Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 01, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | STRAYER EDUCATION INC | ||
Entity Central Index Key | 1,013,934 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 516.3 | ||
Entity Common Stock, Shares Outstanding | 11,093,489 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 129,245 | $ 106,889 |
Tuition receivable, net | 20,532 | 18,519 |
Other current assets | 10,766 | 6,944 |
Total current assets | 160,543 | 132,352 |
Property and equipment, net | 73,124 | 77,139 |
Deferred income taxes | 31,096 | 26,449 |
Goodwill | 20,744 | 6,800 |
Other assets | 13,189 | 5,694 |
Total assets | 298,696 | 248,434 |
Current liabilities: | ||
Accounts payable and accrued expenses | 41,132 | 42,253 |
Income taxes payable | 1,883 | 2,684 |
Deferred revenue | 16,691 | 12,373 |
Other current liabilities | 133 | 281 |
Total current liabilities | 59,839 | 57,591 |
Other long-term liabilities | 50,483 | 47,987 |
Total liabilities | 110,322 | 105,578 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, par value $0.01; 20,000,000 shares authorized; 11,027,177 and 11,093,489 shares issued and outstanding at December 31, 2015 and 2016, respectively | 111 | 110 |
Additional paid-in capital | 35,453 | 24,738 |
Retained earnings | 152,810 | 118,008 |
Total stockholders' equity | 188,374 | 142,856 |
Total liabilities and stockholders' equity | $ 298,696 | $ 248,434 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
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 | 11,093,489 | 11,027,177 |
Common stock, shares outstanding | 11,093,489 | 11,027,177 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statements of Income [Abstract] | |||
Revenues | $ 441,088 | $ 434,437 | $ 446,041 |
Costs and expenses: | |||
Instruction and educational support | 241,026 | 234,097 | 236,303 |
Marketing | 79,025 | 70,084 | 66,495 |
Admissions advisory | 17,832 | 16,304 | 16,661 |
General and administration | 45,733 | 44,254 | 44,835 |
Total costs and expenses | 383,616 | 364,739 | 364,294 |
Income from operations | 57,472 | 69,698 | 81,747 |
Investment income | 462 | 283 | 117 |
Interest expense | 642 | 3,850 | 5,248 |
Income before income taxes | 57,292 | 66,131 | 76,616 |
Provision for income taxes | 22,490 | 26,108 | 30,260 |
Net income | $ 34,802 | $ 40,023 | $ 46,356 |
Earnings per share: | |||
Basic | $ 3.28 | $ 3.78 | $ 4.39 |
Diluted | $ 3.21 | $ 3.73 | $ 4.35 |
Weighted average shares outstanding: | |||
Basic | 10,610 | 10,588 | 10,561 |
Diluted | 10,845 | 10,740 | 10,650 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statements of Comprehensive Income [Abstract] | |||
Net income | $ 34,802 | $ 40,023 | $ 46,356 |
Other comprehensive income: | |||
Change in fair value of derivative instrument, net of income tax | (88) | 60 | |
Comprehensive income | $ 34,802 | $ 39,935 | $ 46,416 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balance at Dec. 31, 2013 | $ 108 | $ 7,137 | $ 31,629 | $ 28 | $ 38,902 |
Beginning balance, shares at Dec. 31, 2013 | 10,797,464 | ||||
Tax shortfall associated with stock-based compensation arrangements | (2,039) | (2,039) | |||
Restricted stock grants, net of forfeitures | $ 1 | (1) | |||
Restricted stock grants, net of forfeitures, shares | 105,877 | ||||
Stock-based compensation | 9,453 | 9,453 | |||
Change in fair value of derivative instrument, net of income tax | 60 | 60 | |||
Net income | 46,356 | 46,356 | |||
Ending balance at Dec. 31, 2014 | $ 109 | 14,550 | 77,985 | 88 | 92,732 |
Ending balance, shares at Dec. 31, 2014 | 10,903,341 | ||||
Tax shortfall associated with stock-based compensation arrangements | (24) | (24) | |||
Restricted stock grants, net of forfeitures | $ 1 | (1) | |||
Restricted stock grants, net of forfeitures, shares | 123,836 | ||||
Stock-based compensation | 10,213 | 10,213 | |||
Change in fair value of derivative instrument, net of income tax | $ (88) | (88) | |||
Net income | 40,023 | 40,023 | |||
Ending balance at Dec. 31, 2015 | $ 110 | 24,738 | 118,008 | 142,856 | |
Ending balance, shares at Dec. 31, 2015 | 11,027,177 | ||||
Tax shortfall associated with stock-based compensation arrangements | (51) | (51) | |||
Restricted stock grants, net of forfeitures | $ 1 | (1) | |||
Restricted stock grants, net of forfeitures, shares | 66,312 | ||||
Stock-based compensation | 10,767 | 10,767 | |||
Net income | 34,802 | 34,802 | |||
Ending balance at Dec. 31, 2016 | $ 111 | $ 35,453 | $ 152,810 | $ 188,374 | |
Ending balance, shares at Dec. 31, 2016 | 11,093,489 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 34,802 | $ 40,023 | $ 46,356 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization of gain on sale of assets | (281) | (280) | (280) |
Amortization of deferred rent | (1,441) | (345) | (1,092) |
Amortization of deferred financing costs | 262 | 1,229 | 780 |
Depreciation and amortization | 17,817 | 18,104 | 20,630 |
Deferred income taxes | (8,697) | (4,006) | (1,036) |
Stock-based compensation | 10,767 | 10,213 | 9,453 |
Changes in assets and liabilities: | |||
Tuition receivable, net | (1,453) | (1,991) | 685 |
Other current assets | (3,949) | 4,005 | (2,862) |
Other assets | (1,865) | 22 | 219 |
Accounts payable and accrued expenses | (262) | (752) | 6,550 |
Income taxes payable and income taxes receivable | (408) | 1,835 | 737 |
Deferred revenue | 7,018 | 12,465 | 11,783 |
Other long-term liabilities | (7,800) | (2,974) | (13,946) |
Net cash provided by operating activities | 44,510 | 77,548 | 77,977 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (13,161) | (12,692) | (6,902) |
Cash used in acquisition, net of cash acquired | (7,635) | ||
Net cash used in investing activities | (20,796) | (12,692) | (6,902) |
Cash flows from financing activities: | |||
Payments on term loan | (118,750) | (3,125) | |
Payments of contingent consideration | (1,358) | (650) | (427) |
Payment of deferred financing costs | (850) | ||
Net cash used in financing activities | (1,358) | (120,250) | (3,552) |
Net increase in cash and cash equivalents | 22,356 | (55,394) | 67,523 |
Cash and cash equivalents - beginning of year | 106,889 | 162,283 | 94,760 |
Cash and cash equivalents - end of year | 129,245 | 106,889 | 162,283 |
Noncash transactions: | |||
Purchases of property and equipment included in accounts payable | $ 349 | $ 365 | $ 412 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2016 | |
Nature of Operations [Abstract] | |
Nature of Operations | 1. Nature of Operation Strayer Education, Inc. (the “Company”), a Maryland corporation, conducts its operations through its wholly-owned subsidiaries, Strayer University (the “University”) and New York Code and Design Academy (“NYCDA”). 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. NYCDA is a New York City-based provider of non-degree web and mobile app development courses. NYCDA courses are delivered on-ground to students seeking to further their career in software application development. The Company has only one reporting segment. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
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 wholly-owned subsidiaries. On January 13, 2016, the Company acquired all of the outstanding stock of NYCDA, and the results of NYCDA are included with the Company from the acquisition date. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. Revenue Recognition The Company’s educational programs typically are offered on a quarterly basis and such periods coincide with the Company’s quarterly financial reporting periods. Approximately 95% of the Company’s revenues during the year ended December 31, 2016 consisted of tuition revenue, which is recognized ratably over the course of instruction as academic services are provided. Tuition revenue is assessed for collectibility on a student-by-student basis throughout the quarter of instruction, and is shown net of any refunds, withdrawals, corporate discounts, scholarships and employee tuition discounts. This collectibility assessment considers available sources of funds for the student including Federal Financial Student Aid programs. The Company reassesses the collectibility of tuition revenue that it may earn based on new information and changes in the facts and circumstances relevant to a student’s ability to pay, including the timing of a student’s withdrawal from a program of study. At the start of each academic term or program, a liability (deferred revenue) is recorded for academic services to be provided and a tuition receivable is recorded for the portion of the tuition not paid in advance. Any cash received prior to the start of an academic term or program is recorded as deferred revenue. Some students may be eligible for scholarship awards, the estimated value of which will be realized in the future and is deducted from revenue when earned, based on historical student attendance and completion behavior. Deferred revenue 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, certificate revenue, certain academic fees, licensing revenue, and other income, all of which are recognized when earned. The Company’s refund policy typically permits students who complete less than half of a course to receive a partial refund of tuition for that course. Refunds reduce the tuition revenue that would have otherwise been recognized for that student. Since the University’s academic terms coincide with the Company’s financial reporting periods, nearly all refunds are processed and recorded within the same quarter as the corresponding revenue. The amount of tuition revenue refundable to students may vary based on the student’s state of residence. Unused books and related academic materials may be returned for a full refund within 21 days of the start of class; however, purchases of electronic content are not refundable if downloaded. Revenues derived from fees are not eligible for a refund. Graduation Fund In the third quarter of 2013, the Company introduced the Graduation Fund, which allows new undergraduate students to earn tuition credits that are redeemable in the final year of a student’s course of study if he or she successfully remains in the program. New students registering in credit-bearing courses in any undergraduate program receive one free course for every three courses that are successfully completed. Students must meet all of the University’s admission requirements, and must be enrolled in a bachelor’s degree program. The Company’s employees and their dependents are not eligible for the program. Students who have more than one consecutive term of non-attendance lose any Graduation Fund credits earned to date, but may earn and accumulate new credits if the student is reinstated or readmitted by the University in the future. Revenue from students participating in the Graduation Fund is recorded in accordance with the Revenue Recognition Topic, ASC 605-50. The Company defers the value of benefits estimated to be redeemed in the future based on the underlying revenue transactions that result in progress by the student toward earning the benefit. The Company’s estimate of the benefits that will be redeemed in the future is based on its historical experience of student persistence toward completion of a course of study within this program and similar programs. Each quarter, the Company assesses its methodologies and assumptions underlying these estimates and, to date, any adjustments to the estimates have not been material. The amount estimated to be redeemed in the next twelve months is $14.5 million and is included in deferred revenue as a current liability in the consolidated balance sheets. The table below presents activity in the Graduation Fund for the years ended December 31, 2015 and 2016 (in thousands): December 31, December 31, 2015 2016 Balance at beginning of period $ $ Revenue deferred Benefit redeemed Balance at end of period $ $ 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 Most 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. Restricted Cash A significant portion of the Company’s revenues are funded by various federal and state government programs. The Company generally does not receive funds from these programs prior to the start of the corresponding academic term. The Company may be required to return certain funds for students who withdraw from the University during the academic term. At December 31, 2016, the Company had approximately $13,000 of these unpaid obligations, which are recorded as restricted cash and included in other current assets in the consolidated balance sheets. There were no amounts payable for these obligations at December 31, 2015. As part of commencing operations in Pennsylvania in 2003, the Company was required to maintain a “minimum protective endowment” of at least $0.5 million in an interest-bearing account. These funds are required as long as the Company operates its campuses in the state. The Company holds these funds in an interest-bearing account which is included in other assets. Tuition Receivable and Allowance for Doubtful Accounts The Company records tuition receivable and deferred revenue for its students upon the start of the academic term or program. Therefore, at the end of the quarter (and academic term), tuition receivable represents amounts due from students for educational services already provided and deferred revenue generally 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. An allowance for doubtful accounts is established primarily based upon historical collection rates by age of receivable, net of estimated recoveries. These collection rates incorporate historical performance based on a student’s current enrollment status and likelihood of future enrollment. 