BRIDGEPOINT EDUCATION INC, 10-K filed on 3/8/2016
Annual Report
Document and Entity Information (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Mar. 2, 2016
Jun. 30, 2015
Entity Information [Line Items]
 
 
 
Entity Registrant Name
Bridgepoint Education Inc 
 
 
Entity Central Index Key
0001305323 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2015 
 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
45,957,061 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 162.4 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Current assets:
 
 
Cash and cash equivalents
$ 282,145 
$ 207,003 
Restricted cash
24,685 
25,934 
Investments
19,387 
12,051 
Accounts receivable, net
24,091 
21,274 
Student loans receivable, net
775 
1,003 
Deferred income taxes
0 
21,301 
Prepaid expenses and other current assets
52,192 
22,818 
Total current assets
403,275 
311,384 
Property and equipment, net
21,742 
78,219 
Investments
47,770 
111,557 
Student loans receivable, net
7,394 
9,510 
Goodwill and intangibles, net
21,265 
24,775 
Deferred income taxes
0 
20,175 
Other long-term assets
5,320 
2,475 
Total assets
506,766 
558,095 
Current liabilities:
 
 
Accounts payable
4,762 
1,013 
Accrued liabilities
74,434 
51,403 
Deferred revenue and student deposits
88,756 
108,048 
Total current liabilities
167,952 
160,464 
Rent liability
20,118 
22,098 
Other long-term liabilities
15,046 
9,652 
Total liabilities
203,116 
192,214 
Commitments and contingencies
   
   
Preferred stock, $0.01 par value:
 
 
20,000 shares authorized; zero shares issued and outstanding at both December 31, 2015, and December 31, 2014
0 
0 
Common stock, $0.01 par value:
 
 
300,000 shares authorized; 63,407 issued and 45,850 outstanding at December 31, 2015; 62,957 issued and 45,400 outstanding at December 31, 2014
634 
630 
Additional paid-in capital
188,863 
180,720 
Retained earnings
451,321 
521,775 
Accumulated other comprehensive gain (loss)
(99)
(175)
Treasury stock, 17,557 shares at cost at both December 31, 2015, and December 31, 2014
(337,069)
(337,069)
Total stockholders' equity
303,650 
365,881 
Total liabilities and stockholders' equity
$ 506,766 
$ 558,095 
Consolidated Balance Sheets Parenthetical (USD $)
Dec. 31, 2015
Dec. 31, 2014
Stockholders' equity:
 
 
Preferred stock, par value per share
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
20,000,000 
20,000,000 
Preferred stock, shares issued
0 
0 
Preferred stock, shares outstanding
0 
0 
Common stock, par value per share
$ 0.01 
$ 0.01 
Common stock, shares authorized
300,000,000 
300,000,000 
Common stock, shares issued
63,407,000 
62,957,000 
Common stock, shares outstanding
45,850,000 
45,400,000 
Treasury stock, shares at cost
17,557,000 
17,557,000 
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Statement [Abstract]
 
 
 
Revenue
$ 561,729 
$ 638,705 
$ 751,449 
Costs and expenses:
 
 
 
Instructional costs and services
281,496 
315,079 
365,404 
Admissions advisory and marketing
197,584 
231,134 
234,511 
General and administrative
56,588 
61,353 
76,081 
Restructuring and impairment charges
68,356 
16,828 
6,990 
Total costs and expenses
604,024 
624,394 
682,986 
Operating income (loss)
(42,295)
14,311 
68,463 
Other income, net
2,106 
2,884 
3,082 
Income (loss) before income taxes
(40,189)
17,195 
71,545 
Income tax expense
30,265 
7,527 
25,662 
Net income (loss)
$ (70,454)
$ 9,668 
$ 45,883 
Earnings (loss) per common share:
 
 
 
Basic (in USD per share)
$ (1.54)
$ 0.21 
$ 0.85 
Diluted (in USD per share)
$ (1.54)
$ 0.21 
$ 0.83 
Weighted average number of common shares outstanding used in computing earnings per common share:
 
 
 
Basic (in shares)
45,665 
45,204 
53,923 
Diluted (in shares)
45,665 
46,512 
55,487 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
Net income (loss)
$ (70,454)
$ 9,668 
$ 45,883 
Other comprehensive gain (loss), net of tax:
 
 
 
Unrealized gains (losses) on investments
76 
(223)
(174)
Comprehensive income (loss)
$ (70,378)
$ 9,445 
$ 45,709 
Consolidated Statement of Stockholders' Equity (USD $)
In Thousands, unless otherwise specified
Total
Common Stock
Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Gain/(Loss)
Treasury Stock
Balance at Dec. 31, 2012
$ 483,196 
$ 614 
$ 151,709 
$ 466,224 
$ 222 
$ (135,573)
Balance, shares at Dec. 31, 2012
 
61,406 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Stock-based compensation
13,934 
 
13,934 
 
 
 
Exercise of stock options, shares, net
 
590 
 
 
 
 
Exercise of stock options
10,464 
6 
10,458 
 
 
 
Tax withholdings related to net exercise of stock options
(9,170)
 
(9,170)
 
 
 
Excess tax shortfalls of option exercises and restricted stock, net of tax benefit
1,516 
 
1,516 
 
 
 
Stock issued under employee stock purchase plan, shares
 
116 
 
 
 
 
Stock issued under employee stock purchase plan
1,234 
1 
1,233 
 
 
 
Stock issued under restricted stock plan, shares
 
115 
 
 
 
 
Stock issued under restricted stock plan, net of shares held for taxes
(1,080)
1 
(1,081)
 
 
 
Exercise of warrants, shares
 
104 
 
 
 
 
Exercise of warrants
231 
1 
230 
 
 
 
Repurchase of common stock
(201,496)
 
 
 
 
(201,496)
Net income (loss)
45,883 
 
 
45,883 
 
 
Unrealized gains (losses) on investments, net of tax
(174)
 
 
 
(174)
 
Balance at Dec. 31, 2013
344,538 
623 
168,829 
512,107 
48 
(337,069)
Balance, shares at Dec. 31, 2013
 
62,331 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Stock-based compensation
10,558 
 
10,558 
 
 
 
Exercise of stock options, shares, net
 
388 
 
 
 
 
Exercise of stock options
3,108 
4 
3,104 
 
 
 
Excess tax shortfalls of option exercises and restricted stock, net of tax benefit
326 
 
326 
 
 
 
Stock issued under restricted stock plan, shares
 
238 
 
 
 
 
Stock issued under restricted stock plan, net of shares held for taxes
(2,094)
3 
(2,097)
 
 
 
Net income (loss)
9,668 
 
 
9,668 
 
 
Unrealized gains (losses) on investments, net of tax
(223)
 
 
 
(223)
 
Balance at Dec. 31, 2014
365,881 
630 
180,720 
521,775 
(175)
(337,069)
Balance, shares at Dec. 31, 2014
 
62,957 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Stock-based compensation
9,710 
 
9,710 
 
 
 
Exercise of stock options, shares, net
 
206 
 
 
 
 
Exercise of stock options
284 
2 
282 
 
 
 
Excess tax shortfalls of option exercises and restricted stock, net of tax benefit
(767)
 
(767)
 
 
 
Stock issued under employee stock purchase plan, shares
 
33 
 
 
 
 
Stock issued under employee stock purchase plan
261 
0 
261 
 
 
 
Stock issued under restricted stock plan, shares
 
211 
 
 
 
 
Stock issued under restricted stock plan, net of shares held for taxes
(1,341)
2 
(1,343)
 
 
 
Net income (loss)
(70,454)
 
 
(70,454)
 
 
Unrealized gains (losses) on investments, net of tax
76 
 
 
 
76 
 
Balance at Dec. 31, 2015
$ 303,650 
$ 634 
$ 188,863 
$ 451,321 
$ (99)
$ (337,069)
Balance, shares at Dec. 31, 2015
 
63,407 
 
 
 
 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Cash flows from operating activities
 
 
 
Net income (loss)
$ (70,454)
$ 9,668 
$ 45,883 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Provision for bad debts
29,863 
28,184 
47,119 
Depreciation and amortization
19,578 
23,317 
21,666 
Amortization of premium/discount
475 
206 
2,624 
Deferred income taxes
40,944 
(7,096)
(6,962)
Stock-based compensation
9,710 
10,558 
13,934 
Excess tax benefit of option exercises
(460)
(1,271)
(2,590)
Loss on impairment of student loans receivable
1,300 
2,400 
1,998 
Net gain (loss) on marketable securities
91 
(34)
(63)
Loss on termination of leased space
17,047 
6,470 
328 
Loss on impairment of fixed assets
44,949 
7,028 
751 
Changes in operating assets and liabilities:
 
 
 
Restricted cash
7,913 
11,042 
10,048 
Accounts receivable
(32,383)
(27,323)
(15,973)
Prepaid expenses and other current assets
(14,446)
659 
(2,607)
Student loans receivable
1,139 
809 
291 
Other long-term assets
(2,845)
266 
(412)
Accounts payable and accrued liabilities
1,104 
(12,102)
13,220 
Deferred revenue and student deposits
(19,170)
(24,411)
(41,607)
Other liabilities
(7,952)
(3,754)
(184)
Uncertain tax position
284 
568 
(1,878)
Net cash provided by operating activities
26,715 
25,219 
85,586 
Cash flows from investing activities
 
 
 
Capital expenditures
(2,477)
(11,429)
(14,825)
Purchases of investments
(20,280)
(87,933)
(26,759)
Non-operating restricted cash
(6,665)
(30)
0 
Capitalized costs for intangible assets
(2,153)
(3,634)
(19,563)
Sales and maturities of investments
76,197 
70,000 
176,343 
Net cash provided by (used in) investing activities
44,622 
(33,026)
115,196 
Cash flows from financing activities
 
 
 
Proceeds from exercise of stock options
284 
3,108 
10,464 
Tax withholdings related to net exercise of stock options
0 
0 
(9,170)
Excess tax benefit of option exercises
460 
1,271 
2,590 
Proceeds from the issuance of stock under employee stock purchase plan
261 
0 
1,234 
Proceeds from the exercise of warrants
0 
0 
231 
Tax withholding on issuance of stock awards
(1,341)
(2,095)
(1,080)
Sale Leaseback Transaction, Gross Proceeds, Financing Activities
4,141 
0 
0 
Repurchase of common stock
0 
0 
(201,496)
Net cash provided by (used in) financing activities
3,805 
2,284 
(197,227)
Net increase (decrease) in cash and cash equivalents
75,142 
(5,523)
3,555 
Cash and cash equivalents at beginning of period
207,003 
212,526 
208,971 
Cash and cash equivalents at end of period
282,145 
207,003 
212,526 
Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
198 
128 
146 
Cash paid for income taxes
6,136 
15,534 
38,642 
Supplemental disclosure of non-cash transactions:
 
 
 
Equipment included in accounts payable and accrued liabilities
$ 4,160 
$ 109 
$ 136 
Nature of Business
Nature of Business
Nature of Business
Bridgepoint Education, Inc. (together with its subsidiaries, the “Company”), incorporated in 1999, is a provider of postsecondary education services. Its wholly-owned subsidiaries, Ashford University® and University of the RockiesSM, are regionally accredited academic institutions that offer associate's, bachelor's, master's and doctoral programs online, as well as at their traditional campuses located in Iowa and Colorado, respectively.
In the third quarter of 2015, the Company announced that Ashford University's campus in Iowa will be closing after the 2015-2016 academic year, following the implementation of a one-year teach-out plan. For further information, refer to Note 3, “Restructuring and Impairment Charges.”
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of Bridgepoint Education, Inc. and its wholly-owned subsidiaries. Intercompany transactions have been eliminated in consolidation.
Use of Estimates
The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates.
Reclassifications
Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. During 2015, the Company decided to separately show a restructuring and impairment charges line item on the Company's consolidated statements of income for each of the periods presented and has therefore reclassified certain amounts for the years ended December 31, 2014 and 2013 to this line. These reclassifications had no effect on previously reported results of operations or retained earnings. For further information, refer to Note 3, “Restructuring and Impairment Charges.”
Cash and Cash Equivalents
Cash and cash equivalents is comprised of cash and other short-term highly liquid investments that are readily convertible into known amounts of cash. The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
Restricted Cash
The Company's restricted cash is primarily held in money market accounts, and is excluded from cash and cash equivalents on the Company's consolidated balance sheets and statements of cash flows. The majority of restricted cash represents funds held for students from Title IV financial aid program funds that result in credit balances on a student’s account. Changes in this restricted cash are included in the Company's condensed consolidated statements of cash flows as cash flows from operating activities. To a lesser extent, restricted cash also represents amounts held as collateral for letters of credit. Changes in this restricted cash are included in the Company's condensed consolidated statements of cash flows as cash flows from investing activities.
Investments
As of December 31, 2015, the Company held short and long-term investments that consisted of mutual funds, corporate notes and bonds and certificates of deposit. The Company's investments are denominated in U.S. dollars, are investment grade and are readily marketable. The Company considers as current assets those investments which will mature or are likely to be sold in less than one year.
The Company classifies its investments as either trading, available-for-sale or held-to-maturity. Trading securities are those bought and held principally to sell in the short-term, with gains or losses from changes in fair value flowing through current earnings. Available-for-sale securities are carried at fair value as determined by quoted market prices, with unrealized gains and losses, net of tax, reported as a separate component of comprehensive income and stockholders’ equity. Held-to-maturity securities would be carried at amortized cost. Amortization of premiums, accretion of discounts, interest, and realized gains and losses are included in other income, net in the consolidated statement of income.
The Company regularly monitors and evaluates the realizable value of its investments. If events and circumstances indicate that a decline in the value of these assets has occurred and is other-than-temporary, the Company would record a charge to other income, net in the consolidated statement of income.
Deferred Compensation
The Company has a deferred compensation plan, into which certain members of management are eligible to defer a maximum of 80% of their regular compensation and a maximum of 100% of their incentive compensation. The amounts deferred by the participant under this plan are credited with earnings or losses based upon changes in values of participant elected notional investments. Each participant is fully vested in the participant amounts deferred. The Company may make contributions that will generally vest according to a four-year vesting schedule. After four years of service, participants become 100% vested in the employer contributions upon reaching normal retirement age, death, disability or a change in control. The Company's obligations under the deferred compensation plan totaled $1.2 million and $1.0 million as of December 31, 2015 and 2014, respectively, and are included in other liabilities in the consolidated balance sheets.
Fair Value Measurements
The Company uses the three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: (i) Level 1, defined as observable inputs such as quoted prices in active markets; (ii) Level 2, defined as inputs other than quoted prices in active markets that are either observable directly or indirectly, through market corroboration, for substantially the full term of the financial instrument; and (iii) Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable consists of student accounts receivable, which represent amounts due for tuition, course digital materials, technology fees and other fees from currently enrolled and former students. Students generally fund their education through grants and/or loans under various Title IV programs, tuition assistance from military and corporate employers or personal funds. Payments are due on the respective course start date and are considered past due dependent upon the student's payment terms. In general, an account is considered delinquent 120 days subsequent to the course start date.
Accounts receivable are stated at the amount management expects to collect from outstanding balances. For accounts receivable, an allowance for doubtful accounts is estimated by management and is principally based on historical collection experience as well as (i) an assessment of individual accounts receivable over a specific aging and amount, (ii) consideration of the nature of the receivable accounts and (iii) potential changes in the business or economic environment. The provision for bad debt is recorded within instructional costs and services in the consolidated statements of income. The Company writes off uncollectable accounts receivable when the student account is deemed uncollectable by internal collection efforts or by a third-party collection agency.
Student Loans Receivable and Loan Loss Reserves
Student loans receivable consist of loans to qualified students and have a repayment period of 10 years from the date of graduation or withdrawal from the Company's institutions. The interest rate charged on student loans is a fixed rate of either 4.5% or 0.0% depending upon the repayment plan selected. If the student selects the rate of 0.0%, the student must pay $50 per month on the loan while enrolled in school and during the six months of grace period (after graduation or withdrawal) before the repayment period begins. On the 0.0% student loans, the Company imputes interest using the rate that would be used in a market transaction with similar terms. Interest income on student loans is recognized using the effective interest method and is recorded within other income in the consolidated statements of income. There was an immaterial amount of revenue recognized related to student loans during each of the years ended December 31, 2015, 2014 and 2013, respectively.
Student loans receivable are stated at the amount management expects to collect from outstanding balances. For tuition related student loan receivables, the Company estimates an allowance for doubtful accounts, similar to that of accounts receivable, based on (i) an assessment of individual loans receivable over a specific aging and amount, (ii) consideration of the nature of the receivable accounts, (iii) potential changes in the business or economic environment and (iv) related FICO scores and other industry metrics. The related provision for bad debts is recorded within instructional costs and services in the consolidated statements of income.
For non-tuition related student loans, the Company utilizes an impairment methodology. Under this methodology, management determines whether a loan would be impaired if the Company will be unable to collect all amounts due in accordance with the contractual terms of the individual loan agreement. This assessment is based on an analysis of several factors, including aging history and delinquency trending, the risk characteristics, credit quality and loan performance of the specific loans, and current economic conditions and industry trends. Credit quality is assessed at the outset of a loan, based upon the applicant's FICO score during the loan application process. The Company considers loans to be impaired when they reach a delinquency status that requires specialized collection efforts. The Company defines delinquency for loans as those students whose last activity is more than 120 days old. The Company records a loss reserve for the full book value of the impaired loans. For the years ended December 31, 2015, and 2014 there was $1.3 million and $2.4 million recorded for loan loss reserves, respectively. The loan loss reserve is maintained at a level deemed adequate by management based on a periodic analysis of the individual loans and is recorded within instructional costs and services in the consolidated statements of income.
Property and Equipment
Property and equipment are recognized at cost less accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives of the related assets as follows:
Buildings
39 years
Furniture and office equipment
3 - 7 years
Software
3 - 5 years
Vehicles
5 years

Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful lives of the assets. Upon the retirement or disposition of property and equipment, the related cost and accumulated depreciation is removed and a gain or loss is recorded in the consolidated statements of income. Repairs and maintenance costs are expensed in the period incurred.
Leases
Leases are evaluated and classified as either operating or capital leases. Leased property and equipment meeting certain criteria are capitalized, and the present value of the related lease payments is recognized as a liability on the consolidated balance sheets. Amortization of capitalized leased assets is computed on the straight-line method over the term of the lease or the life of the related asset, whichever is shorter.
If the Company receives tenant allowances from the lessor for certain improvements made to the leased property, these allowances are capitalized as leasehold improvements and a long-term liability is established. The long-term liability is amortized on a straight-line basis over the corresponding lease term. The Company records rent expense on a straight-line basis over the initial term of a lease. The difference between the rent payment and the straight-line rent expense is recorded as either a short-term or long-term liability.
The Company recognizes liabilities for exit and disposal activities on non-cancelable lease obligations at fair value in the period the liability is incurred. For the non-cancelable lease obligations, the Company records the obligation when the contract is terminated in accordance with the contract terms.
Impairment of Long-Lived Assets
The Company assesses potential impairment to its long-lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recorded if the carrying amount of the long-lived asset is not recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds fair value and is recorded as a reduction in the carrying value of the related asset and an expense to operating results.
Goodwill and Other Intangible Assets
The Company tests goodwill and indefinite-lived intangible assets for impairment annually in the fourth quarter of each fiscal year, or more frequently if events and circumstances warrant.
The Company adopted accounting guidance which simplifies how an entity tests goodwill for impairment. The Company first assesses qualitative factors, such as deterioration in general economic conditions or negative company financial performance, to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. The Company's assessment of goodwill during the fourth quarter of fiscal 2015 indicated that it was not more likely than not that the fair value of a reporting unit is less than its carrying amount, and therefore, goodwill was not impaired. There have been no related impairment losses recognized by the Company for any periods presented. If negative qualitative indicators had been noted above, the Company would then need to assess the fair value of its reporting units to determine whether they were in excess of the carrying values.
To evaluate the impairment of the indefinite-lived intangible assets, the Company assessed the fair value of the assets to determine whether they were in excess of the carrying values. Determining the fair value of indefinite-lived intangible asset is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions are inherently uncertain, and can include such items as growth rates used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and a determination of appropriate market comparables. The Company's assessment of indefinite-lived intangible assets during the fourth quarter of fiscal 2015 did not result in any impairment. There have been no impairment losses for indefinite-lived intangibles recognized by the Company for any periods presented.
The Company also has definite-lived intangible assets, which primarily consist of purchased intangibles and capitalized curriculum development costs. The definite-lived intangible assets are recognized at cost less accumulated amortization. Amortization is computed using the straight-line method based on estimated useful lives of the related assets.
Revenue and Deferred Revenue
The Company recognizes revenue when persuasive evidence of an arrangement exists, services have been rendered or delivery has occurred, its fees or price is fixed or determinable, and collectibility is reasonably assured. The Company's revenue consists of tuition, technology fees, course digital materials and other miscellaneous fees. Tuition revenue is deferred and recognized on a straight-line basis over the applicable period of instruction net of scholarships and expected refunds, with the exception of an online student's first course per degree level at Ashford University. An online student's first course per degree level at Ashford University falls under a three-week conditional admission period in which the revenue is deferred until the student matriculates into the course.
The Company's institutions' online students generally enroll in a program that encompasses a series of five to six-week courses that are taken consecutively over the length of the program. With the exception of those students under conditional admission, the online students are billed on a payment period basis on the first day of class. The Company's institutions' campus-based students enroll in a program that encompasses a series of nine-week or 16-week courses. Campus-based students are billed at the beginning of each term. The Company assesses collectibility at the start of a student’s payment period for the courses in that payment period (generally five courses for undergraduates and four courses for graduates).
If a student's attendance in a class precedes the receipt of cash from the student's source of funding, the Company establishes an account receivable and corresponding deferred revenue in the amount of the tuition due for that payment period. Cash received either directly from the student or from the student's source of funding reduces the balance of accounts receivable due from the student. Financial aid from sources such as the federal government's Title IV programs pertains to the online student's award year and is generally divided into two disbursement periods. As such, each disbursement period may contain funding for up to four courses. Financial aid disbursements are typically received during the online student's attendance in the first or second course. Since the majority of disbursements cover more courses than for which a student is currently enrolled, the amount received in excess effectively represents a prepayment from the online student for up to four courses. At the end of each accounting period, the deferred revenue and student deposits and related account receivable balances are reduced to present amounts attributable to the current course.
Students under conditional admission are not obligated for payment until after their conditional admission period has lapsed, so there is no related refund. For all subsequent courses, the Company records a provision for expected refunds and reduces revenue for the amount that is expected to be subsequently refunded. Provisions for expected refunds have not been material to any period presented. If a student withdraws from a program prior to a specified date, a portion of such student's tuition is refunded, subject to certain state requirements that require a pro rata refund. The Company reassess collectibility throughout the period revenue is recognized by the Company's institutions, on a student-by-student basis. The Company reassesses collectibility based upon new information and changes in facts and circumstances relevant to a student's ability to pay. For example, the Company reassesses collectibility when a student drops from the institution (i.e., is no longer enrolled) and when a student attends a course that was not included in the initial assessment of collectibility at the start of a student’s payment period.
In certain cases, the Company's institutions' provide scholarships to students for various programs. Scholarships issued by the universities are recorded in association with the related specific course, term or payment period. Scholarships are generally deferred and recognized against revenue over the course term. Incentive-based scholarships, such as the Leadership Development Grant (“LDG”) and Alumni Scholarship are recognized against revenue over the period of benefit to the student.
Ashford University records revenue from technology fee on a per course charge basis. The per course technology fee revenue for Ashford University is recognized on a straight-line basis over the applicable period of instruction. University of the Rockies records revenue from technology fees as one-time start up fees charged to each new online student (other than military, scholarship students or certain corporate reimbursement students), and then recognizes that revenue ratably over the average expected enrollment of a student. The average expected enrollment of the student was estimated each quarter based upon historical duration of attendance and qualitative factors as deemed necessary.
Other miscellaneous fees include fees for course content and textbooks and other services, such as commencements, and are recognized upon delivery of the goods or when the related service is performed.
Workers Compensation
The Company records a gross liability for estimated workers compensation claims, incurred but not yet reported, as of each balance sheet date. The Company also records the gross insurance recoverable due for individual claim amounts. This is recorded as an other asset and as an equal accrued liability. The stop-loss premium is determined annually, but invoiced and paid on a quarterly basis. The related insurance premiums are expensed ratably over the coverage period.
Income Taxes
The Company accounts for its income taxes using the liability method whereby deferred tax assets and liabilities are determined based on temporary differences between the bases used for financial reporting and income tax reporting purposes. Deferred income taxes are provided based on the enacted tax rates expected to be in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for deferred tax assets if it is more-likely-than-not that the Company will not realize those tax assets through future operations.
The Company evaluates and accounts for uncertain tax positions using a two-step approach. Recognition (step one) occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination. Measurement (step two) determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Derecognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained.
Stock-Based Compensation
Stock-based compensation expense is measured at the grant date fair value of the award and is expensed over the vesting period. The Company estimates the fair value of stock options on the grant date using the Black-Scholes option pricing model. The Company estimates the fair value of its performance stock units (“PSUs”) on the grant date using a Monte Carlo simulation model. Determining the fair value of stock-based awards at the grant date under these models requires judgment, including estimating volatility, employee stock option exercise behaviors and forfeiture rates. The assumptions used in calculating the fair value of stock-based awards represent the Company's best estimates, but these estimates involve inherent uncertainties and the application of management judgment. The fair value of the Company's restricted stock units (“RSUs”) is based on the market price of the Company's common stock on the date of grant.
The amount of stock-based compensation expense recognized during a period is based on the portion of the awards that are ultimately expected to vest. The Company estimates award forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company's equity incentive plans require that stock option awards have an exercise price that equals or exceeds the closing price of the Company's common stock on the date of grant.
Stock-based compensation expense for stock-based awards is recorded in the consolidated statement of income, net of estimated forfeitures, using the graded-vesting method over the requisite service periods of the respective stock awards. The requisite service period is generally the period over which an employee is required to provide service to the Company in exchange for the award.
Instructional Costs and Services
Instructional costs and services consist primarily of costs related to the administration and delivery of the Company's educational programs. These expenses include compensation for campus-based faculty and administrative personnel, costs associated with online faculty, curriculum and new program development costs, financial aid processing costs, technology license costs, bad debt expense and costs associated with other support groups that provide services directly to the students. Instructional costs and services also include an allocation of information technology, facility, depreciation and amortization costs.
Admissions Advisory and Marketing
Admissions advisory and marketing costs include compensation of personnel engaged in marketing and recruitment, as well as costs associated with purchasing leads and producing marketing materials. Such costs are generally affected by the cost of advertising media and leads, the efficiency of the Company's marketing and recruiting efforts, compensation for the Company's enrollment personnel and expenditures on advertising initiatives for new and existing academic programs. Admissions advisory and marketing costs also include an allocation of information technology, facility, depreciation and amortization costs.
Advertising costs, a subset of admissions advisory and marketing costs, consists primarily of marketing leads and other branding and promotional activities. These advertising activities are expensed as incurred, or the first time the advertising takes place, depending on the type of advertising activity. Advertising costs were $68.4 million, $89.0 million and $76.5 million for the years ended December 31, 2015, 2014 and 2013, respectively.
General and Administrative
General and administrative expenses include compensation of employees engaged in corporate management, finance, human resources, compliance and other corporate functions. General and administrative expenses also include professional services fees, travel and entertainment expenses and an allocation of information technology, facility, depreciation and amortization costs.
Restructuring and Impairment Charges
Restructuring and impairment charges are primarily comprised of i) charges related to the write off of certain fixed assets and assets abandoned, ii) student transfer agreement costs, iii) severance costs related to headcount reductions made in connection with restructuring plans, iv) estimated lease losses related to facilities vacated or consolidated under restructuring plans, and v) the impairment of capitalized software costs.
Earnings Per Share
Basic earnings per common share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net income available to common stockholders by the sum of (i) the weighted average number of common shares outstanding during the period and (ii) potentially dilutive securities outstanding during the period, if the effect is dilutive. Potentially dilutive common shares consist of incremental shares of common stock issuable upon the exercise of the stock options and warrants and upon the settlement of RSUs and PSUs.
Segment Information
The Company operates in one reportable segment as a single educational delivery operation using a core infrastructure that serves the curriculum and educational delivery needs of both its campus-based and online students regardless of geography. The Company's chief operating decision maker, its CEO and President, manages the Company's operations as a whole, and no revenue, expense or operating income information is evaluated by the chief operating decision maker on any component level.
Comprehensive Income
Comprehensive income consists of net income and other gains and losses affecting stockholders’ equity that, under GAAP, are excluded from net income. For the year ended December 31, 2015, such items consisted of unrealized gains and losses on investments. The following table summarizes the components of other comprehensive gain (loss) and the related tax effects for the years ended December 31, 2015, 2014 and 2013 (in thousands):
 
