BRIDGEPOINT EDUCATION INC, 10-Q filed on 5/5/2015
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2015
Apr. 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-Q 
 
Document Period End Date
Mar. 31, 2015 
 
Document Fiscal Year Focus
2015 
 
Document Fiscal Period Focus
Q1 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
45,666,305 
Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Current assets:
 
 
Cash and cash equivalents
$ 241,277 
$ 207,003 
Restricted cash
20,206 
25,934 
Investments
12,177 
12,051 
Accounts receivable, net
30,918 
21,274 
Student loans receivable, net
859 
1,003 
Deferred income taxes
21,295 
21,301 
Prepaid expenses and other current assets
22,321 
22,818 
Total current assets
349,053 
311,384 
Property and equipment, net
75,728 
78,219 
Investments
81,593 
111,557 
Student loans receivable, net
9,146 
9,510 
Goodwill and intangibles, net
23,901 
24,775 
Deferred income taxes
20,043 
20,175 
Other long-term assets
2,661 
2,475 
Total assets
562,125 
558,095 
Current liabilities:
 
 
Accounts payable
6,894 
1,013 
Accrued liabilities
55,986 
51,403 
Deferred revenue and student deposits
102,688 
108,048 
Total current liabilities
165,568 
160,464 
Rent liability
20,275 
22,098 
Other long-term liabilities
9,728 
9,652 
Total liabilities
195,571 
192,214 
Commitments and contingencies (see Note 12)
   
   
Preferred stock, $0.01 par value:
 
 
20,000 shares authorized; zero shares issued and outstanding at both March 31, 2015, and December 31, 2014
0 
0 
Common stock, $0.01 par value:
 
 
300,000 shares authorized; 63,222 issued and 45,665 outstanding at March 31, 2015; 62,957 issued and 45,400 outstanding at December 31, 2014
632 
630 
Additional paid-in capital
181,597 
180,720 
Retained earnings
521,404 
521,775 
Accumulated other comprehensive income (loss)
(10)
(175)
Treasury stock, 17,557 shares at cost at both March 31, 2015, and December 31, 2014
(337,069)
(337,069)
Total stockholders' equity
366,554 
365,881 
Total liabilities and stockholders' equity
$ 562,125 
$ 558,095 
Condensed Consolidated Balance Sheets - Parenthetical (USD $)
Mar. 31, 2015
Dec. 31, 2014
Stockholders' equity:
 
 
Preferred stock, par value
$ 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
$ 0.01 
$ 0.01 
Common stock, shares authorized
300,000,000 
300,000,000 
Common stock, shares issued
63,222,000 
62,957,000 
Common stock, shares outstanding
45,665,000 
45,400,000 
Treasury stock, shares at cost
17,557,000 
17,557,000 
Condensed Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Revenue
$ 142,518 
$ 157,270 
Costs and expenses:
 
 
Instructional costs and services
75,049 
83,081 
Admissions advisory and marketing
52,347 
65,778 
General and administrative
16,322 
16,269 
Total costs and expenses
143,718 
165,128 
Operating loss
(1,200)
(7,858)
Other income, net
689 
367 
Loss before income taxes
(511)
(7,491)
Income tax benefit
(140)
(3,161)
Net loss
$ (371)
$ (4,330)
Earnings (loss) per share:
 
 
Basic (in usd per share)
$ (0.01)
$ (0.10)
Diluted (in usd per share)
$ (0.01)
$ (0.10)
Weighted average number of common shares outstanding used in computing earnings per share:
 
 
Basic (in shares)
45,428 
44,897 
Diluted (in shares)
45,428 
44,897 
Condensed Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Net loss
$ (371)
$ (4,330)
Other comprehensive income (loss), net of tax:
 
 
Unrealized gains (losses) on investments
165 
(36)
Comprehensive loss
$ (206)
$ (4,366)
Condensed Consolidated Statement of Stockholders' Equity (USD $)
In Thousands, unless otherwise specified
Total
Common Stock
Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Treasury Stock
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
2,245 
 
2,245 
 
 
 
Exercise of stock options, shares
 
76 
 
 
 
 
Exercise of stock options
127 
0 
127 
 
 
 
Excess tax benefit of option exercises and restricted stock, net of tax shortfall
(270)
 
(270)
 
 
 
Stock issued under restricted stock plan, net of shares held for taxes, shares
 
189 
 
 
 
 
Stock issued under restricted stock plan, net of shares held for taxes
(1,223)
2 
(1,225)
 
 
 