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 as of December 31, 2015 and 2016 (in thousands): December 31, 2015 December 31, 2016 Tuition receivable $ $ Allowance for doubtful accounts Tuition receivable, net $ $ Approximately $2.0 million and $2.3 million of tuition receivable is included in other assets as of December 31, 2015 and 2016, respectively, 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 three years ended December 31, 2016 (in thousands): 2014 2015 2016 Allowance for doubtful accounts, beginning of period $ $ $ Additions charged to expense Write-offs, net of recoveries Allowance for doubtful accounts, end of period $ $ $ 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 2016, 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 expense was $20.6 million, $18.1 million and $17.8 million for the years ended December 31, 2014, 2015, and 2016, respectively. Construction in progress includes costs of computer software developed for internal use, which 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, 2016 in the consolidated statements of cash flows have been adjusted to exclude noncash 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 acquired businesses over the amount assigned to the assets acquired and liabilities assumed. At the time of an acquisition, the Company assigns the goodwill and related acquired assets and liabilities to its reporting units. Accordingly, the Company’s goodwill is allocated to JWMI and NYCDA. Indefinite-lived intangible assets, which include trade names, are recorded at fair market value on their acquisition date. An indefinite life was assigned to the trade names because they have the continued ability to generate cash flows indefinitely. Goodwill and the indefinite-lived intangible assets 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. During the fourth quarter of 2016, the Company changed the date of its annual impairment test from September 30 to December 31. The change was made to more closely align the impairment testing date with the Company’s planning and forecasting process. The change in the annual impairment testing date did not delay, accelerate, or avoid an impairment charge. The Company has determined that this change in accounting principle is preferable under the circumstances and does not result in adjustments to its financial statements when applied retrospectively. During 2016, the annual impairment test was performed as of September 30, 2016 and was performed again as of December 31, 2016. 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 for each reporting unit. Following its qualitative assessment as of September 30 and December 31, the Company determined it was not more likely than not that the fair value of its goodwill for JWMI and NYCDA was less than the carrying amount and, accordingly, no impairment existed in 2016. The Company tested its intangible assets concurrently with goodwill and determined that no impairment existed in 2016. The following table presents changes in goodwill for the years ended December 31, 2015 and 2016 (in thousands): 2015 2016 Balance as of the beginning of period $ $ Acquisition (see Note 3) — Measurement period adjustments — Balance as of the end of period $ $ Long-Term Liabilities Included in the Company’s long-term liabilities are amounts related to the Company’s operating leases, deferred payments related to an acquisition completed in 2011, and the non-current portion of deferred revenue. 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 underlying assets 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 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 recorded the non-current portion of the gain related to the sale and lease back of a campus facility as a long-term liability. 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 11,027,177 and 11,093,489 shares were issued and outstanding as of December 31, 2015 and 2016, 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, 2016 is based on awards ultimately expected to vest and, therefore, has been adjusted for estimated forfeitures. The Company estimates forfeitures at the time of grant and revises the estimate, if necessary, 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, 2016, the Company had no issued and outstanding stock options that were excluded from the calculation. Set forth below is a reconciliation of shares used to calculate basic and diluted earnings per share for each of the three years ended December 31, 2016 (in thousands): 2014 2015 2016 Weighted average shares outstanding used to compute basic earnings per share Incremental shares issuable upon the assumed exercise of stock options Unvested restricted stock and restricted stock units Shares used to compute diluted earnings per share 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, 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 2013-2016 remain open for Federal tax examination and the tax years 2012-2016 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, fair value of contingent consideration, and the provision for income taxes. Actual results could differ from those estimates. Comprehensive Income Comprehensive income consists of net income and the change in the fair value of the Company’s interest rate swap, net of income taxes. Recent Accounting Pronouncements In November 2015, the FASB issued ASU No. 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”). The new guidance requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The Company adopted ASU 2015-17 effective January 1, 2016 and reclassified approximately $6.4 million of its deferred tax asset from current to non-current assets in the consolidated balance sheet as of December 31, 2015, to conform to the current period presentation. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). The new guidance requires the recognition of right-of-use assets and lease liabilities on the balance sheet for most leases. Under current guidance, operating leases are off-balance sheet. ASU 2016-02 also requires more extensive quantitative and qualitative disclosures about leasing arrangements. ASU 2016-02 applies to fiscal periods beginning after December 15, 2018, using the modified retrospective method, with early adoption permitted. The Company anticipates that the impact of ASU 2016-02 on its consolidated balance sheet will be material as the Company will record significant asset and liability balances in connection with its leased properties. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 impacts several aspects of the accounting for share-based payment transactions, including classification of certain items on the consolidated statement of cash flows and accounting for income taxes. Specifically, ASU 2016-09 requires excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in earnings. In addition, ASU 2016-09 allows companies to recognize the impact of stock award forfeitures at the time of forfeiture, rather than as an estimate ratably over the life of awards. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company will adopt ASU 2016-09, effective January 1, 2017, which may introduce significant volatility to the Company’s provision for income taxes In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The standard establishes a new recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date , which defers the effective date of ASU 2014-09 by one year to fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2016. Accordingly, the new revenue recognition standard is effective for the Company on January 1, 2018 using either a full retrospective or a modified retrospective approach. During 2016, the FASB issued four new ASUs amending certain aspects of ASU 2014-09. The Company is currently evaluating which transition approach to use and the impact that the new revenue recognition standard and related ASUs will have on our Consolidated Financial Statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses , which is included in ASC Topic 326, Measurement of Credit Losses on Financial Instruments . The new guidance revises the accounting requirements related to the measurement of credit losses and will require organizations to measure all expected credit losses for financial assets based on historical experience, current conditions and reasonable and supportable forecasts about collectibility. Assets must be presented in the financial statements at the net amount expected to be collected. The guidance will be effective for the Company's annual and interim reporting periods beginning January 1, 2020, with early adoption permitted. The Company is evaluating the impact this standard will have on its financial condition, results of operations, and disclosures. In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-15, Classification of Certain Cash Receipts and Cash Payments , which is included in FASB Accounting Standards Codification (ASC) Topic 230, Statement of Cash Flows . The new guidance clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows, including contingent consideration payments made after a business acquisition. The guidance will be effective for the Company's annual and interim reporting periods beginning January 1, 2018, and early adoption is permitted. The Company does not expect adoption of this guidance to have a material impact on its financial condition, results of operations, or disclosures. Other ASUs issued by the FASB but not yet effective are not expected to have a material effect on the Company’s Consolidated Financial Statements. |
Acquisition of New York Code an
Acquisition of New York Code and Design Academy | 12 Months Ended |
Dec. 31, 2016 | |
Acquisition of New York Code and Design Academy [Abstract] | |
Acquisition of New York Code and Design Academy | 3. On January 13, 2016, the Company acquired all of the outstanding stock of NYCDA, a provider of non-degree information technology curriculum based in New York City (the “Acquisition”). The Acquisition supports the Company’s strategy to leverage current resources and capabilities to grow into new high demand sectors of the education marketplace. The Company incurred transaction costs of approximately $0.2 million, and these costs are included in general and administrative costs in the consolidated statements of income. The Acquisition is accounted for as a business combination. The purchase price included $2.4 million paid up front in cash, plus contingent cash payments of (a) up to $12.5 million payable based on NYCDA’s results of operations over a five-year period (the “Earnout”), and (b) $5.5 million payable based on NYCDA’s receipt of state regulatory permits. Pursuant to the Acquisition, $1.0 million of the Earnout may be accelerated upon receipt of one of the state regulatory permits. In April 2016 and August 2016, NYCDA received the state regulatory permits and the Company paid $6.0 and $0.5 million of contingent consideration to the sellers, respectively. In addition, the Company paid a total of $4.6 million to two of NYCDA’s founders who are required to remain employed for at least three years from the acquisition date. If either of them terminates employment voluntarily, or is terminated for cause (as defined), he is required to reimburse the Company his respective portion of the retention amount. This amount is classified as prepaid compensation and is amortized to compensation expense over three years. Total potential cash payments for the acquisition and the Earnout could total $25.0 million. The Company estimated the fair values of the assets acquired and liabilities assumed at the date of the Acquisition. During 2016, based on final analyses that supported the underlying estimate, the Company recorded measurement period adjustments of $0.3 million to goodwill and deferred tax liabilities. The final allocation of the purchase price is as follows: Purchase Price Allocation Useful Life Cash $ Other assets Intangibles: Trade name Indefinite Goodwill Liabilities assumed Total assets acquired and liabilities assumed, net Less: contingent consideration Less: cash acquired Cash paid for acquisition, net of cash acquired $ The fair value of the contingent consideration was measured by applying a probability weighted discounted cash flow model based on significant inputs not observable in the market (Level 3 inputs). Key assumptions include a discount rate of 4.5% and expected future value of payments of $12.5 million. During the fourth quarter of 2016, the Company revised its assumptions of the timing of future cash flows and recorded an adjustment to reduce the fair value of contingent consideration by $1.3 million. The fair value of assets acquired and liabilities assumed was determined based on assumptions that reasonable market participants would use while employing the concept of highest and best use of the respective items. The following assumptions were used, the majority of which include significant unobservable inputs (Level 3), and valuation methodologies to determine fair value: · Intangibles – Income approaches were used to value the substantial majority of the acquired intangibles. The trade name was valued using the relief from-royalty method, which represents the benefit of owning these intangible assets rather than paying royalties for their use. · Other assets and liabilities – The carrying value of all other assets and liabilities approximated fair value at the time of acquisition. Pro forma financial information for the NYCDA acquisition has not been presented as it was not material to the Company’s consolidated results. |
Restructuring and Related Charg
Restructuring and Related Charges | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Charges [Abstract] | |