December 31, 2015
 
Before-Tax Amount
 
Tax Effect
 
Net-of-Tax Amount
Unrealized gains on investments
$
125

 
$
(49
)
 
$
76

 
 
 
 
 
 
 
December 31, 2014
 
Before-Tax Amount
 
Tax Effect
 
Net-of-Tax Amount
Unrealized losses on investments
$
(359
)
 
$
136

 
$
(223
)
 
 
 
 
 
 
 
December 31, 2013
 
Before-Tax Amount
 
Tax Effect
 
Net-of-Tax Amount
Unrealized losses on investments
$
(280
)
 
$
106

 
(174
)

The Company reclassified an immaterial amount out of other comprehensive income for each of the years ended December 31, 2014 and 2013, respectively, relating to the net realized gain on the sale of securities. There was no such reclassification during the year ended December 31, 2015.
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) 605, Revenue Recognition. This literature is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The accounting guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This standard can be adopted using one of two retrospective application methods. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date, which defers the effective date of ASU 2014-09 by one year, to fiscal years beginning after December 15, 2017. The Company continues to evaluate the impacts, if any, the adoption of ASU 2014-09 and ASU 2015-14 will have on the Company's financial position or results of operations.
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The amendments are effective for periods ending after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company adopted ASU 2014-15 effective January 1, 2015, and the adoption did not have a material effect on its consolidated financial statements.
In January 2015, the FASB issued ASU 2015-01, Income Statement—Extraordinary and Unusual Items (Subtopic 225-20). This update simplifies the income statement presentation requirements and eliminates from GAAP the concept of extraordinary items, and essentially deletes the requirements in Subtopic 225-20. However, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The amendments may be applied prospectively, or retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company adopted ASU 2015-01 effective April 1, 2015. The adoption of ASU 2015-01 does not have a material effect on the Company’s consolidated financial statements.
In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740). The amendments in this Update are intended to simplify 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. Prior to this amendment, Topic 740, Income Taxes, requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. Deferred tax liabilities and assets are classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. Deferred tax liabilities and assets that are not related to an asset or liability for financial reporting are classified according to the expected reversal date of the temporary difference. The amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company adopted the guidance prospectively as of December 31, 2015 and all current deferred tax assets have been classified as noncurrent as of that date.
In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10). The amendments in this Update require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this Update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition the amendments in this Update eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities and the requirement for to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of ASU 2016-01 is not expected to have a material effect on the Company’s consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under this new guidance, as of the lease commencement date, lessees will be required to recognize the following for all leases, with the exception of short-term leases: i) a lease liability for the obligation to make lease payments arising from a lease, measured on a discounted basis; and ii) a right-of-use asset, representing the lessee’s right to use, or control the use of, a specified asset for the lease term. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a 'modified retrospective' transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. The Company is assessing the impact of adopting ASU 2016-02, but expects it to have a material effect on the Company's consolidated financial statements.
Restructuring and Impairment Charges
Restructuring and Impairment Charges
Restructuring and Impairment Charges
During the three year period ended December 31, 2015, the Company initiated various restructuring plans to better align its resources with its business strategy. The related restructuring charges are primarily comprised of (i) charges related to the write off of certain fixed assets and assets abandoned, (ii) student transfer agreement costs, (iii) severance costs related to headcount reductions made in connection with restructuring plans, (iv) estimated lease losses related to facilities vacated or consolidated under restructuring plans, and (v) the impairment of capitalized software costs. These charges were recorded in the restructuring and impairment charges line item on the Company's consolidated statements of income.
On July 7, 2015, the Company committed to the implementation of a plan to close Ashford University's campus in Clinton, Iowa (the “Clinton Campus”) following the 2015-2016 academic year, at the end of May 2016. The Ashford University Board of Trustees made the decision to close the Clinton Campus following an ongoing review of the University's strategic direction and as a result of the University's inability to meet campus enrollment requirements despite its best efforts to continue maintaining and operating the Clinton Campus. The closure of the Clinton Campus is intended to realign the Company's operations to focus on its core mission of leveraging technology to create innovative solutions that advance learning. As this closure of the Clinton Campus does not meet the criteria for discontinued operations under ASC 360, Property, Plant and Equipment, the results of operations are reported within continuing operations for all periods presented. On December 22, 2015, the Company entered into a Purchase Agreement and Escrow Instructions with Clinton Catalyst, LLC (“Catalyst”) pursuant to which the Company agreed to sell the Clinton Campus to Catalyst for $1.6 million. Simultaneously with the closing of the sale on December 29, 2015, the Company entered into a Lease Agreement with Catalyst pursuant to which the Company is leasing the Clinton Campus from Catalyst through December 31, 2016.
Primarily as a result of the planned closure of the Clinton Campus, during the year ended December 31, 2015, the Company recognized asset impairment charges of $43.3 million relating to the write-off of certain fixed assets. During the years ended December 31, 2014 and 2013, the Company recognized impairment charges of $4.6 million and $0.7 million, respectively, relating to the write-off of certain fixed assets.
With the planned closure of the Clinton Campus, ground-based Ashford University students will be provided opportunities to complete their degrees based upon their respective transfer agreements. The Company recorded restructuring charges relating to future cash expenditures for student transfer agreement costs of approximately $3.3 million during the year ended December 31, 2015. This estimate is based upon several assumptions that are subject to change, including student decisions regarding transfer. There was no such charge in years prior to the year ended December 31, 2015.
In recent years, the Company has implemented reductions in force to help better align personnel resources with the decline in enrollment. During the year ended December 31, 2015, the Company recognized $4.7 million as restructuring charges related to severance costs for wages and benefits resulting from the reductions in force. We anticipate these costs will be paid out by the end of the first quarter of 2016 from existing cash on hand. During the years ended December 31, 2014 and 2013, the Company recognized $3.6 million and $5.9 million, respectively, as restructuring charges related to severance costs for wages and benefits resulting from the reductions in force.
During the fourth quarter of 2014, the Company terminated a software development program for internal operations due to a change in the Company's operating plan. As a result, the Company recorded an asset impairment charge of $2.2 million during the year ended December 31, 2014 for previously capitalized software costs.
As part of its continued efforts to streamline operations, the Company vacated or consolidated properties in Denver and San Diego, and reassessed its obligations on non-cancelable leases. The fair value estimate of these non-cancelable leases is based on the contractual lease costs over the remaining term, partially offset by estimated future sublease rental income. The estimated rental income considers subleases the Company has executed or expects to execute, current commercial real estate market data and conditions, comparable transaction data and qualitative factors specific to the related facilities. For the year ended December 31, 2015, the Company recorded $17.0 million for lease exit costs, primarily related to properties in Denver and San Diego. For the years ended December 31, 2014 and 2013 the Company recorded $6.5 million and $0.3 million, respectively, for lease exit costs, primarily related to properties in Denver and San Diego.
The following table summarizes the amounts recorded in the restructuring and impairment charges line item on the Company's consolidated statements of income for each of the periods presented (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Asset impairment
$
43,328

 
$
4,566

 
$
748

Student transfer agreement costs
3,264

 
—

 
—

Severance costs
4,717

 
3,560

 
5,914

Lease exit and other costs
17,047

 
6,470

 
328

Capitalized software costs
—

 
2,232

 
—

Total restructuring and impairment charges
$
68,356

 
$
16,828

 
$
6,990


The following table summarizes the changes in the Company's restructuring liability by type during the three-year period ended December 31, 2015 (in thousands):
 
Asset Impairment
 
Student Transfer Agreement Costs
 
Severance Costs
 
Lease Exit and Other Costs
 
Capitalized Software Costs
 
Total
Balance at December 31, 2012
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Restructuring and impairment charges
748

 
—

 
5,914

 
328

 
—

 
6,990

Payments
—

 
—

 
(5,914
)
 
—

 
—

 
(5,914
)
Non-cash transaction
(748
)
 
—

 
—

 
—

 
—

 
(748
)
Balance at December 31, 2013
—

 
—

 
—

 
328

 
—

 
328

Restructuring and impairment charges
4,566

 
—

 
3,560

 
6,470

 
2,232

 
16,828

Payments
—

 
—

 
(2,700
)
 
(218
)
 
—

 
(2,918
)
Non-cash transaction
(4,566
)
 
—

 
—

 
—

 
(2,232
)
 
(6,798
)
Balance at December 31, 2014
—

 
—

 
860

 
6,580

 
—

 
7,440

Restructuring and impairment charges
43,328

 
3,264

 
4,717

 
17,047

 
—

 
68,356

Payments
—

 
(40
)
 
(3,833
)
 
(9,706
)
 
—

 
(13,579
)
Non-cash transaction
(43,328
)
 
—

 
—

 
—

 
—

 
(43,328
)
Balance at December 31, 2015
$
—

 
$
3,224

 
$
1,744

 
$
13,921

 
$
—

 
$
18,889

Investments
Investments
Investments
The following table summarizes the fair value information of short and long-term investments as of December 31, 2015 and 2014, respectively (in thousands):
 
December 31, 2015
 
Level 1
 
Level 2
 
Level 3
 
Total
Mutual funds
$
1,314

 
$
—

 
$
—

 
$
1,314

Corporate notes and bonds
—

 
40,843

 
—

 
40,843

Certificates of deposit
—

 
25,000

 
—

 
25,000

Total
$
1,314

 
$
65,843

 
$
—

 
$
67,157

 
December 31, 2014
 
Level 1
 
Level 2
 
Level 3
 
Total
Mutual funds
$
1,071

 
$
—

 
$
—

 
$
1,071

Corporate notes and bonds
—

 
62,550

 
—

 
62,550

U.S. government and agency securities
—

 
34,987

 
—

 
34,987

Certificates of deposit
—

 
25,000

 
—

 
25,000

Total
$
1,071

 
$
122,537

 
$
—

 
$
123,608


The tables above include amounts related to investments classified as other investments, such as certificates of deposit, which are carried at amortized cost. The amortized cost of such investments approximated fair value at each balance sheet date. The assumptions used in these fair value estimates are considered as other observable inputs and are therefore categorized as Level 2 measurements under the accounting guidance. The Company's Level 2 investments are valued using readily available pricing sources that utilize market observable inputs, including the current interest rate for similar types of instruments. There was one transfer from Level 2 into Level 1 during the year ended 2014, as a result of the Company evaluating the related mutual funds as having readily observable market prices.
The following table summarizes the differences between amortized cost and fair value of short and long-term investments as of December 31, 2015 and 2014, respectively (in thousands):
 
December 31, 2015
 
 
 
 
 
Gross unrealized
 
 
 
Maturities
 
Amortized Cost
 
Gain
 
Loss
 
Fair Value
Short-term
 
 
 
 
 
 
 
 
 
Corporate notes and bonds
1 year or less
 
18,113

 
—

 
(40
)
 
18,073

Long-term
 
 
 
 
 
 
 
 
 
Corporate notes and bonds
3 years or less
 
22,887

 
—

 
(117
)
 
22,770

Certificates of deposit
3 years or less
 
25,000

 
—

 
—

 
25,000

Total
 
 
$
66,000

 
$
—

 
$
(157
)
 
$
65,843

The above table does not include $1.3 million for mutual funds for December 31, 2015, which are recorded as trading securities.
 
December 31, 2014
 
 
 
 
 
Gross unrealized
 
 
 
Maturities
 
Amortized Cost
 
Gain
 
Loss
 
Fair Value
Short-term
 
 
 
 
 
 
 
 
 
Corporate notes and bonds
1 year or less
 
$
10,947

 
$
33

 
$
—

 
$
10,980

Long-term
 
 
 
 
 
 
 
 
 
Corporate notes and bonds
3 years or less
 
51,874

 
—

 
(304
)
 
51,570

U.S. government and agency securities
3 years or less
 
35,000

 
—

 
(13
)
 
34,987

Certificate of deposit
3 years or less
 
25,000

 
—

 
—

 
25,000

Total
 
 
$
122,821

 
$
33

 
$
(317
)
 
$
122,537


The above table does not include $1.1 million for mutual funds for December 31, 2014, which are recorded as trading securities.
As of December 31, 2015, there were ten investments that were in an unrealized loss position for less than 12 months. There were no investments that were in an unrealized loss position for greater than 12 months. There was no impairment considered other-than-temporary, as it is more likely than not the Company will hold the securities until maturity or a recovery of the cost basis. The Company accumulates unrealized gains and losses on the available-for-sale debt securities, net of tax, in accumulated other comprehensive gain (loss) in the stockholders’ equity section of the Company's balance sheets. As of December 31, 2014, there were no investments that were in an unrealized loss position for either less than or greater than 12 months.
Accounts Receivable
Accounts Receivables
Accounts Receivable
Accounts receivable, net, consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Accounts receivable
$
34,205

 
$
48,841

Less allowance for doubtful accounts
10,114

 
27,567

Accounts receivable, net
$
24,091

 
$
21,274


There are an immaterial amount of accounts receivable at each balance sheet date with a payment due date of greater than one year.
The following table presents the changes in the allowance for doubtful accounts for accounts receivable for the periods indicated (in thousands):
 
Beginning
Balance
 
Charged to
Expense
 
Deductions(1)
 
Ending
Balance
Allowance for doubtful accounts receivable:
 
 
 
 
 
 
 
For the year ended December 31, 2015
$
27,567

 
$
29,782

 
$
(47,235
)
 
$
10,114

For the year ended December 31, 2014
26,901

 
27,853

 
(27,187
)
 
27,567

For the year ended December 31, 2013
31,466

 
46,851

 
(51,416
)
 
26,901

(1)
Deductions represent accounts written off, net of recoveries.
Student Loans Receivable
Student loans receivable, net, consist of the following (in thousands):
 
As of December 31,
Short-term:
2015
 
2014
   Student loans receivable (non-tuition related)
$
310

 
$
509

   Student loans receivable (tuition related)
555

 
626

   Current student loans receivable
865

 
1,135

Less allowance for doubtful accounts
90

 
132

Student loans receivable, net
$
775

 
$
1,003

 
 
 
 
 
As of December 31,
Long-term:
2015
 
2014
   Student loans receivable (non-tuition related)
$
3,314

 
$
4,805

   Student loans receivable (tuition related)
4,943

 
6,068

   Non-current student loans receivable
8,257

 
10,873

Less allowance for doubtful accounts
863

 
1,363

Student loans receivable, net
$
7,394

 
$
9,510


Student loans receivable is presented net of any related discount, and the balances approximated fair value at each balance sheet date. The Company estimates the fair value of the student loans receivable by discounting the future cash flows using an interest rate of 4.5%, which approximates the interest rates used in similar arrangements. The assumptions used in this estimate are considered unobservable inputs and are therefore categorized as Level 3 measurements under the accounting guidance.
The following table presents the changes in the allowance for doubtful accounts for student loans receivable (tuition related) for the periods indicated (in thousands):
 
Beginning
Balance
 
Charged to
Expense
 
Deductions(1)
 
Ending
Balance
Allowance for doubtful student loans receivable:
 
 
 
 
 
 
 
For the year ended December 31, 2015
$
1,495

 
$
81

 
$
(623
)
 
$
953

For the year ended December 31, 2014
2,144

 
331

 
(980
)
 
1,495

For the year ended December 31, 2013
1,895

 
268

 
(19
)
 
2,144

(1)
Deductions represent accounts written off, net of recoveries.
For the non-tuition related student loans receivable, the Company monitors the credit quality using credit scores, aging history and delinquency trending. The loan reserve methodology is reviewed on a quarterly basis. Delinquency is the main factor in determining if a loan is impaired. If a loan were determined to be impaired, interest would no longer accrue. For the years ended December 31, 2015, December 31, 2014 and December 31, 2013, there was $1.3 million, $2.4 million and $2.0 million of loans that were impaired, respectively. As of December 31, 2015, $0.4 million of loans had been placed on non-accrual status.
As of December 31, 2015, the repayment status of gross student loans receivable was as follows (in thousands):
Less than 120 days
$
10,865

From 120 - 269 days
351

Greater than 270 days
740

Total gross student loans receivable
11,956

Less: Amounts reserved or impaired
(1,398
)
Less: Discount on student loans receivable
(2,389
)
Total student loans receivable, net
$
8,169

Student Loans Receivable
Student Loans Receivable
Accounts Receivable
Accounts receivable, net, consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Accounts receivable
$
34,205

 
$
48,841

Less allowance for doubtful accounts
10,114

 
27,567

Accounts receivable, net
$
24,091

 
$
21,274


There are an immaterial amount of accounts receivable at each balance sheet date with a payment due date of greater than one year.
The following table presents the changes in the allowance for doubtful accounts for accounts receivable for the periods indicated (in thousands):
 
Beginning
Balance
 
Charged to
Expense
 
Deductions(1)
 
Ending
Balance
Allowance for doubtful accounts receivable:
 
 
 
 
 
 
 
For the year ended December 31, 2015
$
27,567

 
$
29,782

 
$
(47,235
)
 
$
10,114

For the year ended December 31, 2014
26,901

 
27,853

 
(27,187
)
 
27,567

For the year ended December 31, 2013
31,466

 
46,851

 
(51,416
)
 
26,901

(1)
Deductions represent accounts written off, net of recoveries.
Student Loans Receivable
Student loans receivable, net, consist of the following (in thousands):
 
As of December 31,
Short-term:
2015
 
2014
   Student loans receivable (non-tuition related)
$
310

 
$
509

   Student loans receivable (tuition related)
555

 
626

   Current student loans receivable
865

 
1,135

Less allowance for doubtful accounts
90

 
132

Student loans receivable, net
$
775

 
$
1,003

 
 
 
 
 
As of December 31,
Long-term:
2015
 
2014
   Student loans receivable (non-tuition related)
$
3,314

 
$
4,805

   Student loans receivable (tuition related)
4,943

 
6,068

   Non-current student loans receivable
8,257

 
10,873

Less allowance for doubtful accounts
863

 
1,363

Student loans receivable, net
$
7,394

 
$
9,510


Student loans receivable is presented net of any related discount, and the balances approximated fair value at each balance sheet date. The Company estimates the fair value of the student loans receivable by discounting the future cash flows using an interest rate of 4.5%, which approximates the interest rates used in similar arrangements. The assumptions used in this estimate are considered unobservable inputs and are therefore categorized as Level 3 measurements under the accounting guidance.
The following table presents the changes in the allowance for doubtful accounts for student loans receivable (tuition related) for the periods indicated (in thousands):
 
Beginning
Balance
 
Charged to
Expense
 
Deductions(1)
 
Ending
Balance
Allowance for doubtful student loans receivable:
 
 
 
 
 
 
 
For the year ended December 31, 2015
$
1,495

 
$
81

 
$
(623
)
 
$
953

For the year ended December 31, 2014
2,144

 
331

 
(980
)
 
1,495

For the year ended December 31, 2013
1,895

 
268

 
(19
)
 
2,144

(1)
Deductions represent accounts written off, net of recoveries.
For the non-tuition related student loans receivable, the Company monitors the credit quality using credit scores, aging history and delinquency trending. The loan reserve methodology is reviewed on a quarterly basis. Delinquency is the main factor in determining if a loan is impaired. If a loan were determined to be impaired, interest would no longer accrue. For the years ended December 31, 2015, December 31, 2014 and December 31, 2013, there was $1.3 million, $2.4 million and $2.0 million of loans that were impaired, respectively. As of December 31, 2015, $0.4 million of loans had been placed on non-accrual status.
As of December 31, 2015, the repayment status of gross student loans receivable was as follows (in thousands):
Less than 120 days
$
10,865

From 120 - 269 days
351

Greater than 270 days
740

Total gross student loans receivable
11,956

Less: Amounts reserved or impaired
(1,398
)
Less: Discount on student loans receivable
(2,389
)
Total student loans receivable, net
$
8,169

Prepaid Expense and Other Current Assets
Prepaid Expenses and Other Current Assets
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Prepaid expenses
$
7,005

 
$
8,500

Prepaid licenses
5,221

 
5,598

Prepaid income taxes
—

 
2,945

Income tax receivable
20,169

 
—

Prepaid insurance
1,619

 
1,508

Insurance recoverable
16,659

 
1,440

Interest receivable
299

 
424

Other current assets
1,220

 
2,403

Total prepaid expenses and other current assets
$
52,192

 
$
22,818

Property and Equipment, Net
Property and Equipment, Net
Property and Equipment, Net
Property and equipment, net, consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Land
$
—

 
$
7,091

Buildings
—

 
29,540

Furniture and office equipment
63,354

 
81,030

Software
12,605

 
12,454

Leasehold improvements
11,136

 
21,096

Vehicles
22

 
147

Total property and equipment
87,117

 
151,358

Less accumulated depreciation and amortization
(65,375
)
 
(73,139
)
Total property and equipment, net
$
21,742

 
$
78,219


Included in the table above is $4.1 million as of December 31, 2015, which represents equipment sold and subsequently leased-back by the Company prior to December 31, 2015. These amounts are classified as financing activities on the Consolidated Statements of Cash Flows as “Proceeds from failed sale-leaseback transaction.”
Depreciation and amortization expense associated with property and equipment totaled $13.9 million, $17.6 million and $18.2 million for the years ended December 31, 2015, 2014 and 2013, respectively.
Goodwill and Intangibles, Net
Goodwill and Intangibles, Net
Goodwill and Intangibles, Net
Goodwill and intangibles, net, consist of the following (in thousands):
 
December 31, 2015
Definite-lived intangible assets:
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Capitalized curriculum costs
$
20,323

 
$
(13,954
)
 
$
6,369

Purchased intangible assets
15,850

 
(3,521
)
 
12,329

     Total definite-lived intangible assets
$
36,173

 
$
(17,475
)
 
$
18,698

Goodwill and indefinite-lived intangibles
 
 
 
