Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2016shares | |
Document And Entity Information [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Mar. 31, 2016 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q1 |
Trading Symbol | ESI |
Entity Registrant Name | ITT EDUCATIONAL SERVICES INC |
Entity Central Index Key | 922,475 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Accelerated Filer |
Entity Common Stock, Shares Outstanding | 23,698,907 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Current assets: | |||
Cash and cash equivalents | $ 108,663 | $ 130,897 | $ 145,951 |
Restricted cash | 5,538 | 6,015 | 6,328 |
Accounts receivable, net | 47,086 | 48,837 | 46,200 |
Private education loans | 9,787 | 8,480 | 9,541 |
Deferred income taxes | 22,044 | 26,440 | 28,584 |
Prepaid expenses and other current assets | 21,447 | 22,429 | 56,068 |
Total current assets | 214,565 | 243,098 | 292,672 |
Property and equipment, net | 138,242 | 142,164 | 152,181 |
Private education loans, excluding current portion, net | 54,912 | 62,161 | 76,528 |
Deferred income taxes | 69,402 | 71,817 | 65,912 |
Collateral deposits | 91,229 | 91,168 | 97,932 |
Other assets | 54,041 | 53,246 | 54,022 |
Total assets | 622,391 | 663,654 | 739,247 |
Current liabilities: | |||
Current portion of term loans | 49,623 | 68,161 | 12,082 |
Current portion of PEAKS Trust senior debt | 15,634 | 20,105 | 26,533 |
Current portion of CUSO secured borrowing obligation | 18,065 | 23,591 | 20,963 |
Accounts payable | 56,694 | 59,753 | 73,390 |
Accrued compensation and benefits | 15,949 | 12,425 | 15,151 |
Other current liabilities | 29,631 | 31,973 | 28,602 |
Deferred revenue | 105,996 | 113,739 | 139,856 |
Total current liabilities | 291,592 | 329,747 | 316,577 |
Term loans, excluding current portion | 0 | 0 | 81,147 |
PEAKS Trust senior debt, excluding current portion | 28,916 | 30,701 | 45,127 |
CUSO secured borrowing obligation, excluding current portion | 89,695 | 91,728 | 96,226 |
Other liabilities | 50,132 | 50,342 | 52,247 |
Total liabilities | $ 460,335 | $ 502,518 | $ 591,324 |
Commitments and contingencies (See Note 11) | |||
Shareholders' equity: | |||
Preferred stock, $.01 par value, 5,000,000 shares authorized, none issued | $ 0 | $ 0 | $ 0 |
Common stock, $.01 par value, 300,000,000 shares authorized, 37,068,904 issued | 371 | 371 | 371 |
Capital surplus | 178,134 | 181,160 | 185,936 |
Retained earnings | 991,330 | 987,223 | 974,184 |
Accumulated other comprehensive (loss) income | (1,932) | (1,693) | 963 |
Treasury stock, 13,369,997, 13,394,834 and 13,516,221 shares, at cost | (1,005,847) | (1,005,925) | (1,013,531) |
Total shareholders' equity | 162,056 | 161,136 | 147,923 |
Total liabilities and shareholders' equity | $ 622,391 | $ 663,654 | $ 739,247 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 | 300,000,000 |
Common stock, shares issued | 37,068,904 | 37,068,904 | 37,068,904 |
Treasury stock, shares | 13,369,997 | 13,394,834 | 13,516,221 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Revenue | $ 191,499 | $ 229,975 |
Costs and expenses: | ||
Cost of educational services | 92,631 | 103,553 |
Student services and administrative expenses | 77,899 | 90,252 |
Legal and professional fees related to certain lawsuits, investigations and accounting matters | 4,871 | 7,286 |
Provision for private education loan losses | 1,878 | 1,244 |
Total costs and expenses | 177,279 | 202,335 |
Operating income | 14,220 | 27,640 |
Interest income | 68 | 13 |
Interest (expense) | (7,099) | (10,388) |
Income (loss) before provision for income taxes | 7,189 | 17,265 |
Provision for income taxes | 3,082 | 6,818 |
Net income | $ 4,107 | $ 10,447 |
Earnings per share: | ||
Basic | $ 0.17 | $ 0.44 |
Diluted | $ 0.17 | $ 0.44 |
Weighted average shares outstanding: | ||
Basic | 23,742 | 23,560 |
Diluted | 23,856 | 23,819 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 4,107 | $ 10,447 |
Other comprehensive (loss), net of tax: | ||
Net actuarial pension loss amortization, net of income tax of $0 and $0 | 0 | 1 |
Prior service cost (credit) amortization, net of income tax of $149 and $150 | (239) | (239) |
Other comprehensive (loss), net of tax | (239) | (238) |
Comprehensive income | $ 3,868 | $ 10,209 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Actuarial pension loss amortization, tax | $ 0 | $ 0 |
Prior service cost (credit) amortization, income tax | $ 149 | $ 150 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 4,107 | $ 10,447 |
Adjustments to reconcile net income to net cash flows from operating activities: | ||
Depreciation and amortization | 5,183 | 5,981 |
Provision for doubtful accounts | 7,309 | 12,183 |
Deferred income taxes | 3,103 | 9,869 |
Stock-based compensation expense | 1,227 | 1,896 |
Accretion of discount on private education loans | (2,724) | (3,081) |
Accretion of discount on term loans | 487 | 391 |
Accretion of discount on PEAKS Trust senior debt | 720 | 1,655 |
Accretion of discount on CUSO secured borrowing obligation | 45 | 219 |
Provision for private education loan losses | 1,878 | 1,244 |
Other | (237) | (267) |
Changes in operating assets and liabilities: | ||
Restricted cash | 477 | (288) |
Accounts receivable | (5,558) | (12,000) |
Private education loans | 6,788 | 6,644 |
Accounts payable | (3,346) | 5,542 |
Other operating assets and liabilities | 618 | 717 |
Deferred revenue | (7,743) | (7,619) |
Net cash flows from operating activities | 12,334 | 33,533 |
Cash flows from investing activities: | ||
Capital expenditures | (718) | (869) |
Collateral and escrowed funds | (61) | 0 |
Net cash flows from investing activities | (779) | (869) |
Cash flows from financing activities: | ||
Repayment of term loans | (19,176) | (2,500) |
Repayment of PEAKS Trust senior debt | (6,976) | (15,646) |
Repayment of CUSO secured borrowing obligation | (7,604) | (4,037) |
Common shares tendered for taxes | (33) | (467) |
Net cash flows from financing activities | (33,789) | (22,650) |
Net change in cash and cash equivalents | (22,234) | 10,014 |
Cash and cash equivalents at beginning of period | 130,897 | 135,937 |
Cash and cash equivalents at end of period | $ 108,663 | $ 145,951 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Capital Surplus [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income/(Loss) [Member] | Common Stock in Treasury [Member] |
Beginning Balance at Dec. 31, 2014 | $ 142,072 | $ 371 | $ 198,883 | $ 963,737 | $ 1,201 | $ (1,022,120) |
Beginning Balance (in shares) at Dec. 31, 2014 | 37,069 | (13,619) | ||||
Net income | 10,447 | 10,447 | ||||
Other comprehensive (loss), net of income tax | (238) | (238) | ||||
Equity award vesting | 0 | (9,056) | $ 9,056 | |||
Equity award vesting (in shares) | 163 | |||||
Tax benefit from equity awards | (5,787) | (5,787) | ||||
Stock-based compensation | 1,896 | 1,896 | ||||
Shares tendered for taxes | (467) | $ (467) | ||||
Shares tendered for taxes (in shares) | (60) | |||||
Ending Balance at Mar. 31, 2015 | 147,923 | $ 371 | 185,936 | 974,184 | 963 | $ (1,013,531) |
Ending Balance (in shares) at Mar. 31, 2015 | 37,069 | (13,516) | ||||
Beginning Balance at Dec. 31, 2014 | 142,072 | $ 371 | 198,883 | 963,737 | 1,201 | $ (1,022,120) |
Beginning Balance (in shares) at Dec. 31, 2014 | 37,069 | (13,619) | ||||
Net income | 12,851 | 12,851 | ||||
Other comprehensive (loss), net of income tax | (2,656) | (2,656) | ||||
Equity award vesting | 0 | (7,753) | $ 7,753 | |||
Equity award vesting (in shares) | 171 | |||||
Tax benefit from equity awards | (913) | (913) | ||||
Stock-based compensation | 3,890 | 3,890 | ||||
Shares tendered for taxes | (165) | $ (165) | ||||
Shares tendered for taxes (in shares) | (52) | |||||
Issuance of shares for Directors' compensation | 206 | 188 | $ 18 | |||
Issuance of shares for Director's compensation (in shares) | 2 | |||||
Ending Balance at Dec. 31, 2015 | 161,136 | $ 371 | 181,160 | 987,223 | (1,693) | $ (1,005,925) |
Ending Balance (in shares) at Dec. 31, 2015 | 37,069 | (13,395) | ||||
Net income | 4,107 | 4,107 | ||||
Other comprehensive (loss), net of income tax | (239) | (239) | ||||
Equity award vesting | 0 | (111) | $ 111 | |||
Equity award vesting (in shares) | 37 | |||||
Tax benefit from equity awards | (4,142) | (4,142) | ||||
Stock-based compensation | 1,227 | 1,227 | ||||
Shares tendered for taxes | (33) | $ (33) | ||||
Shares tendered for taxes (in shares) | (12) | |||||
Ending Balance at Mar. 31, 2016 | $ 162,056 | $ 371 | $ 178,134 | $ 991,330 | $ (1,932) | $ (1,005,847) |
Ending Balance (in shares) at Mar. 31, 2016 | 37,069 | (13,370) |
The Company and Basis of Presen
The Company and Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
The Company and Basis of Presentation | 1. The Company and Basis of Presentation ITT Educational Services, Inc. is a leading proprietary provider of postsecondary degree programs in the United States based on revenue and student enrollment. References in these Notes to “we,” “us” and “our” refer to ITT Educational Services, Inc., its wholly-owned subsidiaries and the variable interest entities (“VIEs”) that it consolidates, unless the context requires or indicates otherwise. As of March 31, 2016, we were offering: • master, bachelor and associate degree programs to approximately 43,000 students at ITT Technical Institute and Daniel Webster College locations; and • short-term information technology and business learning solutions for career advancers and other professionals. As of March 31, 2016, we had 138 campus locations in 39 states. In addition, we offered one or more of our online degree programs to students who are located in all 50 states. All of our campus locations are authorized by the applicable education authorities of the states in which they operate and are accredited by an accrediting commission recognized by the U.S. Department of Education (“ED”). We have provided career-oriented education programs since 1969 under the “ITT Technical Institute” name and since 2009 under the “Daniel Webster College” name. Our corporate headquarters are located in Carmel, Indiana. The accompanying unaudited condensed consolidated financial statements include the accounts of ITT Educational Services, Inc., its wholly-owned subsidiaries and, beginning on February 28, 2013 and September 30, 2014, two VIEs that we consolidate in our consolidated financial statements, and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim periods and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures, including significant accounting policies, normally included in a complete presentation of financial statements prepared in accordance with those principles, rules and regulations have been omitted. All significant intercompany balances and transactions are eliminated upon consolidation. The Condensed Consolidated Balance Sheet as of December 31, 2015 was derived from audited financial statements but, as presented in this report, may not include all disclosures required by GAAP. We reclassified debt issuance costs that were previously reported in the line item Other assets on our Condensed Consolidated Balance Sheets as of December 31, 2015 and March 31, 2015 to the line items Current portion of term loans and Term loans, excluding current portion, upon adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). These reclassifications had no impact on previously reported net income, total shareholders’ equity or cash flows. See Note 8 – Debt, for the amount of debt issuance costs that were reclassified. We review the operations of our business on a regular basis to determine our reportable operating segments, as defined in Accounting Standards Codification (“ASC” or “Codification”) 280, “Segment Reporting.” As of March 31, 2016, December 31, 2015 and March 31, 2015, we reported our financial results under one reportable operating segment. In the opinion of our management, the condensed consolidated financial statements reflect all adjustments that are normal, recurring and necessary for a fair presentation of our financial condition and results of operations. The interim financial information should be read in conjunction with the audited consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (“2015 Form 10-K”) as filed with the SEC. |
New Accounting Guidance and Ado
New Accounting Guidance and Adoption of New Accounting Guidance | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Guidance and Adoption of New Accounting Guidance | 2. New Accounting Guidance and Adoption of New Accounting Guidance New Accounting Guidance. In February 2016, the FASB issued ASU No. 2016-02, “Leases” (“ASU 2016-02”), which is included in the Codification under ASC 840, “Leases” (“ASC 840”). This guidance introduces a new lessee model that brings substantially all leases on the balance sheet and represents a significant change to lease accounting. This guidance will be effective for our interim and annual reporting periods beginning January 1, 2019, with early adoption permitted. A modified retrospective approach is to be used for the adoption of this guidance. We are assessing the impact that ASU 2016-02 may have on our consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes” (“ASU 2015-17”), which is included in the Codification under ASC 740, “Income Taxes” (“ASC 740”). This guidance simplifies the presentation of deferred income taxes by requiring that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This guidance will be effective for our interim and annual reporting periods beginning January 1, 2017. Earlier adoption is permitted as of the beginning of an interim or annual reporting period. The amendments in ASU 2015-17 may be applied either prospectively to all deferred income tax liabilities and assets or retrospectively to all periods presented. We are assessing the impact that this guidance may have on our consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, “Inventory” (“ASU 2015-11”), which is included in the Codification under ASC 330, “Inventory” (“ASC 330”). This guidance requires inventory to be measured at the lower of cost and net realizable value under certain circumstances. Current guidance requires inventory to be measured at the lower of cost or market value, where market value could be either replacement cost, net realizable value, or net realizable value less a normal profit margin. This guidance will be effective for our interim and annual reporting periods beginning January 1, 2017, with early adoption permitted. A prospective approach is to be used for the adoption of this guidance. We do not expect the adoption of ASU 2015-11 to have a material impact on our consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern” (“ASU 2014-15”), which is included in the Codification under ASC 205, “Presentation of Financial Statements” (“ASC 205”). This guidance was issued to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosure in certain circumstances. Under the new guidance, management is required to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued and to provide related disclosures. The guidance will be effective for our interim and annual reporting periods beginning January 1, 2017, with early adoption permitted. A prospective approach is to be used for the adoption of this guidance. We are assessing the impact that this guidance may have on our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which is included in the Codification under ASC 606, “Revenue From Contracts With Customers” (“ASC 606”). This guidance requires the recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration expected in exchange for those goods or services. Originally, this guidance was to become effective for our interim and annual reporting periods beginning January 1, 2017. In August 2015, the FASB issued ASU No. 2015-14, which defers the effective date of ASU 2014-09 by one year. Therefore, ASU 2014-09 will become effective for our interim and annual reporting periods beginning January 1, 2018. Early adoption is permitted, but not any earlier than the original effective date. A full retrospective or a modified retrospective approach may be used for the adoption of this guidance. We are assessing the impact that this guidance may have on our consolidated financial statements. Adoption of New Accounting Guidance. In April 2015, the FASB issued ASU 2015-03 which is included in the Codification under ASC 835, “Interest” (“ASC 835”). This guidance requires that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that liability. This guidance became effective for our interim and annual reporting periods beginning January 1, 2016 and was applied retrospectively. The adoption of ASU 2015-03 did not have a material impact on our consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02, “Amendment to the Consolidation Analysis” (“ASU 2015-02”), which is included in the Codification under ASC 810. This guidance changes the analysis that an entity must perform to determine whether it should consolidate certain types of legal entities. This guidance became effective for our interim and annual reporting periods beginning January 1, 2016 and was applied prospectively. The adoption of ASU 2015-02 did not have a material impact on our consolidated financial statements. In January 2015, the FASB issued ASU No. 2015-01, “Income Statement – Extraordinary and Unusual Items” (“ASU 2015-01”), which is included in the Codification under ASC 225, “Income Statement” (“ASC 225”). This guidance eliminates the concept of extraordinary items from GAAP. This guidance became effective for our interim and annual reporting periods beginning January 1, 2016 and was applied prospectively. The adoption of ASU 2015-01 did not have a material impact on our consolidated financial statements. |
Fair Value and Credit Risk of F
Fair Value and Credit Risk of Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value and Credit Risk of Financial Instruments | 3. Fair Value and Credit Risk of Financial Instruments Fair value for financial reporting is defined as the price that would be received upon the sale of an asset or paid upon the transfer of a liability in an orderly transaction between market participants at the measurement date. The fair value measurement of our financial assets utilized assumptions categorized as observable inputs under the accounting guidance. Observable inputs are assumptions based on independent market data sources. The following table sets forth information regarding the recurring fair value measurement of our financial assets as reflected on our Condensed Consolidated Balance Sheet as of March 31, 2016: Fair Value Measurements at Reporting Date Using Description As of (Level 1) (Level 2) (Level 3) Cash equivalents: Money market fund $ 102,127 $ 102,127 $ 0 $ 0 Restricted cash: Money market fund 474 474 0 0 Collateral deposits: Money market fund 8,632 8,632 0 0 $ 111,233 $ 111,233 $ 0 $ 0 The following table sets forth information regarding the recurring fair value measurement of our financial assets as reflected on our Condensed Consolidated Balance Sheet as of December 31, 2015: Fair Value Measurements at Reporting Date Using Description As of (Level 1) (Level 2) (Level 3) Cash equivalents: Money market fund $ 130,821 $ 130,821 $ 0 $ 0 Restricted cash: Money market fund 585 585 0 0 Collateral deposits: Money market fund 8,631 8,631 0 0 $ 140,037 $ 140,037 $ 0 $ 0 The following table sets forth information regarding the recurring fair value measurement of our financial assets as reflected on our Condensed Consolidated Balance Sheet as of March 31, 2015: Fair Value Measurements at Reporting Date Using Description As of (Level 1) (Level 2) (Level 3) Cash equivalents: Money market fund $ 141,930 $ 141,930 $ 0 $ 0 Restricted cash: Money market fund 1,811 1,811 0 0 Collateral deposits: Money market fund 8,629 8,629 0 0 $ 152,370 $ 152,370 $ 0 $ 0 We used quoted prices in active markets for identical assets as of the measurement dates to value our financial assets that were categorized as Level 1. The carrying value for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and other current liabilities approximate fair value, because of the immediate or short-term maturity of these financial instruments. We did not have any financial assets or liabilities recorded at estimated fair value on a non-recurring basis on our Condensed Consolidated Balance Sheets as of March 31, 2016, December 31, 2015 or March 31, 2015. As of March 31, 2016 and December 31, 2015, the carrying value of a building that we considered held-for-sale was approximately $2,300, and was included in Prepaid expenses and other current assets on our Condensed Consolidated Balance Sheets. The carrying value of that building as of those dates was approximately equal to its estimated fair value, less selling costs. In the three months ended March 31, 2016, we recorded an impairment charge of approximately $543 to reduce the carrying value of another building to its estimated fair value. The estimated fair value of that building was approximately $2,600 and was included in Property and equipment, net on our Condensed Consolidated Balance Sheet as of March 31, 2016. We considered the results of independent appraisals and other available market data to determine the estimated fair value of the buildings as of March 31, 2016. As of March 31, 2016, the aggregate carrying value of the private education loans (“PEAKS Trust Student Loans”) owned by a trust (the “PEAKS Trust”) that purchased, owns and collects private education loans made under the PEAKS Private Student Loan Program (the “PEAKS Program”) and the private education loans (“CUSO Student Loans”) owned by an entity (the “CUSO”) that purchased, owns and collects private education loans made under a private education loan program for our students (the “CUSO Program”) was $64,699 and the estimated fair value was approximately $75,000. As of March 31, 2015, the aggregate carrying value of the PEAKS Trust Student Loans and the CUSO Student Loans (collectively, the “Private Education Loans”) was $86,069 and the estimated fair value was approximately $95,774. The fair value of the Private Education Loans was estimated using the income approach with estimated discounted expected cash flows. We utilized inputs that were unobservable in determining the estimated fair value of the Private Education Loans. The significant inputs used in determining the estimated fair value included the default rate, repayment rate and discount rate. Fair value measurements that utilize significant unobservable inputs are categorized as Level 3 measurements under the accounting guidance. As of March 31, 2016, the carrying value of our debt under our Financing Agreement (as defined in Note 8—Debt) was $49,623 and the estimated fair value was approximately $50,000. As of March 31, 2015, the carrying value of our debt under our Financing Agreement was $93,229 and the estimated fair value was approximately $94,000. The fair value of our debt under our Financing Agreement was estimated by discounting the future cash flows using current rates for similar loans with similar characteristics and remaining maturities. We utilized inputs that were unobservable in determining the estimated fair value of our debt under the Financing Agreement. The significant input used in determining the estimated fair value was the discount rate utilized for credit and liquidity purposes. Fair value measurements that utilize significant unobservable inputs are categorized as Level 3 measurements under the accounting guidance. As of March 31, 2016, the carrying value of the senior debt issued by the PEAKS Trust in the initial aggregate principal amount of $300,000 (the “PEAKS Senior Debt”) was $44,550 and the estimated fair value was approximately $38,000. As of March 31, 2015, the carrying value of the PEAKS Senior Debt was $71,660 and the estimated fair value was approximately $72,348. The fair value of the PEAKS Senior Debt was estimated using the income approach with estimated discounted cash flows. We utilized inputs that were unobservable in determining the estimated fair value of the PEAKS Senior Debt. The significant input used in determining the estimated fair value was the discount rate utilized for both credit and liquidity purposes. Fair value measurements that utilize significant unobservable inputs are categorized as Level 3 measurements under the accounting guidance. As of March 31, 2016, the carrying value of the liability that the CUSO was required to record (the “CUSO Secured Borrowing Obligation”) on its balance sheet for the cash received from the owners of the CUSO (the “CUSO Participants”), which liability we now consolidate, was $107,760 and the estimated fair value was approximately $76,000. As of March 31, 2015, the carrying value of the CUSO Secured Borrowing Obligation was $117,189 and the estimated fair value was approximately $115,211. The fair value of the CUSO Secured Borrowing Obligation was estimated using the income approach with estimated discounted cash flows. We utilized inputs that were unobservable in determining the estimated fair value of the CUSO Secured Borrowing Obligation. The significant input used in determining the estimated fair value was the discount rate utilized for both credit and liquidity purposes. Fair value measurements that utilize significant unobservable inputs are categorized as Level 3 measurements under the accounting guidance. Financial instruments that potentially subject us to credit risk consist primarily of accounts receivable, cash equivalents and the Private Education Loans. There is no concentration of credit risk of our accounts receivable, as the total is comprised of a large number of individual balances owed by students whose credit profiles vary and who are located throughout the United States. Our cash equivalents generally consist of money market funds which invest in high-quality securities issued by various entities. The Private Education Loans consist of a large number of individual loans owed by borrowers, whose credit profiles vary and who are located throughout the United States. |