Restructuring and Related Charges | 4. Restructuring and Related Charges In October 2013, the Company implemented a restructuring to better align the Company’s resources with student enrollments at the time. This restructuring included the closing of 20 physical locations and reductions in the number of campus-based and corporate employees. A liability for lease obligations, some of which continue through 2022, was recorded and is measured at fair value using a discounted cash flow approach encompassing significant unobservable inputs (Level 3). The estimation of future cash flows includes non-cancelable contractual lease costs over the remaining terms of the leases discounted at the Company’s marginal borrowing rate of 4.5%, partially offset by estimated future sublease rental income discounted at credit-adjusted rates. The Company’s estimates, which involve significant judgment, also consider the amount and timing of sublease rental income based on subleases that have been executed and subleases expected to be executed based on current commercial real estate market data and conditions, and other qualitative factors specific to the facilities. The estimates are subject to adjustment as market conditions change or as new information becomes available, including the execution of additional sublease agreements. The following details the changes in the Company’s restructuring liability by type of cost during the three years ended December 31, 2016 (in thousands): Severance Lease and Other and Related Employee Costs, Net Separation Costs Total Balance at December 31, 2013 $ $ $ Payments Adjustments (2) Balance at December 31, 2014 (1) — Payments — Adjustments (2) — Balance at December 31, 2015 (1) — Payments — Adjustments (2) — Balance at December 31, 2016 (1) $ $ — $ (1) The current portion of restructuring liabilities was $4.8 million and $4.2 million as of December 31, 2015 and December 31, 2016, respectively, which are included in accounts payable and accrued expenses. The long-term portion is included in other long-term liabilities. (2) Adjustments include accretion of interest on lease costs, offset by changes in the timing and expected income from sublease agreements. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment [Abstract] | |
Property and Equipment | 5. Property and Equipment The composition of property and equipment as of December 31, 2015 and 2016 is as follows (in thousands): Estimated useful 2015 2016 life (years) Land $ $ — Buildings and improvements 5-40 Furniture, equipment, and computer hardware and software 5-10 Leasehold improvements 3-10 Construction in progress Accumulated depreciation and amortization $ $ Construction in progress includes costs associated with the construction and renovation of campuses and the development of information technology applications. In 2015 and 2016, the Company recorded leasehold improvements of $2.9 million and $0.3 million, respectively, which were reimbursed by lessors as lease incentives. In 2015 and 2016, the Company wrote off $13.3 million and $3.2 million, respectively, in fixed assets that were fully depreciated and no longer in service. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurement [Abstract] | |
Fair Value Measurement | 6. Fair Value Measurement Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2016 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable December 31, Assets/Liabilities Inputs Inputs 2016 (Level 1) (Level 2) (Level 3) Assets: Money market funds $ $ $ — $ — Liabilities: Deferred payments $ $ — $ — $ Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2015 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable December 31, Assets/Liabilities Inputs Inputs 2015 (Level 1) (Level 2) (Level 3) Assets: Money market funds $ $ $ — $ — Liabilities: Deferred payments $ $ — $ — $ 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. The Company’s cash and cash equivalents held at December 31, 2015 and 2016, approximate fair value and are not disclosed in the above tables because of the short-term nature of the financial instruments. · Deferred payments — The Company acquired certain assets and entered into deferred payment arrangements with the sellers in transactions in 2011 and January 2016, which are classified within Level 3 as there is no liquid market for similarly priced instruments. The deferred payments are valued using a discounted cash flow model that encompasses significant unobservable inputs to estimate the operating results of the acquired assets. The assumptions used include estimates for interest rates, enrollment growth, retention rates, obtaining regulatory approvals for expansion into new markets, pricing strategies, and future cash flows. These assumptions are subject to change as the underlying data sources evolve and the program matures. The short-term portion of deferred payments was $1.1 million as of December 31, 2016 and is included in accounts payable and accrued expense. The Company’s lease loss liability incorporates an assessment of current sublease market conditions and uses Level 3 inputs, but is not deemed a fair value liability as the future lease payments are required to be discounted using the Company’s incremental borrowing rate at the date of lease abandonment without subsequent adjustment. See Note 4 for further discussion of the Company’s lease loss liability. 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, 2015 or 2016. Changes in the fair value of the Company’s Level 3 liabilities during the years ended December 31, 2015 and 2016 are as follows (in thousands): 2015 2016 Balance as of the beginning of period $ $ Amounts paid Contingent consideration originally recorded in connection with NYCDA acquisition — Other adjustments to fair value Balance as of the beginning of period $ $ |
Long Term Debt
Long Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Long Term Debt [Abstract] | |
Long Term Debt | 7. Long Term Debt On July 2, 2015, the Company entered into an amended credit facility (the “Amended Credit Facility”) which provides for a revolving line of credit (the “Revolver”) up to $150 million and provides the Company with an option, under certain conditions, to increase the commitments under the Revolver or establish one or more incremental term loans in an amount up to $50 million in the aggregate in the future. The maturity date of the Amended Credit Facility is July 2, 2020. The Amended Credit Facility replaced the Company’s prior credit agreement (the “Prior Credit Agreement”), dated November 8, 2012, which had provided for both a term loan and revolving line of credit and an original maturity date of December 31, 2016. All amounts outstanding under the Prior Credit Agreement were repaid upon execution of the Amended Credit Facility. The Company paid approximately $0.9 million in debt financing costs associated with the Amended Credit Facility. Borrowings under the Revolver will bear interest at a per annum rate equal to, at the Company’s election, LIBOR or a base rate, plus a margin ranging from 1.75% to 2.25% depending on the Company’s leverage ratio. The Company also is subject to a quarterly unused commitment fee ranging from 0.25% to 0.35% per annum depending on the Company’s leverage ratio, times the daily unused amount under the Revolver. All other remaining terms of the Prior Credit Agreement remain in full force and effect. The Amended Credit Facility is guaranteed by the University and is secured by substantially all of the personal property and assets of the Company and its subsidiaries. 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, as with the Prior Credit Agreement, the Amended Credit Facility requires that the Company satisfy certain financial maintenance covenants, including: · A leverage ratio of not greater than 2 to 1. Leverage ratio is defined as the ratio of total debt to trailing four-quarter EBITDA (earnings before interest, taxes, depreciation, amortization and noncash charges such as stock-based compensation). · A coverage ratio of not less than 1.75 to 1. Coverage ratio is defined as the ratio of trailing four-quarter EBITDA and rent expense to trailing four-quarter interest and rent expense. · 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, 2016. During the years ended December 31, 2015 and 2016, the Company paid cash interest of $2.4 million and $0.3 million, respectively. The Company’s average annual interest rate, including noncash charges for the amortization of debt financing costs, was 4.3% in 2015 during the period in which the Company had debt outstanding. The Company had no balance outstanding under the Revolver during 2016 and as of December 31, 2016. |
Stock Options, Restricted Stock
Stock Options, Restricted Stock and Restricted Stock Units | 12 Months Ended |
Dec. 31, 2016 | |
Stock Options, Restricted Stock and Restricted Stock Units [Abstract] | |
Stock Options, Restricted Stock and Restricted Stock Units | 8. Stock Options, Restricted Stock and Restricted Stock Units On May 5, 2015, the Company’s shareholders approved the Strayer Education, Inc. 2015 Equity Compensation Plan (the “2015 Plan”), which 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 2015 Plan is ten years. The number of shares of common stock reserved for issuance under the 2015 Plan is 500,000 authorized but unissued shares, plus the number of shares available for grant under the Company’s previously existing equity compensation plans at the time of stockholder approval of the 2015 Plan, and plus the number of shares which may in the future become available under any previously existing equity compensation Plan due to forfeitures of outstanding awards. In February 2016, the Company’s Board of Directors approved grants of 176,802 shares of restricted stock and restricted stock units to certain employees. These shares, which vest over a two- to four -year period, were granted pursuant to the 2015 Plan. The Company’s stock price closed at $50.67 on the date of these restricted stock grants. In May 2016, the Company’s Board of Directors approved grants of 11,365 shares of restricted stock. These shares, which vest annually over a three-year period, were awarded to non-employee members of the Company’s Board of Directors, as part of the Company’s annual director compensation program and the 2015 Plan. The Company’s stock price closed at $49.27 on the date of these restricted stock grants. In November 2016, the Company’s Board of Directors approved a grant of 570 shares of restricted stock. These shares, which vest annually over a three-year period, were awarded to a non-employee member of the Company’s Board of Directors upon his appointment to serve on the Board of Direcrors, as part of the Company’s annual director compensation program and the 2015 Plan. The Company’s stock price closed at $65.75 on the date of this restricted stock grant. 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 and restricted stock units activity for each of the three years in the period ended December 31, 2016: Number of Weighted- Balance, December 31, 2013 $ Grants Vested shares Forfeitures Balance, December 31, 2014 $ Grants Vested shares Forfeitures Balance, December 31, 2015 $ Grants Vested shares Forfeitures Balance, December 31, 2016 $ Stock Options The table below sets forth the stock option activity and other stock option information for each of the three years in the period ended December 31, 2016: Weighted- average Weighted- remaining Aggregate Number of average contractual intrinsic value (1) shares exercise price life (years) (in thousands) Balance, December 31, 2013 $ $ — Grants — — Exercises — — Forfeitures — — Balance, December 31, 2014 $ $ Grants — — Exercises — — Forfeitures — — Balance, December 31, 2015 $ $ Grants — — Exercises — — Forfeitures/Expirations — — Balance, December 31, 2016 $ $ Exercisable, December 31, 2016 $ $ (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 options 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, 2014, 2015 and 2016 are as follows: Number of Weighted-average shares exercise price Exercisable, December 31, 2014 — $ Exercisable, December 31, 2015 $ Exercisable, December 31, 2016 $ Valuation and Expense Information under Stock Compensation Topic ASC 718 At December 31, 2016, total stock-based compensation cost which has not yet been recognized was $20.9 million for unvested restricted stock, restricted stock units, and stock option awards. This cost is expected to be recognized over the next 26 months on a weighted-average basis. Awards of approximately 550,000 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 over the respective vesting periods. Such a determination involves significant judgment surrounding the Company’s ability to maintain regulatory compliance. If the performance targets are not reached during the respective 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. The following table sets forth the amount of stock-based compensation expense recorded in each of the expense line items for the years ended December 31, 2014, 2015 and 2016 (in thousands): 2014 2015 2016 Instruction and educational support $ $ $ Marketing — — — Admissions advisory — — — General and administration Stock-based compensation expense included in operating expense Tax benefit Stock-based compensation expense, net of tax $ $ $ The following table summarizes information regarding share-based payment arrangements for the years ended December 31, 2014, 2015 and 2016 (in thousands): 2014 2015 2016 Proceeds from stock options exercised $ — $ — $ — Tax shortfall related to share-based payment arrangements $ $ $ Intrinsic value of stock options exercised $ — $ — $ — |
Other Long-Term Liabilities
Other Long-Term Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Other Long-Term Liabilities [Abstract] | |