 
2,567

Total goodwill and intangibles, net
 
 
 
 
$
21,265

 
 
 
 
 
 
 
December 31, 2014
Definite-lived intangible assets:
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Capitalized curriculum costs
$
18,174

 
$
(9,526
)
 
$
8,648

Purchased intangible assets
15,850

 
(2,290
)
 
13,560

     Total definite-lived intangible assets
$
34,024

 
$
(11,816
)
 
$
22,208

Goodwill and indefinite-lived intangibles
 
 
 
 
2,567

Total goodwill and intangibles, net
 
 
 
 
$
24,775


Goodwill and indefinite lived-intangibles includes the goodwill resulting from prior period acquisitions and the indefinite lived-intangibles attributable to the accreditation of the Company's institutions.
In October 2013, the Company entered into an agreement (the “Forbes Agreement”) to license certain trademarks and print and online content, as well as other intellectual property, for use in Ashford University's bachelor’s and master’s business programs. The Forbes Agreement has an initial 12-year term, with an option to renew. During the fourth quarter of 2013, the Company made a payment of $15 million, that was recorded as an intangible asset, and which will be amortized over the life of the Forbes Agreement. The Company began paying royalties in 2014, based on a percentage of annual revenues attributable to Ashford University’s business-related programs, subject to a $2.5 million annual minimum which is recorded within instructional costs and services on the income statement. The Company does not plan to capitalize any future costs to renew or extend the term of the acquired intangible assets.
For the years ended December 31, 2015, 2014 and 2013, amortization expense was $5.7 million, $5.7 million and $3.4 million, respectively. The following table summarizes the estimated remaining amortization expense as of each fiscal year ended below (in thousands):
Year Ended December 31,
 
 
2016
$
4,671

2017
3,183

2018
2,104

2019
1,342

2020
1,232

Thereafter
6,166

Total future amortization expense
$
18,698

Accrued Liabilities
Accrued Liabilities
Accrued Liabilities
Accrued liabilities consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Accrued salaries and wages
$
10,476

 
$
8,250

Accrued bonus
4,295

 
2,720

Accrued vacation
9,628

 
9,771

Accrued litigation and fees
720

 
542

Accrued expenses
17,227

 
18,223

Rent liability
13,406

 
8,528

Accrued insurance liability
18,666

 
2,920

Accrued income taxes payable
16

 
449

Total accrued liabilities
$
74,434

 
$
51,403

Deferred Revenue and Student Deposits
Deferred Revenue and Student Deposits
Deferred Revenue and Student Deposits
Deferred revenue and student deposits consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Deferred revenue
$
23,311

 
$
26,445

Student deposits
65,445

 
81,603

Total deferred revenue and student deposits
$
88,756

 
$
108,048

Other Long-Term Liabilities
Other Long-Term Liabilities
Other Long-Term Liabilities
Other long-term liabilities consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Uncertain tax positions
$
7,870

 
$
7,586

Legal settlements
178

 
1,000

Other long-term liabilities
6,998

 
1,066

Total other long term liabilities
$
15,046

 
$
9,652

Credit Facilities
Credit Facilities
Credit Facilities
The Company previously had a $50 million revolving line of credit (the “Facility”) pursuant to an Amended and Restated Revolving Credit Agreement (the “Revolving Credit Agreement”) with the lenders signatory thereto and Comerica Bank (“Comerica”). The Facility had an original term of three years and expired on April 13, 2015. Up through the date of expiration of the Facility, the Company had no borrowings outstanding under the Facility.
Under the Revolving Credit Agreement and the documents executed in connection therewith (collectively, the “Facility Loan Documents”), the lenders agreed to make loans to the Company and issue letters of credit on the Company's behalf, subject to specific terms and conditions. The Company had previously used the availability under the Facility to issue letters of credit, but subsequent to the expiration of the Facility, the Company collateralized the letters of credit with cash, which is included as restricted cash as of December 31, 2015.
Interest and fees accruing under the Facility were payable quarterly in arrears and principal was payable at maturity. For any advance under the Facility, interest would accrue at either the “Base Rate” or the “Eurodollar-based Rate” at the Company's option.
The Facility Loan Documents contained other customary affirmative, negative and financial maintenance covenants, representations and warranties, events of default, and remedies upon an event of default, including the acceleration of debt and the right to foreclose on the collateral securing the Facility. Up through the date of expiration of the Facility, the Company had no outstanding financial covenants in the Facility Loan Documents.
Surety Bond Facility
As part of its normal business operations, the Company is required to provide surety bonds in certain states in which the Company does business. As of December 31, 2015, the Company's total available surety bond facility was $12.0 million and the surety had issued bonds under the facility totaling $3.7 million on the Company's behalf.
Lease Obligations
Lease Obligations
Lease Obligations
Operating leases
The Company leases certain office facilities and office equipment under non-cancelable lease arrangements that expire at various dates through 2023. The office leases contain certain renewal options. Rent expense under non-cancelable operating lease arrangements is accounted for on a straight-line basis and totaled $38.5 million, $42.2 million and $37.1 million for the years ended December 31, 2015, 2014 and 2013, respectively.
The following table summarizes the future minimum rental payments under non-cancelable operating lease arrangements in effect at December 31, 2015 (in thousands):
Year Ended December 31,
 
 
2016
$
36,655

2017
36,127

2018
31,445

2019
20,876

2020
9,546

Thereafter
7,148

Total minimum payments
$
141,797


The Company has signed certain agreements to sub-lease portions of its office facilities, with two active subleases as of December 31, 2015. The Company is subleasing approximately 13,000 square feet of office space in San Diego, California with a commitment to lease for 17 months for $0.4 million. This sublease has a 90-day periodic term, which renews automatically every 90 days but can be canceled by either party. In addition, the Company is subleasing approximately 35,000 square feet of office space in Denver, Colorado with a commitment to lease for 35 months and a net sublease value of $3.2 million.
Earnings Per Share
Earnings Per Share
Earnings Per Share
Basic earnings per common share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period.
Diluted earnings per common share is calculated by dividing net income available to common stockholders by the sum of (i) the weighted average number of common shares outstanding for the period and (ii) potentially dilutive securities outstanding during the period, if the effect is dilutive. Potentially dilutive securities for the periods presented may include incremental shares of common stock issuable upon the exercise of stock options and warrants and upon the settlement of RSUs and PSUs.
The following table sets forth the computation of basic and diluted earnings per common share for the periods indicated (in thousands, except per share data):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Numerator:
 
 
 
 
 
Net income (loss)
$
(70,454
)
 
$
9,668

 
$
45,883

Denominator:
 
 
 
 
 
Weighted average number of common shares outstanding
45,665

 
45,204

 
53,923

Effect of dilutive options and restricted stock units
—

 
1,308

 
1,482

Effect of dilutive warrants
—

 
—

 
82

Diluted weighted average number of common shares outstanding
45,665

 
46,512

 
55,487

Earnings per common share:
 
 
 
 
 
Basic earnings per common share
$
(1.54
)
 
$
0.21

 
$
0.85

Diluted earnings per common share
(1.54
)
 
0.21

 
0.83


For the periods indicated below, the computation of dilutive common shares outstanding excludes stock options and RSUs, as applicable, because their effect was anti-dilutive.
 
Year Ended December 31,
(in thousands)
2015
 
2014
 
2013
Options
5,063

 
2,660

 
3,004

Restricted stock units
762

 
—

 
3

Stock-Based Compensation
Stock-Based Compensation
Stock-Based Compensation
The Company recorded $9.7 million, $10.6 million and $13.9 million of compensation expense related to equity awards for the years ended December 31, 2015, 2014 and 2013, respectively. The related income tax benefit was $3.6 million, $4.0 million and $5.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. The Company records stock-based compensation expense over the vesting term using the graded-vesting method.
Stock Options
The Company grants stock options from its 2009 Stock Incentive Plan (the “2009 Plan”). The compensation committee of the Company's board of directors, or the full board of directors, determines eligibility, vesting schedules and exercise prices for stock options granted under the 2009 Plan. Stock options granted under the 2009 Plan typically have a maximum contractual term of 10 years, subject to the option holder's continuing service to the Company. Stock options are generally granted with a four-year vesting requirement, pursuant to which the option holder must continue providing service to the Company at each vesting date. All stock options granted in 2015, 2014 and 2013, were awarded pursuant to the 2009 Plan. Under the 2009 Plan, the number of authorized shares is subject to automatic increase each January 1 through and including January 1, 2019, pursuant to a formula contained in the 2009 Plan, without the need for further approval by the Company's board of directors or stockholders.
Before the adoption of the 2009 Plan, the Company awarded stock options pursuant to the Company's Amended and Restated 2005 Stock Incentive Plan (the “2005 Plan”). Effective upon the closing of the Company's initial public offering, the 2005 Plan was terminated and no further stock options may be issued under the 2005 Plan, provided that all stock options then outstanding under the 2005 Plan will continue to remain outstanding pursuant to the terms of the 2005 Plan and the applicable award agreements.
The following table presents a summary of stock option activity in 2015, 2014 and 2013 (in thousands, except for exercise prices and contractual terms):
 
Options
Outstanding
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic Value
December 31, 2012
6,412

 
$
14.17

 
7.21
 
$
9,010

Granted
483

 
10.23

 
 
 
 
Exercised
(1,060
)
 
9.87

 
 
 
 
Forfeitures and expired
(345
)
 
20.65

 
 
 
 
December 31, 2013
5,490

 
14.25

 
6.52
 
$
28,769

Granted
403

 
14.35

 
 
 
 
Exercised
(388
)
 
8.01

 
 
 
 
Forfeitures and expired
(337
)
 
21.43

 
 
 
 
December 31, 2014
5,168

 
14.26

 
5.73
 
$
7,732

Granted
454

 
9.44

 
 
 
 
Exercised
(206
)
 
1.38

 
 
 
 
Forfeitures and expired
(764
)
 
18.15

 
 
 
 
December 31, 2015
4,653

 
$
13.72

 
4.84
 
$
2,556

Vested and expected to vest at December 31, 2015
4,597

 
$
13.75

 
4.79
 
$
2,556

Exercisable at December 31, 2015
3,904

 
$
14.07

 
4.15
 
$
2,556


As of December 31, 2015, the Company has 7.5 million shares of common stock reserved for issuance upon the exercise of stock options and settlement of outstanding stock awards under the Company's equity incentive plans. Shares issued upon stock option exercises and settlements of stock awards are drawn from the authorized but unissued shares of common stock.
During the year ended December 31, 2015, there were 0.2 million stock options exercised with an intrinsic value of $1.6 million. The windfall tax benefit realized from these exercises was $0.5 million. The Company also recognized a tax benefit shortfall of $0.1 million related to stock options exercised at values lower than the related compensation expense, and of $0.8 million related to stock options that expired unexercised during the year. During the year ended December 31, 2014, there were 0.4 million stock options exercised with an intrinsic value of $3.3 million. The windfall tax benefit realized from these exercises was $0.7 million. The Company also recognized a tax benefit shortfall of $0.1 million related to stock options exercised at values lower than the related compensation expense, and $0.8 million related to stock options that expired unexercised during the year. During the year ended December 31, 2013, there were 1.1 million stock options exercised with an intrinsic value of $9.4 million. The windfall tax benefit realized from these exercises was $2.1 million. The Company also recognized a tax benefit shortfall of $0.6 million related to stock options exercised at values lower than the related compensation expense, and $0.5 million related to stock options that expired unexercised during the year.
During the years ended December 31, 2015 and 2014, approximately 583,000 and 203,000 stock options expired, respectively.
The fair value of each option award granted during the years ended December 31, 2015, 2014 and 2013, was estimated on the date of grant using the Black-Scholes option pricing model. The Company's determination of the fair value of share-based awards is affected by the Company's common stock price as well as assumptions regarding a number of complex and subjective variables. Below is a summary of the assumptions used for the stock options granted in the years indicated.
 
2015
 
2014
 
2013
Weighted average exercise price per share
$
9.44

 
$
14.35

 
$
10.23

Risk-free interest rate
1.6
%
 
2.0
%
 
1.0
%
Expected dividend yield
—

 
—

 
—

Expected volatility
50.7
%
 
55.1
%
 
58.9
%
Expected life (in years)
5.75

 
5.75

 
5.85

Forfeiture rate
7.0
%
 
6.0
%
 
5.0
%
Weighted average grant date fair value per share
$
4.52

 
$
7.43

 
$
5.48


The risk-free interest rate is based on the currently available rate on a U.S. Treasury zero-coupon issue with a remaining term equal to the expected term of the stock option converted into a continuously compounded rate. The Company has never declared or paid any cash dividends on its common stock and does not currently anticipate paying cash dividends in the future. The Company has enough historical option exercise information to compute an expected term for use as an assumption in the Black-Scholes option pricing model, and as such, its computation of expected term was calculated using its own historical data. The volatility of the Company's common stock is also based upon its own historical volatility.
As of December 31, 2015, 2014 and 2013, there was $1.7 million, $3.2 million and $5.6 million, respectively, of unrecognized compensation costs related to unvested stock options.
At December 31, 2015, the unrecognized compensation costs of stock options are expected to be recognized over a weighted average period of 1.10 years.
Stock Awards
The Company also grants RSUs to its employees under the 2009 Plan. Each RSU represents a future issuance of one share of common stock contingent upon the recipient's continued service to the Company through the vesting date. Upon the vesting date, RSUs are automatically settled for shares of the Company's common stock unless the applicable award agreement provides for delayed settlement. If, prior to the vesting date, the employee's status as a full-time employee is terminated, then the RSU is automatically canceled on the employment termination date, unless otherwise specified in an employee's individual employment agreement. The fair value of an RSU is calculated based on the market value of the common stock on the grant date and is amortized over the applicable vesting period using the graded-vesting method.
The Company has also granted PSUs under the 2009 Plan to certain individuals. The total amount of PSUs granted is comprised of certain shares that will vest contingent upon a market-based measure, the Company's stock price, and certain shares that will vest contingent upon a performance-based measure, the Company's diluted earnings per share.
Each PSU represents a future issuance of one share of common stock contingent upon achieving certain performance measures and the recipient's continued service to the Company through the vesting date. The PSUs are subject to cliff vesting equally over four years at the end of each annual service period upon meeting the performance-based and/or market-based measures applicable to such service period. Upon the vesting date, PSUs are automatically settled for shares of the Company's common stock unless the applicable award agreement provides for delayed settlement. If, prior to the vesting date, the employee's status as a full-time employee is terminated, then the PSU is automatically canceled on the employment termination date, unless otherwise specified in an employee's individual employment agreement.
The fair value of the PSU awards on the grant date was $5.3 million. PSUs are amortized over the applicable vesting period using the graded-vesting method. The fair value of the performance-based portion of the PSU awards was based on the Company's stock price as of the date the target was approved by the Company's board of directors. Compensation cost for the portion of the PSUs with a performance-based measure is recorded based on the probable outcome of the performance conditions associated with the respective shares, as determined by management. The fair value of the market-based measure portion of the PSU awards was estimated based on the Company's stock price as of the date of grant using a Monte Carlo simulation model.
The assumptions for the market-based portion of the PSUs granted are noted in the following table:
 
2015
Grant price per share
$
9.46

Risk-free interest rate
0.7
%
Expected dividend yield
—

Historical volatility
50.0
%
Expected life (in years)
4.0

Forfeiture rate
7.0
%
Weighted average grant date fair value per share
$
4.04


A summary of the RSU and PSU activity and related information is as follows:
 
Restricted Stock Units and Performance Stock Units
 
Time Based RSU
 
Performance-Based PSU
 
Market-Based PSU
 
Number of Shares
 
Weighted Average
Purchase Price
 
Number of Shares
 
Weighted Average
Purchase Price
 
Number of Shares
 
Weighted Average
Purchase Price
Balance at December 31, 2012
362,199

 
$
9.72

 
—

 
$
—

 
—

 
$
—

Awarded
1,016,035

 
10.50

 
—

 
—

 
—

 
—

Vested
(181,104
)
 
9.72

 
—

 
—

 
—

 
—

Canceled
(98,613
)
 
10.39

 
—

 
—

 
—

 
—

Balance at December 31, 2013
1,098,517

 
10.38

 
—

 
—

 
—

 
—

Awarded
786,250

 
14.33

 
—

 
—

 
975,295

 
5.39

Vested
(393,106
)
 
10.15

 
—

 
—

 
—

 
—

Canceled
(212,572
)
 
11.89

 
—

 
—

 
—

 
—

Balance at December 31, 2014
1,279,089

 
12.63

 
—

 
—

 
975,295

 
5.39

Awarded
983,473

 
9.33

 
455,765

 
9.86

 
229,017

 
4.04

Vested
(353,126
)
 
12.34

 
—

 
—

 
—

 
—

Canceled
(519,425
)
 
11.51

 
(96,621
)
 
9.86

 
(238,084
)
 
5.21

Balance at December 31, 2015
1,390,011

 
$
10.78

 
359,144

 
$
9.86

 
966,228

 
$
5.11


As of December 31, 2015 and 2014, there was $6.9 million and $8.5 million, respectively, of unrecognized compensation costs related to unvested RSUs. The unrecognized compensation costs of RSUs are expected to be recognized over a weighted average period of 1.4 years.
During the year ended December 31, 2015, 0.4 million RSUs vested and were released with a market value of $3.3 million. The tax benefit shortfall realized from the RSUs released was $0.4 million. During the year ended December 31, 2014, 0.4 million RSUs vested and were released with a market value of $5.3 million. The actual tax benefit windfall realized from the RSUs released was $0.5 million. During the year ended December 31, 2013, 0.2 million RSUs vested and were released with a market value of $3.0 million. The actual tax benefit windfall realized from the RSUs released was $0.5 million.
As of December 31, 2015, there was $4.0 million of unrecognized compensation costs related to unvested PSUs. The unrecognized compensation costs of PSUs are expected to be recognized over a weighted average period of 1.7 years, to the extent the performance criteria is met. There were no PSUs which vested during 2014, and no PSUs granted in 2013.
Stock Repurchase Programs
Stock Repurchase Programs
Stock Repurchase Programs
The Company's board of directors has authorized the Company to repurchase outstanding shares of its common stock from time to time in the open market through block trades or otherwise depending on market conditions and other considerations, pursuant to the applicable rules of the Securities and Exchange Commission (the “SEC”). The Company's policy is to retain these repurchased shares as treasury shares and not to retire them. The amount and timing of future share repurchases, if any, will be made as market and business conditions warrant.
On November 10, 2013, a special committee of the Company's board of directors approved a plan to purchase up to 10.25 million shares of the Company's common stock through a tender offer. The tender offer commenced on November 13, 2013 and expired on December 11, 2013. On December 18, 2013, the Company repurchased shares of its common stock through the tender offer at a price of $19.50 per share. The tender offer was oversubscribed, resulting in the purchase of 10.2 million shares, including 0.2 million shares underlying previously unexercised stock options, for a total cost of $199.9 million, exclusive of fees. The repurchased shares were added to treasury stock. We did not repurchase any shares of our common stock in the either 2014 or 2015.
Income Taxes
Income Taxes
Income Taxes
The Company uses the asset and liability method to account for taxes. Under this method, deferred income tax assets and liabilities result from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements that will result in income and deductions in future years. The components of income tax expense are as follows (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Current:
 
 
 
 
 
Federal
$
(10,370
)
 
$
12,686

 
$
29,456

State
(309
)
 
1,937

 
3,168

 
(10,679
)
 
14,623

 
32,624

Deferred:
 
 
 
 
 
Federal
33,482

 
(6,216
)
 
(5,952
)
State
7,462

 
(880
)
 
(1,010
)
 
40,944

 
(7,096
)
 
(6,962
)
Total
$
30,265

 
$
7,527

 
$
25,662


Each reporting period, the Company assesses the likelihood that it will be able to recover its deferred tax assets, which represent timing differences in the recognition of certain tax deductions for accounting and tax purposes. The realization of deferred tax assets is dependent, in part, upon future taxable income. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, the Company considers all available evidence, including past operating results, estimates of future taxable income given current business conditions affecting the Company, and the feasibility of ongoing tax planning strategies.
In the third quarter of 2015, there were several pieces of negative evidence that contributed to the Company’s conclusion that a valuation allowance was appropriate against all deferred tax assets that rely upon future taxable income for realization. This negative evidence included (i) a significant third quarter pre-tax loss, (ii) projections that showed the Company would be in a three-year cumulative loss position by 2016 and (iii) the continued difficult business and regulatory environment surrounding for-profit education institutions. After weighing all positive and negative evidence, the Company concluded it could not rely upon future taxable income to support realizability of deferred tax assets and, therefore, recorded a valuation allowance against the deferred tax assets that rely on future taxable income in the third quarter of 2015. As of December 31, 2015, the Company continues to record a valuation allowance against the deferred tax assets. The Company intends to maintain a valuation allowance against its deferred tax assets until sufficient positive evidence exists to support its reversal.
Deferred income tax balances reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when taxes are paid or recovered. Significant components of the Company’s deferred tax assets and liabilities and balance sheet classifications are as follows (in thousands):
 
As of December 31,
 
2015
 
2014
Deferred tax assets:
 
 
 
Net operating loss
$
737

 
$
211

Fixed assets
(1,328
)
 
194

Bad debt
2,412

 
2,338

Vacation accrual
3,305

 
2,956

Stock-based compensation
15,766

 
16,291

Deferred rent
12,585

 
11,580

State tax
2,154

 
2,257

Bonus accrual
1,609

 
1,023

Unearned interest
898

 
1,118

Accrued expenses
3,939

 
2,121

Revenue reserves
64

 
9,820

Other
278

 
107

Total deferred tax assets
42,419

 
50,016

Valuation allowance
(42,419
)
 
—

Net deferred tax assets
—

 
50,016

Deferred tax liabilities:
 
 
 
Fixed assets and intangibles
—

 
(8,540
)
Indefinite-lived intangibles
(744
)
 
—

Total deferred tax liabilities
(744
)
 
(8,540
)
Total net deferred tax assets (liabilities)
$
(744
)
 
$
41,476


The current year change in net deferred tax assets of $42.2 million is comprised of net deferred expense of $40.9 million recorded through income tax expense, $1.2 million related to the recognized shortfall recorded as a reduction in additional paid in capital and $0.1 million tax effect of unrealized gain on investments recorded through other comprehensive income. Deferred taxes are reflected in the balance sheet as follows (in thousands):
 
As of December 31,
 
2015
 
2014
Current deferred tax assets
$
—

 
$
21,301

Current deferred tax liabilities
—

 
—

Noncurrent deferred tax assets
—

 
20,175

Noncurrent deferred tax liabilities
(744
)
 
—

Total
$
(744
)
 
$
41,476


At December 31, 2015, the Company had federal net operating loss carryforwards of $0.6 million, which are available to offset future taxable income. The federal net operating loss carryforwards will begin to expire in 2022. The Company’s utilization of net operating loss carryforwards may be subject to annual limitations due to ownership change provisions of Section 382 of Internal Revenue Code of 1986, as amended. The Company has performed a Section 382 analysis and has determined that there is no material effect on the net operating loss carryforwards.
A reconciliation of the income tax expense computed using the U.S. federal statutory tax rate of 35% and the Company's provision for income taxes follows (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Computed expected federal tax expense
$
(14,066
)
35.0
 %
 
$
6,018

35.0
 %
 
$
25,041

35.0
 %
State taxes, net of federal benefit
(655
)
1.6

 
426

2.5

 
1,466

2.0

Permanent differences
1,033

(2.6
)
 
1,125

6.5

 
1,295

1.8

Uncertain tax positions
480

(1.2
)
 
424

2.5

 
(1,762
)
(2.5
)
Credits
(206
)
0.5

 
(470
)
(2.7
)
 
(378
)
(0.4
)
Stock compensation
1,246

(3.1
)
 
—

—

 
—

—

Valuation allowance
42,419

(105.5
)
 
—

—

 
—

—

Other
14

—

 
4

—

 
—

—

Income tax expense
$
30,265

(75.3
)%
 
$
7,527

43.8
 %
 
$
25,662

35.9
 %

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Unrecognized tax benefits at December 31, 2013
$
7,387

Gross increases-tax positions in prior period
13,869

Gross decreases-tax positions in prior period
(23
)
Gross increases-current period tax positions
53

Settlements
(409
)
Lapse of statute of limitations
—

Unrecognized tax benefits at December 31, 2014
20,877

Gross increases-tax positions in prior period
169

Gross decreases-tax positions in prior period
(2
)
Gross increases-current period tax positions
—

