fair Value Measurement (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Cash equivalents: | ' | ' |
Total assets at fair value on a recurring basis | $8,427 | $1,380 |
Other liabilities: | ' | ' |
Total liabilities at fair value on a recurring basis | 2,115 | 3,330 |
Deferred Payments [Member] | ' | ' |
Other liabilities: | ' | ' |
Total liabilities at fair value on a recurring basis | 2,115 | 2,119 |
Interest Rate Swaps [Member] | ' | ' |
Cash equivalents: | ' | ' |
Total assets at fair value on a recurring basis | 45 | ' |
Other liabilities: | ' | ' |
Total liabilities at fair value on a recurring basis | ' | 1,211 |
Money Market Funds [Member] | ' | ' |
Cash equivalents: | ' | ' |
Total assets at fair value on a recurring basis | 8,382 | 1,380 |
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | ' | ' |
Cash equivalents: | ' | ' |
Total assets at fair value on a recurring basis | 8,382 | 1,380 |
Other liabilities: | ' | ' |
Total liabilities at fair value on a recurring basis | ' | ' |
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | Deferred Payments [Member] | ' | ' |
Other liabilities: | ' | ' |
Total liabilities at fair value on a recurring basis | ' | ' |
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | Interest Rate Swaps [Member] | ' | ' |
Cash equivalents: | ' | ' |
Total assets at fair value on a recurring basis | ' | ' |
Other liabilities: | ' | ' |
Total liabilities at fair value on a recurring basis | ' | ' |
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | Money Market Funds [Member] | ' | ' |
Cash equivalents: | ' | ' |
Total assets at fair value on a recurring basis | 8,382 | 1,380 |
Significant Other Observable Inputs (Level 2) [Member] | ' | ' |
Cash equivalents: | ' | ' |
Total assets at fair value on a recurring basis | 45 | ' |
Other liabilities: | ' | ' |
Total liabilities at fair value on a recurring basis | ' | 1,211 |
Significant Other Observable Inputs (Level 2) [Member] | Deferred Payments [Member] | ' | ' |
Other liabilities: | ' | ' |
Total liabilities at fair value on a recurring basis | ' | ' |
Significant Other Observable Inputs (Level 2) [Member] | Interest Rate Swaps [Member] | ' | ' |
Cash equivalents: | ' | ' |
Total assets at fair value on a recurring basis | 45 | ' |
Other liabilities: | ' | ' |
Total liabilities at fair value on a recurring basis | ' | 1,211 |
Significant Other Observable Inputs (Level 2) [Member] | Money Market Funds [Member] | ' | ' |
Cash equivalents: | ' | ' |
Total assets at fair value on a recurring basis | ' | ' |
Significant Unobservable Inputs (Level 3) [Member] | ' | ' |
Cash equivalents: | ' | ' |
Total assets at fair value on a recurring basis | ' | ' |
Other liabilities: | ' | ' |
Total liabilities at fair value on a recurring basis | 2,115 | 2,119 |
Significant Unobservable Inputs (Level 3) [Member] | Deferred Payments [Member] | ' | ' |
Other liabilities: | ' | ' |
Total liabilities at fair value on a recurring basis | 2,115 | 2,119 |
Significant Unobservable Inputs (Level 3) [Member] | Interest Rate Swaps [Member] | ' | ' |
Cash equivalents: | ' | ' |
Total assets at fair value on a recurring basis | ' | ' |
Other liabilities: | ' | ' |
Total liabilities at fair value on a recurring basis | ' | ' |
Significant Unobservable Inputs (Level 3) [Member] | Money Market Funds [Member] | ' | ' |
Cash equivalents: | ' | ' |
Total assets at fair value on a recurring basis | ' | ' |
Fair_Value_Measurement_Details1
Fair Value Measurement (Details 1) (Deferred Payments [Member], USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Deferred Payments [Member] | ' |
Schedule of changes in fair value of level 3 liability | ' |
Balance at December 31, 2012 | $2,119 |
Amounts earned | -311 |
Adjustments to fair value | 307 |
Transfers in or out of Level 3 | ' |
Balance at December 31, 2013 | $2,115 |
Fair_Value_Measurement_Details2
Fair Value Measurement (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Swap | ||
Fair Value Measurement (Textual) | ' | ' |
Carrying value of the debt | $121,875,000 | ' |
Number of interest rate swaps | 2 | ' |
Interest rate swap, notional amount | 121,900,000 | ' |
Fair value assets and liabilities hierarchy level transfers amount | ' | ' |
Fair Value, Measurements, Nonrecurring [Member] | ' | ' |
Fair Value Measurement (Textual) | ' | ' |
Assets measured at fair value on a non-recurring basis, goodwill | 6,800,000 | 6,800,000 |