Net loss
(371)
 
 
(371)
 
 
Unrealized losses on investments, net of tax
165 
 
 
 
165 
 
Balance at Mar. 31, 2015
$ 366,554 
$ 632 
$ 181,597 
$ 521,404 
$ (10)
$ (337,069)
Balance, shares at Mar. 31, 2015
 
63,222 
 
 
 
 
Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Cash flows from operating activities
 
 
Net loss
$ (371)
$ (4,330)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
Provision for bad debts
8,396 
7,560 
Depreciation and amortization
5,345 
6,029 
Amortization of premium/discount
19 
(19)
Stock-based compensation
2,245 
1,893 
Excess tax benefit of option exercises
(231)
(793)
Loss on impairment of student loans receivable
359 
265 
Net loss on marketable securities
34 
0 
Loss on disposal of fixed assets
163 
80 
Changes in operating assets and liabilities:
 
 
Restricted cash
5,716 
8,208 
Accounts receivable
(17,931)
(14,092)
Prepaid expenses and other current assets
360 
(6,297)
Student loans receivable
260 
198 
Other long-term assets
(185)
(240)
Accounts payable and accrued liabilities
10,270 
9,526 
Deferred revenue and student deposits
(5,313)
(24,084)
Other liabilities
(1,748)
(403)
Net cash provided by (used in) operating activities
7,388 
(16,499)
Cash flows from investing activities
 
 
Capital expenditures
(1,626)
(3,054)
Purchases of investments
(142)
(23,111)
Non-operating restricted cash
12 
0 
Capitalized costs for intangible assets
(592)
(1,121)
Sales and maturities of investments
30,101 
20,000 
Net cash provided by (used in) investing activities
27,753 
(7,286)
Cash flows from financing activities
 
 
Proceeds from exercise of stock options
127 
2,361 
Excess tax benefit of option exercises
231 
793 
Tax withholdings on issuance of stock awards
(1,225)
(1,204)
Net cash provided by (used in) financing activities
(867)
1,950 
Net increase (decrease) in cash and cash equivalents
34,274 
(21,835)
Cash and cash equivalents at beginning of period
207,003 
212,526 
Cash and cash equivalents at end of period
241,277 
190,691 
Supplemental disclosure of non-cash transactions:
 
 
Purchase of equipment included in accounts payable and accrued liabilities
$ 35 
$ 526 
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.
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Bridgepoint Education, Inc. and its wholly-owned subsidiaries. Intercompany transactions have been eliminated in consolidation.
Unaudited Interim Financial Information
The condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the Securities and Exchange Commission (“SEC”) on March 10, 2015. In the opinion of management, these financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary to present a fair statement of the Company's condensed consolidated financial position, results of operations and cash flows as of and for the periods presented.
Operating results for any interim period are not necessarily indicative of the results that may be expected for the full year. The year-end condensed consolidated balance sheet data were derived from audited financial statements, but do not include all disclosures required by GAAP for complete annual financial statements.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed 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. These reclassifications had no effect on previously reported results of operations or retained earnings.
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. The standard will be effective for the first interim period within fiscal years beginning after December 15, 2016, using one of two retrospective application methods. The Company continues to evaluate the impacts, if any, the adoption of ASU 2014-09 will have on the Company's financial position or results of operations.
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 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, and such adoption does not have a material effect on its consolidated financial statements.
Investments
Investments
Investments
The following tables summarize the fair value information of short and long-term investments as of March 31, 2015 and December 31, 2014, respectively (in thousands):
 
As of March 31, 2015
 
Level 1
 
Level 2
 
Level 3
 
Total
Mutual funds
$
1,240

 
$
—

 
$
—

 
$
1,240

Corporate notes and bonds
—

 
52,530

 
—

 
52,530

U.S. government and agency securities
—

 
15,000

 
—

 
15,000

Certificates of deposit
—

 
25,000

 
—

 
25,000

Total
$
1,240

 
$
92,530

 
$
—

 
$
93,770

 
As of 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.
The Company records the changes in unrealized gains and losses on its investments arising during the period in other comprehensive income. For the three months ended March 31, 2015 and 2014, the Company recorded a net unrealized gain of $165,000 and a net unrealized loss of $36,000, respectively, in other comprehensive income, which were net of tax expense of $138,000 and tax benefit of $26,000, respectively.
During the three months ended March 31, 2015, the Company reclassified $61,000 out of other comprehensive income and was realized as a net loss on marketable securities on the consolidated statement of income for the period. There was no such reclassification in the three months ended March 31, 2014.
Accounts Receivable
Accounts Receivable
Accounts Receivable
Accounts receivable, net, consist of the following (in thousands):
 