Settlements
(455
)
Lapse of statute of limitations
—

Unrecognized tax benefits at December 31, 2015
$
20,589


Included in the amount of unrecognized tax benefits at December 31, 2015 and 2014 is $13.4 million and $13.6 million, respectively, of tax benefits that, if recognized, would affect the Company's effective tax rate. Also included in the balance of unrecognized tax benefits at December 31, 2015 and 2014 is $7.2 million and $7.3 million, respectively, of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred tax assets. It is reasonably possible that the total amount of the unrecognized tax benefit will change during the next 12 months; however, the Company does not expect the potential change to have a material effect on the results of operations or financial position in the next year.
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. At December 31, 2015 and 2014, the Company had approximately $2.0 million and $1.9 million, respectively, of accrued interest, before any tax benefit, related to uncertain tax positions.
The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The tax years 2002 through 2014 are open to examination by major taxing jurisdictions to which the Company is subject.
The Company is currently under audit by the California Franchise Tax Board for the years 2008 through 2012. In connection with the California Franchise Tax Board audit, in 2014 the Company filed a refund claim for tax years 2008 through 2010 for approximately $12.6 million. However, the Company will not recognize any income statement benefit in its financial statements related to the refund claim until the final resolution of the audit.
The Company is also subject to various other state audits. With regard to all audits, the Company does not expect any significant adjustments to amounts already reserved.
Regulatory
Regulatory
Regulatory
The Company is subject to extensive regulation by federal and state governmental agencies and accrediting bodies. In particular, the Higher Education Act of 1965, as amended (the “Higher Education Act”), and the regulations promulgated thereunder by the U.S. Department of Education (the “Department”) subject the Company to significant regulatory scrutiny on the basis of numerous standards that institutions of higher education must satisfy in order to participate in the various federal student financial assistance programs under Title IV of the Higher Education Act.
Ashford University is regionally accredited by WASC Senior College and University Commission (“WSCUC”), and University of the Rockies is regionally accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools (“HLC”).
Department of Education Program Review of Ashford University
On July 31, 2014, the Company and Ashford University received notification from the Department that it intended to conduct a program review of Ashford University’s administration of federal student financial aid programs (“Title IV programs”) in which the university participates. The review commenced on August 25, 2014, and covers federal financial aid years 2012-2013 and 2013-2014, as well as compliance with the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act (the “Clery Act”), the Drug-Free Schools and Communities Act and related regulations. Ashford University was provided with the Department's program review report and has responded to such initial report. Following consideration of the university's response, the Department will issue a Final Program Review Determination letter.
WSCUC Grant of Initial Accreditation of Ashford University
In July 2013, WSCUC granted Initial Accreditation to Ashford University for five years, until July 15, 2018. In December 2013, Ashford University effected its transition to WSCUC accreditation and designated its San Diego, California facilities as its main campus and its Clinton, Iowa campus as an additional location. As part of a continuing monitoring process, Ashford University hosted a visiting team from WSCUC in a special visit in April 2015. In July 2015, Ashford University received an Action Letter from WSCUC outlining the findings arising out of its team's special visit. The Action Letter stated that the WSCUC visiting team found substantial evidence that Ashford University continues to make sustained progress in all six areas recommended by WSCUC in 2013.
WSCUC also performs Mid-Cycle Reviews of its accredited institutions near the midpoint of their periods of accreditation, as required by the Department. The purpose of the Mid-Cycle Review is to identify problems with an institution’s or program’s continued compliance with agency standards while taking into account institutional or program strengths and stability. The Mid-Cycle Review report will focus particularly on student achievement, including indicators of educational effectiveness, retention and graduation data.
Licensure by California BPPE
To be eligible to participate in Title IV programs, an institution must be legally authorized to offer its educational programs by the states in which it is physically located. Effective July 2011, the Department established new requirements to determine if an institution is considered to be legally authorized by a state. In connection with its transition to WSCUC accreditation, Ashford University designated its San Diego, California facilities as its main campus for Title IV purposes and submitted an Application for Approval to Operate an Accredited Institution to the State of California, Department of Consumer Affairs, Bureau for Private Postsecondary Education (“BPPE”) on September 10, 2013.
In April 2014, the application was granted, and the university was approved by BPPE to operate in California until July 15, 2018. As a result, Ashford University is no longer exempt from certain laws and regulations applicable to private, post-secondary educational institutions. These laws and regulations entail certain California reporting requirements, including but not limited to, graduation, employment and licensing data, certain changes of ownership and control, faculty and programs, and student refund policies, as well as the triggering of other state and federal student employment data reporting and disclosure requirements.
Negotiated Rulemaking and Other Executive Action
Three negotiated rulemaking sessions held between January and March of 2014 resulted in draft regulations to enact changes to the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act (the “Clery Act”) required by the enactment of the Violence Against Women Act (“VAWA”). The Department published final regulations in the Federal Register on October 20, 2014, which became effective on July 1, 2015. Among other things, VAWA requires institutions to compile statistics for additional incidents to those currently required by the Clery Act and include certain policies, procedures and programs pertaining to these incidents in annual security reports.
The Department held Program Integrity and Improvement negotiated rulemaking sessions between February and May of 2014 that focused on topics including, but not limited to, cash management of Title IV program funds, state authorization for programs offering distance or correspondence education, credit and clock hour conversions, the retaking of coursework, and the definition of “adverse credit” for PLUS loan borrowers. No consensus resulted from the rulemaking sessions. As a result, the Department had discretion to propose Program Integrity regulations in these areas. In August 2014, the Department published a Notice of Proposed Rulemaking proposing new regulations regarding the federal Direct PLUS loan program. The final regulations became effective on July 1, 2015 and update the standards for determining if a potential parent or student borrower has an adverse credit history for purposes of eligibility for a PLUS loan. Specifically, the regulations revise the definition of “adverse credit history” and require that parents and students who have an adverse credit history, but who are approved for a PLUS loan on the basis of extenuating circumstances or who obtain an endorser for the PLUS loan, must receive loan counseling before receiving the loan.
On September 3, 2014, the Department published a notice in the Federal Register to announce its intention to establish a negotiated rulemaking committee to prepare proposed regulations for the William D. Ford “Federal Direct Loan Program” authorized by the Higher Education Act. Two public hearings were held in October and November 2014. On December 19, 2014, the Department published a notice to announce its intention to establish the committee to (i) prepare proposed regulations to establish a new Pay as Your Earn repayment plan for those not covered by the existing Federal Direct Loan Program and (ii) establish procedures for Federal Family Education Loan Program (“FFEL Program”) loan holders to use to identify U.S. military service members who may be eligible for a lower interest rate on their FFEL Program loans. The committee met in February, March and April of 2015. On July 9, 2015, the Department published a Notice of Proposed Rulemaking proposing to amend the regulations governing the Federal Direct Loan Program, and on October 30, 2015, the regulations were amended to create a new income-contingent repayment plan in accordance with President Obama's initiative to allow more Federal Direct Loan Program borrowers to cap their loan payments at 10% of their monthly income. Changes were also made to the FFEL Program and Federal Direct Loan Program regulations to streamline and enhance existing processes and provide additional support to struggling borrowers. The amended regulations also expand the circumstances in which an institution may challenge or appeal a draft or final cohort default rate based on the institution's participation rate index.
On October 30, 2014, the Obama administration announced that the Department would lead an effort to formalize an interagency task force to conduct oversight of for-profit institutions of higher education, especially regarding alleged unfair, deceptive, and abusive policies and practices. The task force has been formed and includes the Departments of Justice, Treasury and Veterans Affairs, as well as the Consumer Financial Protection Bureau, Federal Trade Commission, Securities and Exchange Commission, and state Attorneys General. The stated purpose of the task force is to “coordinate...activities and promote information sharing to protect students from unfair, deceptive and abusive policies and practices.”
On March 24, 2015, the Department's Office of Inspector General (the “OIG”) issued a final audit report titled “Federal Student Aid's Oversight of Schools' Compliance with the Incentive Compensation Ban.” In its report, the OIG concluded that the Department's Office of Federal Student Aid (the “FSA”) failed to (i) revise its enforcement procedures and guidance after the Department eliminated the incentive compensation safe harbors in 2010, (ii) develop procedures and guidance on appropriate enforcement action and (iii) properly resolve incentive compensation ban findings. In response to the report, the OIG and the FSA agreed on corrective action that may increase scrutiny and enforcement action related to payment of incentive compensation.
On May 18, 2015, the Department published a Notice of Proposed Rulemaking to amend cash management regulations related to Title IV program funds. The proposed regulations address student access to Title IV program funds, financial account fees and the opening of financial accounts. The proposed regulations also clarify how the Department treats previously passed coursework for Title IV eligibility purposes, and streamline the requirements for converting clock hours to credit hours.
On June 8, 2015, the Department held a press conference and released a document entitled “Fact Sheet: Protecting Students from Abusive Career Colleges” in which the Department announced processes that will be established to assist students who may have been the victims of fraud in gaining relief under the “defense to repayment” provisions of the Federal Direct Loan Program regulations. Rarely used in the past, the defense to repayment provisions allow a student to assert as a defense against repayment of federal Direct Loans any commission of fraud or other violation of applicable state law by the school related to such loans or the educational services paid for. The processes outlined by the Department on June 8 include (i) extending debt relief eligibility to groups of students where possible, (ii) providing loan forbearance and pausing payments while claims are being resolved, (iii) appointing a Special Master dedicated to borrower defense issues for students who believe they have a defense to repayment, (iv) establishing a streamlined process and (v) building a better system for debt relief for the future. The Department noted that building a better system for debt relief would involve developing new regulations to clarify and streamline loan forgiveness under the defense to repayment provisions, while maintaining or enhancing current consumer protection standards and strengthening provisions that hold schools accountable for actions that result in loan discharges.
On August 20, 2015, the Department announced its intention to establish a negotiated rulemaking committee to prepare proposed regulations for the Federal Student Aid programs authorized under Title IV of the Higher Education Act. The Department held two public hearings in September 2015 at which interested parties commented on the topics suggested by the Department and suggested additional topics that should be considered for action by the negotiating committee. The Department also accepted written comments and suggestions. The Department intends to convene a committee to develop proposed regulations for determining which acts or omissions of an institution of higher education a borrower may assert as a defense to repayment, and the consequences of the assertion of such borrower defenses for borrowers, institutions and the Department. Specifically, the Department intends to address (i) the procedures to be used for a borrower to establish a defense to repayment, (ii) the criteria the Department will use to identify acts or omissions of an institution that constitute defenses to repayment, (iii) the standards and procedures the Department will use to determine the liability of the institution for amounts based on borrower defenses and (iv) the effect of borrower defenses on institutional capability assessments. The committee met in January and February of 2016, and is scheduled to meet again in March 2016.
The “90/10” Rule
Under the Higher Education Act, a for-profit institution loses its eligibility to participate in Title IV programs if the institution derives more than 90% of its revenues (calculated in accordance with applicable Department regulations) from Title IV program funds for two consecutive fiscal years. This rule is commonly referred to as the “90/10 rule.” Any institution that violates the 90/10 rule for two consecutive fiscal years becomes ineligible to participate in Title IV programs for at least two fiscal years. In addition, an institution whose rate exceeds 90% for any single year will be placed on provisional certification and may be subject to other enforcement measures.
For the years ended December 31, 2015, 2014 and 2013, Ashford University derived 80.9%, 83.4% and 85.6% and respectively, and University of the Rockies derived 86.6%, 88.3% and 87.6%, respectively, of their respective revenues (calculated in accordance with applicable Department regulations) from Title IV program funds.
Cohort Default Rate
For each federal fiscal year, the Department calculates a rate of student defaults over a three-year measuring period for each educational institution, which is known as a “cohort default rate.” An institution may lose its eligibility to participate in the federal Direct Loan and Pell programs if, for each of the three most recent federal fiscal years, 30% or more of its students who became subject to a repayment obligation in that federal fiscal year defaulted on such obligation by the end of the following federal fiscal year.
The three-year cohort default rates for Ashford University for the 2012, 2011 and 2010 federal fiscal years, were 15.3%, 15.3% and 16.3%, respectively. The three-year cohort default rates for University of the Rockies for the 2012, 2011 and 2010 federal fiscal years, were 4.3%, 6.6% and 8.0%, respectively.
Substantial misrepresentation
The Higher Education Act prohibits an institution participating in Title IV programs from engaging in substantial misrepresentation of the nature of its educational programs, financial charges or graduate employability. Under the Department's rules, a “misrepresentation” is any false, erroneous or misleading statement an institution, one of its representatives, or any ineligible institution, organization, or person with whom the institution has an agreement to provide educational programs, or marketing, advertising, recruiting, or admissions services makes directly to a student or prospective student or any member of the public, or to an accrediting agency, to a state agency or the Department. The Department's rules define a “substantial misrepresentation” as any misrepresentation on which the person to whom it was made could reasonably be expected to rely, or has reasonably relied, to that person's detriment.
On December 10, 2015, Ashford University received a request for information from the Multi-Regional and Foreign School Participation Division of the FSA for (i) advertising and marketing materials provided to prospective students regarding the transferability of certain credit, (ii) documents produced in response to the Consumer Financial Protection Bureau's (the “CFPB”) August 10, 2015 Civil Investigative Demand related to the CFPB's investigation to determine whether for-profit post-secondary education companies or other unnamed persons have engaged in or are engaging in unlawful acts or practices related to the advertising, marketing or origination of private student loans, (iii) certain documents produced in response to subpoenas and interrogatories issued by the California Attorney General and (iv) records created between 2009 and 2012 related to the disbursement of certain Title IV funds. The FSA is investigating representations made by Ashford University to potential and enrolled students, and has asked the Company and Ashford University to assist in its assessment of Ashford University's compliance with the prohibition on substantial misrepresentations. The Company and Ashford University intend to provide the FSA with their full cooperation with a view toward demonstrating the compliant nature of their practices.
If the Department determines that one of the Company's institutions has engaged in substantial misrepresentation, the Department may (i) attempt to revoke the institution's program participation agreement if the institution is provisionally certified, (ii) impose limitations on the institution's participation in Title IV programs if the institution is provisionally certified, (iii) deny applications from the institution for approval of new programs or locations or other matters or (iv) initiate proceedings to fine the institution or limit, suspend or terminate its eligibility to participate in Title IV programs. Because Ashford University is provisionally certified, it could be subject to the actions set forth in clauses (i) and (ii) above in addition to any other actions taken by the Department if it were determined that Ashford University has engaged in substantial misrepresentation.
Return of Title IV Funds
An institution participating in Title IV programs must correctly calculate the amount of unearned Title IV program funds that have been disbursed to students who withdraw from their educational programs before completion and must return those unearned funds in a timely manner, generally within 45 days of the date the school determines that the student has withdrawn. Under Department regulations, failure to make timely returns of Title IV program funds for 5% or more of students sampled on the institution's annual compliance audit in either of its two most recently completed fiscal years can result in the institution having to post a letter of credit in an amount equal to 25% of its required Title IV returns during its most recently completed fiscal year. If unearned funds are not properly calculated and returned in a timely manner, an institution is also subject to monetary liabilities or an action to impose a fine or to limit, suspend or terminate its participation in Title IV programs. For the years ended December 31, 2015 and 2014, the Company's institutions did not exceed the 5% threshold for late refunds sampled.
Financial Responsibility
The Department calculates an institution's composite score for financial responsibility based on its (i) equity ratio, which measures the institution's capital resources, ability to borrow and financial viability; (ii) primary reserve ratio, which measures the institution's ability to support current operations from expendable resources; and (iii) net income ratio, which measures the institution's ability to operate at a profit. An institution that does not meet the Department's minimum composite score of 1.5 may demonstrate its financial responsibility by posting a letter of credit in favor of the Department and possibly accepting other conditions on its participation in the Title IV programs.
For the fiscal year ended December 31, 2014, the consolidated composite score calculated was 2.7, satisfying the composite score requirement of the Department's financial responsibility test, which institutions must satisfy in order to participate in Title IV programs. The Company expects the consolidated composite score to be 1.8 for the year ended December 31, 2015. However, the consolidated calculation is subject to determination by the Department once it receives and reviews our audited financial statements for the year ended December 31, 2015.
Administrative capability
The Department specifies extensive criteria by which an institution must establish that it has the requisite administrative capability to participate in Title IV programs. To meet the administrative capability standards, an institution must, among other things, (i) comply with all applicable Title IV program requirements (ii) have an adequate number of qualified personnel to administer Title IV programs, (iii) have acceptable standards for measuring the satisfactory academic progress of its students, (iv) have procedures in place for awarding, disbursing and safeguarding Title IV funds and for maintaining required records, (v) administer Title IV programs with adequate checks and balances in its system of internal control over financial reporting, (vi) not be, and not have any principal or affiliate who is, debarred or suspended from federal contracting or engaging in activity that is cause for debarment or suspension, (vii) provide financial aid counseling to its students, (viii) refer to the OIG any credible information indicating that any student, parent, employee, third-party servicer or other agent of the institution has engaged in any fraud or other illegal conduct involving Title IV programs, (ix) timely submit all required reports and financial statements and (x) not otherwise appear to lack administrative capability.
Ashford University and University of the Rockies were notified by the Department that it did not believe the institutions fully responded to the disclosures of data required by the Gainful Employment regulations, that this was an indication of a serious lack of administrative capability, and that as a result the Department would not make any decisions regarding the addition of any new programs or additional locations until the reporting requirements were met. The Department informed the Company that failure to fully comply in all Gainful Employment data reporting requirements could result in the referral of the errant institution to the Department's Administrative Actions and Appeals Service Group for consideration of an administrative action against that institution, including a fine, the limitation, suspension or termination of institutional eligibility to participate in Title IV programs, or revocation of the institution's program participation agreement (if provisional). The Company worked with the Department to address their concerns with respect to the reporting of the Company's institutions under the Gainful Employment regulations. The Department has since approved two new programs for Ashford University, and the Company does not anticipate any actions against its institutions related to this notification.
Retirement Plans
Retirement Plans
Retirement Plans
The Company maintains an employee savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code of 1986, as amended. Under the savings plan, participating employees may contribute a portion of their pre-tax earnings up to the Internal Revenue Service annual contribution limit. Additionally, the Company may elect to make matching contributions into the savings plan in its sole discretion. The Company's total expense related to the 401(k) plan was $3.4 million, $3.7 million and $3.3 million for the years ended December 31, 2015, 2014 and 2013, respectively.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Litigation
From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. When the Company becomes aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. In accordance with authoritative guidance, the Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated. Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the specific claim if the likelihood of a potential loss is reasonably possible and the amount involved is material. The Company continuously assesses the potential liability related to the Company’s pending litigation and revises its estimates when additional information becomes available. Below is a list of material legal proceedings to which the Company or its subsidiaries is a party.
Compliance Audit by the Department's Office of the Inspector General
In January 2011, Ashford University received a final audit report from the OIG regarding the compliance audit commenced in May 2008 and covering the period July 1, 2006 through June 30, 2007. The audit covered Ashford University's administration of Title IV program funds, including compliance with regulations governing institutional and student eligibility, awards and disbursements of Title IV program funds, verification of awards and returns of unearned funds during that period, and its compensation of financial aid and recruiting personnel during the period May 10, 2005 through June 30, 2009.
The final audit report contained audit findings, in each case for the period July 1, 2006 through June 30, 2007, which are applicable to award year 2006-2007. Each finding was accompanied by one or more recommendations to the FSA. Ashford University provided the FSA a detailed response to the OIG’s final audit report in February 2011. In June 2011, in connection with two of the six findings, the FSA requested that Ashford University conduct a file review of the return to Title IV fund calculations for all Title IV recipients who withdrew from distance education programs during the 2006-2007 award year. The institution cooperated with the request and supplied the information within the time frame required. If the FSA were to determine to assess a monetary liability or commence other administrative action, Ashford University would have an opportunity to contest the assessment or proposed action through administrative proceedings, with the right to seek review of any final administrative action in the federal courts.
The outcome of this audit is uncertain at this point because of the many questions of fact and law that may arise. At present, the Company cannot reasonably estimate a range of loss for this action based on the information available to the Company. Accordingly, the Company has not accrued any liability associated with this matter.
Iowa Attorney General Civil Investigation of Ashford University
In February 2011, Ashford University received from the Attorney General of the State of Iowa (the “Iowa Attorney General”) a Civil Investigative Demand and Notice of Intent to Proceed (the “CID”) relating to the Iowa Attorney General’s investigation of whether certain of the university's business practices comply with Iowa consumer laws. Pursuant to the CID, the Iowa Attorney General requested documents and detailed information for the time period January 1, 2008 to present. On numerous occasions, representatives from the Company and Ashford University met with the Iowa Attorney General to discuss the status of the investigation and the Iowa Attorney General’s allegations against the Company that had been communicated to the Company in June 2013. As a result of these meetings, on May 15, 2014, the Iowa Attorney General, the Company and Ashford University entered into an Assurance of Voluntary Compliance (the “AVC”) in full resolution of the CID and the Iowa Attorney General’s allegations. The AVC, in which the Company and Ashford University do not admit any liability, contains several components including injunctive relief, nonmonetary remedies and a payment to the Iowa Attorney General to be used for restitution to Iowa consumers, costs and fees. The AVC also provides for the appointment of a settlement administrator for a period of three years to review the Company’s and Ashford University’s compliance with the terms of the AVC. The Company had originally accrued $9.0 million in 2013 related to this matter, which represented its best estimate of the total restitution, cost of non-monetary remedies and future legal costs. The remaining accrual of $0.9 million as of December 31, 2015 is split between both current and long-term liabilities.
New York Attorney General Investigation of Bridgepoint Education, Inc.
In May 2011, the Company received from the Attorney General of the State of New York (the “NY Attorney General”) a subpoena relating to the NY Attorney General's investigation of whether the Company and its academic institutions have complied with certain New York state consumer protection, securities and finance laws. Pursuant to the subpoena, the NY Attorney General has requested from the Company and its academic institutions documents and detailed information for the time period March 17, 2005 to present. The Company is cooperating with the investigation and cannot predict the eventual scope, duration or outcome of the investigation at this time.
North Carolina Attorney General Investigation of Ashford University
In September 2011, Ashford University received from the Attorney General of the State of North Carolina (the “NC Attorney General”) an Investigative Demand relating to the NC Attorney General's investigation of whether the university's business practices complied with North Carolina consumer protection laws. Pursuant to the Investigative Demand, the NC Attorney General has requested from Ashford University documents and detailed information for the time period January 1, 2008 to present. Ashford University is cooperating with the investigation and cannot predict the eventual scope, duration or outcome of the investigation at this time.
California Attorney General Investigation of For-Profit Educational Institutions
In January 2013, the Company received from the Attorney General of the State of California (the “CA Attorney General”) an Investigative Subpoena relating to the CA Attorney General’s investigation of for-profit educational institutions. Pursuant to the Investigative Subpoena, the CA Attorney General has requested documents and detailed information for the time period March 1, 2009 to present. On July 24, 2013, the CA Attorney General filed a petition to enforce certain categories of the Investigative Subpoena related to recorded calls and electronic marketing data. On September 25, 2013, the Company reached an agreement with the CA Attorney General to produce certain categories of the documents requested in the petition and stipulated to continue the hearing on the petition to enforce from October 3, 2013 to January 9, 2014. On January 13, 2014 and June 19, 2014, the Company received additional Investigative Subpoenas from the CA Attorney General each requesting additional documents and information for the time period March 1, 2009 through the current date. Representatives from the Company have met with the CA Attorney General’s office on several occasions to discuss the status of the investigation, additional information requests, and specific concerns related to possible unfair business practices in connection with the Company’s recruitment of students and debt collection practices. The parties are currently scheduled to meet again on March 8 and 9, 2016 to discuss the status of the investigation and explore a potential resolution involving injunctive relief and a monetary payment. The Company cannot predict the eventual scope, duration or outcome of the investigation at this time. As a result, the Company cannot reasonably estimate a range of loss for this action and accordingly has not accrued any liability associated with this action. However, if the Company were able to resolve this matter, the Company believes any such resolution would result in a material payment and certain non-monetary remedies.
Massachusetts Attorney General Investigation of Bridgepoint Education, Inc. and Ashford University
On July 21, 2014, the Company and Ashford University received from the Attorney General of the State of Massachusetts (the “MA Attorney General”) a Civil Investigative Demand relating to the MA Attorney General's investigation of for-profit educational institutions and whether the university's business practices complied with Massachusetts consumer protection laws. Pursuant to the Civil Investigative Demand, the MA Attorney General has requested from the Company and Ashford University documents and information for the time period January 1, 2006 to present. The Company is cooperating with the investigation and cannot predict the eventual scope, duration or outcome of the investigation at this time.
Securities & Exchange Commission Subpoena of Bridgepoint Education, Inc.
On July 22, 2014, the Company received from the SEC a subpoena relating to certain of the Company’s accounting practices, including revenue recognition, receivables and other matters relating to the Company’s previously disclosed intention to restate its financial statements for fiscal year ended December 31, 2013 and revise its financial statements for the years ended December 31, 2011 and 2012, and the prior revision of the Company’s financial statements for the fiscal year ended December 31, 2012. Pursuant to the subpoena, the SEC has requested from the Company documents and detailed information for the time period January 1, 2009 to present. The Company is cooperating with the investigation and cannot predict the eventual scope, duration or outcome of the investigation at this time. As a result, the Company cannot reasonably estimate a range of loss for this action and accordingly has not accrued any liability associated with this action.
Consumer Financial Protection Bureau Subpoena of Bridgepoint Education, Inc. and Ashford University
On August 10, 2015, the Company and Ashford University received from the Consumer Financial Protection Bureau (the “CFPB”) Civil Investigative Demands related to the CFPB's investigation to determine whether for-profit post-secondary-education companies or other unnamed persons have engaged in or are engaging in unlawful acts or practices related to the advertising, marketing or origination of private student loans. The Company and Ashford University have provided documents, testimony and other information to the CFPB, and cannot predict the eventual scope, duration or outcome of the investigation at this time. As a result, the Company cannot reasonably estimate a range of loss for this action and accordingly has not accrued any liability associated with this action.
Securities Class Actions
Consolidated Securities Class Action
On July 13, 2012, a securities class action complaint was filed in the U.S. District Court for the Southern District of California by Donald K. Franke naming the Company, Andrew Clark, Daniel Devine and Jane McAuliffe as defendants for allegedly making false and materially misleading statements regarding the Company’s business and financial results, specifically the concealment of accreditation problems at Ashford University. The complaint asserts a putative class period stemming from May 3, 2011 to July 6, 2012. A substantially similar complaint was also filed in the same court by Luke Sacharczyk on July 17, 2012 making similar allegations against the Company, Andrew Clark and Daniel Devine. The Sacharczyk complaint asserts a putative class period stemming from May 3, 2011 to July 12, 2012. On July 26, 2012, another purported securities class action complaint was filed in the same court by David Stein against the same defendants based upon the same general set of allegations and class period. The complaints allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder and seek unspecified monetary relief, interest, and attorneys’ fees.
On October 22, 2012, the Sacharczyk and Stein actions were consolidated with the Franke action and the Court appointed the City of Atlanta General Employees' Pension Fund and the Teamsters Local 677 Health Services & Insurance Plan as lead plaintiffs. A consolidated complaint was filed on December 21, 2012 and the Company filed a motion to dismiss on February 19, 2013. On September 13, 2013, the Court granted the motion to dismiss with leave to amend for alleged misrepresentations relating to Ashford University’s quality of education, the WSCUC accreditation process and the Company’s financial forecasts. The Court denied the motion to dismiss for alleged misrepresentations concerning Ashford University’s persistence rates.
Following the conclusion of discovery, the parties entered into an agreement to settle the litigation for $15.5 million, which was funded by the Company's insurance carriers. The settlement was granted preliminary approval by the Court on December 14, 2015 and is now proceeding through the shareholder claims administration process.
Zamir v. Bridgepoint Education, Inc., et al.
On February 24, 2015, a securities class action complaint was filed in the U.S. District Court for the Southern District of California by Nelda Zamir naming the Company, Andrew Clark and Daniel Devine as defendants. The complaint asserts violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, claiming that the defendants made false and materially misleading statements and failed to disclose material adverse facts regarding the Company's business, operations and prospects, specifically regarding the Company’s improper application of revenue recognition methodology to assess collectability of funds owed by students. The complaint asserts a putative class period stemming from August 7, 2012 to May 30, 2014 and seeks unspecified monetary relief, interest and attorneys' fees. On July 15, 2015, the Court granted plaintiff's motion for appointment as lead plaintiff and for appointment of lead counsel.
On September 18, 2015, the plaintiff filed a substantially similar amended complaint that asserts a putative class period stemming from March 12, 2013 to May 30, 2014. The amended complaint also names Patrick Hackett, Adarsh Sarma, Warburg Pincus & Co., Warburg Pincus LLC, Warburg Pincus Partners LLC, and Warburg Pincus Private Equity VIII, L.P. as additional defendants. On November 24, 2015, all defendants filed motions to dismiss, which are currently pending with the Court. The outcome of this legal proceeding is uncertain at this point because of the many questions of fact and law that may arise. Based on information available to the Company at present, it cannot reasonably estimate a range of loss for this action. Accordingly, the Company has not accrued any liability associated with this action.
Shareholder Derivative Actions
In re Bridgepoint, Inc. Shareholder Derivative Action
On July 24, 2012, a shareholder derivative complaint was filed in California Superior Court by Alonzo Martinez. In the complaint, the plaintiff asserts a derivative claim on the Company's behalf against certain of its current and former officers and directors. The complaint is captioned Martinez v. Clark, et al. and generally alleges that the individual defendants breached their fiduciary duties of candor, good faith and loyalty, wasted corporate assets and were unjustly enriched. The lawsuit seeks unspecified monetary relief and disgorgement on behalf of the Company, as well as other equitable relief and attorneys' fees. On September 28, 2012, a substantially similar shareholder derivative complaint was filed in California Superior Court by David Adolph-Laroche. In the complaint, the plaintiff asserts a derivative claim on the Company's behalf against certain of its current and former officers and directors. The complaint is captioned Adolph-Laroche v. Clark, et al. and generally alleges that the individual defendants breached their fiduciary duties of candor, good faith and loyalty, wasted corporate assets and were unjustly enriched.
On October 11, 2012, the Adolph-Laroche action was consolidated with the Martinez action and the case is now captioned In re Bridgepoint, Inc. Shareholder Derivative Action. A consolidated complaint was filed on December 18, 2012 and the defendants filed a motion to stay the case while the underlying securities class action is pending. The motion was granted by the Court on April 11, 2013. A status conference was held on October 10, 2013, during which the Court ordered the stay continued for the duration of discovery in the securities class action, but permitted the plaintiff to receive copies of any discovery responses served in the underlying securities class action.
Cannon v. Clark, et al.
On November 1, 2013, a shareholder derivative complaint was filed in the U.S. District Court for the Southern District of California by James Cannon. In the complaint, the plaintiff asserts a derivative claim on the Company's behalf against certain of its current officers and directors. The complaint is captioned Cannon v. Clark, et al. and is substantially similar to the previously filed California State Court derivative action now captioned In re Bridgepoint, Inc. Shareholder Derivative Action. In the complaint, plaintiff generally alleges that the individual defendants breached their fiduciary duties of candor, good faith and loyalty, wasted corporate assets and were unjustly enriched. The lawsuit seeks unspecified monetary relief and disgorgement on behalf of the Company, as well as other equitable relief and attorneys' fees. Pursuant to a stipulation among the parties, on January 6, 2014, the Court ordered the case stayed during discovery in the underlying securities class action, but permitted the plaintiff to receive copies of any discovery responses served in the underlying securities class action.
Di Giovanni v. Clark, et al., and Craig-Johnston v. Clark, et al.
On December 9, 2013, two nearly identical shareholder derivative complaints were filed in the United States District Court for the Southern District of California. The complaints assert derivative claims on the Company's behalf against the members of the Company's board of directors as well as against Warburg Pincus & Co., Warburg Pincus LLC, Warburg Pincus Partners LLC, and Warburg Pincus Private Equity VIII, L.P. The two complaints are captioned Di Giovanni v. Clark, et al. and Craig-Johnston v. Clark, et al. The complaints generally allege that all of the defendants breached their fiduciary duties and were unjustly enriched and that the individual defendants wasted corporate assets in connection with the tender offer commenced by the Company on November 13, 2013. The lawsuits seek unspecified monetary relief and disgorgement, as well as other equitable relief and attorneys’ fees. On February 28, 2014, the defendants filed motions to dismiss, which were granted by the Court on October 17, 2014. The plaintiffs filed a notice of appeal on December 8, 2014 and the case is currently under appeal with the United States Court of Appeals for the Ninth Circuit.
Klein v. Clark, et al.
On January 9, 2014, a shareholder derivative complaint was filed in the Superior Court of the State of California in San Diego. The complaint asserts derivative claims on the Company's behalf against the members of the Company's board of directors as well as against Warburg Pincus & Co., Warburg Pincus LLC, Warburg Pincus Partners LLC, and Warburg Pincus Private Equity VIII, L.P. The complaint is captioned Klein v. Clark, et al. and generally alleges that all of the defendants breached their fiduciary duties and were unjustly enriched and that the individual defendants wasted corporate assets in connection with the tender offer commenced by the Company on November 13, 2013. The lawsuit seeks unspecified monetary relief and disgorgement, as well as other equitable relief and attorneys’ fees. On March 21, 2014, the Court granted the parties' stipulation to stay the case until the motions to dismiss in the related federal derivative action were decided. On November 14, 2014, the Court dismissed the case but retained jurisdiction in the event the dismissal in the federal case is reversed on appeal by the United States Court of Appeals for the Ninth Circuit.
Reardon v. Clark, et al.
On March 18, 2015, a shareholder derivative complaint was filed in the Superior Court of the State of California in San Diego. The complaint asserts derivative claims on the Company's behalf against certain of its current and former officers and directors. The complaint is captioned Reardon v. Clark, et al. and generally alleges that the individual defendants breached their fiduciary duties of candor, good faith and loyalty, wasted corporate assets and were unjustly enriched. The lawsuit seeks unspecified monetary relief and disgorgement, as well as other equitable relief and attorneys’ fees. Pursuant to a stipulation among the parties, on May 27, 2015, the Court ordered the case stayed during discovery in the underlying Zamir securities class action, but permitted the plaintiff to receive copies of any discovery conducted in the underlying Zamir securities class action.
Guzman v. Bridgepoint Education, Inc.
In January 2011, Betty Guzman filed a class action lawsuit against the Company, Ashford University and University of the Rockies in the U.S. District Court for the Southern District of California. The complaint is captioned Guzman v. Bridgepoint Education, Inc., et al. and generally alleges that the defendants engaged in misrepresentation and other unlawful behavior in their efforts to recruit and retain students. The complaint asserts a putative class period of March 1, 2005 through the present. In March 2011, the defendants filed a motion to dismiss the complaint, which was granted by the Court with leave to amend in October 2011.
In January 2012, the plaintiff filed a first amended complaint asserting similar claims and the same class period, and the defendants filed another motion to dismiss. In May 2012, the Court granted University of the Rockies’ motion to dismiss and granted in part and denied in part the motion to dismiss filed by the Company and Ashford University. The Court also granted the plaintiff leave to file a second amended complaint. In August 2012, the plaintiff filed a second amended complaint asserting similar claims and the same class period. The second amended complaint seeks unspecified monetary relief, disgorgement of all profits, various other equitable relief, and attorneys’ fees. The defendants filed a motion to strike portions of the second amended complaint, which was granted in part and denied in part. On April 30, 2014, the plaintiff filed a motion for class certification, which was denied by the Court on March 26, 2015. On April 9, 2015, the plaintiff filed a petition for permission to appeal the denial of class certification with the United States Court of Appeals for the Ninth Circuit, which was denied by the Court of Appeals on June 9, 2015.
On October 13, 2015, the parties entered into an agreement to settle the case for an immaterial amount and the case was dismissed with prejudice by the Court on November 2, 2015.
Qui Tam Complaints
In December 2012, the Company received notice that the U.S. Department of Justice had declined to intervene in a qui tam complaint filed in the U.S. District Court for the Southern District of California by Ryan Ferguson and Mark T. Pacheco under the federal False Claims Act on March 10, 2011 and unsealed on December 26, 2012. The complaint is captioned United States of America, ex rel., Ryan Ferguson and Mark T. Pacheco v. Bridgepoint Education, Inc., Ashford University and University of the Rockies. The qui tam complaint alleges, among other things, that since March 10, 2005, the Company caused its institutions, Ashford University and University of the Rockies, to violate the federal False Claims Act by falsely certifying to the Department that the institutions were in compliance with various regulations governing Title IV programs, including those that require compliance with federal rules regarding the payment of incentive compensation to enrollment personnel, student disclosures, and misrepresentation in connection with the institutions' participation in Title IV programs. The complaint seeks significant damages, penalties and other relief. On April 30, 2013, the relators petitioned the Court for voluntary dismissal of the complaint without prejudice. The U.S. Department of Justice filed a notice stipulating to the dismissal and the Court granted the dismissal on June 12, 2013.
In January 2013, the Company received notice that the U.S. Department of Justice had declined to intervene in a qui tam complaint filed in the U.S. District Court for the Southern District of California by James Carter and Roger Lengyel under the federal False Claims Act on July 2, 2010 and unsealed on January 2, 2013. The complaint is captioned United States of America, ex rel., James Carter and Roger Lengyel v. Bridgepoint Education, Inc., Ashford University. The qui tam complaint alleges, among other things, that since March 2005, the Company and Ashford University have violated the federal False Claims Act by falsely certifying to the Department that Ashford University was in compliance with federal rules regarding the payment of incentive compensation to enrollment personnel in connection with the institution's participation in Title IV programs. Pursuant to a stipulation between the parties, the relators filed an amended complaint on May 10, 2013. The amended complaint is substantially similar to the original complaint and seeks significant damages, penalties and other relief.
In March 2015, the Company filed a motion to dismiss the case pursuant to the public disclosure bar, which was granted without leave to amend by the Court on August 17, 2015. The relators filed a notice of appeal on September 15, 2015 and the case is currently under appeal with the United States Court of Appeals for the Ninth Circuit. During the pendency of the appeal, the parties agreed to settle the case for an immaterial amount and are in the process of finalizing a settlement agreement.
Cavazos v. Ashford University
On June 22, 2015, Diamond Cavazos filed a purported class action against Ashford University in the Superior Court of the State of California in San Diego. The complaint is captioned Diamond Cavazos v. Ashford University, LLC and generally alleges various wage and hour claims under California law for failure to pay overtime, failure to pay minimum wages and failure to provide rest and meal breaks. The lawsuit seeks back pay, the cost of benefits, penalties and interest on behalf of the putative class members, as well as other equitable relief and attorneys' fees. Before responding to the complaint, the parties entered into an agreement to settle the case for an immaterial amount and the Court dismissed the case without prejudice on January 15, 2016.
Coleman et al. v. Ashford University
On June 4, 2015, Brandy Coleman and a group of seven other former employees filed a purported class action against Ashford University in the Superior Court of the State of California in San Diego. The complaint is captioned Brandy Coleman v. Ashford University, LLC and generally alleges violations of the California WARN Act for back pay and benefits associated with the termination of the plaintiffs' employment in May 2015. The lawsuit seeks unpaid wages, penalties and interest on behalf of the putative class members, as well as other equitable relief and attorneys' fees. Before responding to the complaint, the parties entered into an agreement to settle the case for an immaterial amount and the Court dismissed the case without prejudice on January 29, 2016.
Concentration of Risk
Concentration of Risk
Concentration of Risk
Concentration of Revenue
In 2015, Ashford University derived 80.9% and University of the Rockies derived 86.6% of their respective revenues (in each case calculated on a cash basis in accordance with applicable Department regulations) from students whose source of funding is through Title IV programs. See Note 19, “Regulatory - The “90/10” Rule.” Title IV programs are subject to political and budgetary considerations and are subject to extensive and complex regulations. The Company's administration of these programs is periodically reviewed by various regulatory agencies. Any regulatory violation could be the basis for the initiation of potentially adverse actions including a suspension, limitation, or termination proceeding, which could have a material adverse effect on the Company's enrollments, revenues and results of operations.
Students obtain access to federal student financial aid through a Department prescribed application and eligibility certification process. Student financial aid funds are generally made available to students at prescribed intervals throughout their expected length of study. Students typically apply the funds received from the federal financial aid programs first to pay their tuition and fees. Any remaining funds are distributed directly to the student.
Concentration of Credit Risk
The Company maintains its cash and cash equivalents accounts in financial institutions. Accounts at these institutions are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The Company performs ongoing evaluations of these institutions to limit its concentrations risk exposure.
Concentration of Sources of Supply
The Company is dependent on a third-party provider for its online platform, which includes a learning management system, that stores, manages and delivers course content, enables assignment uploading, provides interactive communication between students and faculty and supplies online assessment tools. The partial or complete loss of this source may have an adverse effect on enrollments, revenues and results of operations.
Quarterly Results of Operations (Unaudited)
Quarterly Results of Operations (Unaudited)
Quarterly Results of Operations (Unaudited)
The following tables set forth unaudited results of operations and certain operating results for each quarter during 2015 and 2014. The Company believes that the information reflects all adjustments necessary to present fairly the information below. Basic and diluted earnings per common share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per common share information may not equal annual basic and diluted earnings per common share.
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 
(In thousands, except per share data)
2015
 