Other Long-Term Liabilities | 9. Other Long-Term Liabilities Other long-term liabilities consist of the following as of December 31, 2015 and 2016 (in thousands): 2015 2016 Deferred payments related to acquisitions $ $ Deferred revenue, net of current portion Loss on facilities not in use Deferred rent and other facility costs Lease incentives Deferred gain on sale of campus building — Other long-term liabilities $ $ Deferred Payments Related to Acquisitions In the first quarter of 2016, the Company acquired NYCDA and entered into deferred payment arrangements with the sellers in connection with this transaction. In April and August 2016, NYCDA achieved certain performance targets and the Company subsequently paid $6.0 million and $0.5 million of deferred payments to the sellers, respectively. The remaining deferred payment arrangements of up to $11.5 million are valued at approximately $7.5 million at December 31, 2016. See Note 3 for further information on the NYCDA deferred payments. In 2011, the Company acquired certain assets associated with the Jack Welch Management Institute, and entered into deferred payment arrangements with the sellers in connection with that acquisition. The deferred payment arrangements are valued at approximately $3.3 million and $3.4 million as of December 31, 2015 and 2016, respectively. In addition, one of the sellers contributed $2.8 million to the Company representing the seller’s continuing interest in the assets acquired. Deferred Revenue The Company provides for certain scholarship and awards programs, such as the Graduation Fund (see Note 2 for additional information), that are earned by students when they successfully complete course requirements. The Company also has licensed certain of its noncredit bearing course content to a third party. Included in long-term deferred revenue is the amount of revenue under these arrangements that the Company expects will be realized after one year. Loss on Facilities Not in Use and Deferred Rent and Other Facility Costs The Company records a liability for lease costs of campuses and non-campus facilities that are not currently in use (see Note 4). For facilities still in use, 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. Lease Incentives In conjunction with the opening of new campuses or renovating existing ones, the Company, in some instances, was reimbursed by the lessors for improvements made to the leased properties. In accordance with ASC 840-20, the underlying assets 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 ten 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, 2016 | |
Other Employee Benefit Plans [Abstract] | |
Other Employee Benefit Plans | 10. Other Employee Benefit Plans The Company has a 401(k) plan covering all eligible employees of the Company. Effective January 1, 2017, participants may contribute up to $18,000 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 $0.9 million, $1.1 million and $1.1 million for the years ended December 31, 2014, 2015, and 2016, 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, 2014, 2015, and 2016 were as follows: Shares Average price purchased per share 2014 $ 2015 $ 2016 $ |
Stock Repurchase Plan
Stock Repurchase Plan | 12 Months Ended |
Dec. 31, 2016 | |
Stock Repurchase Plan [Abstract] | |
Stock Repurchase Plan | 11. Stock Repurchase Plan In November 2003, the Company’s Board of Directors authorized the Company to repurchase up to an aggregate of $15 million in value of common stock 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, 2016, approximately $70 million of the Company’s share repurchase authorization was remaining for repurchases through December 31, 2017. 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. 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. No shares were repurchased during each of the three years ended December 31, 2014, 2015, and 2016, and the Company has $70.0 million available for future repurchases. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies The University participates in various federal student financial assistance programs which are subject to audit by agencies including the Department of Education, the Veterans Administration, and the Department of Defense. 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, 2016, the Company had 85 long-term, non-cancelable operating leases for campuses and other administrative facilities. Rent expense was $35.7 million, $37.5 million, and $33.7 million for the years ended December 31, 2014, 2015, and 2016, respectively. Rent expense for 2015 and 2016 includes benefits of approximately $0.4 million and $ 1.9 million, respectively, to reduce the Company’s liability for losses on facilities no longer in use. The rents on the Company’s leases are subject to annual increases. The minimum rental commitments for the Company as of December 31, 2016 are as follows (in thousands): Minimum rental commitments 2017 $ 2018 2019 2020 2021 Thereafter Total $ |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | 13. Income Taxes The income tax provision for the years ended December 31, 2014, 2015 and 2016 is summarized below (in thousands): 2014 2015 2016 Current: Federal $ $ $ State Total current Deferred: Federal State Total deferred Total provision for income taxes $ $ $ 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, 2015 and 2016 (in thousands): 2015 2016 Stock-based compensation $ $ Property and equipment Other facility-related costs Deferred revenue Tuition receivable Deferred leasing costs Prepaid compensation — Other Net deferred tax asset $ $ As of December 31, 2015 and 2016, the Company’s liabilities for unrecognized tax benefits are included in income taxes payable in the consolidated balance sheets. Interest and penalties, including those related to uncertain tax positions, are included in the provision for income taxes in the consolidated statements of income. The Company recognized $0.1 million of expense in 2015 and 2016, related to interest and penalties. The total amount of interest and penalties included in the consolidated balance sheets was $0.2 million and $0.1 million as of December 31, 2015 and 2016, respectively. The following table summarizes changes in unrecognized tax benefits, excluding interest and penalties, for the respective periods (in thousands): Year Ended December 31, 2015 2016 Beginning unrecognized tax benefits $ $ Reductions for tax positions taken in prior years Ending unrecognized tax benefits $ $ It is reasonably possible that approximately $0.1 million of unrecognized tax benefits will be reduced in the next twelve months due to expiration of the applicable statutes of limitations. The Company does not anticipate significant changes to other unrecognized tax benefits. As of December 31, 2016, $0.2 million of the Company’s total unrecognized tax benefits would favorably affect the Company’s effective tax rate if recognized. If amounts accrued are less than amounts ultimately assessed by taxing authorities, the Company would record additional income tax expense. A reconciliation between the Company’s statutory tax rate and the effective tax rate for the years ended December 31, 2014, 2015, and 2016 is as follows: 2014 2015 2016 Statutory federal rate % % % State income taxes, net of federal benefits Other Effective tax rate % % % Cash payments for income taxes were $30.8 million, $28.5 million, and $31.6 million in 2014, 2015, and 2016, respectively. |
Summarized Quarterly Financial
Summarized Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Summarized Quarterly Financial Data (Unaudited) [Abstract] | |
Summarized Quarterly Financial Data (Unaudited) | 14. Summarized Quarterly Financial Data (Unaudited) Quarterly financial information for 2015 and 2016 is as follows (in thousands except per share data): Quarter 2015 First Second Third Fourth Revenues $ $ $ $ Income from operations Net income Net income per share: Basic $ $ $ $ Diluted $ $ $ $ Quarter 2016 First Second Third Fourth Revenues $ $ $ $ Income from operations Net income Net income per share: Basic $ $ $ $ Diluted $ $ $ $ |
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Litigation | 15. 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, 2016 | |
Regulation [Abstract] | |
Regulation | 16. Regulation Gainful Employment Under the Higher Education Act, a proprietary institution offering programs of study other than a baccalaureate degree in liberal arts (for which there is a limited statutory exception) must prepare students for gainful employment in a recognized occupation. On October 31, 2014, the Department of Education published final regulations related to gainful employment. The regulation went into effect on July 1, 2015, with the exception of new disclosure requirements, which were scheduled to go into effect January 1, 2017, but have been delayed until April 3, 2017. The new regulations include two debt-to-earnings measures, consisting of an annual income rate and a discretionary income rate. The annual income rate measures student debt in relation to earnings, and the discretionary income rate measures student debt in relation to discretionary income. A program passes if the program’s graduates: · have an annual income rate that does not exceed 8%; or · have a discretionary income rate that does not exceed 20%. In addition, a program that does not pass either of the debt-to-earnings metrics, and that has an annual income rate between 8% and 12%, or a discretionary income rate between 20% and 30%, is considered to be in a warning zone. A program fails if the program’s graduates have an annual income rate of 12% or greater and a discretionary income rate of 30% or greater. A program would become Title IV-ineligible for three years if it fails both metrics for two out of three consecutive years, or fails to pass at least one metric for four consecutive award years. The regulations provide a means by which an institution may challenge the Department of Education’s calculation of any of the debt metrics prior to loss of Title IV eligibility. On January 8, 2017, Strayer received its final 2015 debt-to-earnings measures. None of Strayer’s programs failed the debt-to-earnings metrics. Two active programs, the Associate in Arts in Accounting and Associate in Arts in Business Administration, are “in the zone,” which means each program remains fully eligible unless (1) either program has a combination of zone and failing designations for four consecutive years, in which case it would become Title IV-ineligible in the fifth year; or (2) either program fails the metrics for two out of three consecutive years, in which case the program could become ineligible for the following award year. If an institution is notified by the Secretary of Education that a program could become ineligible, based on its final rates, for the next award year: · The institution must provide a warning with respect to the program to students and prospective students indicating, among other things, that students may not be able to use Title IV funds to attend or continue in the program; and · The institution must not enroll, register or enter into a financial commitment with a prospective student until a specified time after providing the warning to the prospective student. The new regulation also requires institutions annually to report student- and program-level data to the Department of Education, and comply with additional disclosure requirements. Final regulations adopted by the Department of Education, which generally became effective on July 1, 2011, require an institution to use a template designed by the Department of Education to disclose to prospective students, with respect to each gainful employment program, occupations that the program prepares students to enter, total cost of the program, on-time graduation rate, job placement rate, if applicable, and the median loan debt of program completers for the most recently completed award year. The regulation effective July 1, 2015 expands upon those existing disclosure requirements and institutions must update their disclosure templates to comply by April 3, 2017. In addition, the gainful employment regulation requires institutions to certify, among other things, that each eligible gainful employment program is programmatically accredited if required by a federal governmental entity or a state governmental entity of a state in which it is located or is otherwise required to obtain state approval. Institutions also must certify that each eligible program satisfies the applicable educational prerequisites for professional licensure or certification requirements in each state in which it is located or is otherwise required to obtain state approval, so that a student who completes the program and seeks employment in that state qualifies to take any licensure or certification exam that is needed for the student to practice or find employment in an occupation that the program prepares students to enter. The University has timely made the required certification. Under the gainful employment regulation, an institution may establish a new program’s Title IV eligibility by updating the list of the institution’s programs maintained by the Department of Education. However, an institution may not update its list of eligible programs to include a failing or zone program that the institution voluntarily discontinued or became ineligible, or a gainful employment program that is substantially similar to such a program, until three years after the loss of eligibility or discontinuance. The requirements associated with the gainful employment regulations may substantially increase the Company’s administrative burdens and could affect our program offerings, student enrollment, persistence and retention. Further, although the regulations provide opportunities for an institution to correct any potential deficiencies in a program prior to the loss of