Assets measured at fair value on a non-recurring basis, other indefinite-lived intangible assets | $1,600,000 | $1,600,000 |
Stock_Options_Restricted_Stock2
Stock Options, Restricted Stock and Restricted Stock Units (Details) (Restricted Stock [Member], USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Restricted Stock [Member] | ' | ' | ' |
Schedule of restricted stock activity | ' | ' | ' |
Beginning Balance, Number of shares | 434,439 | 380,944 | 341,440 |
Grants, Number of shares | 225,741 | 82,741 | 74,868 |
Vested shares, Number of shares | -51,916 | -26,189 | -17,574 |
Forfeitures, Number of shares | -120,491 | -3,057 | -17,790 |
Ending Balance, Number of shares | 487,773 | 434,439 | 380,944 |
Beginning Balance, Weighted-average grant price | $178.88 | $194.26 | $204.89 |
Grants, Weighted-average grant price | $57.90 | $111.44 | $130.96 |
Vested shares, Weighted-average grant price | $164.22 | $195.58 | $131.31 |
Forfeitures, Weighted-average grant price | $140.30 | $127.51 | $155.01 |
Ending Balance, Weighted-average grant price | $131.51 | $178.88 | $194.26 |
Stock_Options_Restricted_Stock3
Stock Options, Restricted Stock and Restricted Stock Units (Details 1) (Stock Options [Member], USD $) | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Stock Options [Member] | ' | ' | ' | ' |
Schedule of stock option activity | ' | ' | ' | ' |
Beginning Balance, Number of shares | 100,000 | 100,000 | 100,000 | ' |
Grants, Number of shares | 100,000 | ' | ' | ' |
Exercises, Number of shares | ' | ' | ' | ' |
Forfeitures/Expirations, Number of shares | -100,000 | ' | ' | ' |
Ending Balance, Number of shares | 100,000 | 100,000 | 100,000 | 100,000 |
Exercisable, Number of shares | ' | 100,000 | 100,000 | ' |
Beginning Balance, Weighted-average exercise price | $107.28 | $107.28 | $107.28 | ' |
Grants, Weighted-average exercise price | $51.95 | ' | ' | ' |
Exercises, Weighted-average exercise price | ' | ' | ' | ' |
Forfeitures/Expirations, Weighted-average exercise price | $107.28 | ' | ' | ' |
Ending Balance, Weighted-average exercise price | $51.95 | $107.28 | $107.28 | $107.28 |
Exercisable, Weighted-average exercise price | $51.95 | $107.28 | $107.28 | ' |
Weighted-average remaining contractual life (yrs.) | '7 years | '1 month 6 days | '1 year 1 month 6 days | '2 years 1 month 6 days |
Exercisable, Weighted-average remaining contractual life (yrs.) | '0 years | ' | ' | ' |
Beginning Balance, Aggregate intrinsic value | ' | ' | $4,494 | ' |
Ending Balance, Aggregate intrinsic value | ' | ' | ' | 4,494 |
Exercisable, Aggregate intrinsic value | ' | ' | ' | ' |
Stock_Options_Restricted_Stock4
Stock Options, Restricted Stock and Restricted Stock Units (Details 2) (Stock Options [Member], USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Stock Options [Member] | ' | ' | ' |
Summary of number of shares exercisable | ' | ' | ' |
Exercisable, Number of shares | ' | 100,000 | 100,000 |
Exercisable, Weighted-average exercise price | $51.95 | $107.28 | $107.28 |
Stock_Options_Restricted_Stock5
Stock Options, Restricted Stock and Restricted Stock Units (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of stock-based compensation expense | ' | ' | ' |
Stock-based compensation expense included in operating expense | $9,291 | $5,464 | $13,234 |
Tax benefit | 3,698 | 2,158 | 5,245 |
Stock-based compensation expense, net of income tax | 5,593 | 3,306 | 7,989 |
Instruction and educational support [Member] | ' | ' | ' |
Schedule of stock-based compensation expense | ' | ' | ' |
Stock-based compensation expense included in operating expense | 1,976 | 3,273 | 3,635 |
Marketing [Member] | ' | ' | ' |
Schedule of stock-based compensation expense | ' | ' | ' |
Stock-based compensation expense included in operating expense | ' | ' | 65 |
Admissions advisory [Member] | ' | ' | ' |
Schedule of stock-based compensation expense | ' | ' | ' |
Stock-based compensation expense included in operating expense | ' | ' | ' |
General and administration [Member] | ' | ' | ' |
Schedule of stock-based compensation expense | ' | ' | ' |
Stock-based compensation expense included in operating expense | $7,315 | $2,191 | $9,534 |
Stock_Options_Restricted_Stock6
Stock Options, Restricted Stock and Restricted Stock Units (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of information regarding share-based payment arrangements | ' | ' | ' |
Proceeds from stock options exercised | ' | ' | ' |