As of
March 31, 2015
 
As of
December 31, 2014
Accounts receivable
$
62,179

 
$
48,841

Less allowance for doubtful accounts
(31,261
)
 
(27,567
)
Accounts receivable, net
$
30,918

 
$
21,274


As of March 31, 2015 and December 31, 2014, there was an immaterial amount included within net accounts receivable with a payment due date of greater than one year.
The following table presents the changes in the allowance for doubtful accounts for the periods indicated (in thousands):
 
Beginning
Balance
 
Charged to
Expense
 
Deductions(1)
 
Ending
Balance
Allowance for doubtful accounts receivable:
 
 
 
 
 
 
 
For the three months ended March 31, 2015
$
(27,567
)
 
$
8,459

 
$
(4,765
)
 
$
(31,261
)
For the three months ended March 31, 2014
(26,901
)
 
7,440

 
(3,580
)
 
(30,761
)
(1)
Deductions represent accounts written off, net of recoveries.
Other Significant Balance Sheet Accounts
Other Significant Balance Sheet Accounts
Other Significant Balance Sheet Accounts
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following (in thousands):
 
As of
March 31, 2015
 
As of
December 31, 2014
Prepaid expenses
$
8,917

 
$
8,500

Prepaid licenses
4,535

 
5,598

Prepaid income taxes
3,268

 
2,945

Prepaid insurance
1,266

 
1,508

Interest receivable
520

 
424

Insurance recoverable
2,666

 
3,040

Other current assets
1,149

 
803

Total prepaid expenses and other current assets
$
22,321

 
$
22,818


Property and Equipment, Net
Property and equipment, net, consist of the following (in thousands):
 
As of
March 31, 2015
 
As of
December 31, 2014
Land
$
7,091

 
$
7,091

Buildings
29,472

 
29,540

Furniture and office equipment
83,800

 
81,030

Software
11,190

 
12,454

Leasehold improvements
21,046

 
21,096

Vehicles
147

 
147

Total property and equipment
152,746

 
151,358

Less accumulated depreciation and amortization
(77,018
)
 
(73,139
)
Total property and equipment, net
$
75,728

 
$
78,219


Goodwill and Intangibles, Net
Goodwill and intangibles, net, consist of the following (in thousands):
 
March 31, 2015
Definite-lived intangible assets:
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Capitalized curriculum costs
$
18,766

 
$
(10,685
)
 
$
8,081

Purchased intangible assets
15,850

 
(2,597
)
 
13,253

     Total definite-lived intangible assets
$
34,616

 
$
(13,282
)
 
$
21,334

Goodwill and indefinite-lived intangibles
 
 
 
 
2,567

Total goodwill and intangibles, net
 
 
 
 
$
23,901

 
 
 
 
 
 
 
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


For the three months ended March 31, 2015 and 2014, amortization expense was $1.5 million and $1.4 million, respectively.
The following table summarizes the estimated remaining amortization expense as of each fiscal year ended below (in thousands):
Year Ended December 31,
 
 
2015
$
4,144

2016
4,238

2017
2,664

2018
1,634

2019
1,254

Thereafter
7,400

Total future amortization expense
$
21,334


Accrued Liabilities
Accrued liabilities consist of the following (in thousands):
 
As of
March 31, 2015
 
As of
December 31, 2014
Accrued salaries and wages
$
13,553

 
$
8,250

Accrued bonus
2,204

 
2,720

Accrued vacation
10,481

 
9,771

Accrued litigation and fees
600

 
542

Accrued expenses
17,483

 
16,623

Rent liability
7,358

 
8,528

Accrued insurance liability
4,307

 
4,520

Accrued income taxes payable
—

 
449

Total accrued liabilities
$
55,986

 
$
51,403


Deferred Revenue and Student Deposits
Deferred revenue and student deposits consist of the following (in thousands):
 
As of
March 31, 2015
 
As of
December 31, 2014
Deferred revenue
$
41,413

 
$
26,445

Student deposits
61,275

 
81,603

Total deferred revenue and student deposits
$
102,688

 
$
108,048


Other Long-Term Liabilities
Other long-term liabilities consist of the following (in thousands):
 