 
 
 
 
 
 
Revenue
$
142,518

 
$
147,057

 
$
140,762

 
$
131,392

Operating income (loss)
(1,200
)
 
(512
)
 
(34,479
)
 
(6,104
)
Net income (loss)
(371
)
 
(650
)
 
(62,746
)
 
(6,687
)
Earnings (loss) per common share:
 
 
 
 
 
 
 
Basic
$
(0.01
)
 
$
(0.01
)
 
$
(1.37
)
 
$
(0.15
)
Diluted
(0.01
)
 
(0.01
)
 
(1.37
)
 
(0.15
)
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 
(In thousands, except per share data)
2014
 
 
 
 
 
 
 
Revenue
$
157,270

 
$
171,522

 
$
162,654

 
$
147,259

Operating income (loss)
(7,858
)
 
22,414

 
10,581

 
(10,826
)
Net income (loss)
(4,330
)
 
12,955

 
6,291

 
(5,248
)
Earnings (loss) per common share:
 
 
 
 
 
 
 
Basic
$
(0.10
)
 
$
0.29

 
$
0.14

 
$
(0.12
)
Diluted
(0.10
)
 
0.28

 
0.14

 
(0.12
)
Summary of Significant Accounting Policies (Policies)
Principles of Consolidation 
Principles of Consolidation
The consolidated financial statements include the accounts of Bridgepoint Education, Inc. and its wholly-owned subsidiaries. Intercompany transactions have been eliminated in consolidation.
Use of Estimates 
Use of Estimates
The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates.
Prior Year Adjustments 
Reclassifications
Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. During 2015, the Company decided to separately show a restructuring and impairment charges line item on the Company's consolidated statements of income for each of the periods presented and has therefore reclassified certain amounts for the years ended December 31, 2014 and 2013 to this line. These reclassifications had no effect on previously reported results of operations or retained earnings. For further information, refer to Note 3, “Restructuring and Impairment Charges.”
Cash and Cash Equivalents 
Cash and Cash Equivalents
Cash and cash equivalents is comprised of cash and other short-term highly liquid investments that are readily convertible into known amounts of cash. The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
Restricted Cash 
Restricted Cash
The Company's restricted cash is primarily held in money market accounts, and is excluded from cash and cash equivalents on the Company's consolidated balance sheets and statements of cash flows. The majority of restricted cash represents funds held for students from Title IV financial aid program funds that result in credit balances on a student’s account. Changes in this restricted cash are included in the Company's condensed consolidated statements of cash flows as cash flows from operating activities. To a lesser extent, restricted cash also represents amounts held as collateral for letters of credit. Changes in this restricted cash are included in the Company's condensed consolidated statements of cash flows as cash flows from investing activities.
Investments 
Investments
As of December 31, 2015, the Company held short and long-term investments that consisted of mutual funds, corporate notes and bonds and certificates of deposit. The Company's investments are denominated in U.S. dollars, are investment grade and are readily marketable. The Company considers as current assets those investments which will mature or are likely to be sold in less than one year.
The Company classifies its investments as either trading, available-for-sale or held-to-maturity. Trading securities are those bought and held principally to sell in the short-term, with gains or losses from changes in fair value flowing through current earnings. Available-for-sale securities are carried at fair value as determined by quoted market prices, with unrealized gains and losses, net of tax, reported as a separate component of comprehensive income and stockholders’ equity. Held-to-maturity securities would be carried at amortized cost. Amortization of premiums, accretion of discounts, interest, and realized gains and losses are included in other income, net in the consolidated statement of income.
The Company regularly monitors and evaluates the realizable value of its investments. If events and circumstances indicate that a decline in the value of these assets has occurred and is other-than-temporary, the Company would record a charge to other income, net in the consolidated statement of income.
Deferred Compensation 
Deferred Compensation
The Company has a deferred compensation plan, into which certain members of management are eligible to defer a maximum of 80% of their regular compensation and a maximum of 100% of their incentive compensation. The amounts deferred by the participant under this plan are credited with earnings or losses based upon changes in values of participant elected notional investments. Each participant is fully vested in the participant amounts deferred. The Company may make contributions that will generally vest according to a four-year vesting schedule. After four years of service, participants become 100% vested in the employer contributions upon reaching normal retirement age, death, disability or a change in control. The Company's obligations under the deferred compensation plan totaled $1.2 million and $1.0 million as of December 31, 2015 and 2014, respectively, and are included in other liabilities in the consolidated balance sheets.
Fair Value Measurements 
Fair Value Measurements
The Company uses the three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: (i) Level 1, defined as observable inputs such as quoted prices in active markets; (ii) Level 2, defined as inputs other than quoted prices in active markets that are either observable directly or indirectly, through market corroboration, for substantially the full term of the financial instrument; and (iii) Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
Accounts Receivable and Allowance for Doubtful Accounts/Student Loans Receivable and Loan Loss Reserves 
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable consists of student accounts receivable, which represent amounts due for tuition, course digital materials, technology fees and other fees from currently enrolled and former students. Students generally fund their education through grants and/or loans under various Title IV programs, tuition assistance from military and corporate employers or personal funds. Payments are due on the respective course start date and are considered past due dependent upon the student's payment terms. In general, an account is considered delinquent 120 days subsequent to the course start date.
Accounts receivable are stated at the amount management expects to collect from outstanding balances. For accounts receivable, an allowance for doubtful accounts is estimated by management and is principally based on historical collection experience as well as (i) an assessment of individual accounts receivable over a specific aging and amount, (ii) consideration of the nature of the receivable accounts and (iii) potential changes in the business or economic environment. The provision for bad debt is recorded within instructional costs and services in the consolidated statements of income. The Company writes off uncollectable accounts receivable when the student account is deemed uncollectable by internal collection efforts or by a third-party collection agency.
Student Loans Receivable and Loan Loss Reserves
Student loans receivable consist of loans to qualified students and have a repayment period of 10 years from the date of graduation or withdrawal from the Company's institutions. The interest rate charged on student loans is a fixed rate of either 4.5% or 0.0% depending upon the repayment plan selected. If the student selects the rate of 0.0%, the student must pay $50 per month on the loan while enrolled in school and during the six months of grace period (after graduation or withdrawal) before the repayment period begins. On the 0.0% student loans, the Company imputes interest using the rate that would be used in a market transaction with similar terms. Interest income on student loans is recognized using the effective interest method and is recorded within other income in the consolidated statements of income. There was an immaterial amount of revenue recognized related to student loans during each of the years ended December 31, 2015, 2014 and 2013, respectively.
Student loans receivable are stated at the amount management expects to collect from outstanding balances. For tuition related student loan receivables, the Company estimates an allowance for doubtful accounts, similar to that of accounts receivable, based on (i) an assessment of individual loans receivable over a specific aging and amount, (ii) consideration of the nature of the receivable accounts, (iii) potential changes in the business or economic environment and (iv) related FICO scores and other industry metrics. The related provision for bad debts is recorded within instructional costs and services in the consolidated statements of income.
For non-tuition related student loans, the Company utilizes an impairment methodology. Under this methodology, management determines whether a loan would be impaired if the Company will be unable to collect all amounts due in accordance with the contractual terms of the individual loan agreement. This assessment is based on an analysis of several factors, including aging history and delinquency trending, the risk characteristics, credit quality and loan performance of the specific loans, and current economic conditions and industry trends. Credit quality is assessed at the outset of a loan, based upon the applicant's FICO score during the loan application process. The Company considers loans to be impaired when they reach a delinquency status that requires specialized collection efforts. The Company defines delinquency for loans as those students whose last activity is more than 120 days old. The Company records a loss reserve for the full book value of the impaired loans. For the years ended December 31, 2015, and 2014 there was $1.3 million and $2.4 million recorded for loan loss reserves, respectively. The loan loss reserve is maintained at a level deemed adequate by management based on a periodic analysis of the individual loans and is recorded within instructional costs and services in the consolidated statements of income.
Property and Equipment 
Property and Equipment
Property and equipment are recognized at cost less accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives of the related assets as follows:
Buildings
39 years
Furniture and office equipment
3 - 7 years
Software
3 - 5 years
Vehicles
5 years

Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful lives of the assets. Upon the retirement or disposition of property and equipment, the related cost and accumulated depreciation is removed and a gain or loss is recorded in the consolidated statements of income. Repairs and maintenance costs are expensed in the period incurred.
Leases 
Leases
Leases are evaluated and classified as either operating or capital leases. Leased property and equipment meeting certain criteria are capitalized, and the present value of the related lease payments is recognized as a liability on the consolidated balance sheets. Amortization of capitalized leased assets is computed on the straight-line method over the term of the lease or the life of the related asset, whichever is shorter.
If the Company receives tenant allowances from the lessor for certain improvements made to the leased property, these allowances are capitalized as leasehold improvements and a long-term liability is established. The long-term liability is amortized on a straight-line basis over the corresponding lease term. The Company records rent expense on a straight-line basis over the initial term of a lease. The difference between the rent payment and the straight-line rent expense is recorded as either a short-term or long-term liability.
The Company recognizes liabilities for exit and disposal activities on non-cancelable lease obligations at fair value in the period the liability is incurred. For the non-cancelable lease obligations, the Company records the obligation when the contract is terminated in accordance with the contract terms.
Impairment of Long-Lived Assets 
Impairment of Long-Lived Assets
The Company assesses potential impairment to its long-lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recorded if the carrying amount of the long-lived asset is not recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds fair value and is recorded as a reduction in the carrying value of the related asset and an expense to operating results.
Goodwill and Other Intangible Assets 
Goodwill and Other Intangible Assets
The Company tests goodwill and indefinite-lived intangible assets for impairment annually in the fourth quarter of each fiscal year, or more frequently if events and circumstances warrant.
The Company adopted accounting guidance which simplifies how an entity tests goodwill for impairment. The Company first assesses qualitative factors, such as deterioration in general economic conditions or negative company financial performance, to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. The Company's assessment of goodwill during the fourth quarter of fiscal 2015 indicated that it was not more likely than not that the fair value of a reporting unit is less than its carrying amount, and therefore, goodwill was not impaired. There have been no related impairment losses recognized by the Company for any periods presented. If negative qualitative indicators had been noted above, the Company would then need to assess the fair value of its reporting units to determine whether they were in excess of the carrying values.
To evaluate the impairment of the indefinite-lived intangible assets, the Company assessed the fair value of the assets to determine whether they were in excess of the carrying values. Determining the fair value of indefinite-lived intangible asset is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions are inherently uncertain, and can include such items as growth rates used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and a determination of appropriate market comparables. The Company's assessment of indefinite-lived intangible assets during the fourth quarter of fiscal 2015 did not result in any impairment. There have been no impairment losses for indefinite-lived intangibles recognized by the Company for any periods presented.
The Company also has definite-lived intangible assets, which primarily consist of purchased intangibles and capitalized curriculum development costs. The definite-lived intangible assets are recognized at cost less accumulated amortization. Amortization is computed using the straight-line method based on estimated useful lives of the related assets.
Revenue and Deferred Revenue 
Revenue and Deferred Revenue
The Company recognizes revenue when persuasive evidence of an arrangement exists, services have been rendered or delivery has occurred, its fees or price is fixed or determinable, and collectibility is reasonably assured. The Company's revenue consists of tuition, technology fees, course digital materials and other miscellaneous fees. Tuition revenue is deferred and recognized on a straight-line basis over the applicable period of instruction net of scholarships and expected refunds, with the exception of an online student's first course per degree level at Ashford University. An online student's first course per degree level at Ashford University falls under a three-week conditional admission period in which the revenue is deferred until the student matriculates into the course.
The Company's institutions' online students generally enroll in a program that encompasses a series of five to six-week courses that are taken consecutively over the length of the program. With the exception of those students under conditional admission, the online students are billed on a payment period basis on the first day of class. The Company's institutions' campus-based students enroll in a program that encompasses a series of nine-week or 16-week courses. Campus-based students are billed at the beginning of each term. The Company assesses collectibility at the start of a student’s payment period for the courses in that payment period (generally five courses for undergraduates and four courses for graduates).
If a student's attendance in a class precedes the receipt of cash from the student's source of funding, the Company establishes an account receivable and corresponding deferred revenue in the amount of the tuition due for that payment period. Cash received either directly from the student or from the student's source of funding reduces the balance of accounts receivable due from the student. Financial aid from sources such as the federal government's Title IV programs pertains to the online student's award year and is generally divided into two disbursement periods. As such, each disbursement period may contain funding for up to four courses. Financial aid disbursements are typically received during the online student's attendance in the first or second course. Since the majority of disbursements cover more courses than for which a student is currently enrolled, the amount received in excess effectively represents a prepayment from the online student for up to four courses. At the end of each accounting period, the deferred revenue and student deposits and related account receivable balances are reduced to present amounts attributable to the current course.
Students under conditional admission are not obligated for payment until after their conditional admission period has lapsed, so there is no related refund. For all subsequent courses, the Company records a provision for expected refunds and reduces revenue for the amount that is expected to be subsequently refunded. Provisions for expected refunds have not been material to any period presented. If a student withdraws from a program prior to a specified date, a portion of such student's tuition is refunded, subject to certain state requirements that require a pro rata refund. The Company reassess collectibility throughout the period revenue is recognized by the Company's institutions, on a student-by-student basis. The Company reassesses collectibility based upon new information and changes in facts and circumstances relevant to a student's ability to pay. For example, the Company reassesses collectibility when a student drops from the institution (i.e., is no longer enrolled) and when a student attends a course that was not included in the initial assessment of collectibility at the start of a student’s payment period.
In certain cases, the Company's institutions' provide scholarships to students for various programs. Scholarships issued by the universities are recorded in association with the related specific course, term or payment period. Scholarships are generally deferred and recognized against revenue over the course term. Incentive-based scholarships, such as the Leadership Development Grant (“LDG”) and Alumni Scholarship are recognized against revenue over the period of benefit to the student.
Ashford University records revenue from technology fee on a per course charge basis. The per course technology fee revenue for Ashford University is recognized on a straight-line basis over the applicable period of instruction. University of the Rockies records revenue from technology fees as one-time start up fees charged to each new online student (other than military, scholarship students or certain corporate reimbursement students), and then recognizes that revenue ratably over the average expected enrollment of a student. The average expected enrollment of the student was estimated each quarter based upon historical duration of attendance and qualitative factors as deemed necessary.
Other miscellaneous fees include fees for course content and textbooks and other services, such as commencements, and are recognized upon delivery of the goods or when the related service is performed.
Workers Compensation 
Workers Compensation
The Company records a gross liability for estimated workers compensation claims, incurred but not yet reported, as of each balance sheet date. The Company also records the gross insurance recoverable due for individual claim amounts. This is recorded as an other asset and as an equal accrued liability. The stop-loss premium is determined annually, but invoiced and paid on a quarterly basis. The related insurance premiums are expensed ratably over the coverage period.
Income Taxes 
Income Taxes
The Company accounts for its income taxes using the liability method whereby deferred tax assets and liabilities are determined based on temporary differences between the bases used for financial reporting and income tax reporting purposes. Deferred income taxes are provided based on the enacted tax rates expected to be in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for deferred tax assets if it is more-likely-than-not that the Company will not realize those tax assets through future operations.
The Company evaluates and accounts for uncertain tax positions using a two-step approach. Recognition (step one) occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination. Measurement (step two) determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Derecognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained.
Stock-Based Compensation 
Stock-Based Compensation
Stock-based compensation expense is measured at the grant date fair value of the award and is expensed over the vesting period. The Company estimates the fair value of stock options on the grant date using the Black-Scholes option pricing model. The Company estimates the fair value of its performance stock units (“PSUs”) on the grant date using a Monte Carlo simulation model. Determining the fair value of stock-based awards at the grant date under these models requires judgment, including estimating volatility, employee stock option exercise behaviors and forfeiture rates. The assumptions used in calculating the fair value of stock-based awards represent the Company's best estimates, but these estimates involve inherent uncertainties and the application of management judgment. The fair value of the Company's restricted stock units (“RSUs”) is based on the market price of the Company's common stock on the date of grant.
The amount of stock-based compensation expense recognized during a period is based on the portion of the awards that are ultimately expected to vest. The Company estimates award forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company's equity incentive plans require that stock option awards have an exercise price that equals or exceeds the closing price of the Company's common stock on the date of grant.
Stock-based compensation expense for stock-based awards is recorded in the consolidated statement of income, net of estimated forfeitures, using the graded-vesting method over the requisite service periods of the respective stock awards. The requisite service period is generally the period over which an employee is required to provide service to the Company in exchange for the award.
Instructional Costs and Services 
Instructional Costs and Services
Instructional costs and services consist primarily of costs related to the administration and delivery of the Company's educational programs. These expenses include compensation for campus-based faculty and administrative personnel, costs associated with online faculty, curriculum and new program development costs, financial aid processing costs, technology license costs, bad debt expense and costs associated with other support groups that provide services directly to the students. Instructional costs and services also include an allocation of information technology, facility, depreciation and amortization costs.
Admissions Advisory and Marketing 
Admissions Advisory and Marketing
Admissions advisory and marketing costs include compensation of personnel engaged in marketing and recruitment, as well as costs associated with purchasing leads and producing marketing materials. Such costs are generally affected by the cost of advertising media and leads, the efficiency of the Company's marketing and recruiting efforts, compensation for the Company's enrollment personnel and expenditures on advertising initiatives for new and existing academic programs. Admissions advisory and marketing costs also include an allocation of information technology, facility, depreciation and amortization costs.
Advertising costs, a subset of admissions advisory and marketing costs, consists primarily of marketing leads and other branding and promotional activities. These advertising activities are expensed as incurred, or the first time the advertising takes place, depending on the type of advertising activity. Advertising costs were $68.4 million, $89.0 million and $76.5 million for the years ended December 31, 2015, 2014 and 2013, respectively.
General and Administrative 
General and Administrative
General and administrative expenses include compensation of employees engaged in corporate management, finance, human resources, compliance and other corporate functions. General and administrative expenses also include professional services fees, travel and entertainment expenses and an allocation of information technology, facility, depreciation and amortization costs.
Restructuring and Impairment Charges 
Restructuring and Impairment Charges
Restructuring and impairment charges are primarily comprised of i) charges related to the write off of certain fixed assets and assets abandoned, ii) student transfer agreement costs, iii) severance costs related to headcount reductions made in connection with restructuring plans, iv) estimated lease losses related to facilities vacated or consolidated under restructuring plans, and v) the impairment of capitalized software costs.
Earnings Per Share 
Earnings Per Share
Basic earnings per common share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net income available to common stockholders by the sum of (i) the weighted average number of common shares outstanding during the period and (ii) potentially dilutive securities outstanding during the period, if the effect is dilutive. Potentially dilutive common shares consist of incremental shares of common stock issuable upon the exercise of the stock options and warrants and upon the settlement of RSUs and PSUs.
Segment Information 
Segment Information
The Company operates in one reportable segment as a single educational delivery operation using a core infrastructure that serves the curriculum and educational delivery needs of both its campus-based and online students regardless of geography. The Company's chief operating decision maker, its CEO and President, manages the Company's operations as a whole, and no revenue, expense or operating income information is evaluated by the chief operating decision maker on any component level.
Comprehensive Income 
Comprehensive Income
Comprehensive income consists of net income and other gains and losses affecting stockholders’ equity that, under GAAP, are excluded from net income. For the year ended December 31, 2015, such items consisted of unrealized gains and losses on investments. The following table summarizes the components of other comprehensive gain (loss) and the related tax effects for the years ended December 31, 2015, 2014 and 2013 (in thousands):
 
December 31, 2015
 
Before-Tax Amount
 
Tax Effect
 
Net-of-Tax Amount
Unrealized gains on investments
$
125

 
$
(49
)
 
$
76

 
 
 
 
 
 
 
December 31, 2014
 
Before-Tax Amount
 
Tax Effect
 
Net-of-Tax Amount
Unrealized losses on investments
$
(359
)
 
$
136

 
$
(223
)
 
 
 
 
 
 
 
December 31, 2013
 
Before-Tax Amount
 
Tax Effect
 
Net-of-Tax Amount
Unrealized losses on investments
$
(280
)
 
$
106

 
(174
)

The Company reclassified an immaterial amount out of other comprehensive income for each of the years ended December 31, 2014 and 2013, respectively, relating to the net realized gain on the sale of securities. There was no such reclassification during the year ended December 31, 2015.
Recent Accounting Pronouncements 
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) 605, Revenue Recognition. This literature is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The accounting guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This standard can be adopted using one of two retrospective application methods. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date, which defers the effective date of ASU 2014-09 by one year, to fiscal years beginning after December 15, 2017. The Company continues to evaluate the impacts, if any, the adoption of ASU 2014-09 and ASU 2015-14 will have on the Company's financial position or results of operations.
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The amendments are effective for periods ending after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company adopted ASU 2014-15 effective January 1, 2015, and the adoption did not have a material effect on its consolidated financial statements.
In January 2015, the FASB issued ASU 2015-01, Income Statement—Extraordinary and Unusual Items (Subtopic 225-20). This update simplifies the income statement presentation requirements and eliminates from GAAP the concept of extraordinary items, and essentially deletes the requirements in Subtopic 225-20. However, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The amendments may be applied prospectively, or retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company adopted ASU 2015-01 effective April 1, 2015. The adoption of ASU 2015-01 does not have a material effect on the Company’s consolidated financial statements.
In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740). The amendments in this Update are intended to simplify 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. Prior to this amendment, Topic 740, Income Taxes, requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. Deferred tax liabilities and assets are classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. Deferred tax liabilities and assets that are not related to an asset or liability for financial reporting are classified according to the expected reversal date of the temporary difference. The amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company adopted the guidance prospectively as of December 31, 2015 and all current deferred tax assets have been classified as noncurrent as of that date.
In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10). The amendments in this Update require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this Update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition the amendments in this Update eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities and the requirement for to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of ASU 2016-01 is not expected to have a material effect on the Company’s consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under this new guidance, as of the lease commencement date, lessees will be required to recognize the following for all leases, with the exception of short-term leases: i) a lease liability for the obligation to make lease payments arising from a lease, measured on a discounted basis; and ii) a right-of-use asset, representing the lessee’s right to use, or control the use of, a specified asset for the lease term. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a 'modified retrospective' transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. The Company is assessing the impact of adopting ASU 2016-02, but expects it to have a material effect on the Company's consolidated financial statements.
Summary of Significant Accounting Policies (Tables)
Property and Equipment 
Property and equipment are recognized at cost less accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives of the related assets as follows:
Buildings
39 years
Furniture and office equipment
3 - 7 years
Software
3 - 5 years
Vehicles
5 years
Property and equipment, net, consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Land
$
—

 
$
7,091

Buildings
—

 
29,540

Furniture and office equipment
63,354

 
81,030

Software
12,605

 
12,454

Leasehold improvements
11,136

 
21,096

Vehicles
22

 
147

Total property and equipment
87,117

 
151,358

Less accumulated depreciation and amortization
(65,375
)
 
(73,139
)
Total property and equipment, net
$
21,742

 
$
78,219

Components of Other Comprehensive Loss and the Related Tax Effects 
The following table summarizes the components of other comprehensive gain (loss) and the related tax effects for the years ended December 31, 2015, 2014 and 2013 (in thousands):
 
December 31, 2015
 
Before-Tax Amount
 
Tax Effect
 
Net-of-Tax Amount
Unrealized gains on investments
$
125

 
$
(49
)
 
$
76

 
 
 
 
 
 
 
December 31, 2014
 
Before-Tax Amount
 
Tax Effect
 
Net-of-Tax Amount
Unrealized losses on investments
$
(359
)
 
$
136

 
$
(223
)
 
 
 
 
 
 
 
December 31, 2013
 
Before-Tax Amount
 
Tax Effect
 
Net-of-Tax Amount
Unrealized losses on investments
$
(280
)
 
$
106

 
(174
)
Restructuring and Impairment Charges Restructuring and Impairment Charges (Tables)
Restructuring and Related Costs 
The following table summarizes the amounts recorded in the restructuring and impairment charges line item on the Company's consolidated statements of income for each of the periods presented (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Asset impairment
$
43,328

 
$
4,566

 
$
748

Student transfer agreement costs
3,264

 
—

 
—

Severance costs
4,717

 
3,560

 
5,914

Lease exit and other costs
17,047

 
6,470

 
328

Capitalized software costs
—

 
2,232

 
—

Total restructuring and impairment charges
$
68,356

 
$
16,828

 
$
6,990

Schedule of Restructuring Reserve 
The following table summarizes the changes in the Company's restructuring liability by type during the three-year period ended December 31, 2015 (in thousands):
 
Asset Impairment
 
Student Transfer Agreement Costs
 
Severance Costs
 
Lease Exit and Other Costs
 
Capitalized Software Costs
 
Total
Balance at December 31, 2012
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Restructuring and impairment charges
748

 
—

 
5,914

 
328

 
—

 
6,990

Payments
—

 
—

 
(5,914
)
 
—

 
—

 
(5,914
)
Non-cash transaction
(748
)
 
—

 
—

 
—

 
—

 
(748
)
Balance at December 31, 2013
—

 
—

 
—

 
328

 
—

 
328

Restructuring and impairment charges
4,566

 
—

 
3,560

 
6,470

 
2,232

 
16,828

Payments
—

 
—

 
(2,700
)
 
(218
)
 
—

 
(2,918
)
Non-cash transaction
(4,566
)
 
—

 
—

 
—

 
(2,232
)
 
(6,798
)
Balance at December 31, 2014
—

 
—

 
860

 
6,580

 
—

 
7,440

Restructuring and impairment charges
43,328

 
3,264

 
4,717

 
17,047

 
—

 
68,356

Payments
—

 
(40
)
 
(3,833
)
 
(9,706
)
 
—

 
(13,579
)
Non-cash transaction
(43,328
)
 
—

 
—

 
—

 
—

 
(43,328
)
Balance at December 31, 2015
$
—

 
$
3,224

 
$
1,744

 
$
13,921

 
$
—

 
$
18,889

Investments (Tables)
Fair Value Information of Short and Long-term Investments 
The following table summarizes the fair value information of short and long-term investments as of December 31, 2015 and 2014, respectively (in thousands):
 
December 31, 2015
 
Level 1
 
Level 2
 
Level 3
 
Total
Mutual funds
$
1,314

 
$
—

 
$
—

 
$
1,314

Corporate notes and bonds
—

 
40,843

 
—

 
40,843

Certificates of deposit
—

 
25,000

 
—

 
25,000

Total
$
1,314

 
$
65,843

 
$
—

 
$
67,157

 
December 31, 2014
 
Level 1
 
Level 2
 
Level 3
 
Total
Mutual funds
$
1,071

 
$
—

 
$
—

 
$
1,071

Corporate notes and bonds
—

 
62,550

 
—

 
62,550

U.S. government and agency securities
—

 
34,987

 
—

 
34,987

Certificates of deposit
—

 
25,000

 
—

 
25,000

Total
$
1,071

 
$
122,537

 
$
—

 
$
123,608

Schedule of Difference Between Amortized Cost and Fair Value 
The following table summarizes the differences between amortized cost and fair value of short and long-term investments as of December 31, 2015 and 2014, respectively (in thousands):
 
December 31, 2015
 
 
 
 
 
Gross unrealized
 
 
 
Maturities
 
Amortized Cost
 
Gain
 
Loss
 
Fair Value
Short-term
 
 
 
 
 
 
 
 
 
Corporate notes and bonds
1 year or less
 
18,113

 
—

 
(40
)
 
18,073

Long-term
 
 
 
 
 
 
 
 
 
Corporate notes and bonds
3 years or less
 
22,887

 
—

 
(117
)
 
22,770

Certificates of deposit
3 years or less
 
25,000

 
—

 
—

 
25,000

Total
 
 
$
66,000

 
$
—

 
$
(157
)
 
$
65,843

The above table does not include $1.3 million for mutual funds for December 31, 2015, which are recorded as trading securities.
 
December 31, 2014
 
 
 
 
 
Gross unrealized
 
 
 
Maturities
 
Amortized Cost
 
Gain
 
Loss
 
Fair Value
Short-term
 
 
 
 
 
 
 
 
 
Corporate notes and bonds
1 year or less
 
$
10,947

 
$
33

 
$
—

 
$
10,980

Long-term
 
 
 
 
 
 
 
 
 
Corporate notes and bonds
3 years or less
 
51,874

 
—

 
(304
)
 
51,570

U.S. government and agency securities
3 years or less
 
35,000

 
—

 
(13
)
 
34,987

Certificate of deposit
3 years or less
 
25,000

 
—

 
—

 
25,000

Total
 
 
$
122,821

 
$
33

 
$
(317
)
 
$
122,537


The above table does not include $1.1 million for mutual funds for December 31, 2014, which are recorded as trading securities.
Accounts Receivable (Tables)
Accounts Receivable 
Accounts receivable, net, consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Accounts receivable
$
34,205

 
$
48,841

Less allowance for doubtful accounts
10,114

 
27,567

Accounts receivable, net
$
24,091

 
$
21,274

Student loans receivable, net, consist of the following (in thousands):
 
As of December 31,
Short-term:
2015
 
2014
   Student loans receivable (non-tuition related)
$
310

 
$
509

   Student loans receivable (tuition related)
555

 
626

   Current student loans receivable
865

 
1,135

Less allowance for doubtful accounts
90

 
132

Student loans receivable, net
$
775

 
$
1,003

 
 
 
 
 
As of December 31,
Long-term:
2015
 
2014
   Student loans receivable (non-tuition related)
$
3,314

 
$
4,805

   Student loans receivable (tuition related)
4,943

 
6,068

   Non-current student loans receivable
8,257

 
10,873

Less allowance for doubtful accounts
863

 
1,363

Student loans receivable, net
$
7,394

 
$
9,510

Changes in the Allowance for Doubtful Accounts 
The following table presents the changes in the allowance for doubtful accounts for accounts receivable for the periods indicated (in thousands):
 
Beginning
Balance
 
Charged to
Expense
 
Deductions(1)
 
Ending
Balance
Allowance for doubtful accounts receivable:
 
 
 
 
 
 
 
For the year ended December 31, 2015
$
27,567

 
$
29,782

 
$
(47,235
)
 
$
10,114

For the year ended December 31, 2014
26,901

 
27,853

 
(27,187
)
 
27,567

For the year ended December 31, 2013
31,466

 
46,851

 
(51,416
)
 
26,901

(1)
Deductions represent accounts written off, net of recoveries.
The following table presents the changes in the allowance for doubtful accounts for student loans receivable (tuition related) for the periods indicated (in thousands):
 
Beginning
Balance
 
Charged to
Expense
 
Deductions(1)
 
Ending
Balance
Allowance for doubtful student loans receivable:
 
 
 
 
 
 
 
For the year ended December 31, 2015
$
1,495

 
$
81

 
$
(623
)
 
$
953

For the year ended December 31, 2014
2,144

 
331

 
(980
)
 
1,495

For the year ended December 31, 2013
1,895

 
268

 
(19
)
 
2,144

(1)
Deductions represent accounts written off, net of recoveries.
Student Loans Receivable (Tables)
Student Loans Receivables, Net 
Accounts receivable, net, consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Accounts receivable
$
34,205

 
$
48,841

Less allowance for doubtful accounts
10,114

 
27,567

Accounts receivable, net
$
24,091

 
$
21,274

Student loans receivable, net, consist of the following (in thousands):
 
As of December 31,
Short-term:
2015
 
2014
   Student loans receivable (non-tuition related)
$
310

 
$
509

   Student loans receivable (tuition related)
555

 
626

   Current student loans receivable
865

 
1,135

Less allowance for doubtful accounts
90

 
132

Student loans receivable, net
$
775

 
$
1,003

 
 
 
 
 
As of December 31,
Long-term:
2015
 
2014
   Student loans receivable (non-tuition related)
$
3,314

 
$
4,805

   Student loans receivable (tuition related)
4,943

 
6,068

   Non-current student loans receivable
8,257

 
10,873

Less allowance for doubtful accounts
863

 
1,363

Student loans receivable, net
$
7,394

 
$
9,510

Changes in the Allowance for Doubtful Accounts 
The following table presents the changes in the allowance for doubtful accounts for accounts receivable for the periods indicated (in thousands):
 
Beginning
Balance
 
Charged to
Expense
 
Deductions(1)
 
Ending
Balance
Allowance for doubtful accounts receivable:
 
 
 
 
 
 
 
For the year ended December 31, 2015
$
27,567

 
$
29,782

 
$
(47,235
)
 
$
10,114

For the year ended December 31, 2014
26,901

 
27,853

 
(27,187
)
 
27,567

For the year ended December 31, 2013
31,466

 
46,851

 
(51,416
)
 
26,901

(1)
Deductions represent accounts written off, net of recoveries.
The following table presents the changes in the allowance for doubtful accounts for student loans receivable (tuition related) for the periods indicated (in thousands):
 
Beginning
Balance
 
Charged to
Expense
 
Deductions(1)
 
Ending
Balance
Allowance for doubtful student loans receivable:
 
 
 
 
 
 
 
For the year ended December 31, 2015
$
1,495

 
$
81

 
$
(623
)
 
$
953

For the year ended December 31, 2014
2,144

 
331

 
(980
)
 
1,495

For the year ended December 31, 2013
1,895

 
268

 
(19
)
 
2,144

(1)
Deductions represent accounts written off, net of recoveries.
Delinquency Status of Gross Student Loans Receivable 
As of December 31, 2015, the repayment status of gross student loans receivable was as follows (in thousands):
Less than 120 days
$
10,865

From 120 - 269 days
351

Greater than 270 days
740

Total gross student loans receivable
11,956

Less: Amounts reserved or impaired
(1,398
)
Less: Discount on student loans receivable
(2,389
)
Total student loans receivable, net
$
8,169

Prepaid Expense and Other Current Assets (Tables)
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Prepaid expenses
$
7,005

 
$
8,500

Prepaid licenses
5,221

 
5,598

Prepaid income taxes
—

 
2,945

Income tax receivable
20,169

 
—

Prepaid insurance
1,619

 
1,508

Insurance recoverable
16,659

 
1,440

Interest receivable
299

 
424

Other current assets
1,220

 
2,403

Total prepaid expenses and other current assets
$
52,192

 
$
22,818

Property and Equipment, Net (Tables)
Property and Equipment
Property and equipment are recognized at cost less accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives of the related assets as follows:
Buildings
39 years
Furniture and office equipment
3 - 7 years
Software
3 - 5 years
Vehicles
5 years
Property and equipment, net, consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Land
$
—

 
$
7,091

Buildings
—

 
29,540

Furniture and office equipment
63,354

 
81,030

Software
12,605

 
12,454

Leasehold improvements
11,136

 
21,096

Vehicles
22

 
147

Total property and equipment
87,117

 
151,358

Less accumulated depreciation and amortization
(65,375
)
 
(73,139
)
Total property and equipment, net
$
21,742

 
$
78,219

Goodwill and Intangibles, Net (Tables)
Goodwill and Intangibles, Net 
Goodwill and intangibles, net, consist of the following (in thousands):
 