Title IV eligibility, the continuing eligibility of the Company’s academic programs will be affected by factors beyond management’s control such as changes in the Company’s graduates’ income levels, changes in student borrowing levels, increases in interest rates, changes in the percentage of former students who are current in the repayment of their student loans, and various other factors. Even if the Company were able to correct any deficiency in the gainful employment metrics in a timely manner, the disclosure requirements associated with a program’s failure to meet at least one metric may adversely affect student enrollments in that program and may adversely affect the reputation of the University. The Clery Act Strayer University must comply with the campus safety and security reporting requirements as well as other requirements in the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act (the “Clery Act”) including changes made to the Clery Act by the Violence Against Women Reauthorization Act of 2013. On October 20, 2014, the Department promulgated regulations, effective July 1, 2015, implementing amendments to the Clery Act. In addition, the Department has interpreted Title IX to categorize sexual violence as a form of prohibited sex discrimination and to require institutions to follow certain disciplinary procedures with respect to such offenses. Failure by Strayer University to comply with the Clery Act or Title IX requirements or regulations thereunder could result in action by the Department fining Strayer University, or limiting or suspending its participating in Title IV programs, could lead to litigation, and could harm Strayer University’s reputation. We believe that Strayer University is in compliance with these requirements. Compliance Reviews Strayer University is subject to announced and unannounced compliance reviews and audits by various external agencies, including the Department of Education, its Office of Inspector General, state licensing agencies, guaranty agencies, and accrediting agencies. The Department conducted four campus-based program reviews of Strayer University campuses in three states and the District of Columbia, with one on-site review conducted August 18-20, 2014; one on-site review conducted September 8-11, 2014; and two on-site reviews conducted September 22-26, 2014. The reviews covered federal financial aid years 2012-2013 and 2013-2014, and two of the reviews also covered compliance with the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, the Drug-Free Schools and Communities Act, and regulations related thereto. On October 21, 2014, the Department issued an Expedited Final Program Review Determination Letter for one of the program reviews conducted the week of September 22, 2014, closing the program review with no further action required by the University. On November 17, 2014, the University received a Program Review Report for the program review conducted in August 2014, and provided a response to the Department on December 15, 2014. On January 7, 2015, the University received a Final Program Review Determination letter from that review, closing the review with no further action required by the University. On March 24, 2015, the University received a Program Review Report for another program review, and provided a response to the Department on April 21, 2015. On April 29, 2015, the University received a Final Program Review Determination Letter closing the review and identifying a payment of less than $500 due to the Department of Education based on an underpayment on a return to Title IV calculation. The University remitted payment, and received a letter from the Department on May 26, 2015, indicating that no further action was required and that the matter was closed. On September 15, 2015, the University received a Program Review Report for the final program review, and provided a response to the Department on October 5, 2015. On January 5, 2016 the University received a Final Program Review Determination Letter for the final program review, indicating that the program review was closed and no further action was required. Program Participation Agreement Each institution participating in Title IV programs must enter into a Program Participation Agreement with the Department. Under the agreement, the institution agrees to follow the Department’s rules and regulations governing Title IV programs. On October 1, 2014, Strayer University received an executed provisional Program Participation Agreement from the Department allowing it to participate in Title IV programs until June 30, 2017. The Program Participation Agreement was issued on a provisional basis because of the Department’s program reviews open at the time of issuance. Under the provisional agreement, the only material additional condition that the University must comply with is obtaining Department approval for substantial changes, including the addition of any new location, level of academic offering, non-degree program, or degree program. |
Significant Accounting Polici24
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Significant Accounting Policies [Abstract] | |
Financial Statement Presentation | Financial Statement Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. On January 13, 2016, the Company acquired all of the outstanding stock of NYCDA, and the results of NYCDA are included with the Company from the acquisition date. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. |
Revenue Recognition | Revenue Recognition The Company’s educational programs typically are offered on a quarterly basis and such periods coincide with the Company’s quarterly financial reporting periods. Approximately 95% of the Company’s revenues during the year ended December 31, 2016 consisted of tuition revenue, which is recognized ratably over the course of instruction as academic services are provided. Tuition revenue is assessed for collectibility on a student-by-student basis throughout the quarter of instruction, and is shown net of any refunds, withdrawals, corporate discounts, scholarships and employee tuition discounts. This collectibility assessment considers available sources of funds for the student including Federal Financial Student Aid programs. The Company reassesses the collectibility of tuition revenue that it may earn based on new information and changes in the facts and circumstances relevant to a student’s ability to pay, including the timing of a student’s withdrawal from a program of study. At the start of each academic term or program, a liability (deferred revenue) is recorded for academic services to be provided and a tuition receivable is recorded for the portion of the tuition not paid in advance. Any cash received prior to the start of an academic term or program is recorded as deferred revenue. Some students may be eligible for scholarship awards, the estimated value of which will be realized in the future and is deducted from revenue when earned, based on historical student attendance and completion behavior. Deferred revenue 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, certificate revenue, certain academic fees, licensing revenue, and other income, all of which are recognized when earned. The Company’s refund policy typically permits students who complete less than half of a course to receive a partial refund of tuition for that course. Refunds reduce the tuition revenue that would have otherwise been recognized for that student. Since the University’s academic terms coincide with the Company’s financial reporting periods, nearly all refunds are processed and recorded within the same quarter as the corresponding revenue. The amount of tuition revenue refundable to students may vary based on the student’s state of residence. Unused books and related academic materials may be returned for a full refund within 21 days of the start of class; however, purchases of electronic content are not refundable if downloaded. Revenues derived from fees are not eligible for a refund. |
Graduation Fund | Graduation Fund In the third quarter of 2013, the Company introduced the Graduation Fund, which allows new undergraduate students to earn tuition credits that are redeemable in the final year of a student’s course of study if he or she successfully remains in the program. New students registering in credit-bearing courses in any undergraduate program receive one free course for every three courses that are successfully completed. Students must meet all of the University’s admission requirements, and must be enrolled in a bachelor’s degree program. The Company’s employees and their dependents are not eligible for the program. Students who have more than one consecutive term of non-attendance lose any Graduation Fund credits earned to date, but may earn and accumulate new credits if the student is reinstated or readmitted by the University in the future. Revenue from students participating in the Graduation Fund is recorded in accordance with the Revenue Recognition Topic, ASC 605-50. The Company defers the value of benefits estimated to be redeemed in the future based on the underlying revenue transactions that result in progress by the student toward earning the benefit. The Company’s estimate of the benefits that will be redeemed in the future is based on its historical experience of student persistence toward completion of a course of study within this program and similar programs. Each quarter, the Company assesses its methodologies and assumptions underlying these estimates and, to date, any adjustments to the estimates have not been material. The amount estimated to be redeemed in the next twelve months is $14.5 million and is included in deferred revenue as a current liability in the consolidated balance sheets. The table below presents activity in the Graduation Fund for the years ended December 31, 2015 and 2016 (in thousands): December 31, December 31, 2015 2016 Balance at beginning of period $ $ Revenue deferred Benefit redeemed Balance at end of period $ $ |
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 Most 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. |
Restricted Cash | Restricted Cash A significant portion of the Company’s revenues are funded by various federal and state government programs. The Company generally does not receive funds from these programs prior to the start of the corresponding academic term. The Company may be required to return certain funds for students who withdraw from the University during the academic term. At December 31, 2016, the Company had approximately $13,000 of these unpaid obligations, which are recorded as restricted cash and included in other current assets in the consolidated balance sheets. There were no amounts payable for these obligations at December 31, 2015. As part of commencing operations in Pennsylvania in 2003, the Company was required to maintain a “minimum protective endowment” of at least $0.5 million in an interest-bearing account. These funds are required as long as the Company operates its campuses in the state. The Company holds these funds in an interest-bearing account which is included in other assets. |
Tuition Receivable and Allowance for Doubtful Accounts | Tuition Receivable and Allowance for Doubtful Accounts The Company records tuition receivable and deferred revenue for its students upon the start of the academic term or program. Therefore, at the end of the quarter (and academic term), tuition receivable represents amounts due from students for educational services already provided and deferred revenue generally 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. An allowance for doubtful accounts is established primarily based upon historical collection rates by age of receivable, net of estimated recoveries. These collection rates incorporate historical performance based on a student’s current enrollment status and likelihood of future enrollment. 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 as of December 31, 2015 and 2016 (in thousands): December 31, 2015 December 31, 2016 Tuition receivable $ $ Allowance for doubtful accounts Tuition receivable, net $ $ Approximately $2.0 million and $2.3 million of tuition receivable is included in other assets as of December 31, 2015 and 2016, respectively, 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 three years ended December 31, 2016 (in thousands): 2014 2015 2016 Allowance for doubtful accounts, beginning of period $ $ $ Additions charged to expense Write-offs, net of recoveries Allowance for doubtful accounts, end of period $ $ $ |