As of
March 31, 2015
 
As of
December 31, 2014
Uncertain tax positions
$
7,634

 
$
7,586

Legal settlements
857

 
1,000

Other long-term liabilities
1,237

 
1,066

Total other long-term liabilities
$
9,728

 
$
9,652

Student Loan Receivables
Student Loans Receivable
Student Loans Receivable
Student loans receivable, net, consist of the following (in thousands):
Short-term:
As of
March 31, 2015
 
As of
December 31, 2014
   Student loans receivable (non-tuition related)
$
476

 
$
509

   Student loans receivable (tuition related)
478

 
626

   Current student loans receivable
954

 
1,135

Less allowance for doubtful accounts
(95
)
 
(132
)
Student loans receivable, net
$
859

 
$
1,003

Long-term:
As of
March 31, 2015
 
As of
December 31, 2014
   Student loans receivable (non-tuition related)
$
4,507

 
$
4,805

   Student loans receivable (tuition related)
5,976

 
6,068

   Non-current student loans receivable
10,483

 
10,873

Less allowance for doubtful accounts
(1,337
)
 
(1,363
)
Student loans receivable, net
$
9,146

 
$
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.
Revenue recognized related to student loans was immaterial during each of the three months ended March 31, 2015 and 2014. The following table presents the changes in the allowance for doubtful accounts for the periods indicated (in thousands):
 
Beginning
Balance
 
Charged to
Expense
 
Deductions(1)
 
Ending
Balance
Allowance for student loans receivable (tuition related):
 
 
 
 
 
 
 
For the three months ended March 31, 2015
$
(1,495
)
 
$
(63
)
 
$
—

 
$
(1,432
)
For the three months ended March 31, 2014
(2,144
)
 
120

 
—

 
(2,264
)
(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 three months ended March 31, 2015, there was $0.4 million of student loans that were impaired. As of March 31, 2015, there were $4.8 million of student loans that had been placed on non-accrual status.
As of March 31, 2015, the delinquency status of gross student loans receivable was as follows (in thousands):
120 days and less
$
15,030

From 121 - 270 days
1,408

Greater than 270 days
2,460

Total gross student loans receivable
18,898

Less: Amounts reserved or impaired
(6,206
)
Less: Discount on student loans receivable
(2,687
)
Total student loans receivable, net
$
10,005

Credit Facilities
Credit Facilities
Credit Facilities
On April 13, 2012, the Company entered into a $50 million revolving line of credit the (the “Facility”) pursuant to an Amended and Restated Revolving Credit Agreement (the “Revolving Credit Agreement”) with the lenders signatory thereto and Comerica Bank (“Comerica”), as administrative agent for the lenders. The Facility had an original term of three years and expired on April 13, 2015.
The Revolving Credit Agreement amended, restated and superseded any prior loan documents. At the Company's option, the Company had the ability to increase the size of the Facility up to $100 million, in certain minimum increments, subject to the terms and conditions of the Revolving Credit Agreement. Additionally, the Company was able to request swing-line advances under the Facility up to $3 million in the aggregate.
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. 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. For any advance under the swing line, interest would accrue at either the Base Rate or, if made available to the Company by the swing line lender, at the lender's option, a different rate quoted by such lender. For any letter of credit issued on the Company's behalf under the Facility, the Company was required to pay a fee of 1.50% of the undrawn amount of such letter of credit plus a letter of credit facing fee. The Company was also required to pay a facility fee of 0.25% of the aggregate commitment then in effect under the Facility, whether used or unused.
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. As security for the performance of the Company's obligations under the Facility Loan Documents, the Company granted the lenders a first priority security interest in substantially all of the Company's assets, including its real property worth $7.1 million as of March 31, 2015.
As of March 31, 2015 and up through the date of expiration of the Facility, the Company had no borrowings outstanding under the Facility. The Company had used the availability under the Facility to issue letters of credit aggregating $6.6 million as of March 31, 2015. The Company was in compliance with all financial covenants in the Facility Loan Documents as of March 31, 2015.
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. In May 2009, the Company entered into a surety bond facility with an insurance company to provide such bonds when required. As of March 31, 2015, the Company's total available surety bond facility was $12.0 million and the surety had issued bonds totaling $5.4 million on the Company's behalf under such facility.
Earnings Per Share
Earnings Per Share
Earnings Per Share
Basic earnings per 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 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 upon the settlement of restricted stock units (“RSUs”) and performance stock units (“PSUs”).
The following table sets forth the computation of basic and diluted earnings per share for the periods indicated (in thousands, except per share data):
 
Three Months Ended March 31,
 
2015
 
2014
Numerator:
 
 
 