Equity Compensation
Equity Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity Compensation | 4. Equity Compensation The amount of stock-based compensation expense and the line items in which those amounts are included in our Condensed Consolidated Statements of Operations and the related estimated income tax benefit recognized in the periods indicated were as follows: Three Months Ended 2016 2015 Cost of educational services $ 708 $ 942 Student services and administrative expenses 519 954 Total stock-based compensation expense $ 1,227 $ 1,896 Income tax (benefit) $ (472 ) $ (730 ) As of March 31, 2016, we estimated that pre-tax compensation expense for unvested stock-based compensation grants in the amount of approximately $3,900, net of estimated forfeitures, will be recognized in future periods. This expense will be recognized over the remaining service period applicable to the grantees which, on a weighted-average basis, is approximately 1.6 years. The stock options granted, forfeited, exercised and expired in the period indicated were as follows: Three Months Ended March 31, 2016 # of Shares Weighted Aggregate Weighted Aggregate (1) Outstanding at beginning of period 1,088,208 $ 70.21 $ 76,405 Granted 159,000 $ 3.57 568 Forfeited 0 $ 0 0 Exercised 0 $ 0 0 Expired (188,500 ) $ 121.56 (22,914 ) Outstanding at end of period 1,058,708 $ 51.06 $ 54,059 1.9 $ 0 Exercisable at end of period 736,061 $ 69.17 $ 50,913 1.7 $ 0 (1) The aggregate intrinsic value of the stock options was calculated by identifying those stock options that had a lower exercise price than the closing market price of our common stock on March 31, 2016 and multiplying the difference between the closing market price of our common stock and the exercise price of each of those stock options by the number of shares subject to those stock options that were outstanding or exercisable, as applicable. Since the closing market price of our common stock on March 31, 2016 was lower than the exercise price of all outstanding stock options and exercisable stock options, the aggregate intrinsic value of the stock options was zero. The following table sets forth information regarding the stock options granted and exercised in the periods indicated: Three Months Ended 2016 2015 Shares subject to stock options granted 159,000 0 Weighted average grant date fair value per share $ 2.09 $ 0 Shares subject to stock options exercised 0 0 Intrinsic value of stock options exercised $ 0 $ 0 Proceeds received from stock options exercised $ 0 $ 0 Tax benefits realized from stock options exercised $ 0 $ 0 The intrinsic value of a stock option is the difference between the fair market value of the stock and the option exercise price. The fair value of each stock option grant was estimated on the date of grant using the following assumptions in the periods indicated: Three Months Ended March 31, 2016 2015 Risk-free interest rates 1.3 % Not applicable Expected lives (in years) 4.8 Not applicable Volatility 75.0 % Not applicable Dividend yield None Not applicable For the three months ended March 31, 2015, the assumptions listed above were not applicable because we did not grant any stock options in that period. The following table sets forth the number of restricted stock units (“RSUs”) that were granted, forfeited and vested in the period indicated: Three Months Ended March 31, 2016 # of RSUs Weighted Average Fair Value Unvested at beginning of period 793,019 $ 14.18 Granted 411,224 3.56 Forfeited (47,837 ) 10.21 Vested (37,350 ) 18.23 Unvested at end of period 1,119,056 $ 10.31 The total fair market value of the RSUs that vested and were settled in shares of our common stock was: • $99 in the three months ended March 31, 2016; and • $1,260 in the three months ended March 31, 2015. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | 5. Variable Interest Entities Under ASC 810, an entity that holds a variable interest in a VIE and meets certain requirements would be considered to be the primary beneficiary of the VIE and required to consolidate the VIE in its consolidated financial statements. In order to be considered the primary beneficiary of a VIE, an entity must hold a variable interest in the VIE and have both: • the power to direct the activities that most significantly impact the economic performance of the VIE; and • the right to receive benefits from, or the obligation to absorb losses of, the VIE that could be potentially significant to the VIE. We hold variable interests in the PEAKS Trust as a result of: • a subordinated note issued to us by the PEAKS Trust in exchange for the portion of each private education loan disbursed to us under the PEAKS Program that we transferred to the PEAKS Trust (“Subordinated Note”); and • our guarantee of the payment of the principal and interest owed on the PEAKS Senior Debt, the administrative fees and expenses of the PEAKS Trust and a minimum required ratio of assets of the PEAKS Trust to outstanding PEAKS Senior Debt (“PEAKS Guarantee”). We hold variable interests in the CUSO as a result of: • a risk sharing agreement (the “CUSO RSA”) that we entered into with the CUSO in connection with the CUSO Program; and • a revolving note owed to us by the CUSO (the “Revolving Note”). Primary Beneficiary Analysis • assessed the risks that the VIE was designed to create and pass through to its variable interest holders; • identified the variable interests in the VIE; • identified the other variable interest holders and their involvement in the activities of the VIE; • identified the activities that most significantly impact the VIE’s economic performance; • determined whether we have the power to direct those activities; and • determined whether we have the right to receive the benefits from, or the obligation to absorb the losses of, the VIE that could potentially be significant to the VIE. We determined that the activities of the PEAKS Trust and the CUSO that most significantly impact the economic performance of the PEAKS Trust and the CUSO involve the servicing (which includes the collection) of the PEAKS Trust Student Loans and the CUSO Student Loans. To make that determination, we analyzed various possible scenarios of student loan portfolio performance to evaluate the potential economic impact on the PEAKS Trust and the CUSO. In our analysis, we made what we believe are reasonable assumptions based on historical data for the following key variables: • the composition of the credit profiles of the borrowers; • the interest rates and fees charged on the loans; • the default rates and the timing of defaults associated with similar types of loans; and • the prepayment and the speed of repayment associated with similar types of loans. Based on our analysis, we concluded that we became the primary beneficiary of the PEAKS Trust on February 28, 2013. This was the first date that we had the power to direct the activities of the PEAKS Trust that most significantly impact the economic performance of the PEAKS Trust, because we could have exercised our right to terminate the servicing agreement that governs the servicing activities of the PEAKS Trust Student Loans (the “PEAKS Servicing Agreement”), due to the failure of the entity that performs those servicing activities for the PEAKS Trust Student Loans on behalf of the PEAKS Trust to meet certain performance criteria specified in the PEAKS Servicing Agreement. We have not, however, exercised our right to terminate the PEAKS Servicing Agreement. As a result of our primary beneficiary conclusion, we consolidated the PEAKS Trust in our consolidated financial statements beginning on February 28, 2013 (the “PEAKS Consolidation”). Prior to February 28, 2013, the PEAKS Trust was not required to be consolidated in our consolidated financial statements, because we concluded that we were not the primary beneficiary of the PEAKS Trust prior to that time. The PEAKS Trust is discussed in more detail below. Our consolidated financial statements for periods as of and after February 28, 2013 include the PEAKS Trust, because we were considered to have control over the PEAKS Trust under ASC 810, as a result of our substantive unilateral right to terminate the PEAKS Servicing Agreement. We do not, however, actively manage the operations of the PEAKS Trust, and the assets of the consolidated PEAKS Trust can only be used to satisfy the obligations of the PEAKS Trust. Our obligations under the PEAKS Guarantee remain in effect, until the PEAKS Senior Debt and the PEAKS Trust’s fees and expenses are paid in full. See Note 11 – Commitments and Contingencies, for a further discussion of the PEAKS Guarantee. Based on our analysis, we concluded that we became the primary beneficiary of the CUSO on September 30, 2014. This was the first date that we determined we had the power to direct the activities of the CUSO that most significantly impact the economic performance of the CUSO, because the entity that performs the servicing activities on behalf of the CUSO (the “CUSO Program Servicer”) failed to meet certain performance criteria specified in the servicing agreement that governs the servicing activities of the CUSO Student Loans (the “CUSO Servicing Agreement”) on that date. The CUSO Servicing Agreement provides that in the event that the CUSO Program Servicer fails to meet certain performance criteria specified in the CUSO Servicing Agreement, and the CUSO Program Servicer does not affect a cure of that failure during a specified cure period, we would have the right to terminate the CUSO Servicing Agreement. We determined that it was not reasonably possible that the CUSO Program Servicer would be able to affect a cure during the specified cure period and, therefore, because the cure period was not substantive, we effectively had the right to terminate the CUSO Servicing Agreement as of the date that the CUSO Program Servicer failed to meet the performance criteria. We have provided notice of termination of the CUSO Servicing Agreement, however, the termination will not be effective until a successor services has been retained by the CUSO. As a result of our primary beneficiary conclusion, we consolidated the CUSO in our consolidated financial statements beginning on September 30, 2014. Prior to September 30, 2014, the CUSO was not required to be consolidated in our consolidated financial statements, because we concluded that we were not the primary beneficiary of the CUSO prior to that time. The CUSO is discussed in more detail below. Our consolidated financial statements for periods as of and after September 30, 2014 include the CUSO, because we were considered to have control over the CUSO under ASC 810, as a result of our substantive right to terminate the CUSO Servicing Agreement after a cure period that was not substantive. We do not, however, actively manage the operations of the CUSO, and the assets of the consolidated CUSO can only be used to satisfy the obligations of the CUSO. Our obligations under the CUSO RSA remain in effect, until all CUSO Student Loans are paid in full. See Note 11—Commitments and Contingencies, for a further discussion of the CUSO RSA. PEAKS Program. Under the PEAKS Program, an unrelated lender originated private education loans to our eligible students and, subsequently, sold those loans to the PEAKS Trust. The PEAKS Trust issued the PEAKS Senior Debt to investors. The lender disbursed the proceeds of the private education loans to us for application to the students’ account balances with us that represented their unpaid education costs. We transferred a portion of the amount of each private education loan disbursed to us under the PEAKS Program to the PEAKS Trust in exchange for the Subordinated Note. The Subordinated Note issued by the PEAKS Trust to us does not bear interest and matures in March 2026. Principal is due on the Subordinated Note following: • the repayment of the PEAKS Senior Debt; • the repayment of fees and expenses of the PEAKS Trust; and • the reimbursement of the amounts of any payments made by us under the PEAKS Guarantee. The carrying value of the Subordinated Note was eliminated from our consolidated balance sheet when we consolidated the PEAKS Trust in our consolidated financial statements beginning on February 28, 2013. In the three months ended December 31, 2012, we determined it was probable that we would not collect the carrying value of the Subordinated Note and, therefore, recorded an impairment charge for the total carrying value of the Subordinated Note. The PEAKS Trust utilized the proceeds from the issuance of the PEAKS Senior Debt and the Subordinated Note to purchase the private education loans made by the lender to our students. The assets of the PEAKS Trust (which include, among other assets, the PEAKS Trust Student Loans) serve as collateral for, and are intended to be the principal source of, the repayment of the PEAKS Senior Debt and the Subordinated Note. Assets and Liabilities of the PEAKS Trust As of March 31, December 31, March 31, Assets Restricted cash $ 1,820 $ 1,462 $ 1,727 Current portion of PEAKS Trust student loans 5,536 5,746 6,475 PEAKS Trust student loans, excluding current portion, less allowance for loan losses of $17,122, $21,816 and $39,596 42,196 45,987 57,596 Total assets $ 49,552 $ 53,195 $ 65,798 Liabilities Current portion of PEAKS Trust senior debt $ 15,634 $ 20,105 $ 26,533 Other current liabilities 0 191 175 PEAKS Trust senior debt, excluding current portion 28,916 30,701 45,127 Total liabilities $ 44,550 $ 50,997 $ 71,835 The assets of the PEAKS Trust can only be used to satisfy the obligations of the PEAKS Trust. Payment of the administrative fees and expenses of the PEAKS Trust and the principal and interest owed on the PEAKS Senior Debt are guaranteed by us under the PEAKS Guarantee. Revenue and Expenses of the PEAKS Trust Three Months Ended 2016 2015 Revenue $ 2,002 $ 2,413 Student services and administrative expenses 495 541 Provision for private education loan losses 1,483 803 Interest expense 1,758 3,259 (Loss) before provision for income taxes $ (1,734 ) $ (2,190 ) The revenue of the PEAKS Trust consists of interest income on the PEAKS Trust Student Loans, which is the accretion of the accretable yield on the PEAKS Trust Student Loans. The servicing, administrative and other fees incurred by the PEAKS Trust are included in Student services and administrative expenses in our Condensed Consolidated Statements of Operations. The provision for private education loan losses represents the increase in the allowance for loan losses that occurred during the period. The allowance for loan losses related to the PEAKS Trust Student Loans represents the difference between the carrying value and the total present value of the expected principal and interest collections of each loan pool of the PEAKS Trust Student Loans, discounted by the loan pool’s effective interest rate as of the end of the reporting period. Interest expense of the PEAKS Trust represents interest expense on the PEAKS Senior Debt, which includes the contractual interest obligation and the accretion of the discount on the PEAKS Senior Debt. PEAKS Guarantee Three Months Ended March 31, 2016 2015 PEAKS Guarantee $ 4,534 $ 13,637 CUSO Program. Assets and Liabilities of the CUSO We recorded the CUSO Secured Borrowing Obligation at the time of the CUSO Consolidation. The CUSO Secured Borrowing Obligation represents the estimated amount that the CUSO owes to the CUSO Participants related to their participation interests in the CUSO Student Loans, which amount is expected to be paid to the CUSO Participants by the CUSO from payments received by the CUSO related to the CUSO Student Loans, whether from the borrower or from us under the CUSO RSA. In accordance with ASC 810, we included the CUSO Secured Borrowing Obligation on our Condensed Consolidated Balance Sheets at its fair value as of September 30, 2014, the date of the CUSO Consolidation. The difference between the estimated fair value of the CUSO Secured Borrowing Obligation and the amount expected to be paid by the CUSO to the CUSO Participants was recorded as an accrued discount on our Condensed Consolidated Balance Sheets at the date of the CUSO Consolidation. The accrued discount is being recognized in interest expense using the interest method based on the actual and projected cash flows, over the expected life of the CUSO Secured Borrowing Obligation. The expected life of the CUSO Secured Borrowing Obligation is an estimate of the period of time over which payments are expected to be made by the CUSO to the CUSO Participants related to their participation interests in the CUSO Student Loans. The period of time over which payments are expected to be made by the CUSO to the CUSO Participants is based upon when the CUSO Student Loans enter a repayment status and the period of time they remain in a repayment status. Since all of the CUSO Student Loans have not entered repayment, and those loans that have entered a repayment status may be granted forbearances or deferments, the period of time over which payments are expected to be made to the CUSO Participants is an estimate. The assumptions used to estimate the expected life of the CUSO Secured Borrowing Obligation are reviewed periodically and updated accordingly, which may result in an adjustment to the expected life of the CUSO Secured Borrowing Obligation and the related recognized interest expense. The following table sets forth the carrying values of assets and liabilities of the CUSO that were included on our Condensed Consolidated Balance Sheets as of the dates indicated: As of March 31, December 31, March 31, Assets Restricted cash $ 3,244 $ 3,968 $ 2,790 Current portion of CUSO Student Loans 4,251 2,734 3,066 CUSO Student Loans, excluding current portion, less allowance for loan losses of $2,412, $1,796 and $2,480 12,716 16,174 18,932 Other assets 285 257 202 Total assets $ 20,496 $ 23,133 $ 24,990 Liabilities Current portion of CUSO Secured Borrowing Obligation $ 18,065 $ 23,591 $ 20,963 Other current liabilities 153 154 182 CUSO Secured Borrowing Obligation, excluding current portion 89,695 91,728 98,002 Total liabilities $ 107,913 $ 115,473 $ 119,147 The assets of the CUSO can only be used to satisfy the obligations of the CUSO. Other liabilities of the CUSO of $1,776 that were reported as of March 31, 2015 have been reclassified and included in the line item CUSO secured borrowing obligation, excluding current portion, to conform with the current year presentation. Revenue and Expenses of the CUSO Three Months Ended 2016 2015 Revenue $ 1,082 $ 1,064 Student services and administrative expenses 360 396 Provision for private education loan losses 395 441 Interest expense 3,167 3,641 (Loss) before provision for income taxes $ (2,840 ) $ (3,414 ) The revenue of the CUSO consists of interest income on the CUSO Student Loans, which is the accretion of the accretable yield on the CUSO Student Loans, and an administrative fee paid by the CUSO Participants to the CUSO on a monthly basis. The servicing, administrative and other fees incurred by the CUSO are included in Student services and administrative expenses in our Condensed Consolidated Statements of Operations. The provision for private education loan losses represents the increase in the allowance for loan losses that occurred during the period, offset by recoveries received from private education loans that were charged off prior to the CUSO consolidation. The allowance for loan losses represents the difference between the carrying value and the total present value of the expected principal and interest collections of each loan pool of the CUSO Student Loans, discounted by the loan pool’s effective interest rate as of the end of the reporting period. Interest expense of the CUSO represents interest expense on the CUSO Secured Borrowing Obligation, which includes the contractual interest obligation on the CUSO Student Loans and the accretion of the discount on the CUSO Secured Borrowing Obligation. CUSO RSA • paying the then outstanding balance (plus accrued and unpaid interest) of those private education loans that have been charged off above a certain percentage and, with respect to which, an amount equal to at least ten monthly payments has been paid; or • paying the then outstanding balance (plus accrued and unpaid interest) of those private education loans that have been