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 2016, 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 expense was $20.6 million, $18.1 million and $17.8 million for the years ended December 31, 2014, 2015, and 2016, respectively. Construction in progress includes costs of computer software developed for internal use, which 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, 2016 in the consolidated statements of cash flows have been adjusted to exclude noncash 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 acquired businesses over the amount assigned to the assets acquired and liabilities assumed. At the time of an acquisition, the Company assigns the goodwill and related acquired assets and liabilities to its reporting units. Accordingly, the Company’s goodwill is allocated to JWMI and NYCDA. Indefinite-lived intangible assets, which include trade names, are recorded at fair market value on their acquisition date. An indefinite life was assigned to the trade names because they have the continued ability to generate cash flows indefinitely. Goodwill and the indefinite-lived intangible assets 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. During the fourth quarter of 2016, the Company changed the date of its annual impairment test from September 30 to December 31. The change was made to more closely align the impairment testing date with the Company’s planning and forecasting process. The change in the annual impairment testing date did not delay, accelerate, or avoid an impairment charge. The Company has determined that this change in accounting principle is preferable under the circumstances and does not result in adjustments to its financial statements when applied retrospectively. During 2016, the annual impairment test was performed as of September 30, 2016 and was performed again as of December 31, 2016. 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 for each reporting unit. Following its qualitative assessment as of September 30 and December 31, the Company determined it was not more likely than not that the fair value of its goodwill for JWMI and NYCDA was less than the carrying amount and, accordingly, no impairment existed in 2016. The Company tested its intangible assets concurrently with goodwill and determined that no impairment existed in 2016. The following table presents changes in goodwill for the years ended December 31, 2015 and 2016 (in thousands): 2015 2016 Balance as of the beginning of period $ $ Acquisition (see Note 3) — Measurement period adjustments — Balance as of the end of period $ $ |
Long-Term Liabilities | Long-Term Liabilities Included in the Company’s long-term liabilities are amounts related to the Company’s operating leases, deferred payments related to an acquisition completed in 2011, and the non-current portion of deferred revenue. 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 underlying assets 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 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 recorded the non-current portion of the gain related to the sale and lease back of a campus facility as a long-term liability. |
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 11,027,177 and 11,093,489 shares were issued and outstanding as of December 31, 2015 and 2016, 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, 2016 is based on awards ultimately expected to vest and, therefore, has been adjusted for estimated forfeitures. The Company estimates forfeitures at the time of grant and revises the estimate, if necessary, 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, 2016, the Company had no issued and outstanding stock options that were excluded from the calculation. Set forth below is a reconciliation of shares used to calculate basic and diluted earnings per share for each of the three years ended December 31, 2016 (in thousands): 2014 2015 2016 Weighted average shares outstanding used to compute basic earnings per share Incremental shares issuable upon the assumed exercise of stock options Unvested restricted stock and restricted stock units Shares used to compute diluted earnings per share |
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, 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 2013-2016 remain open for Federal tax examination and the tax years 2012-2016 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, fair value of contingent consideration, and the provision for income taxes. Actual results could differ from those estimates. |
Comprehensive Income | Comprehensive Income Comprehensive income consists of net income 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 November 2015, the FASB issued ASU No. 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”). The new guidance requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The Company adopted ASU 2015-17 effective January 1, 2016 and reclassified approximately $6.4 million of its deferred tax asset from current to non-current assets in the consolidated balance sheet as of December 31, 2015, to conform to the current period presentation. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). The new guidance requires the recognition of right-of-use assets and lease liabilities on the balance sheet for most leases. Under current guidance, operating leases are off-balance sheet. ASU 2016-02 also requires more extensive quantitative and qualitative disclosures about leasing arrangements. ASU 2016-02 applies to fiscal periods beginning after December 15, 2018, using the modified retrospective method, with early adoption permitted. The Company anticipates that the impact of ASU 2016-02 on its consolidated balance sheet will be material as the Company will record significant asset and liability balances in connection with its leased properties. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 impacts several aspects of the accounting for share-based payment transactions, including classification of certain items on the consolidated statement of cash flows and accounting for income taxes. Specifically, ASU 2016-09 requires excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in earnings. In addition, ASU 2016-09 allows companies to recognize the impact of stock award forfeitures at the time of forfeiture, rather than as an estimate ratably over the life of awards. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company will adopt ASU 2016-09, effective January 1, 2017, which may introduce significant volatility to the Company’s provision for income taxes In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The standard establishes a new recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date , which defers the effective date of ASU 2014-09 by one year to fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2016. Accordingly, the new revenue recognition standard is effective for the Company on January 1, 2018 using either a full retrospective or a modified retrospective approach. During 2016, the FASB issued four new ASUs amending certain aspects of ASU 2014-09. The Company is currently evaluating which transition approach to use and the impact that the new revenue recognition standard and related ASUs will have on our Consolidated Financial Statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses , which is included in ASC Topic 326, Measurement of Credit Losses on Financial Instruments . The new guidance revises the accounting requirements related to the measurement of credit losses and will require organizations to measure all expected credit losses for financial assets based on historical experience, current conditions and reasonable and supportable forecasts about collectibility. Assets must be presented in the financial statements at the net amount expected to be collected. The guidance will be effective for the Company's annual and interim reporting periods beginning January 1, 2020, with early adoption permitted. The Company is evaluating the impact this standard will have on its financial condition, results of operations, and disclosures. In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-15, Classification of Certain Cash Receipts and Cash Payments , which is included in FASB Accounting Standards Codification (ASC) Topic 230, Statement of Cash Flows . The new guidance clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows, including contingent consideration payments made after a business acquisition. The guidance will be effective for the Company's annual and interim reporting periods beginning January 1, 2018, and early adoption is permitted. The Company does not expect adoption of this guidance to have a material impact on its financial condition, results of operations, or disclosures. Other ASUs issued by the FASB but not yet effective are not expected to have a material effect on the Company’s Consolidated Financial Statements. |
Significant Accounting Polici25
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Significant Accounting Policies [Abstract] | |
Schedule of graduation fund liability | The table below presents activity in the Graduation Fund for the years ended December 31, 2015 and 2016 (in thousands): December 31, December 31, 2015 2016 Balance at beginning of period $ $ Revenue deferred Benefit redeemed Balance at end of period $ $ |
Schedule of tuition receivable and allowance for doubtful accounts | The Company’s tuition receivable and allowance for doubtful accounts were as follows as of December 31, 2015 and 2016 (in thousands): December 31, 2015 December 31, 2016 Tuition receivable $ $ Allowance for doubtful accounts Tuition receivable, net $ $ |
Schedule of allowance for doubtful accounts | The following table illustrates changes in the Company’s allowance for doubtful accounts for each of the three years ended December 31, 2016 (in thousands): 2014 2015 2016 Allowance for doubtful accounts, beginning of period $ $ $ Additions charged to expense Write-offs, net of recoveries Allowance for doubtful accounts, end of period $ $ $ |
Schedule of changes in goodwill | The following table presents changes in goodwill for the years ended December 31, 2015 and 2016 (in thousands): 2015 2016 Balance as of the beginning of period $ $ Acquisition (see Note 3) — Measurement period adjustments — Balance as of the end of period $ $ |
Schedule of reconciliation of shares used to calculate basic and diluted earnings per share | Set forth below is a reconciliation of shares used to calculate basic and diluted earnings per share for each of the three years ended December 31, 2016 (in thousands): 2014 2015 2016 Weighted average shares outstanding used to compute basic earnings per share Incremental shares issuable upon the assumed exercise of stock options Unvested restricted stock and restricted stock units Shares used to compute diluted earnings per share |
Acquisition of New York Code 26
Acquisition of New York Code and Design Academy (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Acquisition of New York Code and Design Academy [Abstract] | |
Summary of purchase price allocated to assets acquired and liabilities assumed at fair value | Purchase Price Allocation Useful Life Cash $ Other assets Intangibles: Trade name Indefinite Goodwill Liabilities assumed Total assets acquired and liabilities assumed, net Less: contingent consideration Less: cash acquired Cash paid for acquisition, net of cash acquired $ |
Restructuring and Related Cha27
Restructuring and Related Charges (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Charges [Abstract] | |
Schedule of restructuring liability by type of cost | The following details the changes in the Company’s restructuring liability by type of cost during the three years ended December 31, 2016 (in thousands): Severance Lease and Other and Related Employee Costs, Net Separation Costs Total Balance at December 31, 2013 $ $ $ Payments Adjustments (2) Balance at December 31, 2014 (1) — Payments — Adjustments (2) — Balance at December 31, 2015 (1) — Payments — Adjustments (2) — Balance at December 31, 2016 (1) $ $ — $ (1) The current portion of restructuring liabilities was $4.8 million and $4.2 million as of December 31, 2015 and December 31, 2016, respectively, which are included in accounts payable and accrued expenses. The long-term portion is included in other long-term liabilities. Adjustments include accretion of interest on lease costs, offset by changes in the timing and expected income from sublease agreements. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment [Abstract] | |
Composition of property and equipment | The composition of property and equipment as of December 31, 2015 and 2016 is as follows (in thousands): Estimated useful 2015 2016 life (years) Land $ $ — Buildings and improvements 5-40 Furniture, equipment, and computer hardware and software 5-10 Leasehold improvements 3-10 Construction in progress Accumulated depreciation and amortization $ $ |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurement [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2016 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable December 31, Assets/Liabilities Inputs Inputs 2016 (Level 1) (Level 2) (Level 3) Assets: Money market funds $ $ $ — $ — Liabilities: Deferred payments $ $ — $ — $ Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2015 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable December 31, Assets/Liabilities Inputs Inputs 2015 (Level 1) (Level 2) (Level 3) Assets: Money market funds $ $ $ — $ — Liabilities: Deferred payments $ $ — $ — $ |
Schedule of changes in fair value of level 3 liability | Changes in the fair value of the Company’s Level 3 liabilities during the years ended December 31, 2015 and 2016 are as follows (in thousands): 2015 2016 Balance as of the beginning of period $ $ Amounts paid Contingent consideration originally recorded in connection with NYCDA acquisition — Other adjustments to fair value Balance as of the beginning of period $ $ |
Stock Options, Restricted Sto30
Stock Options, Restricted Stock and Restricted Stock Units (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock Options, Restricted Stock and Restricted Stock Units [Abstract] | |
Schedule of restricted stock and restricted stock units activity | Number of Weighted- Balance, December 31, 2013 $ Grants Vested shares Forfeitures Balance, December 31, 2014 $ Grants Vested shares Forfeitures Balance, December 31, 2015 $ Grants Vested shares Forfeitures Balance, December 31, 2016 $ |
Schedule of stock option activity and other stock option information | Weighted- average Weighted- remaining Aggregate Number of average contractual intrinsic value (1) shares exercise price life (years) (in thousands) Balance, December 31, 2013 $ $ — Grants — — Exercises — — Forfeitures — — Balance, December 31, 2014 $ $ Grants — — Exercises — — Forfeitures — — Balance, December 31, 2015 $ $ Grants — — Exercises — — Forfeitures/Expirations — — Balance, December 31, 2016 $ $ Exercisable, December 31, 2016 $ $ (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 options 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 | The number of shares exercisable as of December 31, 2014, 2015 and 2016 are as follows: Number of Weighted-average shares exercise price Exercisable, December 31, 2014 — $ Exercisable, December 31, 2015 $ Exercisable, December 31, 2016 $ |