Net loss
$
(371
)
 
$
(4,330
)
Denominator:
 
 
 
Weighted average number of common shares outstanding
45,428

 
44,897

Effect of dilutive options and stock units
—

 
—

Diluted weighted average number of common shares outstanding
45,428

 
44,897

Earnings (loss) per share:
 
 
 
Basic earnings per share
$
(0.01
)
 
$
(0.10
)
Diluted earnings per share
$
(0.01
)
 
$
(0.10
)

For the periods indicated below, the computation of dilutive common shares outstanding excludes stock options, RSUs and PSUs, as applicable, because their effect was anti-dilutive (in thousands):
 
Three Months Ended March 31,
 
2015
 
2014
Options
4,889

 
2,792

Stock units
558

 
350

Stock-Based Compensation
Stock-Based Compensation
Stock-Based Compensation
The Company recorded $2.2 million and $1.9 million of stock-based compensation expense for the three months ended March 31, 2015 and 2014, respectively. The related income tax benefit was $0.8 million and $0.7 million for the three months ended March 31, 2015 and 2014, respectively.
The Company granted approximately 0.8 million RSUs during the three months ended March 31, 2015 at a grant date fair value of $9.43. During the three months ended March 31, 2015, 0.3 million RSUs vested.
The Company granted approximately 0.6 million PSUs during the three months ended March 31, 2015 at a weighted grant date fair value of $8.18. No PSUs vested during the three months ended March 31, 2015.
The Company granted approximately 0.4 million options to purchase shares of common stock during the three months ended March 31, 2015. During the three months ended March 31, 2015, options to purchase 0.1 million shares of common stock were exercised.
As of March 31, 2015, there was unrecognized compensation cost of $27.6 million related to the combined unvested stock options, RSUs and PSUs.
Income Taxes
Income Taxes
Income Taxes
The Company's current estimated annual effective income tax rate that has been applied to normal, recurring operations for the three months ended March 31, 2015 was 43.7%. The Company's actual effective income tax rate was 27.4% for the three months ended March 31, 2015. The actual effective income tax rate for the three months ended March 31, 2015 differed from the Company's estimated annual effective income tax rate due to the impact of discrete items on the Company's income before the provision for income taxes, particularly interest accrued on unrecognized tax benefits.
At March 31, 2015 and December 31, 2014, the Company had $20.4 million and $20.9 million of gross unrecognized tax benefits, respectively, of which $13.3 million and $13.6 million, respectively, would impact the effective income tax rate if recognized.
The tax years 2002 through 2014 are open to examination by major taxing jurisdictions to which the Company is subject. The California Franchise Tax Board is auditing the Company's 2008 through 2012 California income tax returns. The Company is also subject to various other state audits. With respect to all audits, the Company does not expect any significant adjustments to amounts already reserved.
In connection with the California Franchise Tax Board audit, the Company filed a refund claim for years 2008 through 2010 for approximately $12.6 million in 2014. 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.
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 any potential change to have a material effect on the Company's results of operations or financial position in the next year.
The Company's continuing practice is to recognize interest and penalties related to uncertain tax positions in income tax expense. Accrued interest and penalties related to uncertain tax positions as of March 31, 2015 and December 31, 2014 was $1.9 million and $1.9 million, respectively.
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”), formerly referred to as WASC. University of the Rockies is regionally accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools.
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 an ordinary course program review of Ashford University’s administration of federal student financial aid (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.
WSCUC Grant of Initial Accreditation of Ashford University
On July 10, 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 WSCUC monitoring process, Ashford University hosted a visiting team from WSCUC in a special visit in April 2015. The university anticipates a final report in June 2015. 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 1, 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.
On October 22, 2014, BPPE notified Ashford University that it had been identified for a compliance inspection of statutory and regulatory requirements. The university submitted documents for review in November 2014 and underwent an onsite compliance inspection on December 16, 2014. No issues of noncompliance were noted in connection with the inspection.
Negotiated Rulemaking and Other Executive Action
The Department held Program Integrity and Improvement negotiated rulemaking sessions in February, March, April and May 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.
On August 8, 2014, the Department published a Notice of Proposed Rulemaking proposing new regulations regarding the federal Direct PLUS loan program. The final regulations, which are effective July 1, 2015, update the standard 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.
Three negotiated rulemaking sessions between January and March of 2014 resulted in draft regulations to enact changes to the Clery Act required by the enactment of the Violence Against Women Act (“VAWA”). The Department published final regulations in the Federal Register on Monday, October 20, 2014, effective July 1, 2015. The Department issued a Dear Colleague Letter on July 14, 2014 and confirmed that it expects institutions to make a good faith effort to comply with the statutory requirements in the interim. 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.
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 of 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 You 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 services 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 October 30, 2014, the Obama administration announced that the Department will 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 will include 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.