Excess tax benefits (shortfall) related to share-based payment arrangements | -3,567 | -245 | -569 |
Intrinsic value of stock options exercised (1) | ' | ' | ' |
Stock_Options_Restricted_Stock7
Stock Options, Restricted Stock and Restricted Stock Units (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | 1 Months Ended | ||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Apr. 30, 2011 | Apr. 30, 2011 | 31-May-13 | Mar. 31, 2013 | Feb. 28, 2013 | 31-May-13 | Feb. 28, 2013 | Feb. 28, 2013 |
1996 Equity Compensation Plan [Member] | 2011 Equity Compensation Plan [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Minimum [Member] | Maximum [Member] | ||
Non-employee [Member] | Restricted Stock [Member] | Restricted Stock [Member] | |||||||
Stock Options and Restricted Stock (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares approved for grants | ' | ' | ' | 43,659 | ' | 165,712 | 16,370 | ' | ' |
Shares available for grant | ' | 350,000 | 300,000 | ' | ' | ' | ' | ' | ' |
Vesting period, years | ' | ' | ' | '4 years | ' | ' | '3 years | '3 years | '5 years |
Closing price of stock on date of stock grant | ' | ' | ' | ' | ' | $62.28 | $45.81 | ' | ' |
Restricted shares converted to restricted stock units | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' |
Maximum term of the awards granted under the Plan | '10 years | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation cost which has not yet been recognized | $34.50 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation cost recognized period, in months | '54 months | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted stock awarded subject to performance condition | 351,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares not meeting performance criteria | 45,920 | ' | ' | ' | ' | ' | ' | ' | ' |
Reduction in stock based compensation | $7 | ' | ' | ' | ' | ' | ' | ' | ' |
Other_LongTerm_Liabilities_Det
Other Long-Term Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other Long-Term Liabilities [Abstract] | ' | ' |
Loss on facilities not in use | $34,339 | ' |
Deferred rent and other facility costs | 8,258 | 11,650 |
Deferred payments (see Note 6) | 4,915 | 4,919 |
Unearned tuition | 1,897 | ' |
Lease incentives | 1,353 | 3,150 |
Deferred gain on sale of campus building | 694 | 975 |
Fair value of interest rate swap (see Note 7) | ' | 1,211 |
Total other long-term liabilities | $51,456 | $21,905 |
Other_LongTerm_Liabilities_Det1
Other Long-Term Liabilities (Details Textual) (USD $) | 1 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2007 | Dec. 31, 2013 |
Asset | ||
Other Long -Term Liabilities (Textual) | ' | ' |
Sale price of one of campus buildings | $5.80 | ' |
Sale and lease back term for most of the campus building | ' | 'Over a 10-year period |
Sale and lease back term | '10 years | ' |
Gain on sale and lease back of one of campus buildings before tax | $2.80 | ' |
Number of assets sold | 1 | ' |
Minimum [Member] | ' | ' |
Other Long -Term Liabilities (Textual) | ' | ' |
Leasehold improvements and long-term liability amortization period | ' | '5 years |
Maximum [Member] | ' | ' |
Other Long -Term Liabilities (Textual) | ' | ' |
Leasehold improvements and long-term liability amortization period | ' | '10 years |
Other_Employee_Benefit_Plans_D
Other Employee Benefit Plans (Details) (Employee Stock [Member], USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Employee Stock [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Shares purchased | 8,911 | 6,549 | 6,636 |
Average price per share | $42.27 | $71.14 | $98.55 |
Other_Employee_Benefit_Plans_D1
Other Employee Benefit Plans (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Other Employee Benefit Plans [Abstract] | ' | ' | ' |
Maximum annual contribution to 401(k) plan by employees, effective January 1, 2014 | $17,500 | ' | ' |
Percentage of company matching contribution to 401(K) plan | 50.00% | ' | ' |
Defined contribution plan employer matching contribution percent | 3.00% | ' | ' |
Company's contributions to 401(K) plan | $1,100,000 | $2,900,000 | $2,700,000 |
Common stock shares purchase price limit for employees as percentage of market value under Employee Stock Purchase Plan | 90.00% | ' | ' |
Employee stock purchase plan maximum percentage of purchase employee can make on eligible compensation | 10.00% | ' | ' |
Maximum number of shares available for purchase by participating employees | 2,500,000 | ' | ' |
Stock_Repurchase_Plan_Details