Schedule of stock-based compensation expense | The following table sets forth the amount of stock-based compensation expense recorded in each of the expense line items for the years ended December 31, 2014, 2015 and 2016 (in thousands): 2014 2015 2016 Instruction and educational support $ $ $ Marketing — — — Admissions advisory — — — General and administration Stock-based compensation expense included in operating expense Tax benefit Stock-based compensation expense, net of tax $ $ $ |
Schedule of information regarding share-based payment arrangements | The following table summarizes information regarding share-based payment arrangements for the years ended December 31, 2014, 2015 and 2016 (in thousands): 2014 2015 2016 Proceeds from stock options exercised $ — $ — $ — Tax shortfall related to share-based payment arrangements $ $ $ Intrinsic value of stock options exercised $ — $ — $ — |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Long-Term Liabilities [Abstract] | |
Schedule of other long-term liabilities | Other long-term liabilities consist of the following as of December 31, 2015 and 2016 (in thousands): 2015 2016 Deferred payments related to acquisitions $ $ Deferred revenue, net of current portion Loss on facilities not in use Deferred rent and other facility costs Lease incentives Deferred gain on sale of campus building — Other long-term liabilities $ $ |
Other Employee Benefit Plans (T
Other Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Employee Benefit Plans [Abstract] | |
Schedule of shares purchased in the open market for employees | Shares purchased in the open market for employees for the years ended December 31, 2014, 2015, and 2016 were as follows: Shares Average price purchased per share 2014 $ 2015 $ 2016 $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Schedule of minimum rental commitments | The minimum rental commitments for the Company as of December 31, 2016 are as follows (in thousands): Minimum rental commitments 2017 $ 2018 2019 2020 2021 Thereafter Total $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
Schedule of income tax provision | The income tax provision for the years ended December 31, 2014, 2015 and 2016 is summarized below (in thousands): 2014 2015 2016 Current: Federal $ $ $ State Total current Deferred: Federal State Total deferred Total provision for income taxes $ $ $ |
Schedule of tax effects of principal temporary differences that give rise to deferred tax assets | 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, 2015 and 2016 (in thousands): 2015 2016 Stock-based compensation $ $ Property and equipment Other facility-related costs Deferred revenue Tuition receivable Deferred leasing costs Prepaid compensation — Other Net deferred tax asset $ $ |
Summary of changes in unrecognized tax benefits | The following table summarizes changes in unrecognized tax benefits, excluding interest and penalties, for the respective periods (in thousands): Year Ended December 31, 2015 2016 Beginning unrecognized tax benefits $ $ Reductions for tax positions taken in prior years Ending unrecognized tax benefits $ $ |
Schedule of reconciliation between statutory tax rate and effective tax rate | 2014 2015 2016 Statutory federal rate % % % State income taxes, net of federal benefits Other Effective tax rate % % % |
Summarized Quarterly Financia35
Summarized Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summarized Quarterly Financial Data (Unaudited) [Abstract] | |
Schedule of quarterly financial information | Quarterly financial information for 2015 and 2016 is as follows (in thousands except per share data): Quarter 2015 First Second Third Fourth Revenues $ $ $ $ Income from operations Net income Net income per share: Basic $ $ $ $ Diluted $ $ $ $ Quarter 2016 First Second Third Fourth Revenues $ $ $ $ Income from operations Net income Net income per share: Basic $ $ $ $ Diluted $ $ $ $ |
Nature of Operations (Details)
Nature of Operations (Details) | 12 Months Ended |
Dec. 31, 2016segment | |
Nature of Operations [Abstract] | |
Number of reporting segments | 1 |
Significant Accounting Polici37
Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Significant Accounting Policies [Abstract] | |
Percentage of tuition revenue in total revenue | 95.00% |
Unused books and academic material refundable period | 21 days |
Significant Accounting Polici38
Significant Accounting Policies - Graduation Fund (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($)classitem | Dec. 31, 2015USD ($) | |
Consecutive terms of non attendance in which Graduation Fund credits will be lost | item | 1 | |
Number of free courses | class | 1 | |
Number of successfully completed courses | class | 3 | |
Balance at beginning of year | $ 20,937,000 | $ 9,706,000 |
Revenue deferred | 20,766,000 | 16,219,000 |
Benefit redeemed | (12,204,000) | (4,988,000) |
Balance at end of year | 29,499,000 | $ 20,937,000 |
Current Liability [Member] | ||
Graduation fund estimated to be redeemed | 14,500,000 | |
Other Assets [Member] | ||
Restricted cash | ||
Minimum protective endowment | 500,000 | |
Other Current Assets [Member] | ||
Restricted cash | ||
Restricted cash | $ 13,000 |
Significant Accounting Polici39
Significant Accounting Policies - Tuition Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of tuition receivable and allowance for doubtful accounts | ||||
Tuition receivable | $ 30,733 | $ 28,543 | ||
Allowance for doubtful accounts | (10,201) | (10,024) | $ (8,835) | $ (10,303) |
Tuition receivable, net | 20,532 | 18,519 | ||
Other Assets [Member] | ||||
Schedule of tuition receivable and allowance for doubtful accounts | ||||
Tuition receivable included in other assets | $ 2,300 | $ 2,000 |
Significant Accounting Polici40
Significant Accounting Policies - Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of allowance for doubtful accounts | |||
Beginning allowance for doubtful accounts | $ 10,024 | $ 8,835 | $ 10,303 |
Additions charged to expense | 16,503 | 13,067 | 16,947 |
Write-offs, net of recoveries | (16,326) | (11,878) | (18,415) |
Ending allowance for doubtful accounts | $ 10,201 | $ 10,024 | $ 8,835 |
Significant Accounting Polici41
Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Impairment loss | $ 0 | ||
Depreciation and amortization | $ 17,817 | $ 18,104 | $ 20,630 |
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life of property and equipment | 3 years | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life of property and equipment | 40 years |
Significant Accounting Polici42
Significant Accounting Policies - Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Goodwill [Line Items] | |
Balance as of the beginning of the period | $ 6,800 |
Acquisition (see Note 3) | 14,242 |
Measurement period adjustments | (298) |
Balance as of the end of period | 20,744 |
Goodwill and intangible assets impairment | $ 0 |
Minimum [Member] | |
Long-Term Liabilities | |
Lease Term | 5 years |
Maximum [Member] | |
Long-Term Liabilities | |
Lease Term | 10 years |
Significant Accounting Polici43
Significant Accounting Policies - EPS (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
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 | 10,610,000 | 10,588,000 | 10,561,000 |
Incremental shares issuable upon the assumed exercise of stock options | 5,000 | 6,000 | 6,000 |
Unvested restricted stock | 230,000 | 146,000 | 83,000 |
Shares used to compute diluted earnings per share | 10,845,000 | 10,740,000 | 10,650,000 |
Common stock, shares authorized | 20,000,000 | 20,000,000 | |
Common stock, par value | $ 0.01 | $ 0.01 | |
Common stock, shares issued | 11,093,489 | 11,027,177 | |
Common stock, shares outstanding | 11,093,489 | 11,027,177 | |
Preferred stock, shares authorized | 8,000,000 | ||
Preferred stock, shares issued | 0 | ||
Preferred stock, shares outstanding | 0 |
Significant Accounting Polici44
Significant Accounting Policies - Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred tax assets, noncurrent | $ 31,096 | $ 26,449 |
Accounting Standards Update 2015 17 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred tax assets, current | (6,400) | |
Deferred tax assets, noncurrent | $ 6,400 |
Acquisition of New York Code 45
Acquisition of New York Code and Design Academy (Details) - New York Code And Design Academy, Inc. $ in Millions | Jan. 13, 2016USD ($) | Aug. 31, 2016USD ($) | Apr. 30, 2016USD ($) | Dec. 31, 2016USD ($)individual |
Business Acquisition [Line Items] | ||||
Cash paid up front | $ 2.4 | |||
Contingent consideration | $ 25 | |||
Contingent consideration payment | $ 0.5 | $ 6 | $ 4.6 | |
Number of founders | individual | 2 | |||
Employment term | 3 years | |||
Contingent Consideration Results of Operations Over Five Year Period [Member] | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | $ 12.5 | |||
Term of additional contingent payments | 5 years | |||
Contingent Consideration Receipt Of State Regulatory Permit [Member] | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | $ 5.5 | |||
Contingent Consideration Accelerated Earnout Upon Receipt Of One State Regulatory Permit [Member] | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | 1 | |||
Selling, General and Administrative Expenses [Member] | ||||
Business Acquisition [Line Items] | ||||
Transaction Costs | $ 0.2 |
Acquisition of New York Code 46
Acquisition of New York Code and Design Academy - Purchase Price Allocation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 20,744 | $ 20,744 | $ 6,800 | $ 6,800 |
Cash paid for acquisition, net of cash acquired | 7,635 | |||
New York Code And Design Academy, Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash | 790 | 790 | ||
Other assets | 1,265 | 1,265 | ||
Trade name | 5,660 | 5,660 | ||
Goodwill | 13,944 | 13,944 | ||
Liabilities assumed | (4,734) | (4,734) | ||
Total assets acquired and liabilities assumed, net | 16,925 | 16,925 | ||
Less: contingent consideration | (14,500) | (14,500) | ||
Cash paid for acquisition, net of cash acquired | $ 1,635 | |||
Discount rate | 4.50% | |||
Measurement adjustment to goodwill | $ 300 | |||
Reduction in fair value of contingent consideration | $ 1,300 | |||
Measurement adjustment to deferred tax liabilities | $ 300 |
Restructuring and Related Cha47
Restructuring and Related Charges (Details) - item | 1 Months Ended | 12 Months Ended |
Oct. 31, 2013 | Dec. 31, 2016 | |
Restructuring and Related Charges [Abstract] | ||
Campus location closed | 20 | |
Lease marginal borrowing rate | 4.50% |
Restructuring and Related Cha48
Restructuring and Related Charges - Liability for lease (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of restructuring liability | |||
Beginning balance | $ 20,055 | $ 27,283 | $ 44,766 |
Payments | (6,438) | (7,754) | (14,556) |
Adjustments | (1,632) | 526 | (2,927) |
Ending balance | 11,985 | 20,055 | 27,283 |
Restructuring liabilities | 4,200 | 4,800 | |
Lease and Related Costs, Net [Member] | |||
Schedule of restructuring liability | |||
Beginning balance | 20,055 | 27,283 | 42,550 |
Payments | (6,438) | (7,754) | (12,418) |
Adjustments | (1,632) | 526 | (2,849) |
Ending balance | $ 11,985 | $ 20,055 | 27,283 |
Severance And Other Employee Separation Costs [Member] | |||
Schedule of restructuring liability | |||
Beginning balance | 2,216 | ||
Payments | (2,138) | ||
Adjustments | $ (78) |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 230,255 | $ 219,734 |
Accumulated depreciation and amortization | (157,131) | (142,595) |
Property and equipment, net | 73,124 | 77,139 |
Leasehold improvements reimbursed by lessors as lease incentives | 300 | 2,900 |
Fixed assets written off | 3,200 | 13,300 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 7,138 | 7,138 |
Building and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 19,238 | 19,109 |
Furniture Equipment And Computer Hardware And Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 157,104 | 150,597 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 39,769 | 38,639 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 7,006 | $ 4,251 |
Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of property and equipment | 40 years | |
Maximum [Member] | Building and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of property and equipment | 40 years | |
Maximum [Member] | Furniture Equipment And Computer Hardware And Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of property and equipment | 10 years | |
Maximum [Member] | Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of property and equipment | 10 years | |
Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of property and equipment | 3 years | |
Minimum [Member] | Building and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of property and equipment | 5 years | |
Minimum [Member] | Furniture Equipment And Computer Hardware And Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of property and equipment | 5 years | |
Minimum [Member] | Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of property and equipment | 3 years |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Money Market Funds [Member] | ||
Schedule of assets and liabilities measured at fair value on a recurring basis | ||
Total assets at fair value on a recurring basis | $ 5,103 | $ 100 |
Deferred payments [Member] | ||
Liabilities: | ||
Total liabilities at fair value on a recurring basis | 11,741 | 3,278 |