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 as of December 31, 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 $1.5 million as of March 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, we 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. On October 24, 2014 and February 12, 2015, representatives from the Company met with the CA Attorney General’s office 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 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.
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.
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. The plaintiff did not file an amended complaint by the October 31, 2013 deadline and therefore the case is now proceeding to discovery. On August 6, 2014, the plaintiff filed a motion for class certification, which was granted by the Court on January 15, 2015.
The outcome of this legal proceeding 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 action.
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 collectibility of funds owed by students. The complaint asserts a putative class period stemming from August 7, 2012 to May 30, 2014. We have not yet responded to the complaint and anticipate that, pursuant to the Private Securities Litigation Reform Act of 1995, the Court will appoint a lead plaintiff and lead counsel pursuant to the provisions of that law, and eventually a consolidated amended complaint will be filed.
The Company is evaluating the complaint and intends to vigorously defend against it. However, because of the many questions of fact and law that may arise, the outcome of the legal proceeding is uncertain at this point. Based on information available to the Company at present, it cannot reasonably estimate a range of loss and accordingly 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 entitled 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 complaint 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 entitled 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 entitled 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 entitled Cannon v. Clark, et al. and is substantially similar to the previously filed California State Court derivative action now entitled 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 complaint 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 lawsuits are captioned Di Giovanni v. Clark, et al., and Craig-Johnston v. Clark, et al. The complaints 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 lawsuit is captioned Klein v. Clark, et al. The complaint 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 lawsuit 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. The individual defendants have not yet responded to the complaint.
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 entitled Guzman v. Bridgepoint Education, Inc., et al., and 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.
The outcome of this legal proceeding 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 action.
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 case is entitled 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 U.S. Department of Education that the institutions were in compliance with various regulations governing the 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 the 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 case is entitled 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 U.S. Department of Education 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. On January 8, 2014, the Court denied the Company's motion to dismiss and the case is currently in discovery.
The outcome of this legal proceeding 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 action.
Subsequent Events (Notes)
Subsequent Events [Text Block]
Subsequent Events
On April 13, 2015, the Facility with Comerica expired. For more information about the Facility, see Note 7, “Credit Facilities.”
Summary of Significant Accounting Policies (Policies)
Principles of Consolidation 
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Bridgepoint Education, Inc. and its wholly-owned subsidiaries. Intercompany transactions have been eliminated in consolidation.
Unaudited Interim Financial Information 
Unaudited Interim Financial Information
The condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the Securities and Exchange Commission (“SEC”) on March 10, 2015. In the opinion of management, these financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary to present a fair statement of the Company's condensed consolidated financial position, results of operations and cash flows as of and for the periods presented.
Operating results for any interim period are not necessarily indicative of the results that may be expected for the full year. The year-end condensed consolidated balance sheet data were derived from audited financial statements, but do not include all disclosures required by GAAP for complete annual financial statements.
Use of Estimates 
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements. Actual results could differ from those estimates.
Reclassifications 
Reclassifications
Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.
Recently Adopted 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. The standard will be effective for the first interim period within fiscal years beginning after December 15, 2016, using one of two retrospective application methods. The Company continues to evaluate the impacts, if any, the adoption of ASU 2014-09 will have on the Company's financial position or results of operations.
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 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, and such adoption does not have a material effect on its consolidated financial statements.
Investments (Tables)
Fair Value Information of Short and Long-term Investments
The following tables summarize the fair value information of short and long-term investments as of March 31, 2015 and December 31, 2014, respectively (in thousands):
 
As of March 31, 2015
 
Level 1
 
Level 2
 
Level 3
 
Total
Mutual funds
$
1,240

 
$
—

 
$
—

 
$
1,240

Corporate notes and bonds
—

 
52,530

 
—

 
52,530

U.S. government and agency securities
—

 
15,000

 
—

 
15,000

Certificates of deposit
—

 
25,000

 
—

 
25,000

Total
$
1,240

 
$
92,530

 
$
—

 
$
93,770

 
As of 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

Accounts Receivable (Tables) (Allowance for Doubtful Accounts, Current)
Schedule of Accounts Receivable, Net 
Accounts receivable, net, consist of the following (in thousands):
 