charged off above a certain percentage and, with respect to which, an amount equal to at least ten monthly payments has not been paid, plus any interest that would otherwise have been payable until ten monthly payments had been made, discounted at the rate of 10% per annum (collectively, “Discharge Payments”). See Note 11 – Commitments and Contingencies, for a further discussion of our obligations to make guarantee payments pursuant to the CUSO RSA. Pursuant to the CUSO RSA, we are entitled to all amounts that the CUSO recovers from loans in a particular loan pool made under the CUSO Program that have been charged off, until all payments that we made under the CUSO RSA with respect to that loan pool have been repaid to us by the CUSO. We have the right to offset payment amounts that we owe under the CUSO RSA by the amount of recoveries from charged-off loans made under the CUSO Program that are owed, but have not been paid, to us. We exercised this offset right in the three months ended March 31, 2016 and 2015. In June 2015, we entered into an amendment to the CUSO RSA that, among other things, allowed us to defer the payments due in June 2015 through December 2015 under the CUSO RSA to January 2016 (the “Deferred Payment”). See Note 11 – Commitments and Contingencies for a discussion of this amendment. In accordance with the provisions of this amendment, we deferred the payments due in June 2015 through December 2015 under the CUSO RSA, and we utilized the amount of the recoveries of charged-off loans received by the CUSO between June 2015 and December 2015 that were due but were not paid to us to offset against amounts that we owed under the CUSO RSA in January 2016. The following table sets forth the payments that we made to the CUSO related to our guarantee obligations under the CUSO RSA in the periods indicated: Three Months Ended 2016 2015 Regular Payments $ 2,597 (1) $ 2,280 (2) Deferred Payment 5,331 (3) 0 Discharge Payments 0 2,709 Total $ 7,928 $ 4,989 (1) This amount is net of $294 of recoveries from charged-off loans owed to us that we offset against amounts we owed under the CUSO RSA. (2) This amount is net of $290 of recoveries from charged-off loans owed to us that we offset against amounts we owed under the CUSO RSA. (3) This amount is net of $761 of recoveries from charged-off loans received by the CUSO from June 8, 2015 through December 31, 2015 that were not paid to us that we offset against amounts owed by us under the CUSO RSA in January 2016. We made advances to the CUSO under the Revolving Note in years prior to 2012. We made the advances so that the CUSO could use those funds primarily to purchase additional private education loans made under the CUSO Program. The period of time during which we could make additional advances under the Revolving Note ended on January 1, 2014. Certain of the assets of the CUSO serve as collateral for the Revolving Note. The Revolving Note bears interest, is subject to customary terms and conditions and is currently due and payable in full. In 2013, we also offset $8,472 owed by us under the CUSO RSA against amounts owed to us by the CUSO under the Revolving Note, instead of making additional payments in that amount. We did not offset any amounts owed by us under the CUSO RSA against amounts owed to us by the CUSO under the Revolving Note, instead of making additional payments in those amounts, in the three months ended March 31, 2016 or 2015. See Note 11 – Commitments and Contingencies, for a further discussion of the offsets and CUSO RSA. The amount owed to us under the Revolving Note, excluding those offsets, was approximately $8,300 as of March 31, 2016 and December 31, 2015, and $8,200 as of March 31, 2015. The amount of the Revolving Note was eliminated from our financial statements as a result of the CUSO Consolidation. |
Private Education Loans
Private Education Loans | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Private Education Loans | 6. Private Education Loans We concluded that we were required to consolidate the PEAKS Trust in our consolidated financial statements beginning on February 28, 2013 and to consolidate the CUSO in our consolidated financial statements beginning on September 30, 2014. See Note 5 – Variable Interest Entities, for a further discussion of the consolidation of the PEAKS Trust and CUSO (the “Consolidated VIEs”). As a result, the assets and liabilities of the Consolidated VIEs were included on our Condensed Consolidated Balance Sheets as of March 31, 2016, December 31, 2015 and March 31, 2015. The aggregate carrying amount of the Private Education Loans included under the Private education loan line items on our Condensed Consolidated Balance Sheets as of March 31, 2016 was $64,699 and as of March 31, 2015 was $86,069. The outstanding principal balance of the Private Education Loans, including accrued interest, was approximately $100,978 as of March 31, 2016 and $161,436 as of March 31, 2015. Initial Measurement The Private Education Loans that did not individually have evidence of deteriorated credit quality at the time of consolidation were also initially measured at fair value and are accounted for in accordance with ASC 310-30. We believe that following the guidance of ASC 310-30 by analogy with respect to those loans provides the most reasonable presentation of the value of those loans, primarily due to: • the evidence of deteriorated credit quality of a significant number of the Private Education Loans; and • the probability that all contractually required payments with respect to those loans will not be collected. All of the Private Education Loans are, therefore, considered to be, and reported as, PCI Loans. This accounting treatment is consistent with the American Institute of Certified Public Accountants’ (the “AICPA”) December 18, 2009 confirmation letter (the “Confirmation Letter’), in which the AICPA summarized the SEC staff’s view regarding the accounting in subsequent periods for discount accretion associated with loan receivables acquired in a business combination or asset purchase. In this letter, the AICPA states that it understands that the SEC staff will not object to an accounting policy based on contractual or expected cash flow. We believe that following ASC 310-30 by analogy with respect to the Private Education Loans that did not individually have evidence of deteriorated credit quality at the time of consolidation is an appropriate application of the accounting guidance to determine the initial measurement of the value of those loans. Aggregation of Loans • the fiscal quarter in which the Private Education Loan was purchased by the PEAKS Trust or the CUSO; and • the consumer credit score of the borrower. PCI Loans that do not have evidence of deteriorated credit quality are not aggregated in the same pools with PCI Loans that have evidence of deteriorated credit quality. The same aggregation criteria, however, were used to determine those loan pools. Each loan pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows. Accretable Yield The excess of any cash flows expected to be collected with respect to a loan pool of the Private Education Loans over the carrying value of the loan pool is referred to as the accretable yield. The accretable yield is not reported on our Condensed Consolidated Balance Sheets, but it is accreted and included as interest income using the effective interest method, which is at a level rate of return over the remaining estimated life of the loan pool. The following table sets forth information regarding aggregate changes in accretable yield of the loan pools of the PEAKS Trust Student Loans, in total, and for those loans pursuant to which ASC 310-30 was applied by analogy, for the periods indicated: Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Total ASC 310-30 Applied By Analogy Total ASC 310-30 Applied By Analogy Balance at beginning of period $ 34,984 $ 19,313 $ 51,819 $ 32,654 Accretion (2,002 ) (1,022 ) (2,413 ) (1,431 ) Reclassification from nonaccretable difference and changes in expected cash flows (1,330 ) (933 ) (1,508 ) (2,541 ) Balance at end of period $ 31,652 $ 17,358 $ 47,898 $ 28,682 The following table sets forth information regarding aggregate changes in accretable yield of the loan pools of the CUSO Student Loans, in total, and for those loans pursuant to which ASC 310-30 was applied by analogy, for the periods indicated: Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Total ASC 310-30 Applied By Analogy Total ASC 310-30 Applied By Analogy Balance at beginning of period $ 12,793 $ 7,611 $ 11,728 $ 5,857 Accretion (722 ) (432 ) (668 ) (346 ) Reclassification from nonaccretable difference and changes in expected cash flows (425 ) (294 ) 60 266 Balance at end of period $ 11,646 $ 6,885 $ 11,120 $ 5,777 Allowance for Private Education Loan Losses If a decrease in the expected cash flows of a loan pool is probable and would cause the expected cash flows to be less than the expected cash flows at the end of the previous fiscal quarter, we would record the impairment as: • a provision for private education loan losses in our Condensed Consolidated Statement of Operations; and • an increase in the allowance for loan losses on our Condensed Consolidated Balance Sheets. The provision for private education loan losses represents the increase in the allowance for loan losses that occurred during the period. The allowance for loan losses is the difference between the carrying value and the total present value of the expected principal and interest collections of each loan pool, discounted by the loan pool’s effective interest rate at the end of the previous fiscal quarter. If a significant increase in the expected cash flows of a loan pool is probable and would cause the expected cash flows to be greater than the expected cash flows at the end of the previous fiscal quarter, we would: • first reverse any allowance for loan losses with respect to that loan pool that was previously recorded on our Condensed Consolidated Balance Sheets, up to the amount of that allowance; and • record any remaining increase prospectively as a yield adjustment over the remaining estimated lives of the loans in the loan pool. The following table sets forth information regarding changes in the allowance for loan losses of the loan pools of the PEAKS Trust Student Loans in the aggregate in the periods indicated: Three Months Ended March 31, 2016 2015 Balance at beginning of period $ 21,816 $ 42,353 Loans charged off (6,907 ) (4,061 ) Recoveries from charged off loans 730 501 Provision for loan losses 1,483 803 Balance at end of period $ 17,122 $ 39,596 The following table sets forth information regarding changes in the allowance for loan losses of the loan pools of the CUSO Student Loans in the aggregate in the periods indicated: Three Months Ended March 31, 2016 2015 Balance at beginning of period $ 1,796 $ 2,039 Loans charged off 0 0 Recoveries from charged off loans 0 0 Provision for loan losses 616 (1) 441 Balance at end of period $ 2,412 $ 2,480 (1) The provision for loan losses was reduced by $221 for recoveries from CUSO Student Loans that were not recognized on our consolidated balance sheet at the time of the CUSO Consolidation. Adjustments to the interest income of a loan pool are recognized prospectively, if those adjustments are due to: • changes in variable interest rates; or • any other changes in the timing of the expected cash flows of the loan pools. Loan Modifications and Charge Offs • a probable and significant change in the expected cash flows of the PCI Loans has occurred; and • the loans should continue to be accounted for and reported as PCI loans. In evaluating the impact of modifications made to PCI Loans on the expected cash flows of those loans, we consider the effect of any foregone interest and the potential for future default. These default estimates are used to calculate expected credit losses with respect to each loan pool. In developing these probabilities of default estimates, we considered the relationship between the credit quality characteristics of the loans in the loan pool and certain assumptions based on the performance history of the Private Education Loans and industry data related to the severity and recovery lag of defaults applicable to private education loans. The charge off of a PCI Loan results in the removal of that loan from the underlying PCI Loan pool and reduces the loan pool discount. If the discount for principal losses for a particular PCI Loan pool has been fully depleted, the charge off of a PCI Loan will reduce the PCI Loan pool’s allowance for loan losses. Removal of a PCI Loan from the underlying PCI Loan Pool does not change the effective yield of the PCI Loan Pool. |
Goodwill and Intangibles
Goodwill and Intangibles | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles | 7. Goodwill and Intangibles We recognized goodwill and certain other intangible assets on our consolidated balance sheet as a result of the acquisition of: • certain assets and liabilities of CompetenC Solutions, Inc. and Great Equalizer, Inc. on January 31, 2014; • the membership interests of Cable Holdings, LLC on August 1, 2013; and • substantially all the assets and certain liabilities of Daniel Webster College on June 10, 2009. The acquired intangible assets consist of certain identifiable intangible assets that are amortized over the asset’s estimated life, and indefinite-lived intangible assets, including goodwill. Goodwill represents the excess of the consideration paid over the estimated fair value of identifiable net assets acquired. The following tables set forth the carrying value of our acquired intangible assets that were included in Other assets on our Condensed Consolidated Balance Sheets as of the dates indicated: As of March 31, 2016 Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Amortization Period (months) Amortizable intangible assets: Customer relationships $ 2,500 $ (1,203 ) $ 1,297 60 Non-compete agreements 1,120 (560 ) 560 60 Training materials 440 (335 ) 105 42 Accreditation 210 (203 ) 7 84 $ 4,270 $ (2,301 ) $ 1,969 As of December 31, 2015 Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Amortization Period (months) Amortizable intangible assets: Customer relationships $ 2,500 $ (1,078 ) $ 1,422 60 Non-compete agreements 1,120 (504 ) 616 60 Training materials 440 (304 ) 136 42 Accreditation 210 (195 ) 15 84 $ 4,270 $ (2,081 ) $ 2,189 As of March 31, 2015 Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Amortization Period (months) Amortizable intangible assets: Customer relationships $ 2,500 $ (703 ) $ 1,797 60 Non-compete agreements 1,120 (336 ) 784 60 Training materials 440 (210 ) 230 42 Accreditation 210 (173 ) 37 84 $ 4,270 $ (1,422 ) $ 2,848 All amortizable intangible assets are being amortized on a straight-line basis. Amortization expense for amortized intangible assets was: • $220 in the three months ended March 31, 2016; and • $221 in the three months ended March 31, 2015. The following table sets forth our estimate of the amortization expense for our amortizable intangible assets in each of the four years, 2016 through 2019: Fiscal Year Ending December 31, Estimated Amortization Expense 2016 $ 865 2017 734 2018 562 2019 28 $ 2,189 The following tables set forth the carrying value of our indefinite-lived intangible assets that were included in Other assets on our Condensed Consolidated Balance Sheets as of the dates indicated. As of March 31, 2016 Gross Carrying Value Accumulated Impairment Loss Net Carrying Value Indefinite-lived intangible assets: Goodwill $ 7,247 $ (7,247 ) $ 0 Trademark 660 (410 ) 250 $ 7,907 $ (7,657 ) $ 250 As of December 31, 2015 Gross Carrying Value Accumulated Impairment Loss Net Carrying Value Indefinite-lived intangible assets: Goodwill $ 7,247 $ (7,247 ) $ 0 Trademark 660 (410 ) 250 $ 7,907 $ (7,657 ) $ 250 As of March 31, 2015 Gross Carrying Value Accumulated Impairment Loss Net Carrying Value Indefinite-lived intangible assets: Goodwill $ 7,290 $ (2,044 ) $ 5,246 Trademark 660 (410 ) 250 $ 7,950 $ (2,454 ) $ 5,496 Indefinite-lived intangible assets include trademarks and goodwill, which are not amortized, since there are no legal, regulatory, contractual, economic or other factors that limit the useful life of those intangible assets by us. Intangible assets that are not subject to amortization are required to be tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset may be impaired. We perform our impairment evaluation annually, during the fourth quarter, or more frequently if facts and circumstances warrant. All of our goodwill relates to one reporting unit, which is defined as one level below an operating segment. In addition to our annual impairment test, we consider certain triggering events when evaluating whether an interim impairment analysis is warranted. Among these is a significant long-term decrease in our market capitalization based on events specific to our operations. Deteriorating operating results and current period and projected future operating results that negatively differ from the operating plans used in the most recent impairment analysis are also triggering events that could be cause for an interim impairment review. In our analysis of triggering events we also consider changes in the accreditation, regulatory or legal environment; increased competition; innovation changes and changes in the market acceptance of our educational programs and the graduates of those programs, among other factors. We concluded that no triggering event had occurred during the three month period ended March 31, 2016 or March 31, 2015. The assumptions and estimates underlying the fair value calculations used in our annual impairment test are uncertain by their nature and can vary significantly from actual results. Therefore, as circumstances and assumptions change, we may be required to recognize additional impairment charges for indefinite-lived intangible assets in future periods. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt As of March 31, 2016, our Condensed Consolidated Balance Sheet included: (i) outstanding Term Loan (as defined below) borrowings under the Financing Agreement, as described further below under “— Term Loans, PEAKS Trust Senior Debt,” Term Loans. On December 23, 2014, we entered into Amendment No. 1 to Financing Agreement (“Amendment No. 1”), on March 17, 2015, we entered into Amendment No. 2 to Financing Agreement (“Amendment No. 2”), on May 26, 2015, we entered into a Limited Consent to Financing Agreement (the “FA Consent”), on September 18, 2015, we entered into Amendment No. 3 to Financing Agreement (“Amendment No. 3”), on December 31, 2015, we entered into Amendment No. 4 to Financing Agreement (“Amendment No. 4”) and on March 10, 2016, we entered into a Limited Waiver (“Waiver”). The Original Financing Agreement, as amended by Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4 and including the FA Consent and Waiver, is referred to herein as the “Financing Agreement.” Pursuant to the Waiver we entered into on March 10, 2016, the agents and the lenders under the Financing Agreement agreed to waive any default or event of default that may have occurred and is continuing, or may occur, under the Financing Agreement or related loan documents as a result of the restatement of our condensed consolidated financial statements for each of the fiscal quarters ended March 31, 2014, June 30, 2014, September 30, 2014, March 31, 2015, June 30, 2015 and September 30, 2015, and our consolidated financial statements for the fiscal year ended December 31, 2014 (the “Restatements”), as long as we delivered to the agents and lenders our restated financial statements by March 31, 2016. We delivered our restated financial statements to the agents and lenders by March 31, 2016. A portion of the proceeds of the Term Loans, as well as other funds, were used for payment of fees in connection with the Financing Agreement. We paid a one-time commitment fee of $3,000 in the fourth quarter of 2014 in connection with the Financing Agreement. The commitment fee and other costs paid to, or on behalf of, the lender were recorded as debt discount on our Consolidated Balance Sheets. The following table sets forth the outstanding principal balance, debt issuance costs, debt discount and carrying value of the Financing Agreement as of the dates indicated: As of March 31, 2016 December 31, 2015 March 31, 2015 Outstanding principal balance $ 50,505 $ 69,681 $ 97,500 Debt issuance costs (209 ) (360 ) (1,011 ) Debt discount (673 ) (1,160 ) (3,260 ) Carrying value $ 49,623 $ 68,161 $ 93,229 The outstanding principal balance under the Financing Agreement is expected to be repaid by us as set forth in the following table: Fiscal Quarter Ending Scheduled Payments Excess Cash Flow Payment Total June 30, 2016 $ 15,500 $ 0 $ 15,500 September 30, 2016 15,500 0 15,500 December 31, 2016 19,505 0 19,505 Total $ 50,505 $ 0 $ 50,505 The Financing Agreement provides for mandatory prepayment of outstanding principal in an amount equal to 50% of Excess Cash Flow (as defined in the Financing Agreement) calculated based on our cash flows for the fiscal years ended December 31, 2015 and 2016 or, in the case of 2015, at least $9,000. Any mandatory prepayment amounts due under this provision are payable within 90 days of December 31. Because our Excess Cash Flow for the fiscal year ended December 31, 2015 was less than the minimum required payment pursuant to the Financing Agreement, we made a mandatory prepayment of $9,000 under the Excess Cash Flow provision in March 2016. The Term Loans will mature on December 4, 2017. Assuming the required principal payments are made in accordance with the repayment schedule for the remainder of 2016, however, the outstanding balance of the Term Loans is expected to be $0 as of December 31, 2016. Based on these repayment expectations, we have classified the entire carrying value of the Term Loans as a current liability on our March 31, 2016 Condensed Consolidated Balance Sheet. The Financing Agreement provides that we must pay a premium on any prepayment of outstanding principal (“Premium Payment”) that we make during the first two years of the Financing Agreement that is not specifically required under the mandatory prepayment provision. We did not make any Premium Payments in 2015. The Premium Payment for any such prepayment of principal is 1.0% of the amount of any prepayment we make from December 5, 2015 through December 4, 2016. We do not expect to make any Premium Payments in 2016. The Term Loans bear interest, at our option, at: • the higher of (a) the London Interbank Offered Rate (“LIBOR”) and (b) 1.00%, plus a margin of 8.50%; or • the highest of (a) 2.00%, (b) the federal funds rate plus 0.50%, (c) LIBOR plus 1.00% and (d) the U.S. Prime Rate, plus a margin of 8.00%. The effective interest rate on our borrowings under the Financing Agreement was approximately: • 14.20% per annum in the three months ended March 31, 2016; and • 12.70% per annum in the three months ended March 31, 2015. The following table sets forth the total amount of interest expense and fees (including amortization of debt issuance costs and accretion of debt discount) that