December 31, 2015
Definite-lived intangible assets:
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Capitalized curriculum costs
$
20,323

 
$
(13,954
)
 
$
6,369

Purchased intangible assets
15,850

 
(3,521
)
 
12,329

     Total definite-lived intangible assets
$
36,173

 
$
(17,475
)
 
$
18,698

Goodwill and indefinite-lived intangibles
 
 
 
 
2,567

Total goodwill and intangibles, net
 
 
 
 
$
21,265

 
 
 
 
 
 
 
December 31, 2014
Definite-lived intangible assets:
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Capitalized curriculum costs
$
18,174

 
$
(9,526
)
 
$
8,648

Purchased intangible assets
15,850

 
(2,290
)
 
13,560

     Total definite-lived intangible assets
$
34,024

 
$
(11,816
)
 
$
22,208

Goodwill and indefinite-lived intangibles
 
 
 
 
2,567

Total goodwill and intangibles, net
 
 
 
 
$
24,775

Summary of Estimated Remaining Amortization Expense 
The following table summarizes the estimated remaining amortization expense as of each fiscal year ended below (in thousands):
Year Ended December 31,
 
 
2016
$
4,671

2017
3,183

2018
2,104

2019
1,342

2020
1,232

Thereafter
6,166

Total future amortization expense
$
18,698

Accrued Liabilities (Tables)
Accrued Liabilities
Accrued liabilities consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Accrued salaries and wages
$
10,476

 
$
8,250

Accrued bonus
4,295

 
2,720

Accrued vacation
9,628

 
9,771

Accrued litigation and fees
720

 
542

Accrued expenses
17,227

 
18,223

Rent liability
13,406

 
8,528

Accrued insurance liability
18,666

 
2,920

Accrued income taxes payable
16

 
449

Total accrued liabilities
$
74,434

 
$
51,403

Deferred Revenue and Student Deposits (Tables)
Deferred Revenue and Student Deposits
Deferred revenue and student deposits consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Deferred revenue
$
23,311

 
$
26,445

Student deposits
65,445

 
81,603

Total deferred revenue and student deposits
$
88,756

 
$
108,048

Other Long-Term Liabilities (Tables)
Schedule of Other Long-Term Liabilities
Other long-term liabilities consist of the following (in thousands):
 
As of December 31,
 
2015
 
2014
Uncertain tax positions
$
7,870

 
$
7,586

Legal settlements
178

 
1,000

Other long-term liabilities
6,998

 
1,066

Total other long term liabilities
$
15,046

 
$
9,652

Lease Obligations (Tables)
Future Minimum Rental Payments Under Non-Cancelable Operating Leases
The following table summarizes the future minimum rental payments under non-cancelable operating lease arrangements in effect at December 31, 2015 (in thousands):
Year Ended December 31,
 
 
2016
$
36,655

2017
36,127

2018
31,445

2019
20,876

2020
9,546

Thereafter
7,148

Total minimum payments
$
141,797

Earnings Per Share (Tables)
Computation of Basic and Diluted Earnings Per Common Share 
The following table sets forth the computation of basic and diluted earnings per common share for the periods indicated (in thousands, except per share data):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Numerator:
 
 
 
 
 
Net income (loss)
$
(70,454
)
 
$
9,668

 
$
45,883

Denominator:
 
 
 
 
 
Weighted average number of common shares outstanding
45,665

 
45,204

 
53,923

Effect of dilutive options and restricted stock units
—

 
1,308

 
1,482

Effect of dilutive warrants
—

 
—

 
82

Diluted weighted average number of common shares outstanding
45,665

 
46,512

 
55,487

Earnings per common share:
 
 
 
 
 
Basic earnings per common share
$
(1.54
)
 
$
0.21

 
$
0.85

Diluted earnings per common share
(1.54
)
 
0.21

 
0.83

Antidilutive Securities 
For the periods indicated below, the computation of dilutive common shares outstanding excludes stock options and RSUs, as applicable, because their effect was anti-dilutive.
 
Year Ended December 31,
(in thousands)
2015
 
2014
 
2013
Options
5,063

 
2,660

 
3,004

Restricted stock units
762

 
—

 
3

Stock-Based Compensation (Tables)
Summary of Stock Option Activity 
The following table presents a summary of stock option activity in 2015, 2014 and 2013 (in thousands, except for exercise prices and contractual terms):
 
Options
Outstanding
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic Value
December 31, 2012
6,412

 
$
14.17

 
7.21
 
$
9,010

Granted
483

 
10.23

 
 
 
 
Exercised
(1,060
)
 
9.87

 
 
 
 
Forfeitures and expired
(345
)
 
20.65

 
 
 
 
December 31, 2013
5,490

 
14.25

 
6.52
 
$
28,769

Granted
403

 
14.35

 
 
 
 
Exercised
(388
)
 
8.01

 
 
 
 
Forfeitures and expired
(337
)
 
21.43

 
 
 
 
December 31, 2014
5,168

 
14.26

 
5.73
 
$
7,732

Granted
454

 
9.44

 
 
 
 
Exercised
(206
)
 
1.38

 
 
 
 
Forfeitures and expired
(764
)
 
18.15

 
 
 
 
December 31, 2015
4,653

 
$
13.72

 
4.84
 
$
2,556

Vested and expected to vest at December 31, 2015
4,597

 
$
13.75

 
4.79
 
$
2,556

Exercisable at December 31, 2015
3,904

 
$
14.07

 
4.15
 
$
2,556

Summary of Assumptions Used for Options Granted 
Below is a summary of the assumptions used for the stock options granted in the years indicated.
 
2015
 
2014
 
2013
Weighted average exercise price per share
$
9.44

 
$
14.35

 
$
10.23

Risk-free interest rate
1.6
%
 
2.0
%
 
1.0
%
Expected dividend yield
—

 
—

 
—

Expected volatility
50.7
%
 
55.1
%
 
58.9
%
Expected life (in years)
5.75

 
5.75

 
5.85

Forfeiture rate
7.0
%
 
6.0
%
 
5.0
%
Weighted average grant date fair value per share
$
4.52

 
$
7.43

 
$
5.48

Schedule of Share-based Payment Award, Equity Instruments Other than Options, Valuation Assumptions [Table Text Block] [Table Text Block] 
The assumptions for the market-based portion of the PSUs granted are noted in the following table:
 
2015
Grant price per share
$
9.46

Risk-free interest rate
0.7
%
Expected dividend yield
—

Historical volatility
50.0
%
Expected life (in years)
4.0

Forfeiture rate
7.0
%
Weighted average grant date fair value per share
$
4.04

Summary of Restricted Stock Units Activity 
A summary of the RSU and PSU activity and related information is as follows:
 
Restricted Stock Units and Performance Stock Units
 
Time Based RSU
 
Performance-Based PSU
 
Market-Based PSU
 
Number of Shares
 
Weighted Average
Purchase Price
 
Number of Shares
 
Weighted Average
Purchase Price
 
Number of Shares
 
Weighted Average
Purchase Price
Balance at December 31, 2012
362,199

 
$
9.72

 
—

 
$
—

 
—

 
$
—

Awarded
1,016,035

 
10.50

 
—

 
—

 
—

 
—

Vested
(181,104
)
 
9.72

 
—

 
—

 
—

 
—

Canceled
(98,613
)
 
10.39

 
—

 
—

 
—

 
—

Balance at December 31, 2013
1,098,517

 
10.38

 
—

 
—

 
—

 
—

Awarded
786,250

 
14.33

 
—

 
—

 
975,295

 
5.39

Vested
(393,106
)
 
10.15

 
—

 
—

 
—

 
—

Canceled
(212,572
)
 
11.89

 
—

 
—

 
—

 
—

Balance at December 31, 2014
1,279,089

 
12.63

 
—

 
—

 
975,295

 
5.39

Awarded
983,473

 
9.33

 
455,765

 
9.86

 
229,017

 
4.04

Vested
(353,126
)
 
12.34

 
—

 
—

 
—

 
—

Canceled
(519,425
)
 
11.51

 
(96,621
)
 
9.86

 
(238,084
)
 
5.21

Balance at December 31, 2015
1,390,011

 
$
10.78

 
359,144

 
$
9.86

 
966,228

 
$
5.11

Income Taxes (Tables)
Components of Income Tax Expense 
The components of income tax expense are as follows (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Current:
 
 
 
 
 
Federal
$
(10,370
)
 
$
12,686

 
$
29,456

State
(309
)
 
1,937

 
3,168

 
(10,679
)
 
14,623

 
32,624

Deferred:
 
 
 
 
 
Federal
33,482

 
(6,216
)
 
(5,952
)
State
7,462

 
(880
)
 
(1,010
)
 
40,944

 
(7,096
)
 
(6,962
)
Total
$
30,265

 
$
7,527

 
$
25,662

Schedule of Deferred Tax Assets and Liabilities 
Deferred income tax balances reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when taxes are paid or recovered. Significant components of the Company’s deferred tax assets and liabilities and balance sheet classifications are as follows (in thousands):
 
As of December 31,
 
2015
 
2014
Deferred tax assets:
 
 
 
Net operating loss
$
737

 
$
211

Fixed assets
(1,328
)
 
194

Bad debt
2,412

 
2,338

Vacation accrual
3,305

 
2,956

Stock-based compensation
15,766

 
16,291

Deferred rent
12,585

 
11,580

State tax
2,154

 
2,257

Bonus accrual
1,609

 
1,023

Unearned interest
898

 
1,118

Accrued expenses
3,939

 
2,121

Revenue reserves
64

 
9,820

Other
278

 
107

Total deferred tax assets
42,419

 
50,016

Valuation allowance
(42,419
)
 
—

Net deferred tax assets
—

 
50,016

Deferred tax liabilities:
 
 
 
Fixed assets and intangibles
—

 
(8,540
)
Indefinite-lived intangibles
(744
)
 
—

Total deferred tax liabilities
(744
)
 
(8,540
)
Total net deferred tax assets (liabilities)
$
(744
)
 
$
41,476

Deferred taxes are reflected in the balance sheet as follows (in thousands):
 
As of December 31,
 
2015
 
2014
Current deferred tax assets
$
—

 
$
21,301

Current deferred tax liabilities
—

 
—

Noncurrent deferred tax assets
—

 
20,175

Noncurrent deferred tax liabilities
(744
)
 
—

Total
$
(744
)
 
$
41,476

Schedule of Income Tax Rate Reconciliation 
A reconciliation of the income tax expense computed using the U.S. federal statutory tax rate of 35% and the Company's provision for income taxes follows (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Computed expected federal tax expense
$
(14,066
)
35.0
 %
 
$
6,018

35.0
 %
 
$
25,041

35.0
 %
State taxes, net of federal benefit
(655
)
1.6

 
426

2.5

 
1,466

2.0

Permanent differences
1,033

(2.6
)
 
1,125

6.5

 
1,295

1.8

Uncertain tax positions
480

(1.2
)
 
424

2.5

 
(1,762
)
(2.5
)
Credits
(206
)
0.5

 
(470
)
(2.7
)
 
(378
)
(0.4
)
Stock compensation
1,246

(3.1
)
 
—

—

 
—

—

Valuation allowance
42,419

(105.5
)
 
—

—

 
—

—

Other
14

—

 
4

—

 
—

—

Income tax expense
$
30,265

(75.3
)%
 
$
7,527

43.8
 %
 
$
25,662

35.9
 %
Summary of Unrecognized Tax Benefits 
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Unrecognized tax benefits at December 31, 2013
$
7,387

Gross increases-tax positions in prior period
13,869

Gross decreases-tax positions in prior period
(23
)
Gross increases-current period tax positions
53

Settlements
(409
)
Lapse of statute of limitations
—

Unrecognized tax benefits at December 31, 2014
20,877

Gross increases-tax positions in prior period
169

Gross decreases-tax positions in prior period
(2
)
Gross increases-current period tax positions
—

Settlements
(455
)
Lapse of statute of limitations
—

Unrecognized tax benefits at December 31, 2015
$
20,589

Quarterly Results of Operations (Unaudited) (Tables)
Schedule of Quarterly Financial Information
The following tables set forth unaudited results of operations and certain operating results for each quarter during 2015 and 2014. The Company believes that the information reflects all adjustments necessary to present fairly the information below. Basic and diluted earnings per common share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per common share information may not equal annual basic and diluted earnings per common share.
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 
(In thousands, except per share data)
2015
 
 
 
 
 
 
 
Revenue
$
142,518

 
$
147,057

 
$
140,762

 
$
131,392

Operating income (loss)
(1,200
)
 
(512
)
 
(34,479
)
 
(6,104
)
Net income (loss)
(371
)
 
(650
)
 
(62,746
)
 
(6,687
)
Earnings (loss) per common share:
 
 
 
 
 
 
 
Basic
$
(0.01
)
 
$
(0.01
)
 
$
(1.37
)
 
$
(0.15
)
Diluted
(0.01
)
 
(0.01
)
 
(1.37
)
 
(0.15
)
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 
(In thousands, except per share data)
2014
 
 
 
 
 
 
 
Revenue
$
157,270

 
$
171,522

 
$
162,654

 
$
147,259

Operating income (loss)
(7,858
)
 
22,414

 
10,581

 
(10,826
)
Net income (loss)
(4,330
)
 
12,955

 
6,291

 
(5,248
)
Earnings (loss) per common share:
 
 
 
 
 
 
 
Basic
$
(0.10
)
 
$
0.29

 
$
0.14

 
$
(0.12
)
Diluted
(0.10
)
 
0.28

 
0.14

 
(0.12
)
Summary of Significant Accounting Policies (Narrative) (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
segment
Dec. 31, 2014
Dec. 31, 2013
Accounting Policies [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 131,392,000 
$ 140,762,000 
$ 147,057,000 
$ 142,518,000 
$ 147,259,000 
$ 162,654,000 
$ 171,522,000 
$ 157,270,000 
$ 561,729,000 
$ 638,705,000 
$ 751,449,000 
Operating income (loss)
(6,104,000)
(34,479,000)
(512,000)
(1,200,000)
(10,826,000)
10,581,000 
22,414,000 
(7,858,000)
(42,295,000)
14,311,000 
68,463,000 
Net income (loss)
(6,687,000)
(62,746,000)
(650,000)
(371,000)
(5,248,000)
6,291,000 
12,955,000 
(4,330,000)
(70,454,000)
9,668,000 
45,883,000 
Deferred compensation, maximum employee contribution, percentage of regular compensation
 
 
 
 
 
 
 
 
80.00% 
 
 
Deferred compensation, maximum employee contribution, percentage of incentive compensation
 
 
 
 
 
 
 
 
100.00% 
 
 
Deferred compensation, requisite service period
 
 
 
 
 
 
 
 
4 years 
 
 
Company obligations under deferred compensation plan
1,200,000 
 
 
 
1,000,000 
 
 
 
1,200,000 
1,000,000 
 
Advertising costs
 
 
 
 
 
 
 
 
$ 68,400,000 
$ 89,000,000 
$ 76,500,000 
Number of reportable segments
 
 
 
 
 
 
 
 
1 
 
 
Summary of Significant Accounting Policies (Receivables) (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Student loans receivable, repayment term following graduation or withdrawal
10 years 
 
 
Student loans receivable, grace period following graduation or withdrawal
6 months 
 
 
Loss on impairment of student loans receivable
$ 1,300,000 
$ 2,400,000 
$ 1,998,000 
Repayment Plan One
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Student loans receivable, interest rate
4.50% 
 
 
Repayment Plan Two
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Student loans receivable, interest rate
0.00% 
 
 
Student loans receivable, monthly payment during school and grace period
$ 50 
 
 
Summary of Significant Accounting Policies (Property and Equipment) (Details)
12 Months Ended
Dec. 31, 2015
Buildings
 
Property, Plant and Equipment [Line Items]
 
Property and equipment, estimated useful lives
39 years 
Furniture and Office Equipment |
Minimum
 
Property, Plant and Equipment [Line Items]
 
Property and equipment, estimated useful lives
3 years 
Furniture and Office Equipment |
Maximum
 
Property, Plant and Equipment [Line Items]
 
Property and equipment, estimated useful lives
7 years 
Capitalized software costs |
Minimum
 
Property, Plant and Equipment [Line Items]
 
Property and equipment, estimated useful lives
3 years 
Capitalized software costs |
Maximum
 
Property, Plant and Equipment [Line Items]
 
Property and equipment, estimated useful lives
5 years 
Vehicles
 
Property, Plant and Equipment [Line Items]
 
Property and equipment, estimated useful lives
5 years 
Summary of Significant Accounting Policies (Revenue and Deferred Revenue) (Details)
12 Months Ended
Dec. 31, 2015
disbursement
Deferred Revenue Arrangement [Line Items]
 
Conditional admission period
21 days 
Number of disbursement periods for financial aid
2 
Online
 
Deferred Revenue Arrangement [Line Items]
 
Length of educational course, short
35 days 
Length of educational course, long
42 days 
Campus-based
 
Deferred Revenue Arrangement [Line Items]
 
Length of educational course, short
63 days 
Length of educational course, long
112 days 
Maximum
 
Deferred Revenue Arrangement [Line Items]
 
Number of courses covered by each disbursement
4 
Summary of Significant Accounting Policies (Comprehensive Income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Accounting Policies [Abstract]
 
 
 
Unrealized losses on investments, before-tax amount
$ 125 
$ (359)
$ (280)
Unrealized losses on investments, tax benefit
(49)
136 
106 
Unrealized losses on investments, net-of-tax amount
$ 76 
$ (223)
$ (174)
Restructuring and Impairment Charges - Impairment Charges (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Proceeds from Sale of Property Held-for-sale
$ 1,600,000 
 
 
 
Restructuring and impairment charges
 
68,356,000 
16,828,000 
6,990,000 
Asset impairment
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and impairment charges
 
43,328,000 
4,566,000 
748,000 
Student transfer agreement costs
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and impairment charges
 
3,264,000 
0 
0 
Severance costs
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and impairment charges
 
4,717,000 
3,560,000 
5,914,000 
Lease exit and other costs
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and impairment charges
 
17,047,000 
6,470,000 
328,000 
Capitalized software costs
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and impairment charges
 
$ 0 
$ 2,232,000 
$ 0 
Restructuring and Impairment Charges - Restructuring Reserve (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve beginning of period
$ 7,440 
$ 328 
$ 0 
Restructuring and impairment charges
68,356 
16,828 
6,990 
Payments
(13,579)
(2,918)
(5,914)
Adjustments
(43,328)
(6,798)
(748)
Restructuring reserve end of period
18,889 
7,440 
328 
Asset impairment
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve beginning of period
0 
0 
0 
Restructuring and impairment charges
43,328 
4,566 
748 
Payments
0 
0 
0 
Adjustments
(43,328)
(4,566)
(748)
Restructuring reserve end of period
0 
0 
0 
Student transfer agreement costs
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve beginning of period
0 
0 
0 
Restructuring and impairment charges
3,264 
0 
0 
Payments
(40)
0 
0 
Adjustments
0 
0 
0 
Restructuring reserve end of period
3,224 
0 
0 
Severance costs
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve beginning of period
860 
0 
0 
Restructuring and impairment charges
4,717 
3,560 
5,914 
Payments
(3,833)
(2,700)
(5,914)
Adjustments
0 
0 
0 
Restructuring reserve end of period
1,744 
860 
0 
Lease exit and other costs
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve beginning of period
6,580 
328 
0 
Restructuring and impairment charges
17,047 
6,470 
328 
Payments
(9,706)
(218)
0 
Adjustments
0 
0 
0 
Restructuring reserve end of period
13,921 
6,580 
328 
Capitalized software costs
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve beginning of period
0 
0 
0 
Restructuring and impairment charges
0 
2,232 
0 
Payments
0 
0 
0 
Adjustments
0 
(2,232)
0 
Restructuring reserve end of period
$ 0 
$ 0 
$ 0 
Investments (Fair Value Information) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities
$ 65,843 
$ 122,537 
Investments
67,157 
123,608 
Level 1
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Investments
1,314 
1,071 
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Investments
65,843 
122,537 
Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Investments
0 
0 
Mutual funds/Demand notes
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading Securities
1,314 
 
Available-for-sale securities
 
1,071 
Mutual funds/Demand notes |
Level 1
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading Securities
1,314 
1,071 
Mutual funds/Demand notes |
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading Securities
0 
 
Available-for-sale securities
 
0 
Mutual funds/Demand notes |
Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading Securities
0 
 
Available-for-sale securities
 
0 
Corporate Notes and Bonds
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities
40,843 
62,550 
Corporate Notes and Bonds |
Level 1
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities
0 
0 
Corporate Notes and Bonds |
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities
40,843 
62,550 
Corporate Notes and Bonds |
Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities
0 
0 
U.S. government and agency securities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities
 
34,987 
U.S. government and agency securities |
Level 1
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities
 
0 
U.S. government and agency securities |
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities
 
34,987 
U.S. government and agency securities |
Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities
 
0 
Certificates of Deposit
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities
25,000 
25,000 
Certificates of Deposit |
Level 1
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities
0 
0 
Certificates of Deposit |
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities
25,000 
25,000 
Certificates of Deposit |
Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities
$ 0 
$ 0 
Investments (Differences Between Amortized Cost and Fair Value of Investments) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized cost
$ 66,000 
$ 122,821 
Gross unrealized gain
0 
33 
Gross unrealized loss
(157)
(317)
Available-for-sale securities
65,843 
122,537 
Number of investments in an unrealized loss position for less than 12 months
10 
0 
Number of investments in an unrealized loss position for greater than 12 months
0 
0 
Number of investments in an unrealized loss position
0 
 
Variable Rate Demand Obligation [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Trading Securities
1,314 
 
Available-for-sale securities
 
1,071 
Corporate Notes and Bonds, Short-term
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized cost
18,113 
10,947 
Gross unrealized gain
0 
33 
Gross unrealized loss
(40)
0 
Available-for-sale securities
18,073 
10,980 
Corporate Notes and Bonds, Long-term
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized cost
22,887 
51,874 
Gross unrealized gain
0 
0 
Gross unrealized loss
(117)
(304)
Available-for-sale securities
22,770 
51,570 
U.S. government and agency securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized cost
 
35,000 
Gross unrealized gain
 
0 
Gross unrealized loss
 
(13)
Available-for-sale securities
 
34,987 
Certificates of Deposit, Long-term
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized cost
25,000 
25,000 
Gross unrealized gain
0 
0 
Gross unrealized loss
0 
0 
Available-for-sale securities
25,000 
25,000 
Certificates of Deposit, Long-term |
Maximum
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Maturities in years
3 years 
3 years 
Level 1 |
Variable Rate Demand Obligation [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Trading Securities
1,314 
1,071 
Level 1 |
U.S. government and agency securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-for-sale securities
 
$ 0 
Accounts Receivable (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Receivables [Abstract]
 
 
Accounts receivable
$ 34,205 
$ 48,841 
Less allowance for doubtful accounts
10,114 
27,567 
Accounts receivable
$ 24,091 
$ 21,274 
Accounts Receivable (Valuation Accounts) (Details) (Allowance for Doubtful Accounts Receivable, USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Allowance for Doubtful Accounts Receivable
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Beginning Balance
$ 27,567 
$ 26,901 
$ 31,466 
Charged to Expense
29,782 
27,853 
46,851 
Deductions(1)
(47,235)1
(27,187)1
(51,416)1
Ending Balance
$ 10,114 
$ 27,567 
$ 26,901 
Student Loans Receivable (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2015
Non-tuition Related
Dec. 31, 2014
Non-tuition Related
Dec. 31, 2015
Tuition Related
Dec. 31, 2014
Tuition Related
Dec. 31, 2015
Repayment Plan One
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
 
Student loans receivable, interest rate
 
 
 
 
 
 
4.50% 
Current student loans receivable
$ 865 
$ 1,135 
$ 310 
$ 509 
$ 555 
$ 626 
 
Less allowance for doubtful accounts
90 
132 
 
 
 
 
 
Student loans receivable, net
775 
1,003 
 
 
 
 
 
Noncurrent student loans receivable
8,257 
10,873 
3,314 
4,805 
4,943 
6,068 
 
Less allowance for doubtful accounts
863 
1,363 
 
 
 
 
 
Student loans receivable, net
$ 7,394 
$ 9,510 
 
 
 
 
 
Student Loans Receivable (Allowance for Doubtful Accounts) (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Impaired student loans
$ 1,300,000 
$ 2,400,000 
$ 1,998,000 
Loans placed on non-accrual status
400,000 
 
 
Allowance for Doubtful Student Loans Receivable
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Beginning Balance
1,495,000 
2,144,000 
1,895,000 
Charged to Expense
81,000 
331,000 
268,000 
Deductions(1)
(623,000)1
(980,000)1
(19,000)1
Ending Balance
$ 953,000 
$ 1,495,000 
$ 2,144,000 
Student Loans Receivable (Delinquency Status) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
 
Loss on impairment of student loans receivable
$ 1,300 
$ 2,400 
$ 1,998 
Allowance for Doubtful Student Loans Receivable
 
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
 
Less than 120 days
10,865 
 
 
From 120 - 269 days
351 
 
 
Greater than 270 days
740 
 
 
Total gross student loans receivable
11,956 
 
 
Less: Amounts reserved or impaired
(1,398)
 