As of
March 31, 2015
 
As of
December 31, 2014
Accounts receivable
$
62,179

 
$
48,841

Less allowance for doubtful accounts
(31,261
)
 
(27,567
)
Accounts receivable, net
$
30,918

 
$
21,274

Changes in Allowance for Doubtful Accounts, Accounts Receivable 
The following table presents the changes in the allowance for doubtful accounts for the periods indicated (in thousands):
 
Beginning
Balance
 
Charged to
Expense
 
Deductions(1)
 
Ending
Balance
Allowance for doubtful accounts receivable:
 
 
 
 
 
 
 
For the three months ended March 31, 2015
$
(27,567
)
 
$
8,459

 
$
(4,765
)
 
$
(31,261
)
For the three months ended March 31, 2014
(26,901
)
 
7,440

 
(3,580
)
 
(30,761
)
(1)
Deductions represent accounts written off, net of recoveries.
Other Significant Balance Sheet Accounts (Tables)
Prepaid Expenses and Other Current Assets 
Prepaid expenses and other current assets consist of the following (in thousands):
 
As of
March 31, 2015
 
As of
December 31, 2014
Prepaid expenses
$
8,917

 
$
8,500

Prepaid licenses
4,535

 
5,598

Prepaid income taxes
3,268

 
2,945

Prepaid insurance
1,266

 
1,508

Interest receivable
520

 
424

Insurance recoverable
2,666

 
3,040

Other current assets
1,149

 
803

Total prepaid expenses and other current assets
$
22,321

 
$
22,818

Property and Equipment, Net 
Property and equipment, net, consist of the following (in thousands):
 
As of
March 31, 2015
 
As of
December 31, 2014
Land
$
7,091

 
$
7,091

Buildings
29,472

 
29,540

Furniture and office equipment
83,800

 
81,030

Software
11,190

 
12,454

Leasehold improvements
21,046

 
21,096

Vehicles
147

 
147

Total property and equipment
152,746

 
151,358

Less accumulated depreciation and amortization
(77,018
)
 
(73,139
)
Total property and equipment, net
$
75,728

 
$
78,219

Goodwill and Intangibles, Net 
Goodwill and intangibles, net, consist of the following (in thousands):
 
March 31, 2015
Definite-lived intangible assets:
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Capitalized curriculum costs
$
18,766

 
$
(10,685
)
 
$
8,081

Purchased intangible assets
15,850

 
(2,597
)
 
13,253

     Total definite-lived intangible assets
$
34,616

 
$
(13,282
)
 
$
21,334

Goodwill and indefinite-lived intangibles
 
 
 
 
2,567

Total goodwill and intangibles, net
 
 
 
 
$
23,901

 
 
 
 
 
 
 
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

Intangibles, 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,
 
 
2015
$
4,144

2016
4,238

2017
2,664

2018
1,634

2019
1,254

Thereafter
7,400

Total future amortization expense
$
21,334

Accrued Liabilities 
Accrued liabilities consist of the following (in thousands):
 
As of
March 31, 2015
 
As of
December 31, 2014
Accrued salaries and wages
$
13,553

 
$
8,250

Accrued bonus
2,204

 
2,720

Accrued vacation
10,481

 
9,771

Accrued litigation and fees
600

 
542

Accrued expenses
17,483

 
16,623

Rent liability
7,358

 
8,528

Accrued insurance liability
4,307

 
4,520

Accrued income taxes payable
—

 
449

Total accrued liabilities
$
55,986

 
$
51,403

Deferred Revenue and Student Deposits 
Deferred revenue and student deposits consist of the following (in thousands):
 
As of
March 31, 2015
 
As of
December 31, 2014
Deferred revenue
$
41,413

 
$
26,445

Student deposits
61,275

 
81,603

Total deferred revenue and student deposits
$
102,688

 
$
108,048

Other Long-Term Liabilities 
Other long-term liabilities consist of the following (in thousands):
 
As of
March 31, 2015
 
As of
December 31, 2014
Uncertain tax positions
$
7,634

 
$
7,586

Legal settlements
857

 
1,000

Other long-term liabilities
1,237

 
1,066

Total other long-term liabilities
$
9,728

 
$
9,652

Student Loans Receivable (Tables)
Delinquency Status of Gross Student Loans Receivable 
As of March 31, 2015, the delinquency status of gross student loans receivable was as follows (in thousands):
120 days and less
$
15,030