we recognized on our borrowings under the Financing Agreement in the periods indicated: Three Months Ended March 31, 2016 2015 Interest expense and fees $ 2,174 $ 3,367 The Term Loans are guaranteed by certain of our subsidiaries (the “Guarantors” and together with us, the “Loan Parties”) and are secured, subject to certain agreed upon exceptions, by: (i) a first-priority lien on and perfected security interest in substantially all the Loan Parties’ assets, including a pledge of the equity of the Guarantors and our other subsidiaries, (ii) a mortgage on the Loan Parties’ owned real estate, and (iii) control agreements on certain of the Loan Parties’ deposit accounts. The Financing Agreement contains certain affirmative and negative covenants, including restrictions on the Loan Parties’ ability to incur debt and liens, make investments, dispose of assets, pay dividends and make prepayments on existing indebtedness, in each case subject to customary exceptions. The Financing Agreement requires us to maintain compliance with a Leverage Ratio (as defined in the Financing Agreement) and a Fixed Charge Coverage Ratio (as defined in the Financing Agreement), as well as with certain educational regulatory measurements. Compliance with the Leverage Ratio and the Fixed Charge Coverage Ratio is determined on a quarterly basis, covering certain prior periods as described in the Financing Agreement. The educational regulatory measurements are calculated over different time periods, based on statutory guidelines. The educational regulatory measurements are set forth in the Financing Agreement, and include the following tests: • a minimum composite score of our equity, primary reserve and net income ratios; • our institutions’ loan cohort default rates under the programs under Title IV (“Title IV Programs”) of the Higher Education Act of 1965, as amended (“HEA”); • our institutions’ compliance with the 90/10 Rule of the HEA; • our compliance with the ED’s gainful employment regulations; and • our institutions’ student retention rate. The Financing Agreement contains certain events of default, including: • the failure by us to pay any amount owed under the Financing Agreement when due; • an inaccuracy in any material respect of the representations or warranties that the Loan Parties made in the Financing Agreement; • a violation of any covenant that the Loan Parties made in the Financing Agreement and the related loan documents; • a default by us under any other material indebtedness owed by us, including, without limitation, our failure to pay any amounts due under the PEAKS Guarantee or the CUSO RSA; • a change of control of us; • the invalidity of certain liens or guarantees granted or made by the Loan Parties in the Financing Agreement; • the occurrence of certain regulatory events; and • certain bankruptcy or insolvency events affecting the Loan Parties. If an event of default occurs under the Financing Agreement, the lenders may declare all Term Loans then outstanding to be immediately due and payable in full. PEAKS Senior Debt . The following table sets forth the outstanding principal balance, debt discount and carrying value of the PEAKS Senior Debt as of the dates indicated: As of March 31, 2016 December 31, 2015 March 31, 2015 Outstanding principal balance $ 50,135 $ 57,111 $ 81,273 Debt discount (5,585 ) (6,305 ) (9,613 ) Carrying value $ 44,550 $ 50,806 $ 71,660 We recorded $15,634 as a current liability as of March 31, 2016, which represented our estimate of the amount of the carrying value of the PEAKS Senior Debt that we expect to be due in the 12 months immediately following March 31, 2016. The PEAKS Senior Debt matures in January 2020. There are no scheduled principal repayment requirements for the PEAKS Senior Debt prior to the January 2020 maturity date. Under the terms of the PEAKS Program documents, however, amounts received on a monthly basis by the PEAKS Trust that exceed the fees and expenses of the PEAKS Trust then due and the interest then due on the PEAKS Senior Debt are to be paid to reduce the outstanding principal balance of the PEAKS Senior Debt. In the three months ended March 31, 2016, the aggregate amount of principal payments on the PEAKS Senior Debt was $6,976. The following table sets forth the estimated principal payments on the PEAKS Senior Debt in the periods indicated: Fiscal Year Ending December 31, Amount 2016 $ 20,181 2017 8,704 2018 8,582 2019 9,355 2020 10,289 Total $ 57,111 The PEAKS Senior Debt bears interest at a variable rate based on the LIBOR, plus a 550 basis point margin. The minimum LIBOR rate applied to the PEAKS Senior Debt cannot be less than 2.00%. The effective interest rate on the PEAKS Senior Debt was approximately: • 14.5% per annum in the three months ended March 31, 2016; and • 16.3% per annum in the three months ended March 31, 2015. The following table sets forth the total amount of contractual interest expense and discount accretion that we recognized on the PEAKS Senior Debt in the periods indicated: Three Months Ended March 31, 2016 2015 Contractual interest expense $ 1,038 $ 1,604 Discount accretion 720 1,655 Total interest expense $ 1,758 $ 3,259 The assets of the PEAKS Trust (which include, among other assets, the PEAKS Trust Student Loans) serve as collateral for, and are intended to be the principal source of, the repayment of the PEAKS Senior Debt. Payment of the PEAKS Senior Debt may be accelerated by the indenture trustee of the PEAKS Trust or by the holders of the PEAKS Senior Debt in response to certain events of default under the indenture under the PEAKS Program (the “PEAKS Indenture”), including, among other things: • a payment default by the PEAKS Trust; • a default in the performance or observation of the PEAKS Trust’s covenants, agreements or conditions under the PEAKS Indenture; • a breach of our obligations under the PEAKS Guarantee; and • certain bankruptcy events with respect to the PEAKS Trust or us. An acceleration of the payment of the PEAKS Senior Debt would result in an acceleration of our obligation to pay the full amount of the PEAKS Senior Debt pursuant to the terms of the PEAKS Guarantee, if the PEAKS Trust was not able to make that payment (and we believe that it is unlikely that the PEAKS Trust would be able to make that payment). The acceleration of our obligation to pay the full amount of the PEAKS Senior Debt, and/or our inability to make that payment, could also result in cross-defaults under the Financing Agreement. Asset/Liability Ratio If the amount of the assets of the PEAKS Trust does not equal or exceed the outstanding PEAKS Senior Debt by the applicable required Asset/Liability Ratio on a monthly measurement date, we are required to make a payment under the PEAKS Guarantee in the following month in an amount that would reduce the outstanding principal balance of the PEAKS Senior Debt to the extent necessary to cause the ratio of the assets of the PEAKS Trust to the resulting outstanding PEAKS Senior Debt to equal or exceed the applicable required Asset/Liability Ratio. In order to cause the PEAKS Trust to maintain the applicable required Asset/Liability Ratio, we made payments of $4,534 in the three months ended March 31, 2016, and $30,090 in the year ended December 31, 2015 under the PEAKS Guarantee that were applied by the PEAKS Trust to reduce the amount of the PEAKS Senior Debt. See Note 11 – Commitments and Contingencies, for a discussion of our projected PEAKS Guarantee payments for 2016 through 2020. As a consequence of the Restatements, the quarterly and annual reports for the affected periods that we were required to deliver to the indenture trustee of the PEAKS Trust under the PEAKS Guarantee were inaccurate. We delivered corrected reports to the indenture trustee on March 14, 2016, and we believe that if any breach of the PEAKS Guarantee or any event of default under the PEAKS Indenture had occurred as a result of the Restatements, that our delivery of the corrected reports has cured any such breach or event of default. We cannot predict, however, whether the holders of the PEAKS Senior Debt will assert other breaches of the PEAKS Guarantee by us or assert that any breach of the PEAKS Guarantee or event of default under the PEAKS Indenture was not properly cured. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | 9. Earnings Per Common Share Earnings per common share for all periods have been calculated in conformity with ASC 260, “Earnings Per Share.” This data is based on historical net income and the weighted average number of shares of our common stock outstanding during each period as set forth in the following table: Three Months Ended March 31, 2016 2015 Shares: Weighted average number of shares of common stock outstanding 23,742 23,560 Shares assumed issued (less shares assumed purchased for treasury) for stock-based compensation 114 259 Outstanding shares for diluted earnings per share calculation 23,856 23,819 A total of approximately 1.9 million shares in the three months ended March 31, 2016 and 1.2 million shares in the three months ended March 31, 2015 were excluded from the calculation of our diluted earnings per common share, because the effect was anti-dilutive. |
Employee Pension Benefits
Employee Pension Benefits | 3 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Pension Benefits | 10. Employee Pension Benefits The following table sets forth the components of net periodic pension benefit of the ESI Pension Plan and ESI Excess Pension Plan in the periods indicated: Three Months Ended March 31, 2016 2015 Interest cost $ 403 $ 409 Expected return on assets (1,225 ) (1,383 ) Recognized net actuarial loss 0 1 Amortization of prior service (credit) (388 ) (389 ) Net periodic pension (benefit) $ (1,210 ) $ (1,362 ) The benefit accruals under the ESI Pension Plan and ESI Excess Pension Plan were frozen effective March 31, 2006. As a result, no service cost has been included in the net periodic pension benefit. We did not make any contributions to the ESI Pension Plan or the ESI Excess Pension Plan in the three months ended March 31, 2016 or 2015. We do not expect to make any significant contributions to the ESI Pension Plan or the ESI Excess Pension Plan in 2016. The following table sets forth the changes in the components of Accumulated other comprehensive income (loss) on our Condensed Consolidated Balance Sheet in the three months ended March 31, 2016: Defined Benefit Pension Items Accumulated Other Comprehensive Income (Loss) Income Tax Benefit (Expense) Accumulated Other Comprehensive Income (Loss) Net of Income Tax Balance at December 31, 2015 $ (2,869 ) $ 1,176 $ (1,693 ) Amortization of: Actuarial (gains) losses 0 0 0 Prior service costs (credits) (388 ) 149 (239 ) Balance at March 31, 2016 $ (3,257 ) $ 1,325 $ (1,932 ) The reclassification of prior service costs or credits from Accumulated other comprehensive income (loss) are included in the computation of net periodic pension benefit. Approximately $783 of net periodic pension benefit was included in Cost of educational services and approximately $427 of net periodic pension benefit was included in Student services and administrative expenses in our Condensed Consolidated Statement of Operations in the three months ended March 31, 2016. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies As part of our normal operations, one of our insurers issues surety bonds for us that are required by various education authorities that regulate us. We are obligated to reimburse our insurer for any of those surety bonds that are paid by the insurer. As of March 31, 2016, the total face amount of those surety bonds was approximately $22,300. As of March 31, 2016, we also had caused a letter of credit with a face amount of approximately $106 to be issued to one of our state regulatory agencies. Our institutions’ failure to submit their 2013 audited consolidated financial statements and the 2013 compliance audits of their administration of the Title IV Programs in which they participate (“Compliance Audits”) to the ED by the due date resulted in sanctions imposed by the ED on our institutions that included, among other things, our institutions having to submit a letter of credit payable to the ED. We caused a letter of credit payable to the ED in the amount of $79,708 (the “ED Letter of Credit”) to be issued on October 31, 2014. On December 16, 2015, we and the ED entered into an agreement (the “ED Agreement”), which provides that we would provide funds to the ED for the ED to maintain in an escrow account (the “ED Escrowed Funds”) in lieu of the ED Letter of Credit. On December 17, 2015, we provided to the ED funds in the amount of $79,708, which amount is subject to further adjustment by the ED based upon changes in our annual federal student aid funding, and based on the ED’s determination of the percentage of our annual federal student aid funding that must be maintained. The ED Letter of Credit was cancelled effective December 22, 2015. As of March 31, 2016 and December 31, 2015 the amount of the ED Escrowed Funds held by the ED was $79,708. The ED Agreement provides that the ED may draw on the ED Escrowed Funds upon certification by the ED that the drafted funds will be used for one or more of the following purposes: • to pay refunds of institutional or non-institutional charges owed to or on behalf of current or former students of our institutions, whether our institutions remain open or have closed; • to provide for the “teach-out” of students enrolled at the time of closure of our institutions; and • to pay any liabilities owing to the ED arising from acts or omissions by our institutions, on or before November 4, 2019, in violation of requirements set forth in the HEA, including the violation of any agreement entered into by our institutions with the ED regarding the administration of Title IV Programs. Claims and Contingencies. The following table sets forth the amounts of our recorded liability related to our claims and contingencies and where the amounts were included on our Condensed Consolidated Balance Sheets as of the dates indicated: As of March 31, 2016 December 31, 2015 March 31, 2015 Other current liabilities $ 15,200 $ 16,330 $ 14,408 Other liabilities 588 588 598 Total $ 15,788 $ 16,918 $ 15,006 The following table sets forth the activity with respect to our recorded liability related to our claims and contingencies in the periods indicated: Three Months Ended March 31, 2016 2015 Balance at beginning of period $ 16,918 $ 15,574 Increases (decreases) from: Additional accruals, other (1) 6,509 5,517 Payments, other (2) (7,639 ) (6,085 ) Balance at end of period $ 15,788 $ 15,006 (1) Consists of accruals for legal fees. (2) Consists of payments for legal and other contingencies. In connection with estimating our recorded liability for claims and contingencies as of March 31, 2016, December 31, 2015 and March 31, 2015, we considered whether additional losses for claims and contingencies were reasonably possible, could be estimated and might be material to our financial condition, results of operations or cash flows. As with any estimate, as facts and circumstances change, the recorded liability and estimated range of reasonably possible losses could change significantly. With respect to legal proceedings, we determined that we cannot provide an estimate of the possible losses, or the range of possible losses, in excess of the amount, if any, accrued, for various reasons, including but not limited to some or all of the following: • there are significant factual issues to be resolved; • there are novel or unsettled legal issues presented; • the proceedings are in the early stages; • there is uncertainty as to the likelihood of a class being certified or decertified or the ultimate size and scope of the class; • there is uncertainty as to the outcome of pending appeals or motions; and • in many cases, the plaintiffs have not specified damages in their complaint or in court filings. We may resolve certain federal and state income tax matters presently under examination within the 12 months immediately following the date of this filing. As of March 31, 2016, we estimated that it was reasonably possible that unrecognized tax benefits, excluding interest and penalties, could decrease in an amount ranging from $0 to $11,100, and that we could pay approximately $4,200, in each case in the 12 months immediately following the date of this filing due to the resolution of those matters. We have presented legal and professional fees related to certain lawsuits, investigations and accounting matters as a separate line item in our Condensed Consolidated Statements of Operations. A portion of the amounts included in this line item represent expenses for various lawsuits, investigations and accounting matters that we believe are not representative of those normally incurred in the ordinary course of business. Certain of those lawsuits and investigations are described in detail, below. The expenses for the accounting matters included in this line item related primarily to: • services relating to accounting for the Private Education Loans; and • services relating to the accounting for the CUSO Consolidation in the three months ended March 31, 2015. Guarantees. PEAKS Guarantee and Purchase Obligation We consolidated the PEAKS Trust in our consolidated financial statements beginning on February 28, 2013. See Note 5 – Variable Interest Entities, for a further discussion of the PEAKS Consolidation. As a result, the assets and liabilities of the PEAKS Trust have been included on, and all intercompany transactions have been eliminated from, our Condensed Consolidated Balance Sheets as of March 31, 2016, December 31, 2015 and March 31, 2015. Projected PEAKS Guarantee Payments The estimated amount and timing of future payments and recoveries with respect to the PEAKS Guarantee discussed above and elsewhere in this report are only estimates, are based on numerous assumptions and are subject to change. As with any estimate, as facts and circumstances change, the estimated amounts and timing could change. We made a number of assumptions in preparing the estimates, which assumptions may not be correct. The assumptions included, among other things, the following: • the repayment performance of the PEAKS Trust Student Loans, the proceeds from which will be used to repay the PEAKS Senior Debt and to pay the fees and expenses of the PEAKS Trust, and the performance of which also affects the Asset/Liability Ratio; • the fact that those loans will consist of a large number of loans of individually immaterial amounts; • the fact that the interest rate on the PEAKS Senior Debt is a variable rate based on the LIBOR plus a margin; and • the amount of fees and expenses of the PEAKS Trust, much of which is based on the principal balance of the PEAKS Trust Student Loans. See also “— PEAKS Guarantee and CUSO RSA Payments in Certain Periods, CUSO RSA Pursuant to the CUSO RSA, we are required to maintain collateral to secure our guarantee obligation in an amount equal to a percentage of the outstanding balance of the private education loans disbursed to our students under the CUSO Program. As of March 31, 2016, December 31, 2015 and March 31, 2015, the total collateral maintained in a restricted bank account was approximately $8,630. This amount was included in Collateral deposits on our Condensed Consolidated Balance Sheets as of each of those dates. The CUSO RSA also requires that we comply with certain covenants, including that we maintain certain financial ratios which are measured on a quarterly basis and that we deliver compliance certificates on a quarterly basis setting forth the status of our compliance with those financial ratios. If we are not in compliance with those covenants at the end of each fiscal quarter, we are required to increase the amount of collateral maintained in the restricted bank account to a predetermined amount, until the end of a succeeding quarter at which we are in compliance with those covenants. The predetermined amount is based on the percentage of the aggregate principal balance of the private education loans made under the CUSO Program that exceeds a certain percentage as of the end of each fiscal quarter. Under the CUSO RSA, we have the right to elect to make Discharge Payments with respect to private education loans made under the CUSO Program that have been charged off. The effect of a making a Discharge Payment related to a private education loan is to reduce the aggregate amount that we may have to pay under our guarantee obligations with respect to that loan. We have claimed as an offset against amounts owed to us under the Revolving Note amounts that would have the effect of discharging our obligations with respect to certain charged off loans under the CUSO RSA. In addition, in the three months ended March 31, 2015, we made Discharge Payments to the CUSO. We did not make any Discharge Payments in the three months ended March 31, 2016. Making Discharge Payments results in us paying amounts to the CUSO in advance of when a guarantee payment would be due, which would negatively impact our liquidity in a particular period, but results in us paying a lesser amount than we otherwise would have been required to pay under our guarantee obligation in future periods under the CUSO RSA. See Note 5– Variable Interest Entities, for a further discussion of Discharge Payments. We consolidated the CUSO in our consolidated financial statements beginning on September 30, 2014. See Note 5– Variable Interest Entities, for a further discussion of the CUSO Consolidation. As a result, the assets and liabilities of the CUSO have been included on, and all intercompany transactions have been eliminated from, our Condensed Consolidated Balance Sheets as of March 31, 2016, December 31, 2015 and March 31, 2015. CUSO RSA Amendment. • the period of time during which we are not required to comply with the debt service ratio covenant under the CUSO RSA is extended through March 31, 2016; • the period of time during which we are not required to comply with the current ratio covenant under the CUSO RSA is extended through March 31, 2016; • we are not required to comply with the average persistence percentage covenant under the CUSO RSA as of the end of each fiscal quarter ending March 31, 2015 through March 31, 2016; • we make a payment of $6,544 to the CUSO, which payment is considered a Discharge Payment under the CUSO RSA; • at our option, we may defer the payment of any amounts otherwise becoming due by us under the CUSO RSA between June 8, 2015 and December 31, 2015, which payments must be made by us on or before January 4, 2016; and • the payments deferred by us will not bear interest, unless we do not pay such amounts by January 4, 2016, in which case any portion of any deferred payments remaining unpaid as of that date will accrue interest at the rate of 12.5% per annum, from the date such deferred payment would otherwise have been due absent the deferral provided in the Sixth Amendment to CUSO RSA. We made the $6,544 Discharge Payment on June 10, 2015, which had the effect of reducing the amount of Regular Payments that we otherwise would have had to make in 2015 