Stock Repurchase Plan (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of stock repurchase activity | ' | ' | ' |
Amount available for future purchases | $70 | $95 | $80 |
Common Stock [Member] | ' | ' | ' |
Schedule of stock repurchase activity | ' | ' | ' |
Number of shares repurchased | 495,085 | 484,841 | 1,581,444 |
Average price paid per share | $50.49 | $51.56 | $128.15 |
Amount available for future purchases | $70 | $95 | $80 |
Stock_Repurchase_Plan_Details_
Stock Repurchase Plan (Details Textual) (USD $) | 0 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Nov. 03, 2003 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Stock Repurchase Plan (Textual) | ' | ' | ' | ' |
Authorized common stock for repurchases, amount | $15 | ' | ' | ' |
Remaining authorized share for repurchases, amount | ' | $70 | $95 | $80 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Schedule of minimum rental commitments | ' |
2014 | $41,975 |
2015 | 39,740 |
2016 | 34,488 |
2017 | 29,114 |
2018 | 24,155 |
Thereafter | 47,640 |
Total | $217,112 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textual) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Campus | |||
Lease | |||
Commitments and Contingencies (Textual) | ' | ' | ' |
Number of long-term, non-cancelable operating leases | 99 | ' | ' |
Rent expense | $82.20 | $46.50 | $42.20 |
Charges related to the closure of campuses and other administrative facilities | $36 | ' | ' |
Number of locations to be closed | 20 | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current: | ' | ' | ' |
Federal | $26,390 | $36,028 | $53,344 |
State | 4,582 | 8,333 | 12,081 |
Total current | 30,972 | 44,361 | 65,425 |
Deferred: | ' | ' | ' |
Federal | -18,387 | -608 | 4,760 |
State | -1,726 | -708 | -707 |
Total deferred | -20,113 | -1,316 | 4,053 |
Total provision for income taxes | $10,859 | $43,045 | $69,478 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of tax effects of principal temporary differences that give rise to deferred tax assets | ' | ' |
Tuition receivable | $4,021 | $4,215 |
Employee-related liabilities | 144 | 280 |
Other facility-related costs | 3,684 | 826 |
Current net deferred tax asset | 7,849 | 5,321 |
Property and equipment | -13,091 | -15,972 |
Deferred leasing costs | 3,082 | 3,475 |
Stock-based compensation | 13,871 | 13,814 |
Other facility-related costs | 13,696 | 1,484 |
Interest rate swap | -18 | 474 |
Other | -411 | 4 |
Long-term net deferred tax asset | 17,129 | 3,279 |
Net deferred tax asset | $24,978 | $8,600 |
Income_Taxes_Details_2
Income Taxes (Details 2) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Schedule of reconciliation between statutory tax rate and effective tax rate | ' | ' | ' |
Statutory federal rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal benefits | 4.60% | 4.30% | 4.30% |
Other | 0.20% | 0.20% | 0.30% |
Effective tax rate | 39.80% | 39.50% | 39.60% |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Taxes (Textual) | ' | ' | ' |
Unrecognized tax benefits | $0.20 | ' | ' |
Liability for uncertain tax positions, current | 2.2 | ' | ' |
Cash payments for income taxes | $26.50 | $47.40 | $67 |
Summarized_Quarterly_Financial2
Summarized Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of quarterly financial information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | $124,083 | $110,031 | $131,980 | $137,506 | $141,933 | $124,260 | $146,254 | $149,532 | $503,600 | $561,979 | $627,434 |
Income (loss) from operations | -30,096 | 6,621 | 26,257 | 29,919 | 28,725 | 7,836 | 36,168 | 40,858 | 32,701 | 113,587 | 179,143 |
Net income (loss) | ($18,957) | $3,149 | $15,002 | $17,231 | $16,627 | $4,103 | $21,212 | $23,989 | $16,425 | $65,930 | $106,044 |
Net income per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic | ($1.80) | $0.30 | $1.43 | $1.59 | $1.47 | $0.36 | $1.86 | $2.10 | $1.55 | $5.79 | $8.91 |
Diluted | ($1.80) | $0.30 | $1.42 | $1.59 | $1.47 | $0.36 | $1.85 | $2.09 | $1.55 | $5.76 | $8.88 |
Regulation_Details
Regulation (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Regulation [Abstract] | ' |
Percentage of annual loans payment | 30.00% |
Average of median annual earning percentage | 8.00% |
Average of median discretionary percentage | 20.00% |
Title IV ineligible description | 'Under the pCDR, a program would become Title IV ineligible for 3 years if the three-year default rate of three consecutive cohorts of students is greater than or equal to 30%. |