Quoted Prices In Active Markets For Identical Assets/Liabilities (Level 1) [Member] | Money Market Funds [Member] | ||
Schedule of assets and liabilities measured at fair value on a recurring basis | ||
Total assets at fair value on a recurring basis | 5,103 | 100 |
Significant Unobservable Inputs (Level 3) [Member] | Deferred payments [Member] | ||
Liabilities: | ||
Total liabilities at fair value on a recurring basis | $ 11,741 | $ 3,278 |
Fair Value Measurement - Level
Fair Value Measurement - Level 3 Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of changes in fair value of level 3 liability | ||
Balance at beginning of year | $ 3,278 | $ 2,398 |
Amounts paid | (7,358) | (650) |
Contingent consideration in connection with NYCDA acquisition | 14,500 | |
Other adjustments to fair value | 1,321 | 1,530 |
Balance at end of year | 11,741 | $ 3,278 |
Accounts payable and accrued expenses | ||
Fair Value, Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Short-term portion of deferred payments | $ 1,100 |
Long Term Debt (Details)
Long Term Debt (Details) | Jul. 02, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | |||
Revolving credit facility, value | $ 150,000,000 | ||
Maximum aggregate incremental term loans | 50,000,000 | ||
Payments of debt financing costs | $ 900,000 | ||
Cash interest paid | $ 300,000 | $ 2,400,000 | |
Maximum total leverage ratio | 2 | ||
Minimum coverage ratio | 1.75 | ||
Minimum department of education financial composite score | 1.5 | ||
Average annual interest rate | 4.30% | ||
Revolving credit facility, outstanding | $ 0 | ||
Revolving Credit Facility [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Margin rate for interest if using base rate | 1.75% | ||
Unused commitment fee | 0.25% | ||
Revolving Credit Facility [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Margin rate for interest if using base rate | 2.25% | ||
Unused commitment fee | 0.35% |
Stock Options, Restricted Sto53
Stock Options, Restricted Stock and Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2016 | May 31, 2016 | Feb. 29, 2016 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Additional shares authorized for grants | 500,000 | |||
Maximum term of the awards granted under the Plan | 10 years | |||
Stock-based compensation cost which has not yet been recognized | $ 20.9 | |||
Stock-based compensation cost recognized period, in months | 26 months | |||
Restricted stock awarded subject to performance condition | 550,000 | |||
Restricted stock and restricted stock units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares authorized for grants | 570 | 11,365 | 176,802 | |
Vesting period | 3 years | 3 years | ||
Share Price | $ 65.75 | $ 49.27 | $ 50.67 | |
Restricted stock and restricted stock units [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 2 years | |||
Restricted stock and restricted stock units [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years |
Stock Options, Restricted Sto54
Stock Options, Restricted Stock and Restricted Stock Units - RSU (Details) - Restricted stock and restricted stock units [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of restricted stock and restricted stock units activity | |||
Beginning Balance, Number of shares or units | 634,327 | 524,216 | 487,773 |
Grants, Number of shares or units | 188,737 | 126,655 | 108,606 |
Vested shares, Number of shares or units | (23,539) | (13,725) | (69,434) |
Forfeitures, Number of shares or units | (72,425) | (2,819) | (2,729) |
Ending Balance, Number of shares or units | 727,100 | 634,327 | 524,216 |
Beginning Balance, Weighted-average grant price | $ 104.66 | $ 115.67 | $ 131.51 |
Grants, Weighted-average grant price | 50.63 | 61 | 38.95 |
Vested shares, Weighted-average grant price | 50.43 | 52.94 | 158.97 |
Forfeitures, Weighted-average grant price | 62.41 | 115.55 | 93.44 |
Ending Balance, Weighted-average grant price | $ 97.53 | $ 104.66 | $ 115.67 |
Stock Options, Restricted Sto55
Stock Options, Restricted Stock and Restricted Stock Units - Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of stock option activity and other stock option information | ||||
Exercisable, Number of shares | 100,000 | 100,000 | ||
Exercisable, Weighted-average exercise price | $ 51.95 | $ 51.95 | $ 51.95 | |
Stock options [Member] | ||||
Schedule of stock option activity and other stock option information | ||||
Beginning Balance, Number of shares | 100,000 | 100,000 | 100,000 | |
Grants, Number of shares | ||||
Exercises, Number of shares | ||||
Forfeitures/Expirations, Number of shares | ||||
Ending Balance, Number of shares | 100,000 | 100,000 | 100,000 | 100,000 |
Exercisable, Number of shares | 100,000 | |||
Beginning Balance, Weighted-average exercise price | $ 51.95 | $ 51.95 | $ 51.95 | |
Grants, Weighted-average exercise price | ||||
Exercises, Weighted-average exercise price | ||||
Forfeitures/Expirations, Weighted-average exercise price | ||||
Ending Balance, Weighted-average exercise price | 51.95 | $ 51.95 | $ 51.95 | $ 51.95 |
Exercisable, Weighted-average exercise price | $ 51.95 | |||
Weighted-average remaining contractual life (years) | 4 years 1 month 6 days | 5 years 1 month 6 days | 6 years | 7 years |
Exercisable, Weighted-average remaining contractual life (years) | 4 years 1 month 6 days | |||
Beginning Balance, Aggregate intrinsic value | $ 817 | $ 2,233 | ||
Ending Balance, Aggregate intrinsic value | 2,868 | $ 817 | $ 2,233 | |
Exercisable, Aggregate intrinsic value | $ 2,868 |
Stock Options, Restricted Sto56
Stock Options, Restricted Stock and Restricted Stock Units - Stock-based compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of stock-based compensation expense | |||
Stock-based compensation expense included in operating expense | $ 10,767 | $ 10,213 | $ 9,453 |
Tax benefit | 4,256 | 4,032 | 3,734 |
Stock-based compensation expense, net of income tax | 6,511 | 6,181 | 5,719 |
Instruction and educational support [Member] | |||
Schedule of stock-based compensation expense | |||
Stock-based compensation expense included in operating expense | 1,432 | 2,134 | 1,736 |
Marketing [Member] | |||
Schedule of stock-based compensation expense | |||
Stock-based compensation expense included in operating expense | |||
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 | $ 9,335 | $ 8,079 | $ 7,717 |
Stock Options, Restricted Sto57
Stock Options, Restricted Stock and Restricted Stock Units - Share-based payment arrangements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of information regarding share-based payment arrangements | |||
Proceeds from stock options exercised | |||
Tax shortfall related to share-based payment arrangements | (51) | (24) | (2,039) |
Intrinsic value of stock options exercised |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Other Long-Term Liabilities [Abstract] | ||
Deferred payments related to acquisition | $ 13,754 | $ 6,078 |
Deferred revenue, net of current portion | 17,981 | 14,429 |
Loss on facilities not in use | 7,813 | 15,229 |
Deferred rent and other facility costs | 8,251 | 8,993 |
Lease incentives | 2,684 | 3,125 |
Deferred gain on sale of campus building | 133 | |
Total other long-term liabilities | $ 50,483 | $ 47,987 |
Other Long-Term Liabilities - D
Other Long-Term Liabilities - Deferred (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2016USD ($) | Apr. 30, 2016USD ($) | Jun. 30, 2007USD ($)Asset | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | |
Sale price of one of campus buildings | $ 5.8 | ||||
Gain on sale and lease back of one of campus buildings before tax | $ 2.8 | ||||
Sale and lease back term | 10 years | ||||
Number of assets sold | Asset | 1 | ||||
Minimum [Member] | |||||
Leasehold improvements and long-term liability amortization period | 5 years | ||||
Maximum [Member] | |||||
Leasehold improvements and long-term liability amortization period | 10 years | ||||
New York Code And Design Academy, Inc. | |||||
Deferred payment arrangements value | $ 7.5 | ||||
Contingent consideration payment | $ 0.5 | $ 6 | 4.6 | ||
New York Code And Design Academy, Inc. | Maximum [Member] | |||||
Deferred payment arrangements value | 11.5 | ||||
Jack Welch Management Institute | |||||
Funds received from investor | $ 2.8 | ||||
Deferred payment arrangement number of sellers | item | 1 | ||||
Deferred payment arrangements value | $ 3.4 | $ 3.3 |
Other Employee Benefit Plans (D
Other Employee Benefit Plans (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Employee Benefit Plans [Abstract] | |||
Maximum annual contribution to 401(k) plan by employees, effective January 1, 2016 | $ 18,000 | ||
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 | $ 1,100,000 | $ 900,000 |
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 |
Other Employee Benefit Plans -
Other Employee Benefit Plans - Shares purchased (Details) - Employee Stock [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares purchased | 4,988 | 5,136 | 5,872 |
Average price per share | $ 46.46 | $ 49.10 | $ 44.55 |
Stock Repurchase Plan (Details)
Stock Repurchase Plan (Details) - Stock Repurchase Plan [Member] - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2003 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Authorized common stock for repurchases, amount | $ 15 | |||
Remaining authorized share for repurchases, amount | $ 70 | $ 70 | $ 70 | |
Number of shares repurchased | 0 | 0 | 0 |
Commitments and Contingencies63
Commitments and Contingencies (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)lease | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Commitments and Contingencies [Abstract] | |||
Number of long-term, non-cancelable operating leases | lease | 85 | ||
Rent expense | $ 33.7 | $ 37.5 | $ 35.7 |
Reduction of liability | $ 1.9 | $ 0.4 |
Commitments and Contingencies -
Commitments and Contingencies - Minimum rental commitments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Schedule of minimum rental commitments | |
2,017 | $ 33,665 |
2,018 | 29,731 |
2,019 | 24,384 |
2,020 | 19,440 |
2,021 | 14,300 |
Thereafter | 14,027 |
Total | $ 135,547 |
Income Taxes - Income tax provi
Income Taxes - Income tax provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ 26,015 | $ 25,515 | $ 25,285 |
State | 4,869 | 4,538 | 4,490 |
Total current | 30,884 | 30,053 | 29,775 |
Deferred: | |||
Federal | (7,748) | (3,634) | 141 |
State | (646) | (311) | 344 |
Total deferred | (8,394) | (3,945) | 485 |
Total provision for income taxes | $ 22,490 | $ 26,108 | $ 30,260 |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of tax effects of principal temporary differences that give rise to deferred tax assets | ||
Stock-based compensation | $ 20,477 | $ 16,742 |
Property and equipment | (6,059) | (9,417) |
Other facility-related costs | 5,242 | 8,535 |
Deferred revenue | 7,182 | 4,267 |
Tuition receivable | 3,922 | 3,908 |
Deferred leasing costs | 3,064 | 3,362 |
Prepaid compensation | (1,139) | |
Other | (1,592) | (948) |
Net deferred tax asset | $ 31,097 | $ 26,449 |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Abstract] | ||
Tax expense (benefits) related to interest and penalties | $ 100 | $ 100 |
Reduction of unrecognized tax benefits in the next twelve months, due to expiration of applicable statues of limitation | 100 | |
Unrecognized tax benefits that affects company's effective tax rate | 200 | |
Amount of interest and penalties | 100 | 200 |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Beginning unrecognized tax benefits | 505 | 2,936 |
Reductions for tax positions taken in prior years | (329) | (2,431) |
Ending unrecognized tax benefits | $ 176 | $ 505 |
Income Taxes - Statutory rate (
Income Taxes - Statutory rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
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 | 4.50% | 4.20% | 4.20% |
Other | (0.20%) | 0.30% | 0.30% |
Effective tax rate | 39.30% | 39.50% | 39.50% |
Cash payments for income taxes | $ 31.6 | $ 28.5 | $ 30.8 |
Summarized Quarterly Financia69
Summarized Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Selected Quarterly Financial Information [Abstract] | |||||||||||
Revenues | $ 119,279 | $ 102,156 | $ 108,487 | $ 111,166 | $ 113,660 | $ 99,142 | $ 109,750 | $ 111,885 | $ 441,088 | $ 434,437 | $ 446,041 |
Income from operations | 19,654 | 4,830 | 12,896 | 20,092 | 21,656 | 7,254 | 20,929 | 19,859 | 57,472 | 69,698 | 81,747 |
Net income | $ 11,718 | $ 2,878 | $ 7,786 | $ 12,420 | $ 13,041 | $ 3,723 | $ 11,874 | $ 11,385 | $ 34,802 | $ 40,023 | $ 46,356 |
Net income per share: | |||||||||||
Basic | $ 1.10 | $ 0.27 | $ 0.73 | $ 1.17 | $ 1.23 | $ 0.35 | $ 1.12 | $ 1.08 | $ 3.28 | $ 3.78 | $ 4.39 |
Diluted | $ 1.07 | $ 0.27 | $ 0.72 | $ 1.15 | $ 1.21 | $ 0.35 | $ 1.11 | $ 1.06 | $ 3.21 | $ 3.73 | $ 4.35 |
Regulation (Details)
Regulation (Details) | Sep. 26, 2014item | Sep. 11, 2014item | Aug. 20, 2014item | Dec. 31, 2016stateitem | Apr. 29, 2015USD ($) |
Regulation [Line Items] | |||||
Number of ineligible years | 3 years | ||||
Minimum [Member] | |||||
Regulation [Line Items] | |||||
Average of median annual earning percentage. | 8.00% | ||||
Average of median discretionary percentage | 20.00% | ||||
Maximum [Member] | |||||
Regulation [Line Items] | |||||
Average of median annual earning percentage. | 12.00% | ||||
Average of median discretionary percentage | 30.00% | ||||
Strayer University | |||||
Regulation [Line Items] | |||||
Number of debt-to-earnings measures | 2 | ||||
Number of current associate degree programs n the Zone | 2 | ||||
Number of conducted compliance reviews | 4 | ||||
Number of on-site reviews conducted | 2 | 1 | 1 | ||
Number of states in which compliance reviews were conducted | state | 3 | ||||
Strayer University | Maximum [Member] | |||||
Regulation [Line Items] | |||||
Amount due to department of education | $ | $ 500 |