by approximately $2,000. The reason for the provision in the Sixth Amendment to CUSO RSA that permits us to defer to 2016 the payment of any amounts otherwise becoming due between June 8, 2015 and December 31, 2015 is because without such deferral, we believed that we would have exceeded the limitation under the Financing Agreement on amounts that we could pay in 2015 under the CUSO RSA and the PEAKS Guarantee. We deferred the full amount of the payments due in June 2015 through December 2015 under the CUSO RSA, which totaled $6,092. Recoveries of charged-off loans received by the CUSO from June 2015 through December 2015 and due to us were $761 and were not paid to us. We utilized those recovery amounts to offset against amounts that we owed under the CUSO RSA in January 2016, resulting in a payment of $5,331 related to this deferral. We believe that, based on our current projections, we may not be in compliance with certain covenants under the CUSO RSA as of June 30, 2016 and, as a result, will be required to deposit approximately $200 as additional collateral in August 2016, based on our estimate of the required collateral amount as of June 30, 2016. Projected CUSO RSA Payments Based on various assumptions, including the historical and projected performance and collections of the CUSO Student Loans, we believe that we will make payments under the CUSO RSA as set forth in the following table: Year Estimated Regular Payments Estimated Recoveries (1) Estimated Total Payments, Net 2016 $ 18,000 (2) $ (1,800 ) (3) $ 16,200 2017 13,000 (1,000 ) 12,000 2018 14,000 (1,000 ) 13,000 2019 and later (4) 95,000 0 95,000 Total $ 140,000 $ (3,800 ) $ 136,200 (1) We expect to offset Regular Payments due to the CUSO from us under the CUSO RSA by the recoveries from charged-off loans that are due to us from the CUSO. (2) This amount includes $6,092 of Regular Payments that otherwise would have been due in 2015, but were deferred to, and paid in, January 2016 as allowed under the Sixth Amendment to CUSO RSA. (3) This amount includes $761 of recoveries from charged-off loans received by the CUSO from June 8, 2015 through December 31, 2015 that were not paid to us that we offset against amounts owed by us under the CUSO RSA in January 2016. (4) We believe that the amount in this row will be paid by us in approximately equal portions in each of 2019 through 2025. Our estimates of the future payment amounts under the CUSO RSA and the timing of those payments assume, among other factors, that we do not make any Discharge Payments in 2016 and future years, based on the uncertainty related to the amount of future operating cash flows that will be available to us to make Discharge Payments. If we do make Discharge Payments in any future years, the effect of those Discharge Payments will be to reduce the total amount of our projected future payments under the CUSO RSA. The estimated amount of future payments under the CUSO RSA assumes that an offset that we made in 2013 of certain payment obligations under the CUSO RSA against the CUSO’s obligations owed to us under the Revolving Note will not be determined to have been improper. See “— PEAKS Guarantee and CUSO RSA Payments in Certain Periods The estimated amount and timing of future payments and recoveries with respect to the CUSO RSA discussed above are only estimates, are based on numerous assumptions and are subject to change. As with any estimate, as facts and circumstances change, the estimated amounts and timing could change. We made a number of assumptions in preparing the estimates, which assumptions may not be correct. The assumptions included, among other things, the following: • the repayment performance of the private education loans made under the CUSO Program; • the timing and rate at which those private education loans will be paid; • the changes in the variable interest rates applicable to those private education loans; • the amounts and timing of collections in the future on those private education loans that have been charged off; and • our ability to utilize the available options for payment of our obligations under the CUSO RSA. PEAKS Guarantee and CUSO RSA Payments in Certain Periods Three Months Ended March 31, Type of Payment 2016 2015 PEAKS Guarantee Payments $ 4,534 $ 13,637 CUSO RSA Regular Payments 2,597 (1) 2,280 (2) CUSO RSA Discharge Payments 0 2,709 CUSO RSA Deferred Payment 5,331 (3) 0 Total $ 12,462 $ 18,626 (1) This amount is net of $294 of recoveries from charged-off loans owed to us that we offset against amounts owed by us under the CUSO RSA. (2) This amount is net of $290 of recoveries from charged-off loans owed to us that we offset against amounts owed by us under the CUSO RSA. (3) This amount is net of $761 of recoveries from charged-off loans received by the CUSO from June 8, 2015 through December 31, 2015 that were not paid to us that we offset against amounts owed by us under the CUSO RSA in January 2016. In the three months ended March 31, 2016 and 2015, we offset all recoveries from charged-off loans that were due to us from the CUSO against the amounts we owed to the CUSO under the CUSO RSA. Since 2013, we have not offset any amounts owed by us under the CUSO RSA against amounts owed to us by the CUSO under the Revolving Note. In the first quarter of 2013, we notified the CUSO that we had determined that the CUSO was in default of its obligations to us under the agreement pursuant to which the Revolving Note was issued and, as a result of that default, all amounts under the Revolving Note were immediately due and payable. We also notified the CUSO that we would not make payments under the CUSO RSA until we received credit for the full amount due us under the Revolving Note, based on the provisions of the CUSO Program documents that allow us to set off amounts owed by us under the CUSO RSA against amounts owed to us by the CUSO under the Revolving Note. At that time, the outstanding amount of the Revolving Note due to us was approximately $8,200, representing principal and accrued interest. In response to our notification, the CUSO denied that it was in default and refused our demand to immediately pay the Revolving Note in full. As a consequence, over the period from February 2013 through August 2013, we offset our then current payment obligations under the CUSO RSA and the amount of Discharge Payments we elected to make during that period against all of the CUSO’s obligations owed to us under the Revolving Note (the “Offset”). We understand that the CUSO’s position is that the Offset was improper, because it has not defaulted and, even if it had defaulted, the assets of the CUSO against which we could offset or exercise our other remedies were limited. We further understand the CUSO’s position to be that, because the Offset was improper, we are in default under the CUSO RSA. In April 2013, the CUSO notified us that it had taken control of the restricted account containing the cash collateral that we deposited to secure our obligations under the CUSO RSA (the “Collateral”). To our knowledge, the CUSO has taken no further action related to the Collateral. We believe that our good faith exercise of our right of offset provided for in the CUSO Program documents does not constitute an event of default under the CUSO RSA, and that the CUSO’s seizure of control of the restricted account containing the Collateral constitutes an additional default by the CUSO. We cannot assure you, however, that the Offset will ultimately be determined to have been proper. In the event of a default by us under the CUSO RSA related to the Offset, we may be required to pay to the CUSO approximately $10,417, net of approximately $1,049 of recoveries from charged-off loans that are owed, but have not been paid, to us. If, instead, the CUSO was to withdraw Collateral in that amount from the restricted bank account, we would be required to deposit that amount of cash in the account to maintain the required level of Collateral. Litigation . On December 22, 2008, we were served with a qui tam action that was filed on July 3, 2007 in the United States District Court for the Southern District of Indiana by a former employee (“relator”) on behalf of herself and the federal government under the following caption: United States of America ex rel. Debra Leveski v. ITT Educational Services, Inc. et seq • treble the amount of unspecified funds paid to us for federal student grants; • treble the amount of unspecified default payments, special allowance payments and interest received by lenders with respect to federal student loans received by our students; • all civil penalties allowed by law; and • attorney’s fees and costs. A qui tam action is a civil lawsuit brought by one or more individuals (a qui tam “relator”) on behalf of the federal or state government for an alleged submission to the government of a false claim for payment. A qui tam action is always filed under seal and remains under seal, until the government decides whether to intervene in the litigation. Whenever a relator files a qui tam action, the government typically initiates an investigation in order to determine whether to intervene in the litigation. If the government intervenes, it has primary control over the litigation. If the government declines to intervene, the relator may pursue the litigation on behalf of the government. If the government or the relator is successful in the litigation, the relator receives a portion of the government’s recovery. On August 8, 2011, the district court granted our motion to dismiss all of the relator’s claims in the Leveski Litigation for lack of subject-matter jurisdiction and issued a judgment for us. On February 16, 2012, the relator in the Leveski Litigation filed a Notice of Appeal with the 7 th th th th We have defended, and intend to continue to defend, ourselves vigorously against the allegations made in the complaint. On March 11, 2013, a complaint in a securities class action lawsuit was filed against us, one of our current executive officers and one of our former executive officers in the United States District Court for the Southern District of New York under the following caption: William Koetsch, Individually and on Behalf of All Others Similarly Situated v. ITT Educational Services, Inc., et al. Massachusetts Laborers’ Annuity Fund, Individually and on Behalf of All Others Similarly Situated v. ITT Educational Services, Inc., et al. In re ITT Educational Services, Inc. Securities Litigation • our failure to properly account for the 2007 RSA, CUSO RSA and PEAKS Program; • employing devices, schemes and artifices to defraud; • making untrue statements of material facts, or omitting material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; • making the above statements intentionally or with reckless disregard for the truth; • engaging in acts, practices, and a course of business that operated as a fraud or deceit upon lead plaintiffs and others similarly situated in connection with their purchases of our common stock; • deceiving the investing public, including lead plaintiffs and the purported class, regarding, among other things, our artificially inflated statements of financial strength and understated liabilities; and • causing our common stock to trade at artificially inflated prices and causing the plaintiff and other putative class members to purchase our common stock at inflated prices. The putative class period in this action is from April 24, 2008 through February 25, 2013. The plaintiffs seek, among other things, the designation of this action as a class action, an award of unspecified compensatory damages, interest, costs and expenses, including counsel fees and expert fees, and such equitable/injunctive and other relief as the court deems appropriate. On July 22, 2014, the district court denied most of our motion to dismiss all of the plaintiffs’ claims for failure to state a claim for which relief can be granted. On August 5, 2014, we filed our answer to the second amended complaint denying all of the plaintiffs’ claims. Plaintiffs filed their motion for class certification on March 27, 2015. On June 16, 2015, to facilitate the parties’ efforts to resolve this action by mediation, the court entered a stipulation and order providing for a three-month stay of all proceedings. On September 14, 2015, the court extended the stay by an additional two months. Following a mediation which began in the third quarter of 2015, the parties came to an agreement in principle to settle the New York Securities Litigation. On November 2, 2015, the parties in the New York Securities Litigation entered into a Stipulation and Agreement of Settlement (the “New York Settlement”) to resolve the action in its entirety. Under the terms of the New York Settlement, we and/or our insurers would make a payment of $16,962 in exchange for the release of claims against the defendants and other released parties, by the plaintiffs and all settlement class members, and for the dismissal of the action with prejudice. On November 2, 2015, the plaintiffs in the New York Securities Litigation filed the New York Settlement and related exhibits with the court and moved, among other things, for the court to preliminarily approve the New York Settlement, to approve the contents and procedures for notice to potential settlement class members, to certify the New York Securities Litigation as a class action for settlement purposes only, and to schedule a hearing for the court to consider final approval of the New York Settlement. On November 23, 2015, the court entered an order preliminarily approving the New York Settlement and scheduled a hearing for March 8, 2016 to consider final approval of the New York Settlement. Prior to the March 8, 2016 hearing, potential settlement class members (all persons and entities who purchased or otherwise acquired our common stock between April 24, 2008 and February 25, 2013, both dates inclusive (with limited exclusions)) had an opportunity to exclude themselves from participating in the New York Settlement or to raise objections with the court regarding the New York Settlement or any part thereof. On March 8, 2016, the court granted final approval of the New York Settlement and entered an order dismissing the New York Securities Litigation with prejudice. The New York Settlement contains no admission of liability, and all of the defendants in the New York Securities Litigation have expressly denied, and continue to deny, all allegations of wrongdoing or improper conduct. Our insurance carriers funded a combined $25,000 collectively towards the settlement payments for the New York Settlement and the Indiana Settlement (defined below). On September 30, 2014, a complaint in a securities class action lawsuit was filed against us, one of our current executive officers and one of our former executive officers in the United States District Court for the Southern District of Indiana under the following caption: David Banes, on Behalf of Himself and All Others Similarly Situated v. Kevin M. Modany, Babulal Tarapara, Individually and on Behalf of All Others Similarly Situated v. ITT Educational Services, Inc. et al. Kumud Jindal, Individually and on Behalf of All Others Similarly Situated v. Kevin Modany, et al. Kristopher Hennen, Individually and on Behalf of All Others Similarly Situated v. ITT Educational Services, Inc. et al. In re ITT Educational Services, Inc. Securities Litigation (Indiana). On May 26, 2015, an amended complaint was filed in the Indiana Securities Litigation. The amended complaint alleges, among other things, that the defendants violated Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder by knowingly or recklessly making false and/or misleading statements and failing to disclose material adverse facts about our business, operations, prospects and financial results. Plaintiffs assert that the defendants engaged in a fraudulent scheme and course of business and that alleged misstatements and/or omissions by the defendants caused members of the putative class to purchase our securities at artificially inflated prices. The amended complaint includes allegations relating to: • the performance of the PEAKS Program and the CUSO Program; • our guarantee obligations under the PEAKS Program and the CUSO Program; • our accounting treatment of the PEAKS Program and the CUSO Program; • consolidation of the PEAKS Trust in our consolidated financial statements; • the impact of the PEAKS Program and the CUSO Program on our liquidity and overall financial condition; • our compliance with Department of Education financial responsibility standards; and • our internal controls over financial reporting. The putative class period in the Indiana Securities Litigation is from February 26, 2013 through May 12, 2015. The plaintiffs in the Indiana Securities Litigation seek, among other things, the designation of the action as a proper class action, an award of unspecified compensatory damages against all defendants, interest, costs, expenses, counsel fees and expert fees, and such other relief as the court deems proper. On July 14, 2015, to facilitate the parties’ efforts to resolve this action by mediation, the court granted a joint motion for a stay of proceedings until October 13, 2015. On October 13, 2015, the court extended the stay to October 27, 2015. On October 27, 2015, the court further extended the stay. On November 3, 2015, due to the filing of the Indiana Settlement (defined below), the stay was lifted. Following a mediation that began in the third quarter of 2015, the parties came to an agreement in principle to settle the Indiana Securities Litigation. On November 2, 2015, the parties in the Indiana Securities Litigation entered into a Stipulation and Agreement of Settlement (the “Indiana Settlement”) to resolve the action in its entirety. Under the terms of the Indiana Settlement, we and/or our insurers would make a payment of $12,538 in exchange for the release of claims against the defendants and other released parties, by the plaintiffs and all settlement class members, and for the dismissal of the action with prejudice. On November 2, 2015, the plaintiffs in the Indiana Securities Litigation filed the Indiana Settlement and related exhibits with the court and moved, among other things, for the court to preliminarily approve the Indiana Settlement, to approve the contents and procedures for notice to potential settlement class members, to certify the Indiana Securities Litigation as a class action for settlement purposes only, and to schedule a hearing for the court to consider final approval of the Indiana Settlement. On November 4, 2015, the court entered an order preliminarily approving the Indiana Settlement and scheduled a hearing for March 10, 2016 to consider final approval of the Indiana Settlement. Prior to the March 10, 2016 hearing, potential settlement class members (all persons and entities who purchased or otherwise acquired our common stock, purchased or otherwise acquired call options on our common stock, or wrote put options on our common stock, between February 26, 2013 and May 12, 2015, both dates inclusive (with limited exclusions)) had an opportunity to exclude themselves from participating in the Indiana Settlement or to raise objections with the court regarding the Indiana Settlement or any part thereof. On March 10, 2016, the court entered an order finding that the Indiana Settlement is fair and reasonable and was entered into in good faith, and the court stated that a separate order regarding the Indiana Settlement would follow. On March 24, 2016, the court entered a final judgment and order approving the Indiana Settlement and dismissing the Indiana Securities Litigation with prejudice. The Indiana Settlement contains no admission of liability, and all of the defendants in the Indiana Securities Litigation have expressly denied, and continue to deny, all allegations of wrongdoing or improper conduct. Our insurance carriers funded a combined $25,000 collectively towards the settlement payments for the Indiana Settlement and the New York Settlement. On May 8, 2013, a complaint in a shareholder derivative lawsuit was filed against two of our current executive officers, one of our former executive officers, all but two of our current Directors, and two former Directors in the United States District Court for the Southern District of New York under the following caption: Sasha Wilfred, Derivatively on Behalf of Nominal Defendant ITT Educational Servic |
Risks and Uncertainties
Risks and Uncertainties | 3 Months Ended |
Mar. 31, 2016 | |
Text Block [Abstract] | |