 
Less: Discount on student loans receivable
(2,389)
 
 
Total student loans receivable, net
$ 8,169 
 
 
Prepaid Expense and Other Current Assets (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
 
 
Prepaid expenses
$ 7,005 
$ 8,500 
Prepaid licenses
5,221 
5,598 
Prepaid income taxes
0 
2,945 
Income tax receivable
20,169 
0 
Prepaid insurance
1,619 
1,508 
Insurance recoverable
16,659 
1,440 
Interest receivable
299 
424 
Other current assets
1,220 
2,403 
Total prepaid expenses and other current assets
$ 52,192 
$ 22,818 
Property and Equipment, Net (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Property, Plant and Equipment [Line Items]
 
 
 
Sale Leaseback Transaction, Amount Due under Financing Arrangement
$ 4,100,000 
 
 
Sale Leaseback Transaction, Gross Proceeds, Financing Activities
4,141,000 
0 
0 
Property and equipment, gross
87,117,000 
151,358,000 
 
Less accumulated depreciation and amortization
(65,375,000)
(73,139,000)
 
Total property and equipment, net
21,742,000 
78,219,000 
 
Depreciation and amortization associated with property and equipment, including assets under capital lease
13,900,000 
17,600,000 
18,200,000 
Land
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
0 
7,091,000 
 
Buildings
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
0 
29,540,000 
 
Furniture and Office Equipment
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
63,354,000 
81,030,000 
 
Capitalized software costs
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
12,605,000 
12,454,000 
 
Leasehold Improvements
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
11,136,000 
21,096,000 
 
Vehicles
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
$ 22,000 
$ 147,000 
 
Goodwill and Intangibles, Net (Details) (USD $)
12 Months Ended 0 Months Ended 3 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2015
Capitalized curriculum costs
Dec. 31, 2014
Capitalized curriculum costs
Oct. 31, 2013
Purchased intangible assets
Dec. 31, 2015
Purchased intangible assets
Dec. 31, 2014
Purchased intangible assets
Goodwill and Intangibles, Net:
 
 
 
 
 
 
 
 
Gross carrying amount
$ 36,173,000 
$ 34,024,000 
 
$ 20,323,000 
$ 18,174,000 
 
$ 15,850,000 
$ 15,850,000 
Accumulated amortization
(17,475,000)
(11,816,000)
 
(13,954,000)
(9,526,000)
 
(3,521,000)
(2,290,000)
Net carrying amount
18,698,000 
22,208,000 
 
6,369,000 
8,648,000 
 
12,329,000 
13,560,000 
Goodwill and indefinite-lived intangibles
2,567,000 
2,567,000 
 
 
 
 
 
 
Total goodwill and intangibles, net
21,265,000 
24,775,000 
 
 
 
 
 
 
Amortization expense
5,700,000 
5,700,000 
3,400,000 
 
 
 
 
 
Licensing Agreement:
 
 
 
 
 
 
 
 
Initial term of Forbes Agreement
 
 
 
 
 
12 years 
 
 
Upfront payment for Forbes Agreement
 
 
 
 
 
 
15,000,000 
 
Future minimum annual royalty payments due
 
 
 
 
 
 
2,500,000.0 
 
Estimated Remaining Amortization Expense as of Each Fiscal Year:
 
 
 
 
 
 
 
 
2016
4,671,000 
 
 
 
 
 
 
 
2017
3,183,000 
 
 
 
 
 
 
 
2018
2,104,000 
 
 
 
 
 
 
 
2019
1,342,000 
 
 
 
 
 
 
 
2020
1,232,000 
 
 
 
 
 
 
 
Thereafter
6,166,000 
 
 
 
 
 
 
 
Total future amortization expense
$ 18,698,000 
 
 
 
 
 
 
 
Accrued Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Accrued Liabilities [Abstract]
 
 
Accrued salaries and wages
$ 10,476 
$ 8,250 
Accrued bonus
4,295 
2,720 
Accrued vacation
9,628 
9,771 
Accrued litigation and fees
720 
542 
Accrued expenses
17,227 
18,223 
Rent liability
13,406 
8,528 
Accrued insurance liability
18,666 
2,920 
Accrued income taxes payable
16 
449 
Accrued liabilities
$ 74,434 
$ 51,403 
Deferred Revenue and Student Deposits (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Deferred Revenue Disclosure [Abstract]
 
 
Deferred revenue
$ 23,311 
$ 26,445 
Student deposits
65,445 
81,603 
Total deferred revenue and student deposits
$ 88,756 
$ 108,048 
Other Long-Term Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Other Liabilities, Noncurrent [Abstract]
 
 
Uncertain tax positions
$ 7,870 
$ 7,586 
Legal settlements
178 
1,000 
Other long-term liabilities
6,998 
1,066 
Total other long term liabilities
$ 15,046 
$ 9,652 
Credit Facilities (Details) (USD $)
0 Months Ended
Dec. 31, 2015
Apr. 13, 2012
April 2012 Credit Facility
Line of Credit Facility [Line Items]
 
 
Revolving line of credit, current borrowing capacity
 
$ 50,000,000 
Revolving line of credit, term
 
3 years 
Revolving line of credit, amount outstanding
0 
 
Surety Bond Facility [Abstract]
 
 
Surety bond facility, available amount
12,000,000 
 
Surety bond facility, issued amount
$ 3,700,000 
 
Lease Obligations (Details) (USD $)
12 Months Ended
Dec. 31, 2015
sublease
Dec. 31, 2014
Dec. 31, 2013
Operating Leased Assets [Line Items]
 
 
 
Number of active subleases
2 
 
 
Rent expense under non-cancelable operating lease arrangements
$ 38,500,000 
$ 42,200,000 
$ 37,100,000 
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
 
 
 
2016
36,655,000 
 
 
2017
36,127,000 
 
 
2018
31,445,000 
 
 
2019
20,876,000 
 
 
2020
9,546,000 
 
 
Thereafter
7,148,000 
 
 
Total minimum payments
141,797,000 
 
 
CALIFORNIA
 
 
 
Operating Leased Assets [Line Items]
 
 
 
Area of Real Estate Property
13,000 
 
 
Length of sublease period
17 months 
 
 
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals
400,000 
 
 
COLORADO
 
 
 
Operating Leased Assets [Line Items]
 
 
 
Area of Real Estate Property
35,000 
 
 
Length of sublease period
35 months 
 
 
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals
$ 3,200,000 
 
 
Earnings Per Share (Basic and Diluted) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$ (6,687)
$ (62,746)
$ (650)
$ (371)
$ (5,248)
$ 6,291 
$ 12,955 
$ (4,330)
$ (70,454)
$ 9,668 
$ 45,883 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding (in shares)
 
 
 
 
 
 
 
 
45,665 
45,204 
53,923 
Effect of dilutive options and restricted stock units (in shares)
 
 
 
 
 
 
 
 
0 
1,308 
1,482 
Effect of dilutive warrants (in shares)
 
 
 
 
 
 
 
 
0 
0 
82 
Diluted weighted average number of common shares outstanding (in shares)
 
 
 
 
 
 
 
 
45,665 
46,512 
55,487 
Earnings per share:
 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per share (in USD per share)
$ (0.15)
$ (1.37)
$ (0.01)
$ (0.01)
$ (0.12)
$ 0.14 
$ 0.29 
$ (0.10)
$ (1.54)
$ 0.21 
$ 0.85 
Diluted earnings (loss) per share (in USD per share)
$ (0.15)
$ (1.37)
$ (0.01)
$ (0.01)
$ (0.12)
$ 0.14 
$ 0.28 
$ (0.10)
$ (1.54)
$ 0.21 
$ 0.83 
Earnings Per Share (Anti-Dilutive Securities) (Details)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Stock Options
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Anti-dilutive securities
5,063 
2,660 
3,004 
Restricted Stock Units (RSUs)
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Anti-dilutive securities
762 
0 
3 
Stock-Based Compensation (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 18, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock-based compensation expense
$ 9,700,000 
$ 10,600,000 
$ 13,900,000 
 
Income tax benefit of stock-based compensation expense
3,600,000 
4,000,000 
5,200,000 
 
Number of common shares reserved for issuance upon exercise of stock options and settlement of RSUs
7,500,000 
 
 
 
Exercise of stock options, shares
206,000 
388,000 
1,060,000 
 
Intrinsic value of exercised options
1,600,000 
3,300,000 
9,400,000 
 
Excess tax benefit of option exercises
460,000 
1,271,000 
2,590,000 
 
Tax benefit realized from exercise of stock options
500,000 
700,000 
2,100,000 
 
Tax benefit shortfall related to share-based compensation activity
100,000 
100,000 
600,000 
 
Employee Service Share-based Compensation, Tax Benefit Realized from Exercise of Stock Options
800,000 
800,000 
500,000 
 
Option expirations in period
583,000 
203,000 
 
 
Shares of common stock represented by each RSU
1 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding
 
 
 
5,300,000 
Employee Service Share-based Compensation, Tax benefit (Shortfall) Realized from Exercise of Restricted Stock Units
(400,000)
500,000 
500,000 
 
Stock Options
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Award expiration period
10 years 
 
 
 
Award vesting period
4 years 
 
 
 
Unrecognized compensation cost
1,700,000 
3,200,000 
5,600,000 
 
Unrecognized compensation cost, period for recognition
1 year 1 month 6 days 
 
 
 
Restricted Stock Units (RSUs)
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Unrecognized compensation cost
6,900,000 
8,500,000 
 
 
Unrecognized compensation cost, period for recognition
1 year 5 months 
 
 
 
Number vested and released in period (in shares)
353,126 
393,106 
181,104 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value
3,300,000 
5,300,000 
3,000,000 
 
Performance Shares
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Unrecognized compensation cost
$ 4,000,000 
 
 
 
Unrecognized compensation cost, period for recognition
1 year 8 months 
 
 
 
Year One |
Performance Shares
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Vesting percentage
25.00% 
 
 
 
Year Two |
Performance Shares
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Vesting percentage
25.00% 
 
 
 
Year Three |
Performance Shares
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Vesting percentage
25.00% 
 
 
 
Year Four |
Performance Shares
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Vesting percentage
25.00% 
 
 
 
Stock-Based Compensation (Stock Option Activity) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
 
 
Balance, beginning of period (in shares)
5,168 
5,490 
6,412 
 
Granted (in shares)
454 
403 
483 
 
Exercised (in shares)
(206)
(388)
(1,060)
 
Forfeitures and expired (in shares)
(764)
(337)
(345)
 
Balance, end of period (in shares)
4,653 
5,168 
5,490 
6,412 
Vested and expected to vest (in shares)
4,597 
 
 
 
Exercisable (in shares)
3,904 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
 
 
 
 
Balance, beginning of period, weighted-average exercise price (in USD per share)
$ 14.26 
$ 14.25 
$ 14.17 
 
Granted, weighted-average exercise price (in USD per share)
$ 9.44 
$ 14.35 
$ 10.23 
 
Exercised, weighted-average exercise price (in USD per share)
$ 1.38 
$ 8.01 
$ 9.87 
 
Forfeitures, weighted-average exercise price (in USD per share)
$ 18.15 
$ 21.43 
$ 20.65 
 
Balance, end of period, weighted-average exercise price (in USD per share)
$ 13.72 
$ 14.26 
$ 14.25 
$ 14.17 
Vested and expected to vest
$ 13.75 
 
 
 
Exercisable
$ 14.07 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
 
 
 
 
Balance, weighted-average remaining contractual term
4 years 10 months 2 days 
5 years 8 months 22 days 
6 years 6 months 7 days 
7 years 2 months 14 days 
Vested and expected to vest, weighted-average remaining contractual term
4 years 9 months 16 days 
 
 
 
Exercisable, weighted-average remaining contractual term
4 years 1 month 25 days 
 
 
 
Balance, aggregate intrinsic value
$ 2,556 
$ 7,732 
$ 28,769 
$ 9,010 
Vested and expected to vest, aggregate intrinsic value
2,556 
 
 
 
Exercisable, aggregate intrinsic value
$ 2,556 
 
 
 
Stock-Based Compensation (Option Valuation Assumptions) (Details)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Weighted average exercise price per share (in USD per share)
$ 9.44 
$ 14.35 
$ 10.23 
Weighted average grant date fair value per share (in USD per share)
$ 4.52 
$ 7.43 
$ 5.48 
Stock Options
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Risk-free interest rate
1.60% 
2.00% 
1.00% 
Expected dividend yield
0.00% 
0.00% 
0.00% 
Expected volatility
50.70% 
55.10% 
58.90% 
Expected life (in years)
5 years 9 months 
5 years 9 months 
5 years 10 months 6 days 
Forfeiture rate
7.00% 
6.00% 
5.00% 
Stock-Based Compensation (Restricted Stock Unit Activity) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Employee Service Share-based Compensation, Tax benefit (Shortfall) Realized from Exercise of Restricted Stock Units
$ 0.4 
$ (0.5)
$ (0.5)
Number of common shares reserved for issuance upon exercise of stock options and settlement of RSUs
7,500,000 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
 
 
 
Weighted average exercise price per share (in USD per share)
$ 9.44 
$ 14.35 
$ 10.23 
Weighted average grant date fair value per share (in USD per share)
$ 4.52 
$ 7.43 
$ 5.48 
Performance Shares
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Unrecognized compensation cost
4.0 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
 
 
 
Weighted average exercise price per share (in USD per share)
$ 9.46 
 
 
Risk-free interest rate
0.70% 
 
 
Expected dividend yield
0.00% 
 
 
Expected volatility
50.00% 
 
 
Expected life (in years)
4 years 
 
 
Forfeiture rate
7.00% 
 
 
Weighted average grant date fair value per share (in USD per share)
$ 4.04 
 
 
Restricted Stock Units (RSUs)
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Unrecognized compensation cost
$ 6.9 
$ 8.5 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
 
 
Balance, beginning of period (in shares)
1,279,089 
1,098,517 
362,199 
Awarded (in shares)
983,473 
786,250 
1,016,035 
Vested and released (in shares)
(353,126)
(393,106)
(181,104)
Canceled (in shares)
(519,425)
(212,572)
(98,613)
Balance, end of period (in shares)
1,390,011 
1,279,089 
1,098,517 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
 
 
 
Balance, beginning of period, weighted average grant date fair value (in USD per share)
$ 12.63 
$ 10.38 
$ 9.72 
Awarded, weighted average grant date fair value (in USD per share)
$ 9.33 
$ 14.33 
$ 10.50 
Vested and released, weighted average grant date fair value (in USD per share)
$ 12.34 
$ 10.15 
$ 9.72 
Canceled, weighted average grant date fair value (in USD per share)
$ 11.51 
$ 11.89 
$ 10.39 
Balance, end of period, weighted average grant date fair value (in USD per share)
$ 10.78 
$ 12.63 
$ 10.38 
Performance-based measure [Member] |
Performance Shares
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
 
 
 
Weighted average grant date fair value per share (in USD per share)
$ 9.86 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
 
 
Awarded (in shares)
455,765 
 
 
Canceled (in shares)
96,621 
 
 
Balance, end of period (in shares)
359,144 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
 
 
 
Canceled, weighted average grant date fair value (in USD per share)
$ 9.86 
 
 
Balance, end of period, weighted average grant date fair value (in USD per share)
$ 9.86 
 
 
Market-based measure [Member] |
Performance Shares
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
 
 
 
Weighted average grant date fair value per share (in USD per share)
$ 4.04 
$ 5.39 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
 
 
Balance, beginning of period (in shares)
975,295 
 
 
Awarded (in shares)
229,017 
975,295 
 
Canceled (in shares)
238,084 
 
 
Balance, end of period (in shares)
966,228 
975,295 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
 
 
 
Balance, beginning of period, weighted average grant date fair value (in USD per share)
$ 5.39 
 
 
Canceled, weighted average grant date fair value (in USD per share)
$ 5.21 
 
 
Balance, end of period, weighted average grant date fair value (in USD per share)
$ 5.11 
$ 5.39 
 
Stock Repurchase Programs (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 12 Months Ended 0 Months Ended
Dec. 18, 2013
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 18, 2013
Nov. 10, 2013
Tender Offer Repurchase Program 2013
Dec. 18, 2013
Stock Options
Equity, Class of Treasury Stock [Line Items]
 
 
 
 
 
 
 
Shares repurchased (in shares)
10,200,000 
0 
0 
 
 
 
200,000 
Repurchase of common stock
$ 199,900 
$ 0 
$ 0 
$ 201,496 
 
 
 
Authorized shares (in shares)
 
 
 
 
 
10,250,000 
 
Share Price (in USD per share)
 
 
 
 
$ 19.50 
 
 
Income Taxes (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
 
Computed expected federal tax expense
35.00% 
35.00% 
35.00% 
Change in net deferred tax assets
$ 42.2 
 
 
Change in net deferred tax expense
40.9 
 
 
Tax benefit shortfall recorded to additional paid in capital
1.2 
 
 
Tax effect of unrealized gain on investments
0.1 
 
 
Gross unrecognized tax benefits that would impact effective tax rate if recognized
13.4 
13.6 
 
Unrecognized tax benefits that would result in adjustments to other tax accounts
7.2 
7.3 
 
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued
2.0 
1.9 
 
Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority
$ 12.6 
 
 
Income Taxes (Components of Income Tax Expense) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Current:
 
 
 
Federal
$ (10,370)
$ 12,686 
$ 29,456 
State
(309)
1,937 
3,168 
Current income tax expense (benefit)
(10,679)
14,623 
32,624 
Deferred:
 
 
 
Federal
33,482 
(6,216)
(5,952)
State
7,462 
(880)
(1,010)
Deferred income tax expense (benefit)
40,944 
(7,096)
(6,962)
Total
$ 30,265 
$ 7,527 
$ 25,662 
Income Taxes (Deferred Tax Assets and Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Deferred tax assets:
 
 
Net operating loss
$ 737 
$ 211 
Fixed assets
(1,328)
194 
Bad debt
2,412 
2,338 
Vacation accrual
3,305 
2,956 
Stock-based compensation
15,766 
16,291 
Deferred rent
12,585 
11,580 
State tax
2,154 
2,257 
Bonus accrual
1,609 
1,023 
Unearned interest
898 
1,118 
Accrued expenses
3,939 
2,121 
Revenue reserves
64 
9,820 
Other
278 
107 
Total deferred tax assets
42,419 
50,016 
Valuation allowance
(42,419)
0 
Net deferred tax assets
0 
50,016 
Deferred tax liabilities:
 
 
Fixed assets and intangibles
0 
(8,540)
Indefinite-lived intangibles
744 
0 
Total deferred tax liabilities
744 
8,540 
Total net deferred tax assets (liabilities)
(744)
 
Total net deferred tax assets (liabilities)
 
$ 41,476 
Income Taxes (Balance Sheet Location of Deferred Tax Assets and Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Income Tax Disclosure [Abstract]
 
 
Current deferred tax assets
$ 0 
$ 21,301 
Current deferred tax liabilities
0 
0 
Noncurrent deferred tax assets
0 
20,175 
Noncurrent deferred tax liabilities
(744)
0 
Total net deferred tax assets (liabilities)
(744)
 
Total net deferred tax assets (liabilities)
 
$ 41,476 
Income Taxes (Operating Loss Carryforwards) (Details) (Internal Revenue Service (IRS) [Member], USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Internal Revenue Service (IRS) [Member]
 
Operating Loss Carryforwards [Line Items]
 
Net operating loss carryforwards
$ 0.6 
Income Taxes (Income Tax Reconciliation) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Tax Reconciliation, Amount:
 
 
 
Computed expected federal tax expense
$ (14,066)
$ 6,018 
$ 25,041 
State taxes, net of federal benefit
(655)
426 
1,466 
Permanent differences
1,033 
1,125 
1,295 
Uncertain tax positions
480 
424 
(1,762)
Credits
(206)
(470)
(378)
Stock compensation
1,246 
0 
0 
Valuation allowance
42,419 
0 
0 
Stock compensation
14 
4 
0 
Total
$ 30,265 
$ 7,527 
$ 25,662 
Income Tax Reconciliation, Percent:
 
 
 
Computed expected federal tax expense
35.00% 
35.00% 
35.00% 
State taxes, net of federal benefit
1.60% 
2.50% 
2.00% 
Permanent differences
(2.60%)
6.50% 
1.80% 
Uncertain tax positions
(1.20%)
2.50% 
(2.50%)
Credits
0.50% 
(2.70%)
(0.40%)
Stock compensation
(3.10%)
0.00% 
0.00% 
Stock compensation
0.00% 
0.00% 
0.00% 
Valuation allowance
(105.50%)
0.00% 
0.00% 
Income tax expense
(75.30%)
43.80% 
35.90% 
Income Taxes (Unrecognized Tax Benefits) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
Unrecognized tax benefits, beginning of period
$ 20,877 
$ 7,387 
Gross increases-tax positions in prior period
169 
13,869 
Gross decreases-tax positions in prior period
(2)
(23)
Gross increases-current period tax positions
0 
53 
Settlements
 
(409)
Settlements
(455)
 
Lapse of statute of limitations
0 
0 
Unrecognized tax benefits, end of period
$ 20,589 
$ 20,877 
Regulatory (Details)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2015
Ashford University
Dec. 31, 2014
Ashford University
Dec. 31, 2013
Ashford University
Dec. 31, 2015
University of the Rockies
Dec. 31, 2014
University of the Rockies
Dec. 31, 2013
University of the Rockies
Sep. 30, 2012
Three-year cohort default rate
Ashford University
Sep. 30, 2011
Three-year cohort default rate
Ashford University
Sep. 30, 2010
Three-year cohort default rate
Ashford University
Sep. 30, 2012
Three-year cohort default rate
University of the Rockies
Sep. 30, 2011
Three-year cohort default rate
University of the Rockies
Sep. 30, 2010
Three-year cohort default rate
University of the Rockies
Dec. 31, 2015
Minimum
The 90-10 Rule:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Title IV eligibility, maximum allowable percentage of revenue from Title IV programs over two consecutive years
90.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Title IV eligibility, minimum term of ineligibility once noncompliant
2 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Title IV eligibility, maximum allowable percentage of revenue from Title IV programs in any single year
90.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Actual percentage of revenue from Title IV programs
 
 
80.90% 
83.40% 
85.60% 
86.60% 
88.30% 
87.60% 
 
 
 
 
 
 
 
Accreditation, Regulatory Compliance, Cohort Default Term
3 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accreditation, Regulatory Terms, Maximum Cohort Default Rate over Prior Three Years
30.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accreditation, Regulatory Compliance, Cohort Default Rate
 
 
 
 
 
 
 
 
15.30% 
15.30% 
16.30% 
4.30% 
6.60% 
8.00% 
 
Return of Title IV Funds:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deadline for return of unearned funds after student withdrawal
45 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unearned Title IV funds, trigger for letter of credit requirement, noncompliance of return of funds, maximum allowable percentage in either of last two annual audits
5.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unearned Title IV funds, noncompliance of return of funds, required letter of credit as percentage of required returns
25.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unearned Title IV funds, actual percentage of noncompliance with return of funds requirement (less than 5%)
5.00% 
5.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Composite score
 
2.7 
 
 
 
 
 
 
 
 
 
 
 
 
1.5 
Estimated composite score
1.8 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement Plans (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Compensation and Retirement Disclosure [Abstract]
 
 
 
Expense related to 401(k) plan
$ 3.4 
$ 3.7 
$ 3.3 
Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2013
Dec. 31, 2015
Payment for restitution, costs and fees
Obligation with Joint and Several Liability Arrangement [Line Items]
 
 
 
Payments to Settle Civil Investigation
 
 
$ 15.5 
Estimated Litigation Liability
$ 0.9 
$ 9.0 
 
Concentration of Risk (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Concentration Risk [Line Items]
 
 
 
Cash and cash equivalents, FDIC insurance limit
$ 250,000 
 
 
Ashford University
 
 
 
Concentration Risk [Line Items]
 
 
 
Actual percentage of revenue from Title IV programs
80.90% 
83.40% 
85.60% 
University of the Rockies
 
 
 
Concentration Risk [Line Items]
 
 
 
Actual percentage of revenue from Title IV programs
86.60% 
88.30% 
87.60% 
Quarterly Results of Operations (Unaudited) Quarterly Results of Operations (Unaudited) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 131,392 
$ 140,762 
$ 147,057 
$ 142,518 
$ 147,259 
$ 162,654 
$ 171,522 
$ 157,270 
$ 561,729 
$ 638,705 
$ 751,449 
Operating income (loss)
(6,104)
(34,479)
(512)
(1,200)
(10,826)
10,581 
22,414 
(7,858)
(42,295)
14,311 
68,463 
Net income (loss)
$ (6,687)
$ (62,746)
$ (650)
$ (371)
$ (5,248)
$ 6,291 
$ 12,955 
$ (4,330)
$ (70,454)
$ 9,668 
$ 45,883 
Basic (in USD per share)
$ (0.15)
$ (1.37)
$ (0.01)
$ (0.01)
$ (0.12)
$ 0.14 
$ 0.29 
$ (0.10)
$ (1.54)
$ 0.21 
$ 0.85 
Diluted (in USD per share)
$ (0.15)
$ (1.37)
$ (0.01)
$ (0.01)
$ (0.12)
$ 0.14 
$ 0.28 
$ (0.10)
$ (1.54)
$ 0.21 
$ 0.83