Risks and Uncertainties | 12. Risks and Uncertainties Many of the amounts of assets, liabilities, revenue and expenses reported in our consolidated financial statements are based on estimates and assumptions that affect the amounts reported. We are subject to risks and uncertainties that could affect amounts reported in our consolidated financial statements in future periods. Our future performance, results of operations, financial condition, cash flows, liquidity, capital resources, ability to meet our obligations and ability to comply with covenants, metrics and regulatory requirements are subject to significant risks and uncertainties that could cause actual results to be materially different from our estimated results. Those significant risks and uncertainties include, but are not limited to, the following: • The PEAKS Consolidation and CUSO Consolidation, which have and could negatively impact our compliance with: • the ED’s financial responsibility measurements, primarily our institutions’ composite score; • the financial requirements of certain state education and professional licensing authorities (“SAs”); and • the financial metrics to which we are subject under the PEAKS Program and the CUSO RSA. See Note 5 – Variable Interest Entities, Note 8 – Debt and Note 11 – Commitments and Contingencies, for additional information. • Our institutions’ failure to submit their 2013 audited consolidated financial statements and 2013 Compliance Audits to the ED by the due date resulted in sanctions imposed by the ED on our institutions that include, among other things, our institutions having to submit a letter of credit, being placed on heightened cash monitoring (“HCM”) and being provisionally certified. We caused the ED Letter of Credit to be issued on October 31, 2014, but it has subsequently been replaced by the ED Agreement. The term of the ED Agreement ends on November 4, 2019. Pursuant to the ED Agreement, $79,708 was held in an escrow account by the ED as of March 31, 2016. The funds held are not available for use by us, and could be used by the ED if certain conditions are met. See Note 11 – Commitments and Contingencies for additional information. An institution that is provisionally certified by the ED must apply for and receive approval from the ED for any substantial change, before the institution can award, disburse or distribute Title IV Program funds based on the substantial change. Substantial changes generally include, but are not limited to: • the establishment of an additional location; • an increase in the level of academic offering beyond those listed in the institution’s Eligibility and Certification Approval Report with the ED; • an addition of any non-degree program or short-term training program; or • an addition of a degree program by a proprietary institution. • On October 19, 2015, we received a letter from the ED identifying additional procedures that we are required to implement as a result of the identification of certain past deficiencies. These additional procedures have resulted in the delay of our receipt of Title IV Program funds. While these additional procedures have affected the timing of our receipt of Title IV Program funds and have imposed an administrative burden on us, we do not expect them to have a significant negative effect on our overall cash flow or operations, but we cannot assure you that there will not be future delays in our institutions’ receipt of Title IV Program funds. The letter also states that we are required to provide certain additional information and reporting to the ED on a regular basis. We have implemented, and are in the process of implementing, measures to comply with the ED’s requirements. We have been submitting the additional information to the ED, and intend to continue submitting information to the ED according to the schedule specified by the ED. • We are subject to various claims and contingencies, including those related to litigation, government investigations, business transactions, tax matters and employee-related matters, among others. See Note 11 – Commitments and Contingencies, for a further discussion of certain litigation and government investigations to which we are subject. • We have significant guarantee obligations under the PEAKS Guarantee and the CUSO RSA (collectively, the “RSAs”). In 2015, we made payments of approximately $30,090 under the PEAKS Guarantee, and approximately $13,093, net of $521 of recoveries owed to us that we offset against amounts that we owed to the CUSO, related to the CUSO RSA. Based on various assumptions, including the historical and projected performance and collection of the PEAKS Trust Student Loans, we believe that we will make payments under the PEAKS Guarantee of approximately $11,200 in 2016 and approximately $600 in 2017. In addition, based upon various assumptions, including the historical and projected performance and collections of the private education loans under the CUSO Program, we believe that we will make payments under the CUSO RSA, net of recoveries, of approximately $16,200 in 2016 and $12,000 in 2017. See Note 8 – Debt and Note 11 – Commitments and Contingencies for a further discussion of the RSAs and estimated payment amounts. • We have principal payments due under the Financing Agreement of $50,505 during the period April 1, 2016 through December 31, 2016. • We had negative working capital as of March 31, 2016, December 31, 2015 and March 31, 2015. • On April 20, 2016, the accrediting agency which accredits our ITT Technical Institute institutions informed us that, based on its review, the ITT Technical Institutes have not demonstrated compliance with certain accreditation standards. As a result, we must show cause why the ITT Technical Institutes’ accreditation should not be withdrawn by suspension or otherwise conditioned. We believe that the ITT Technical Institutes are in compliance with all accreditation standards, however, if the ITT Technical Institutes ultimately were to lose their accreditation, they would lose their eligibility to participate in Title IV Programs, in which case we likely would not be able to continue to operate our business. Based on our current projections, we believe that cash generated from operations will be sufficient for us to satisfy our payment obligations under the RSAs, working capital, loan repayment and capital expenditure requirements over the 12-month period following the date that this Quarterly Report on Form 10-Q was filed with the SEC. We also believe that any reduction in cash and cash equivalents that may result from their use to make payments under the RSAs or repay loans will not have a material adverse effect on our planned capital expenditures, ability to meet any applicable regulatory financial responsibility standards, ability to satisfy the financial covenants under the Financing Agreement or ability to conduct normal operations over the 12-month period following the date that this Quarterly Report on Form 10-Q was filed with the SEC. Accordingly, our consolidated financial statements contained in this Quarterly Report on Form 10-Q were prepared on the basis that we will continue to operate as a going concern. There can be no assurance, however, that the ultimate outcome of those events, whether individually or in the aggregate, will not have a material adverse effect on our financial condition, results of operations or cash flows. |
Fair Value and Credit Risk of21
Fair Value and Credit Risk of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement of Financial Assets | The following table sets forth information regarding the recurring fair value measurement of our financial assets as reflected on our Condensed Consolidated Balance Sheet as of March 31, 2016: Fair Value Measurements at Reporting Date Using Description As of (Level 1) (Level 2) (Level 3) Cash equivalents: Money market fund $ 102,127 $ 102,127 $ 0 $ 0 Restricted cash: Money market fund 474 474 0 0 Collateral deposits: Money market fund 8,632 8,632 0 0 $ 111,233 $ 111,233 $ 0 $ 0 The following table sets forth information regarding the recurring fair value measurement of our financial assets as reflected on our Condensed Consolidated Balance Sheet as of December 31, 2015: Fair Value Measurements at Reporting Date Using Description As of (Level 1) (Level 2) (Level 3) Cash equivalents: Money market fund $ 130,821 $ 130,821 $ 0 $ 0 Restricted cash: Money market fund 585 585 0 0 Collateral deposits: Money market fund 8,631 8,631 0 0 $ 140,037 $ 140,037 $ 0 $ 0 The following table sets forth information regarding the recurring fair value measurement of our financial assets as reflected on our Condensed Consolidated Balance Sheet as of March 31, 2015: Fair Value Measurements at Reporting Date Using Description As of (Level 1) (Level 2) (Level 3) Cash equivalents: Money market fund $ 141,930 $ 141,930 $ 0 $ 0 Restricted cash: Money market fund 1,811 1,811 0 0 Collateral deposits: Money market fund 8,629 8,629 0 0 $ 152,370 $ 152,370 $ 0 $ 0 |
Equity Compensation (Tables)
Equity Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense and Related Income Tax Benefit | The amount of stock-based compensation expense and the line items in which those amounts are included in our Condensed Consolidated Statements of Operations and the related estimated income tax benefit recognized in the periods indicated were as follows: Three Months Ended 2016 2015 Cost of educational services $ 708 $ 942 Student services and administrative expenses 519 954 Total stock-based compensation expense $ 1,227 $ 1,896 Income tax (benefit) $ (472 ) $ (730 ) |
Stock Options Granted, Forfeited, Exercised and Expired | The stock options granted, forfeited, exercised and expired in the period indicated were as follows: Three Months Ended March 31, 2016 # of Shares Weighted Aggregate Weighted Aggregate (1) Outstanding at beginning of period 1,088,208 $ 70.21 $ 76,405 Granted 159,000 $ 3.57 568 Forfeited 0 $ 0 0 Exercised 0 $ 0 0 Expired (188,500 ) $ 121.56 (22,914 ) Outstanding at end of period 1,058,708 $ 51.06 $ 54,059 1.9 $ 0 Exercisable at end of period 736,061 $ 69.17 $ 50,913 1.7 $ 0 (1) The aggregate intrinsic value of the stock options was calculated by identifying those stock options that had a lower exercise price than the closing market price of our common stock on March 31, 2016 and multiplying the difference between the closing market price of our common stock and the exercise price of each of those stock options by the number of shares subject to those stock options that were outstanding or exercisable, as applicable. Since the closing market price of our common stock on March 31, 2016 was lower than the exercise price of all outstanding stock options and exercisable stock options, the aggregate intrinsic value of the stock options was zero. |
Stock Options Granted and Exercised | The following table sets forth information regarding the stock options granted and exercised in the periods indicated: Three Months Ended 2016 2015 Shares subject to stock options granted 159,000 0 Weighted average grant date fair value per share $ 2.09 $ 0 Shares subject to stock options exercised 0 0 Intrinsic value of stock options exercised $ 0 $ 0 Proceeds received from stock options exercised $ 0 $ 0 Tax benefits realized from stock options exercised $ 0 $ 0 |
Assumptions used to Estimate Grant Date Fair Value of Stock Options | The fair value of each stock option grant was estimated on the date of grant using the following assumptions in the periods indicated: Three Months Ended March 31, 2016 2015 Risk-free interest rates 1.3 % Not applicable Expected lives (in years) 4.8 Not applicable Volatility 75.0 % Not applicable Dividend yield None Not applicable |
Number of Restricted Stock Units (RSUs) Granted, Forfeited and Vested | The following table sets forth the number of restricted stock units (“RSUs”) that were granted, forfeited and vested in the period indicated: Three Months Ended March 31, 2016 # of RSUs Weighted Average Fair Value Unvested at beginning of period 793,019 $ 14.18 Granted 411,224 3.56 Forfeited (47,837 ) 10.21 Vested (37,350 ) 18.23 Unvested at end of period 1,119,056 $ 10.31 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
CUSO [Member] | |
Schedule of Fair Value and Carrying Value of Assets and Liabilities | The following table sets forth the carrying values of assets and liabilities of the CUSO that were included on our Condensed Consolidated Balance Sheets as of the dates indicated: As of March 31, December 31, March 31, Assets Restricted cash $ 3,244 $ 3,968 $ 2,790 Current portion of CUSO Student Loans 4,251 2,734 3,066 CUSO Student Loans, excluding current portion, less allowance for loan losses of $2,412, $1,796 and $2,480 12,716 16,174 18,932 Other assets 285 257 202 Total assets $ 20,496 $ 23,133 $ 24,990 Liabilities Current portion of CUSO Secured Borrowing Obligation $ 18,065 $ 23,591 $ 20,963 Other current liabilities 153 154 182 CUSO Secured Borrowing Obligation, excluding current portion 89,695 91,728 98,002 Total liabilities $ 107,913 $ 115,473 $ 119,147 |
Schedule of Revenue and Expenses of VIE | Revenue and Expenses of the CUSO Three Months Ended 2016 2015 Revenue $ 1,082 $ 1,064 Student services and administrative expenses 360 396 Provision for private education loan losses 395 441 Interest expense 3,167 3,641 (Loss) before provision for income taxes $ (2,840 ) $ (3,414 ) |
Aggregate Amount of Guarantee and Other Payments | The following table sets forth the payments that we made to the CUSO related to our guarantee obligations under the CUSO RSA in the periods indicated: Three Months Ended 2016 2015 Regular Payments $ 2,597 (1) $ 2,280 (2) Deferred Payment 5,331 (3) 0 Discharge Payments 0 2,709 Total $ 7,928 $ 4,989 (1) This amount is net of $294 of recoveries from charged-off loans owed to us that we offset against amounts we owed under the CUSO RSA. (2) This amount is net of $290 of recoveries from charged-off loans owed to us that we offset against amounts we owed under the CUSO RSA. (3) This amount is net of $761 of recoveries from charged-off loans received by the CUSO from June 8, 2015 through December 31, 2015 that were not paid to us that we offset against amounts owed by us under the CUSO RSA in January 2016. |
PEAKS Trust [Member] | |
Schedule of Fair Value and Carrying Value of Assets and Liabilities | The following table sets forth the carrying value of assets and liabilities of the PEAKS Trust that were included on our Condensed Consolidated Balance Sheets as of the dates indicated: As of March 31, December 31, March 31, Assets Restricted cash $ 1,820 $ 1,462 $ 1,727 Current portion of PEAKS Trust student loans 5,536 5,746 6,475 PEAKS Trust student loans, excluding current portion, less allowance for loan losses of $17,122, $21,816 and $39,596 42,196 45,987 57,596 Total assets $ 49,552 $ 53,195 $ 65,798 Liabilities Current portion of PEAKS Trust senior debt $ 15,634 $ 20,105 $ 26,533 Other current liabilities 0 191 175 PEAKS Trust senior debt, excluding current portion 28,916 30,701 45,127 Total liabilities $ 44,550 $ 50,997 $ 71,835 |
Schedule of Revenue and Expenses of VIE | Revenue and Expenses of the PEAKS Trust Three Months Ended 2016 2015 Revenue $ 2,002 $ 2,413 Student services and administrative expenses 495 541 Provision for private education loan losses 1,483 803 Interest expense 1,758 3,259 (Loss) before provision for income taxes $ (1,734 ) $ (2,190 ) |
Aggregate Amount of Guarantee and Other Payments | The following table sets forth the PEAKS Guarantee payments that were made in the periods indicated: Three Months Ended March 31, 2016 2015 PEAKS Guarantee $ 4,534 $ 13,637 |
Private Education Loans (Tables
Private Education Loans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
CUSO Student Loans [Member] | |
Schedule of Information Regarding Aggregate Changes in Accretable Yield | The following table sets forth information regarding aggregate changes in accretable yield of the loan pools of the CUSO Student Loans, in total, and for those loans pursuant to which ASC 310-30 was applied by analogy, for the periods indicated: Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Total ASC 310-30 Applied By Analogy Total ASC 310-30 Applied By Analogy Balance at beginning of period $ 12,793 $ 7,611 $ 11,728 $ 5,857 Accretion (722 ) (432 ) (668 ) (346 ) Reclassification from nonaccretable difference and changes in expected cash flows (425 ) (294 ) 60 266 Balance at end of period $ 11,646 $ 6,885 $ 11,120 $ 5,777 |
Schedule of Information Regarding Changes in Allowance for Loan Losses | The following table sets forth information regarding changes in the allowance for loan losses of the loan pools of the CUSO Student Loans in the aggregate in the periods indicated: Three Months Ended March 31, 2016 2015 Balance at beginning of period $ 1,796 $ 2,039 Loans charged off 0 0 Recoveries from charged off loans 0 0 Provision for loan losses 616 (1) 441 Balance at end of period $ 2,412 $ 2,480 (1) The provision for loan losses was reduced by $221 for recoveries from CUSO Student Loans that were not recognized on our consolidated balance sheet at the time of the CUSO Consolidation. |
PEAKS Trust Student Loans [Member] | |
Schedule of Information Regarding Aggregate Changes in Accretable Yield | The following table sets forth information regarding aggregate changes in accretable yield of the loan pools of the PEAKS Trust Student Loans, in total, and for those loans pursuant to which ASC 310-30 was applied by analogy, for the periods indicated: Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Total ASC 310-30 Applied By Analogy Total ASC 310-30 Applied By Analogy Balance at beginning of period $ 34,984 $ 19,313 $ 51,819 $ 32,654 Accretion (2,002 ) (1,022 ) (2,413 ) (1,431 ) Reclassification from nonaccretable difference and changes in expected cash flows (1,330 ) (933 ) (1,508 ) (2,541 ) Balance at end of period $ 31,652 $ 17,358 $ 47,898 $ 28,682 |
Schedule of Information Regarding Changes in Allowance for Loan Losses | The following table sets forth information regarding changes in the allowance for loan losses of the loan pools of the PEAKS Trust Student Loans in the aggregate in the periods indicated: Three Months Ended March 31, 2016 2015 Balance at beginning of period $ 21,816 $ 42,353 Loans charged off (6,907 ) (4,061 ) Recoveries from charged off loans 730 501 Provision for loan losses 1,483 803 Balance at end of period $ 17,122 $ 39,596 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Value of Acquired Intangible Assets | The following tables set forth the carrying value of our acquired intangible assets that were included in Other assets on our Condensed Consolidated Balance Sheets as of the dates indicated: As of March 31, 2016 Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Amortization Period (months) Amortizable intangible assets: Customer relationships $ 2,500 $ (1,203 ) $ 1,297 60 Non-compete agreements 1,120 (560 ) 560 60 Training materials 440 (335 ) 105 42 Accreditation 210 (203 ) 7 84 $ 4,270 $ (2,301 ) $ 1,969 As of December 31, 2015 Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Amortization Period (months) Amortizable intangible assets: Customer relationships $ 2,500 $ (1,078 ) $ 1,422 60 Non-compete agreements 1,120 (504 ) 616 60 Training materials 440 (304 ) 136 42 Accreditation 210 (195 ) 15 84 $ 4,270 $ (2,081 ) $ 2,189 As of March 31, 2015 Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Amortization Period (months) Amortizable intangible assets: Customer relationships $ 2,500 $ (703 ) $ 1,797 60 Non-compete agreements 1,120 (336 ) 784 60 Training materials 440 (210 ) 230 42 Accreditation 210 (173 ) 37 84 $ 4,270 $ (1,422 ) $ 2,848 |
Estimated Amortization Expense of Intangible Assets | The following table sets forth our estimate of the amortization expense for our amortizable intangible assets in each of the four years, 2016 through 2019: Fiscal Year Ending December 31, Estimated Amortization Expense 2016 $ 865 2017 734 2018 562 2019 28 $ 2,189 |
Schedule of Indefinite Lived Intangible Assets | The following tables set forth the carrying value of our indefinite-lived intangible assets that were included in Other assets on our Condensed Consolidated Balance Sheets as of the dates indicated. As of March 31, 2016 Gross Carrying Value Accumulated Impairment Loss Net Carrying Value Indefinite-lived intangible assets: Goodwill $ 7,247 $ (7,247 ) $ 0 Trademark 660 (410 ) 250 $ 7,907 $ (7,657 ) $ 250 As of December 31, 2015 Gross Carrying Value Accumulated Impairment Loss Net Carrying Value Indefinite-lived intangible assets: Goodwill $ 7,247 $ (7,247 ) $ 0 Trademark 660 (410 ) 250 $ 7,907 $ (7,657 ) $ 250 As of March 31, 2015 Gross Carrying Value Accumulated Impairment Loss Net Carrying Value Indefinite-lived intangible assets: Goodwill $ 7,290 $ (2,044 ) $ 5,246 Trademark 660 (410 ) 250 $ 7,950 $ (2,454 ) $ 5,496 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Term Loan [Member] | |
Outstanding Principal Balance, Debt Discount and Carrying Value of Financing Agreement | The following table sets forth the outstanding principal balance, debt issuance costs, debt discount and carrying value of the Financing Agreement as of the dates indicated: As of March 31, 2016 December 31, 2015 March 31, 2015 Outstanding principal balance $ 50,505 $ 69,681 $ 97,500 Debt issuance costs (209 ) (360 ) (1,011 ) Debt discount (673 ) (1,160 ) (3,260 ) Carrying value $ 49,623 $ 68,161 $ 93,229 |
Estimated Principal Payments of Debt | The outstanding principal balance under the Financing Agreement is expected to be repaid by us as set forth in the following table: Fiscal Quarter Ending Scheduled Payments Excess Cash Flow Payment Total June 30, 2016 $ 15,500 $ 0 $ 15,500 September 30, 2016 15,500 0 15,500 December 31, 2016 19,505 0 19,505 Total $ 50,505 $ 0 $ 50,505 |
Total Amount of Interest Expense and Fees Recognized on Borrowing | The following table sets forth the total amount of interest expense and fees (including amortization of debt issuance costs and accretion of debt discount) that we recognized on our borrowings under the Financing Agreement in the periods indicated: Three Months Ended March 31, 2016 2015 Interest expense and fees $ 2,174 $ 3,367 |
PEAKS Senior Debt [Member] | |
Outstanding Principal Balance, Debt Discount and Carrying Value of Financing Agreement | The following table sets forth the outstanding principal balance, debt discount and carrying value of the PEAKS Senior Debt as of the dates indicated: As of March 31, 2016 December 31, 2015 March 31, 2015 Outstanding principal balance $ 50,135 $ 57,111 $ 81,273 Debt discount (5,585 ) (6,305 ) (9,613 ) Carrying value $ 44,550 $ 50,806 $ 71,660 |
Estimated Principal Payments of Debt | The following table sets forth the estimated principal payments on the PEAKS Senior Debt in the periods indicated: Fiscal Year Ending December 31, Amount 2016 $ 20,181 2017 8,704 2018 8,582 2019 9,355 2020 10,289 Total $ 57,111 |
Total Amount of Interest Expense and Discount Accretion on Debt | The following table sets forth the total amount of contractual interest expense and discount accretion that we recognized on the PEAKS Senior Debt in the periods indicated: Three Months Ended March 31, 2016 2015 Contractual interest expense $ 1,038 $ 1,604 Discount accretion 720 1,655 Total interest expense $ 1,758 $ 3,259 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Historical Net Income and Weighted Average Number of Shares of Common Stock Outstanding | This data is based on historical net income and the weighted average number of shares of our common stock outstanding during each period as set forth in the following table: Three Months Ended March 31, 2016 2015 Shares: Weighted average number of shares of common stock outstanding 23,742 23,560 Shares assumed issued (less shares assumed purchased for treasury) for stock-based compensation 114 259 Outstanding shares for diluted earnings per share calculation 23,856 23,819 |
Employee Pension Benefits (Tabl
Employee Pension Benefits (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of Net Periodic Pension Benefit of Pension Plan and Excess Pension Plan | The following table sets forth the components of net periodic pension benefit of the ESI Pension Plan and ESI Excess Pension Plan in the periods indicated: Three Months Ended March 31, 2016 2015 Interest cost $ 403 $ 409 Expected return on assets (1,225 ) (1,383 ) Recognized net actuarial loss 0 1 Amortization of prior service (credit) (388 ) (389 ) Net periodic pension (benefit) $ (1,210 ) $ (1,362 ) |
Schedule of Changes in Components of Accumulated Other Comprehensive Income (Loss) | The following table sets forth the changes in the components of Accumulated other comprehensive income (loss) on our Condensed Consolidated Balance Sheet in the three months ended March 31, 2016: Defined Benefit Pension Items Accumulated Other Comprehensive Income (Loss) Income Tax Benefit (Expense) Accumulated Other Comprehensive Income (Loss) Net of Income Tax Balance at December 31, 2015 $ (2,869 ) $ 1,176 $ (1,693 ) Amortization of: Actuarial (gains) losses 0 0 0 Prior service costs (credits) (388 ) 149 (239 ) Balance at March 31, 2016 $ (3,257 ) $ 1,325 $ (1,932 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Amounts of Recorded Liability Related to Claims and Contingencies | The following table sets forth the amounts of our recorded liability related to our claims and contingencies and where the amounts were included on our Condensed Consolidated Balance Sheets as of the dates indicated: As of March 31, 2016 December 31, 2015 March 31, 2015 Other current liabilities $ 15,200 $ 16,330 $ 14,408 Other liabilities 588 588 598 Total $ 15,788 $ 16,918 $ 15,006 |
Activity with Respect to Claims and Contingencies | The following table sets forth the activity with respect to our recorded liability related to our claims and contingencies in the periods indicated: Three Months Ended March 31, 2016 2015 Balance at beginning of period $ 16,918 $ 15,574 Increases (decreases) from: Additional accruals, other (1) 6,509 5,517 Payments, other (2) (7,639 ) (6,085 ) Balance at end of period $ 15,788 $ 15,006 (1) Consists of accruals for legal fees. (2) Consists of payments for legal and other contingencies. |
Historical and Projected Performance and Collections of the CUSO Student Loans under the CUSO RSA | Based on various assumptions, including the historical and projected performance and collections of the CUSO Student Loans, we believe that we will make payments under the CUSO RSA as set forth in the following table: Year Estimated Regular Payments Estimated Recoveries (1) Estimated Total Payments, Net 2016 $ 18,000 (2) $ (1,800 ) (3) $ 16,200 2017 13,000 (1,000 ) 12,000 2018 14,000 (1,000 ) 13,000 2019 and later (4) 95,000 0 95,000 Total $ 140,000 $ (3,800 ) $ 136,200 (1) We expect to offset Regular Payments due to the CUSO from us under the CUSO RSA by the recoveries from charged-off loans that are due to us from the CUSO. (2) This amount includes $6,092 of Regular Payments that otherwise would have been due in 2015, but were deferred to, and paid in, January 2016 as allowed under the Sixth Amendment to CUSO RSA. (3) This amount includes $761 of recoveries from charged-off loans received by the CUSO from June 8, 2015 through December 31, 2015 that were not paid to us that we offset against amounts owed by us under the CUSO RSA in January 2016. (4) We believe that the amount in this row will be paid by us in approximately equal portions in each of 2019 through 2025. |
Aggregate Amount of Guarantee Payments | The following table sets forth the approximate aggregate amount of PEAKS Guarantee payments and CUSO RSA payments that were made in the periods indicated: Three Months Ended March 31, Type of Payment 2016 2015 PEAKS Guarantee Payments $ 4,534 $ 13,637 CUSO RSA Regular Payments 2,597 (1) 2,280 (2) CUSO RSA Discharge Payments 0 2,709 CUSO RSA Deferred Payment 5,331 (3) 0 Total $ 12,462 $ 18,626 (1) This amount is net of $294 of recoveries from charged-off loans owed to us that we offset against amounts owed by us under the CUSO RSA. (2) This amount is net of $290 of recoveries from charged-off loans owed to us that we offset against amounts owed by us under the CUSO RSA. (3) This amount is net of $761 of recoveries from charged-off loans received by the CUSO from June 8, 2015 through December 31, 2015 that were not paid to us that we offset against amounts owed by us under the CUSO RSA in January 2016. |
Business and Significant Accoun
Business and Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016StateLocationSegmentAttendant | Mar. 31, 2015Segment | Dec. 31, 2015Segment | |
Accounting Policies [Abstract] | |||
Number of students in degree programs | Attendant | 43,000 | ||
Number of states where online programs are offered | 50 | ||
Number of locations | Location | 138 | ||
Number of states | 39 | ||
Number of business segment | Segment | 1 | 1 | 1 |
Fair Value and Credit Risk of31
Fair Value and Credit Risk of Financial Instruments - Fair Value Measurement of Financial Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Financial assets fair value disclosure | $ 111,233 | $ 140,037 | $ 152,370 |
Money Market Funds [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | 102,127 | 130,821 | 141,930 |
Restricted cash | 474 | 585 | 1,811 |
Collateral deposits | 8,632 | 8,631 | 8,629 |
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Financial assets fair value disclosure | 111,233 | 140,037 | 152,370 |
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Money Market Funds [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | 102,127 | 130,821 | 141,930 |
Restricted cash | 474 | 585 | 1,811 |
Collateral deposits | 8,632 | 8,631 | 8,629 |
(Level 2) Significant Other Observable Inputs [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Financial assets fair value disclosure | 0 | 0 | 0 |
(Level 2) Significant Other Observable Inputs [Member] | Money Market Funds [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | 0 | 0 | 0 |
Restricted cash | 0 | 0 | 0 |
Collateral deposits | 0 | 0 | 0 |
(Level 3) Significant Unobservable Inputs [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Financial assets fair value disclosure | 0 | 0 | 0 |
(Level 3) Significant Unobservable Inputs [Member] | Money Market Funds [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | 0 | 0 | 0 |
Restricted cash | 0 | 0 | 0 |
Collateral deposits | $ 0 | $ 0 | $ 0 |
Fair Value and Credit Risk of32
Fair Value and Credit Risk of Financial Instruments - Additional Information (Detail) - USD ($) | 3 Months Ended | |||
Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Jan. 31, 2010 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Financial assets recorded at estimated fair value on non-recurring basis | $ 0 | $ 0 | $ 0 | |
Financial liabilities recorded at estimated fair value on non-recurring basis | 0 | 0 | 0 | |
Impairment charge | 543,000 | |||
Prepaid Expenses and Other Current Assets [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying value of building held-for-sale | 2,300,000 | 2,300,000 | ||
Property and Equipment, Net [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Estimated fair value of building | 2,600,000 | |||
Private Education Loans [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying value of the loans | 64,699,000 | 86,069,000 | ||
CUSO [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Secured borrowing obligation, carrying value | 107,760,000 | 117,189,000 | ||
(Level 3) Significant Unobservable Inputs [Member] | Private Education Loans [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
The estimated fair value of loans | 75,000,000 | 95,774,000 | ||
(Level 3) Significant Unobservable Inputs [Member] | CUSO [Member] | Secured Borrowing Obligation [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Estimated fair value of debt | 76,000,000 | 115,211,000 | ||
Term Loan [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying value of debt | 49,623,000 | 93,229,000 | ||
Term Loan [Member] | (Level 3) Significant Unobservable Inputs [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Estimated fair value of debt | 50,000,000 | 94,000,000 | ||
PEAKS Senior Debt [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Aggregate principal amount of debt | 300,000,000 | $ 300,000,000 | ||
Carrying value senior debt | 44,550,000 | $ 50,806,000 | 71,660,000 | |
PEAKS Senior Debt [Member] | (Level 3) Significant Unobservable Inputs [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Estimated fair value senior debt | $ 38,000,000 | $ 72,348,000 |
Equity Compensation Plans - Sto
Equity Compensation Plans - Stock-Based Compensation Expense and Related Income Tax Benefit (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | $ 1,227 | $ 1,896 |
Income tax (benefit) | (472) | (730) |
Cost of Educational Services [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 708 | 942 |
Student Services and Administrative Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | $ 519 | $ 954 |
Equity Compensation Plans - Add
Equity Compensation Plans - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Pre-tax compensation expense for unvested stock-based compensation grants | $ 3,900 | |
Service period applicable to the grantees on a weighted-average basis, years | 1 year 7 months 6 days | |
RSUs vested and settled in shares of common stock, amount | $ 99 | $ 1,260 |
Equity Compensation Plans - S35
Equity Compensation Plans - Stock Options Granted, Forfeited, Exercised and Expired (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Number of shares | |||
Number of Shares, Outstanding at beginning of period | 1,088,208 | ||
Number of Shares, Granted | 159,000 | 0 | |
Number of Shares, Forfeited | 0 | ||
Number of Shares, Exercised | 0 | 0 | |
Number of Shares, Expired | (188,500) | ||
Number of Shares, Outstanding at end of period | 1,058,708 | ||
Number of Shares, Exercisable at end of period | 736,061 | ||
Weighted Average Exercise Price | |||
Weighted Average Exercise Price, Outstanding at beginning of period | $ 70.21 | ||
Weighted Average Exercise Price, Granted | 3.57 | ||
Weighted Average Exercise Price, Forfeited | 0 | ||
Weighted Average Exercise Price, Exercised | 0 | ||
Weighted Average Exercise Price, Expired | 121.56 | ||
Weighted Average Exercise Price, Outstanding at end of period | 51.06 | ||
Weighted Average Exercise Price, Exercisable at end of period | $ 69.17 | ||
Aggregate Exercise Price | |||
Aggregate Exercise Price, Outstanding at beginning of period | $ 76,405 | ||
Aggregate Exercise Price, Granted | 568 | ||
Aggregate Exercise Price, Forfeited | 0 | ||
Aggregate Exercise Price, Exercised | 0 | ||
Aggregate Exercise Price, Expired | (22,914) | ||
Aggregate Exercise Price, Outstanding at end of period | 54,059 | ||
Aggregate Exercise Price, Exercisable at end of period | $ 50,913 | ||
Weighted Average Remaining Contractual Term | |||
Weighted Average Remaining Contractual Term, Outstanding at end of period, years | 1 year 10 months 24 days | ||
Weighted Average Remaining Contractual Term, Exercisable at end of period, years | 1 year 8 months 12 days | ||
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value, Outstanding at end of period | [1] | $ 0 | |
Aggregate Intrinsic Value, Exercisable at end of period | [1] | $ 0 | |
[1] | The aggregate intrinsic value of the stock options was calculated by identifying those stock options that had a lower exercise price than the closing market price of our common stock on March 31, 2016 and multiplying the difference between the closing market price of our common stock and the exercise price of each of those stock options by the number of shares subject to those stock options that were outstanding or exercisable, as applicable. Since the closing market price of our common stock on March 31, 2016 was lower than the exercise price of all outstanding stock options and exercisable stock options, the aggregate intrinsic value of the stock options was zero. |
Equity Compensation Plans - S36
Equity Compensation Plans - Stock Options Granted and Exercised (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Shares subject to stock options granted | 159,000 | 0 |
Weighted average grant date fair value per share | $ 2.09 | $ 0 |
Shares subject to stock options exercised | 0 | 0 |
Intrinsic value of stock options exercised | $ 0 | $ 0 |
Proceeds received from stock options exercised | 0 | 0 |
Tax benefits realized from stock options exercised | $ 0 | $ 0 |
Equity Compensation Plans - Ass
Equity Compensation Plans - Assumptions used to Estimate Grant Date Fair Value of Stock options (Detail) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Risk-free interest rates | 1.30% |
Expected lives (in years) | 4 years 9 months 18 days |
Volatility | 75.00% |
Dividend yield | 0.00% |
Equity Compensation Plans - Num
Equity Compensation Plans - Number of Restricted Stock Units (RSUs) Granted, Forfeited and Vested (Detail) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Number of RSUs | |
Number of RSUs, Unvested at beginning of period | shares | 793,019 |
Number of RSUs, Granted | shares | 411,224 |
Number of RSUs, Forfeited | shares | (47,837) |
Number of RSUs, Vested | shares | (37,350) |
Number of RSUs, Unvested at end of period | shares | 1,119,056 |
Weighted Average Grant Date Fair Value | |
Weighted Average Grant Date Fair Value, Unvested at beginning of period | $ / shares | $ 14.18 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 3.56 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 10.21 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 18.23 |
Weighted Average Grant Date Fair Value, Unvested at end of period | $ / shares | $ 10.31 |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Carrying Value of Assets and Liabilities of PEAKS Trust (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Variable Interest Entity [Line Items] | |||
Restricted cash | $ 5,538 | $ 6,015 | $ 6,328 |
Current portion of PEAKS Trust student loans | 9,787 | 8,480 | 9,541 |
PEAKS Trust student loans, excluding current portion, less allowance for loan losses of $17,122, $21,816 and $39,596 | 54,912 | 62,161 | 76,528 |
Total assets | 622,391 | 663,654 | 739,247 |
Current portion of PEAKS Trust senior debt | 15,634 | 20,105 | 26,533 |
Other current liabilities | 29,631 | 31,973 | 28,602 |
PEAKS Trust senior debt, excluding current portion | 28,916 | 30,701 | 45,127 |
Total liabilities | 460,335 | 502,518 | 591,324 |
PEAKS Trust [Member] | |||
Variable Interest Entity [Line Items] | |||
Restricted cash | 1,820 | 1,462 | 1,727 |
Current portion of PEAKS Trust student loans | 5,536 | 5,746 | 6,475 |
PEAKS Trust student loans, excluding current portion, less allowance for loan losses of $17,122, $21,816 and $39,596 | 42,196 | 45,987 | 57,596 |
Total assets | 49,552 | 53,195 | 65,798 |
Current portion of PEAKS Trust senior debt | 15,634 | 20,105 | 26,533 |
Other current liabilities | 0 | 191 | 175 |
PEAKS Trust senior debt, excluding current portion | 28,916 | 30,701 | 45,127 |
Total liabilities | $ 44,550 | $ 50,997 | $ 71,835 |
Variable Interest Entities - 40
Variable Interest Entities - Schedule of Carrying Value of Assets and Liabilities of PEAKS Trust (Parenthetical) (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
PEAKS Trust [Member] | |||
Variable Interest Entity [Line Items] | |||
Allowance for loan losses | $ 17,122 | $ 21,816 | $ 39,596 |
Variable Interest Entities - 41
Variable Interest Entities - Schedule of Revenue and Expenses of PEAKS Trust (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Variable Interest Entity [Line Items] | ||
Student services and administrative expenses | $ 77,899 | $ 90,252 |
Provision for private education loan losses | 1,878 | 1,244 |
Interest expense | 7,099 | 10,388 |
Income (loss) before provision for income taxes | 7,189 | 17,265 |
PEAKS Trust [Member] | ||
Variable Interest Entity [Line Items] | ||
Revenue | 2,002 | 2,413 |
Student services and administrative expenses | 495 | 541 |
Provision for private education loan losses | 1,483 | 803 |
Interest expense | 1,758 | 3,259 |
Income (loss) before provision for income taxes | $ (1,734) | $ (2,190) |
Variable Interest Entities - Gu
Variable Interest Entities - Guarantee and Other Payments Related to PEAKS Program (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Variable Interest Entity [Line Items] | |||
PEAKS Guarantee | $ 30,090 | ||
PEAKS Program [Member] | |||
Variable Interest Entity [Line Items] | |||
PEAKS Guarantee | $ 4,534 | $ 13,637 |
Variable Interest Entities - 43
Variable Interest Entities - Schedule of Fair Value and Carrying Value of Assets and Liabilities of the CUSO (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Variable Interest Entity [Line Items] | |||
Restricted cash | $ 5,538 | $ 6,015 | $ 6,328 |
Current portion of CUSO Student Loans | 9,787 | 8,480 | 9,541 |
CUSO Student Loans, excluding current portion, less allowance for loan losses of $2,412, $1,796 and $2,480 | 54,912 | 62,161 | 76,528 |
Total assets | 622,391 | 663,654 | 739,247 |
Current portion of CUSO secured borrowing obligation | 18,065 | 23,591 | 20,963 |
Other current liabilities | 29,631 | 31,973 | 28,602 |
CUSO secured borrowing obligation, excluding current portion | 89,695 | 91,728 | 96,226 |
Total liabilities | 460,335 | 502,518 | 591,324 |
CUSO [Member] | |||
Variable Interest Entity [Line Items] | |||
Restricted cash | 3,244 | 3,968 | 2,790 |
Current portion of CUSO Student Loans | 4,251 | 2,734 | 3,066 |
CUSO Student Loans, excluding current portion, less allowance for loan losses of $2,412, $1,796 and $2,480 | 12,716 | 16,174 | 18,932 |
Other assets | 285 | 257 | 202 |
Total assets | 20,496 | 23,133 | 24,990 |
Current portion of CUSO secured borrowing obligation | 18,065 | 23,591 | 20,963 |
Other current liabilities | 153 | 154 | 182 |
CUSO secured borrowing obligation, excluding current portion | 89,695 | 91,728 | 98,002 |
Total liabilities | $ 107,913 | $ 115,473 | $ 119,147 |
Variable Interest Entities - 44
Variable Interest Entities - Schedule of Fair Value and Carrying Value of Assets and Liabilities of the CUSO (Parenthetical) (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
CUSO [Member] | |||
Variable Interest Entity [Line Items] | |||
Allowance for loan losses | $ 2,412 | $ 1,796 | $ 2,480 |
Variable Interest Entities - Ad
Variable Interest Entities - Additional Information (Detail) - CUSO [Member] $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016USD ($)Installment | Dec. 31, 2013USD ($) | Dec. 31, 2015USD ($) | Mar. 31, 2015USD ($) | |
Variable Interest Entity [Line Items] | ||||
Other liabilities | $ 1,776 | |||
Number of monthly payments | Installment | 10 | |||
Discount rate | 10.00% | |||
Offset amounts under Revolving Note | $ 8,472 | |||
Revolving note, amount owned to company | $ 8,300 | $ 8,300 | $ 8,200 |
Variable Interest Entities - 46
Variable Interest Entities - Schedule of Revenue and Expenses of CUSO (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Variable Interest Entity [Line Items] | ||
Student services and administrative expenses | $ 77,899 | $ 90,252 |
Provision for private education loan losses | 1,878 | 1,244 |
Interest expense | 7,099 | 10,388 |
Income (loss) before provision for income taxes | 7,189 | 17,265 |
CUSO [Member] | ||
Variable Interest Entity [Line Items] | ||
Revenue | 1,082 | 1,064 |
Student services and administrative expenses | 360 | 396 |
Provision for private education loan losses | 395 | 441 |
Interest expense | 3,167 | 3,641 |
Income (loss) before provision for income taxes | $ (2,840) | $ (3,414) |
Variable Interest Entities - 47
Variable Interest Entities - Schedule of Payments Made to Entity Related to Guarantee Obligations (Detail) - CUSO RSA [Member] - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | |||
Variable Interest Entity [Line Items] | ||||
Regular Payments | $ 2,597 | [1],[2] | $ 2,280 | [3],[4] |
Deferred Payment | 5,331 | [5] | 0 | |
Discharge Payments | 0 | 2,709 | ||
Net guarantee obligation payments | $ 7,928 | $ 4,989 | ||
[1] | This amount is net of $294 of recoveries from charged-off loans owed to us that we offset against amounts owed by us under the CUSO RSA. | |||
[2] | This amount is net of $294 of recoveries from charged-off loans owed to us that we offset against amounts we owed under the CUSO RSA. | |||
[3] | This amount is net of $290 of recoveries from charged-off loans owed to us that we offset against amounts owed by us under the CUSO RSA. | |||
[4] | This amount is net of $290 of recoveries from charged-off loans owed to us that we offset against amounts we owed under the CUSO RSA. | |||
[5] | This amount is net of $761 of recoveries from charged-off loans received by the CUSO from June 8, 2015 through December 31, 2015 that were not paid to us that we offset against amounts owed by us under the CUSO RSA in January 2016. |
Variable Interest Entities - 48
Variable Interest Entities - Schedule of Payments Made to Entity Related to Guarantee Obligations (Parenthetical) (Detail) - CUSO RSA [Member] - USD ($) $ in Thousands | 3 Months Ended | 7 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Regular Payments [Member] | |||
Variable Interest Entity [Line Items] | |||
Recoveries of charged off loans received | $ 294 | $ 290 | |
Deferred Payments [Member] | |||
Variable Interest Entity [Line Items] | |||
Recoveries of charged off loans received | $ 761 |
Private Education Loans - Addit
Private Education Loans - Additional Information (Detail) | 3 Months Ended | ||
Mar. 31, 2016USD ($)Pool_Loan | Mar. 31, 2015USD ($) | Feb. 28, 2013USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, outstanding amount | $ 100,978,000 | $ 161,436,000 | |
Allowance for loan losses | $ 0 | ||
Private Education Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, carrying amount | $ 64,699,000 | $ 86,069,000 | |
PEAKS Trust Student Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of separate pools of loans | Pool_Loan | 24 | ||
CUSO Student Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of separate pools of loans | Pool_Loan | 48 |
Private Education Loans - Sched
Private Education Loans - Schedule of Information Regarding Aggregate Changes in Accretable Yield (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
PEAKS Trust Student Loans [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Balance at beginning of period | $ 34,984 | $ 51,819 |
Accretion | (2,002) | (2,413) |
Reclassification from nonaccretable difference and changes in expected cash flows | (1,330) | (1,508) |
Balance at end of period | 31,652 | 47,898 |
PEAKS Trust Student Loans [Member] | Analogy [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Balance at beginning of period | 19,313 | 32,654 |
Accretion | (1,022) | (1,431) |
Reclassification from nonaccretable difference and changes in expected cash flows | (933) | (2,541) |
Balance at end of period | 17,358 | 28,682 |
CUSO Student Loans [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Balance at beginning of period | 12,793 | 11,728 |
Accretion | (722) | (668) |
Reclassification from nonaccretable difference and changes in expected cash flows | (425) | 60 |
Balance at end of period | 11,646 | 11,120 |
CUSO Student Loans [Member] | Analogy [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Balance at beginning of period | 7,611 | 5,857 |
Accretion | (432) | (346) |
Reclassification from nonaccretable difference and changes in expected cash flows | (294) | 266 |
Balance at end of period | $ 6,885 | $ 5,777 |
Private Education Loans - Sch51
Private Education Loans - Schedule of Information Regarding Changes in Allowance for Loan Losses (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Provision for loan losses | $ 1,878 | $ 1,244 | |
PEAKS Trust Student Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Balance at beginning of period | 21,816 | 42,353 | |
Loans charged off | (6,907) | (4,061) | |
Recoveries from charged off loans | 730 | 501 | |
Provision for loan losses | 1,483 | 803 | |
Balance at end of period | 17,122 | 39,596 | |
CUSO Student Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Balance at beginning of period | 1,796 | 2,039 | |
Loans charged off | 0 | 0 | |
Recoveries from charged off loans | 0 | 0 | |
Provision for loan losses | 616 | [1] | 441 |
Balance at end of period | $ 2,412 | $ 2,480 | |
[1] | The provision for loan losses was reduced by $221 for recoveries from CUSO Student Loans that were not recognized on our consolidated balance sheet at the time of the CUSO Consolidation. |
Private Education Loans - Sch52
Private Education Loans - Schedule of Information Regarding Changes in Allowance for Loan Losses (Parenthetical) (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
CUSO Student Loans [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Recovery of loan losses | $ 221 |
Goodwill and Intangibles - Sche
Goodwill and Intangibles - Schedule of Carrying Value of Acquired Amortizable Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Amortizable intangible assets, Gross Carrying Value | $ 4,270 | $ 4,270 | $ 4,270 |
Amortizable intangible assets, Accumulated Amortization | (2,301) | (1,422) | (2,081) |
Amortizable intangible assets, Net Carrying Value | 1,969 | 2,848 | 2,189 |
Customer Relationships [Member] | |||
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Amortizable intangible assets, Gross Carrying Value | 2,500 | 2,500 | 2,500 |
Amortizable intangible assets, Accumulated Amortization | (1,203) | (703) | (1,078) |
Amortizable intangible assets, Net Carrying Value | $ 1,297 | $ 1,797 | $ 1,422 |
Amortizable intangible assets, Weighted Average Amortization Period | 60 months | 60 months | 60 months |
Non-compete Agreements [Member] | |||
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Amortizable intangible assets, Gross Carrying Value | $ 1,120 | $ 1,120 | $ 1,120 |
Amortizable intangible assets, Accumulated Amortization | (560) | (336) | (504) |
Amortizable intangible assets, Net Carrying Value | $ 560 | $ 784 | $ 616 |
Amortizable intangible assets, Weighted Average Amortization Period | 60 months | 60 months | 60 months |
Training Materials [Member] | |||
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Amortizable intangible assets, Gross Carrying Value | $ 440 | $ 440 | $ 440 |
Amortizable intangible assets, Accumulated Amortization | (335) | (210) | (304) |
Amortizable intangible assets, Net Carrying Value | $ 105 | $ 230 | $ 136 |
Amortizable intangible assets, Weighted Average Amortization Period | 42 months | 42 months | 42 months |
Accreditation [Member] | |||
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Amortizable intangible assets, Gross Carrying Value | $ 210 | $ 210 | $ 210 |
Amortizable intangible assets, Accumulated Amortization | (203) | (173) | (195) |
Amortizable intangible assets, Net Carrying Value | $ 7 | $ 37 | $ 15 |
Amortizable intangible assets, Weighted Average Amortization Period | 84 months | 84 months | 84 months |
Goodwill and Intangibles - Addi
Goodwill and Intangibles - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense for amortized intangible assets | $ 220 | $ 221 |
Goodwill and Intangibles - Esti
Goodwill and Intangibles - Estimated Amortization Expense of Intangible Assets (Detail) $ in Thousands | Mar. 31, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,016 | $ 865 |
2,017 | 734 |
2,018 | 562 |
2,019 | 28 |
Total | $ 2,189 |
Goodwill and Intangibles - Sc56
Goodwill and Intangibles - Schedule of Indefinite Lived Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill, Gross Carrying Value | $ 7,247 | $ 7,290 | $ 7,247 |
Goodwill, Accumulated Impairment Loss | (7,247) | (2,044) | (7,247) |
Goodwill, Net Carrying Value | 0 | 5,246 | 0 |
Indefinite-lived intangible assets, Gross Carrying Value | 7,907 | 7,950 | 7,907 |
Indefinite-lived intangible assets, Accumulated Impairment Loss | (7,657) | (2,454) | (7,657) |
Indefinite-lived intangible assets, Net Carrying Value | 250 | 5,496 | 250 |
Trademark [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets, Trademark, Gross Carrying Value | 660 | 660 | 660 |
Indefinite-lived intangible assets, Trademark, Accumulated Impairment Loss | (410) | (410) | (410) |
Indefinite-lived intangible assets, Trademark, Net Carrying Value | $ 250 | $ 250 | $ 250 |
Debt - Term Loans - Additional
Debt - Term Loans - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | |
Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 100,000 | ||||
Commitment fee | $ 3,000 | ||||
Excess cash flow for prepayment of debt | $ 9,000 | ||||
Percentage of outstanding principal amount in excess of cash flow | 50.00% | ||||
Percentage of premium on prepayment of principal | 1.00% | ||||
Period of prepayment of outstanding principal on Financing Agreement that requires premium payment | 2 years | ||||
Term Loan [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Mandatory prepayment of outstanding principal amount, minimum | $ 9,000 | ||||
Term Loan [Member] | Scenario, Forecast [Member] | |||||
Debt Instrument [Line Items] | |||||
Outstanding loan balance | $ 0 | ||||
Financing Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Outstanding loan balance | $ 50,505 | $ 69,681 | $ 97,500 | ||
Effective interest rate on borrowings | 14.20% | 12.70% | |||
Option One [Member] | |||||
Debt Instrument [Line Items] | |||||
Variable rate basis | LIBOR | ||||
Base rate percentage | 1.00% | ||||
Option One [Member] | Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Variable rate, margin percentage | 8.50% | ||||
Option Two [Member] | |||||
Debt Instrument [Line Items] | |||||
Base rate percentage | 2.00% | ||||
Option Two [Member] | Federal Fund Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Variable rate, margin percentage | 0.50% | ||||
Option Two [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||
Debt Instrument [Line Items] | |||||
Variable rate, margin percentage | 1.00% | ||||
Option Two [Member] | Prime Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Variable rate, margin percentage | 8.00% |
Debt - Outstanding Principal Ba
Debt - Outstanding Principal Balance, Debt Discount and Carrying Value of Financing Agreement (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Feb. 28, 2013 | |
Financing Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Outstanding principal balance | $ 50,505 | $ 97,500 | $ 69,681 | |
Debt issuance costs | (209) | (1,011) | (360) | |
Debt discount | (673) | (3,260) | (1,160) | |
Carrying value | 49,623 | 93,229 | 68,161 | |
PEAKS Senior Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Outstanding principal balance | 50,135 | 81,273 | 57,111 | $ 257,533 |
Debt discount | (5,585) | (9,613) | (6,305) | |
Carrying value | $ 44,550 | $ 71,660 | $ 50,806 |
Debt - Schedule of Principal Re
Debt - Schedule of Principal Repayment under the Financing Agreement (Detail) - Term Loan [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Debt Instrument [Line Items] | |
Scheduled Payments | $ 50,505 |
Excess Cash Flow Payment | 0 |
Total | 50,505 |
Second Quarter [Member] | |
Debt Instrument [Line Items] | |
Scheduled Payments | 15,500 |
Excess Cash Flow Payment | 0 |
Total | 15,500 |
Third Quarter [Member] | |
Debt Instrument [Line Items] | |
Scheduled Payments | 15,500 |
Excess Cash Flow Payment | 0 |
Total | 15,500 |
Fourth Quarter [Member] | |
Debt Instrument [Line Items] | |
Scheduled Payments | 19,505 |
Excess Cash Flow Payment | 0 |
Total | $ 19,505 |
Debt - Total Amount of Interest
Debt - Total Amount of Interest Expense and Fees Recognized on Borrowing (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Financing Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Interest expense and fees | $ 2,174 | $ 3,367 |
Debt - PEAKS Trust Senior Debt
Debt - PEAKS Trust Senior Debt - Additional Information (Detail) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Feb. 28, 2013USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Jan. 31, 2010USD ($) | |
Debt Instrument [Line Items] | |||||
Current liability | $ 15,634 | $ 26,533 | $ 20,105 | ||
Repayment of PEAKS Trust senior debt | 6,976 | 15,646 | |||
PEAKS Guarantee | 30,090 | ||||
PEAKS Trust [Member] | |||||
Debt Instrument [Line Items] | |||||
Current liability | 15,634 | 26,533 | 20,105 | ||
PEAKS Senior Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount of debt | 300,000 | $ 300,000 | |||
Estimated fair value of senior debt | $ 226,096 | ||||
Outstanding balance | 257,533 | 50,135 | $ 81,273 | 57,111 | |
Difference in Estimated Fair Value and Outstanding Principal Amount | $ 31,437 | ||||
Current liability | $ 15,634 | ||||
Debt instrument maturity date | Jan. 31, 2020 | ||||
Variable rate percentage | 5.50% | ||||
Minimum LIBOR rate applied | 2.00% | ||||
Effective Interest Rate | 14.50% | 16.30% | |||
PEAKS Senior Debt [Member] | PEAKS Trust [Member] | |||||
Debt Instrument [Line Items] | |||||
Amount of assets for computation of Asset/Liability ratio | $ 68,273 | ||||
Amount of liabilities for computation of Asset/Liability ratio | $ 50,135 | ||||
PEAKS Senior Debt [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Required Asset/Liability ratio | 1.05 | ||||
PEAKS Senior Debt [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Required Asset/Liability ratio | 1.40 | ||||
PEAKS Program [Member] | |||||
Debt Instrument [Line Items] | |||||
Payments under PEAK Guarantee | $ 30,090 | ||||
PEAKS Guarantee | $ 4,534 | $ 13,637 |
Debt - Estimated Principal Paym
Debt - Estimated Principal Payments on the PEAKS Senior Debt in the Period (Detail) - PEAKS Senior Debt [Member] $ in Thousands | Mar. 31, 2016USD ($) |
Debt Instrument [Line Items] | |
2,016 | $ 20,181 |
2,017 | 8,704 |
2,018 | 8,582 |
2,019 | 9,355 |
2,020 | 10,289 |
Total | $ 57,111 |
Debt - Total Amount of Intere63
Debt - Total Amount of Interest Expense and Discount Accretion on PEAKS Senior Debt (Detail) - PEAKS Senior Debt [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Debt Instrument [Line Items] | ||
Contractual interest expense | $ 1,038 | $ 1,604 |
Discount accretion | 720 | 1,655 |
Total interest expense | $ 1,758 | $ 3,259 |
Earnings Per Common Share - His
Earnings Per Common Share - Historical Net Income and Weighted Average Number of Shares of Common Stock Outstanding (Detail) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Weighted average number of shares of common stock outstanding | 23,742 | 23,560 |
Shares assumed issued (less shares assumed purchased for treasury) for stock-based compensation | 114 | 259 |
Outstanding shares for diluted earnings per share calculation | 23,856 | 23,819 |
Earnings Per Common Share - Add
Earnings Per Common Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Shares excluded from calculation of diluted earnings per share | 1.9 | 1.2 |
Employee Pension Benefits - Com
Employee Pension Benefits - Components of Net Periodic Pension Benefit of Pension Plan and Excess Pension Plan (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | ||
Interest cost | $ 403 | $ 409 |
Expected return on assets | (1,225) | (1,383) |
Recognized net actuarial loss | 0 | 1 |
Amortization of prior service (credit) | (388) | (389) |
Net periodic pension (benefit) | $ (1,210) | $ (1,362) |
Employee Pension Benefits - Add
Employee Pension Benefits - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost included in net periodic pension benefit | $ 0 | |
Expected significant contributions to pension plans, current fiscal year | 0 | |
Net periodic pension benefit | 1,210,000 | $ 1,362,000 |
Cost of Educational Services [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net periodic pension benefit | 783,000 | |
Student Services and Administrative Expenses [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net periodic pension benefit | 427,000 | |
ESI Pension Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contributions to pension plans | 0 | 0 |
ESI Excess Pension Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contributions to pension plans | $ 0 | $ 0 |
Employee Pension Benefits - Sch
Employee Pension Benefits - Schedule of Changes in Components of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | ||
Accumulated Other Comprehensive Income (Loss) Before Tax - Beginning Balance | $ (2,869) | |
Actuarial (gains) losses | 0 | |
Prior service costs (credits) | (388) | |
Accumulated Other Comprehensive Income (Loss) Before Tax - Ending Balance | (3,257) | |
Income Tax Benefit (Expense) - Beginning Balance | 1,176 | |
Actuarial (gains) losses | 0 | $ 0 |
Prior service costs (credits) | 149 | |
Income Tax Benefit (Expense) - Ending Balance | 1,325 | |
Accumulated Other Comprehensive Income (Loss) Net of Income Tax - Beginning Balance | (1,693) | |
Actuarial (gains) losses | 0 | 1 |
Prior service costs (credits) | (239) | $ (239) |
Accumulated Other Comprehensive Income (Loss) Net of Income Tax - Ending Balance | $ (1,932) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 21, 2016 | Nov. 02, 2015 | Oct. 28, 2015 | Jun. 10, 2015 | Jun. 08, 2015 | Mar. 26, 2012 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Aug. 31, 2016 | Dec. 17, 2015 | Oct. 31, 2014 | Feb. 28, 2013 |
Loss Contingencies [Line Items] | ||||||||||||||
Face amount of surety bonds | $ 22,300 | |||||||||||||
ED Escrowed Funds | 79,708 | $ 79,708 | $ 79,708 | $ 79,708 | ||||||||||
ED Letter of Credit payable | $ 79,708 | |||||||||||||
Amount of unrecognized tax benefits that could be paid in 12 months | 4,200 | |||||||||||||
Payments under PEAK Guarantee | 30,090 | |||||||||||||
Collateral maintained with bank for education loan | 8,630 | $ 8,630 | 8,630 | 8,630 | ||||||||||
Deferred payments, gross | 6,092 | |||||||||||||
Litigation settlement amount | $ 395 | |||||||||||||
Insurance recoveries | 25,000 | |||||||||||||
Litigation Settlement to pay | $ 1,100 | |||||||||||||
Scenario, Forecast [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Additional collateral required to deposit | $ 200 | |||||||||||||
Indiana Securities Litigation [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Litigation settlement amount | $ 12,538 | |||||||||||||
Gallien Litigation [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Litigation settlement amount | $ 400 | |||||||||||||
Percentage of net settlement amounts paid to settlement class members in the form of individual settlement payments | 55.00% | |||||||||||||
Net settlement amounts paid in individual settlement payments | $ 204 | |||||||||||||
New York Securities Litigation [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Litigation settlement amount | $ 16,962 | |||||||||||||
Massachusetts Litigation [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Civil penalties sought value per violation | 5 | |||||||||||||
CUSO Program [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Principal amount for private education loans | 141,000 | |||||||||||||
CUSO RSA [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Discharge Payments | 0 | 2,709 | ||||||||||||
PEAKS Guarantee [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Future recovery of PEAKS guarantee payments | 35,000 | |||||||||||||
PEAKS Senior Debt [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Outstanding balance | 50,135 | $ 81,273 | 57,111 | $ 57,111 | $ 257,533 | |||||||||
Letter of Credit Issued to Insurers and Agencies [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Letter of credit payable | 106 | |||||||||||||
Revolving Note [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Credit facility outstanding, amount | 8,200 | |||||||||||||
CUSO [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Amount of offset to repay | 10,417 | |||||||||||||
Recoveries of loans previously from charged-off not received | 1,049 | |||||||||||||
Period From April One Two Thousand Sixteen Through December Thirty One Two Thousand Sixteen [Member] | PEAKS Guarantee [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Payments under PEAK Guarantee | 6,700 | |||||||||||||
Year 2016 [Member] | PEAKS Senior Debt [Member] | PEAKS Guarantee [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Outstanding balance | 36,000 | |||||||||||||
Year 2017 [Member] | PEAKS Guarantee [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Payments under PEAK Guarantee | 600 | |||||||||||||
Year 2017 [Member] | PEAKS Senior Debt [Member] | PEAKS Guarantee [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Outstanding balance | 28,000 | |||||||||||||
Year 2020 [Member] | PEAKS Guarantee [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Payments under PEAK Guarantee | 10,300 | |||||||||||||
Year 2020 [Member] | PEAKS Senior Debt [Member] | PEAKS Guarantee [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Outstanding balance | 0 | |||||||||||||
Deferred Payments [Member] | CUSO RSA [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Recoveries of charged off loans received | $ 761 | |||||||||||||
Maximum [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Unrecognized tax benefits that could decrease in the 12 months immediately following the date of this filing | 11,100 | |||||||||||||
Minimum [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Unrecognized tax benefits that could decrease in the 12 months immediately following the date of this filing | $ 0 | |||||||||||||
Sixth Amendment [Member] | CUSO RSA [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Discharge Payments | $ 6,544 | |||||||||||||
Accrued interest rate | 12.50% | |||||||||||||
Reduction amount in Regular Payments | $ 2,000 |
Commitments and Contingencies70
Commitments and Contingencies - Amounts of Recorded Liability Related to Claims and Contingencies (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Commitments and Contingencies Disclosure [Abstract] | ||||
Other current liabilities | $ 15,200 | $ 16,330 | $ 14,408 | |
Other liabilities | 588 | 588 | 598 | |
Total | $ 15,788 | $ 16,918 | $ 15,006 | $ 15,574 |
Commitments and Contingencies71
Commitments and Contingencies - Activity With Respect to Claims and Contingencies (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Commitments and Contingencies Disclosure [Abstract] | |||
Claims and contingencies, Balance at beginning of period | $ 16,918 | $ 15,574 | |
Additional accruals, other | [1] | 6,509 | 5,517 |
Payments, other | [2] | (7,639) | (6,085) |
Claims and contingencies, Balance at end of period | $ 15,788 | $ 15,006 | |
[1] | Consists of accruals for legal fees. | ||
[2] | Consists of payments for legal and other contingencies. |
Commitments and Contingencies72
Commitments and Contingencies - Historical and Projected Performance and Collections of the CUSO Student Loans under the CUSO RSA (Detail) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($) | ||
Summary Of Projections Of Estimated Payments And Recoveries [Line Items] | ||
Estimated Regular Payments | $ 140,000 | |
Estimated Recoveries | (3,800) | [1] |
Estimated Total Payments, Net | 136,200 | |
2016 [Member] | ||
Summary Of Projections Of Estimated Payments And Recoveries [Line Items] | ||
Estimated Regular Payments | 18,000 | [2] |
Estimated Recoveries | (1,800) | [1],[3] |
Estimated Total Payments, Net | 16,200 | |
2017 [Member] | ||
Summary Of Projections Of Estimated Payments And Recoveries [Line Items] | ||
Estimated Regular Payments | 13,000 | |
Estimated Recoveries | (1,000) | [1] |
Estimated Total Payments, Net | 12,000 | |
2018 [Member] | ||
Summary Of Projections Of Estimated Payments And Recoveries [Line Items] | ||
Estimated Regular Payments | 14,000 | |
Estimated Recoveries | (1,000) | [1] |
Estimated Total Payments, Net | 13,000 | |
2019 and later [Member] | ||
Summary Of Projections Of Estimated Payments And Recoveries [Line Items] | ||
Estimated Regular Payments | 95,000 | [4] |
Estimated Recoveries | 0 | [1],[4] |
Estimated Total Payments, Net | $ 95,000 | [4] |
[1] | We expect to offset Regular Payments due to the CUSO from us under the CUSO RSA by the recoveries from charged-off loans that are due to us from the CUSO. | |
[2] | This amount includes $6,092 of Regular Payments that otherwise would have been due in 2015, but were deferred to, and paid in, January 2016 as allowed under the Sixth Amendment to CUSO RSA. | |
[3] | This amount includes $761 of recoveries from charged-off loans received by the CUSO from June 8, 2015 through December 31, 2015 that were not paid to us that we offset against amounts owed by us under the CUSO RSA in January 2016. | |
[4] | We believe that the amount in this row will be paid by us in approximately equal portions in each of 2019 through 2025. |
Commitments and Contingencies73
Commitments and Contingencies - Historical and Projected Performance and Collections of the CUSO Student Loans under the CUSO RSA (Parenthetical) (Detail) $ in Thousands | 7 Months Ended |
Dec. 31, 2015USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Deferred payments, gross | $ 6,092 |
Recoveries from charged-off loans | $ 761 |
Commitments and Contingencies74
Commitments and Contingencies - Aggregate Amount of Guarantee Payments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |||
Schedule of Claims and Contingencies [Line Items] | |||||
PEAKS Guarantee Payment | $ 30,090 | ||||
Total | $ 12,462 | $ 18,626 | |||
PEAKS Program [Member] | |||||
Schedule of Claims and Contingencies [Line Items] | |||||
PEAKS Guarantee Payment | 4,534 | 13,637 | |||
CUSO RSA [Member] | |||||
Schedule of Claims and Contingencies [Line Items] | |||||
CUSO RSA Regular Payments | 2,597 | [1],[2] | 2,280 | [3],[4] | |
CUSO RSA Discharge Payments | 0 | 2,709 | |||
CUSO RSA Deferred Payment | $ 5,331 | [5] | $ 0 | ||
[1] | This amount is net of $294 of recoveries from charged-off loans owed to us that we offset against amounts owed by us under the CUSO RSA. | ||||
[2] | This amount is net of $294 of recoveries from charged-off loans owed to us that we offset against amounts we owed under the CUSO RSA. | ||||
[3] | This amount is net of $290 of recoveries from charged-off loans owed to us that we offset against amounts owed by us under the CUSO RSA. | ||||
[4] | This amount is net of $290 of recoveries from charged-off loans owed to us that we offset against amounts we owed under the CUSO RSA. | ||||
[5] | This amount is net of $761 of recoveries from charged-off loans received by the CUSO from June 8, 2015 through December 31, 2015 that were not paid to us that we offset against amounts owed by us under the CUSO RSA in January 2016. |
Commitments and Contingencies75
Commitments and Contingencies - Aggregate Amount of Guarantee Payments (Parenthetical) (Detail) - CUSO RSA [Member] - USD ($) $ in Thousands | 3 Months Ended | 7 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Regular Payments [Member] | |||
Schedule of Claims and Contingencies [Line Items] | |||
Recoveries of charged off loans received | $ 294 | $ 290 | |
Deferred Payments [Member] | |||
Schedule of Claims and Contingencies [Line Items] | |||
Recoveries of charged off loans received | $ 761 |
Risks and Uncertainties - Addit
Risks and Uncertainties - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 17, 2015 | Oct. 31, 2014 | |
Unusual Risk or Uncertainty [Line Items] | |||||
Letter of credit termination date | Nov. 4, 2019 | ||||
ED Escrowed Funds | $ 79,708 | $ 79,708 | $ 79,708 | ||
ED Letter of Credit payable | $ 79,708 | ||||
Payments under PEAK Guarantee | 30,090 | ||||
Financing Agreement [Member] | |||||
Unusual Risk or Uncertainty [Line Items] | |||||
Outstanding principal balance | 50,505 | $ 97,500 | 69,681 | ||
2016 [Member] | |||||
Unusual Risk or Uncertainty [Line Items] | |||||
Payments under PEAKS guarantee | 11,200 | ||||
2016 [Member] | CUSO [Member] | |||||
Unusual Risk or Uncertainty [Line Items] | |||||
Payments under CUSO Program | 16,200 | ||||
2017 [Member] | |||||
Unusual Risk or Uncertainty [Line Items] | |||||
Payments under PEAKS guarantee | 600 | ||||
2017 [Member] | CUSO [Member] | |||||
Unusual Risk or Uncertainty [Line Items] | |||||
Payments under CUSO Program | 12,000 | ||||
CUSO RSA [Member] | |||||
Unusual Risk or Uncertainty [Line Items] | |||||
Net guarantee obligation payments | $ 7,928 | $ 4,989 | |||
CUSO RSA [Member] | CUSO [Member] | |||||
Unusual Risk or Uncertainty [Line Items] | |||||
Net guarantee obligation payments | 13,093 | ||||
Recoveries from charged-off loans | $ 521 |