From 121 - 270 days
1,408

Greater than 270 days
2,460

Total gross student loans receivable
18,898

Less: Amounts reserved or impaired
(6,206
)
Less: Discount on student loans receivable
(2,687
)
Total student loans receivable, net
$
10,005

Schedule of Student Loans Receivable, Net 
Student loans receivable, net, consist of the following (in thousands):
Short-term:
As of
March 31, 2015
 
As of
December 31, 2014
   Student loans receivable (non-tuition related)
$
476

 
$
509

   Student loans receivable (tuition related)
478

 
626

   Current student loans receivable
954

 
1,135

Less allowance for doubtful accounts
(95
)
 
(132
)
Student loans receivable, net
$
859

 
$
1,003

Long-term:
As of
March 31, 2015
 
As of
December 31, 2014
   Student loans receivable (non-tuition related)
$
4,507

 
$
4,805

   Student loans receivable (tuition related)
5,976

 
6,068

   Non-current student loans receivable
10,483

 
10,873

Less allowance for doubtful accounts
(1,337
)
 
(1,363
)
Student loans receivable, net
$
9,146

 
$
9,510

Changes in Allowance for Doubtful Accounts, Student Loans Receivable 
The following table presents the changes in the allowance for doubtful accounts for the periods indicated (in thousands):
 
Beginning
Balance
 
Charged to
Expense
 
Deductions(1)
 
Ending
Balance
Allowance for student loans receivable (tuition related):
 
 
 
 
 
 
 
For the three months ended March 31, 2015
$
(1,495
)
 
$
(63
)
 
$
—

 
$
(1,432
)
For the three months ended March 31, 2014
(2,144
)
 
120

 
—

 
(2,264
)
(1)
Deductions represent accounts written off, net of recoveries.
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 share for the periods indicated (in thousands, except per share data):
 
Three Months Ended March 31,
 
2015
 
2014
Numerator:
 
 
 
Net loss
$
(371
)
 
$
(4,330
)
Denominator:
 
 
 
Weighted average number of common shares outstanding
45,428

 
44,897

Effect of dilutive options and stock units
—

 
—

Diluted weighted average number of common shares outstanding
45,428

 
44,897

Earnings (loss) per share:
 
 
 
Basic earnings per share
$
(0.01
)
 
$
(0.10
)
Diluted earnings per share
$
(0.01
)
 
$
(0.10
)
Antidilutive Securities 
For the periods indicated below, the computation of dilutive common shares outstanding excludes stock options, RSUs and PSUs, as applicable, because their effect was anti-dilutive (in thousands):
 
Three Months Ended March 31,
 
2015
 
2014
Options
4,889

 
2,792

Stock units
558

 
350

Investments (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Available-for-sale securities
$ 93,770 
 
$ 123,608 
Unrealized gains (losses) on investments
165 
(36)
 
Unrealized gains (losses) on investments, tax expense (benefit)
(138)
26 
 
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax
61 
 
 
Level 1
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Available-for-sale securities
1,240 
 
1,071 
Level 2
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Available-for-sale securities
92,530 
 
122,537 
Level 3
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Available-for-sale securities
0 
 
0 
Mutual funds
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Available-for-sale securities
1,240 
 
1,071 
Mutual funds |
Level 1
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Available-for-sale securities
1,240 
 
1,071 
Mutual funds |
Level 2
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Available-for-sale securities
0 
 
0 
Mutual funds |
Level 3
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Available-for-sale securities
0 
 
0 
Corporate notes and bonds
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Available-for-sale securities
52,530 
 
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
52,530 
 
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
15,000 
 
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 
 
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
15,000 
 
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 
 
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 
Accounts Receivable (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Receivables [Abstract]
 
 
Accounts receivable
$ 62,179 
$ 48,841 
Less allowance for doubtful accounts
(31,261)
(27,567)
Accounts receivable, net
$ 30,918 
$ 21,274 
Accounts Receivable (Change in Allowance) (Details) (Allowance for Doubtful Accounts, Current, USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Allowance for Doubtful Accounts, Current
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
Beginning Balance
$ (27,567)
$ (26,901)
Charged to Expense
8,459 
7,440 
Deductions(1)
(4,765)
(3,580)
Ending Balance
$ (31,261)
$ (30,761)
Other Significant Balance Sheet Accounts (Prepaid Expenses and Other Current Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Prepaid Expense and Other Assets, Current [Abstract]
 
 
Prepaid expenses
$ 8,917 
$ 8,500 
Prepaid licenses
4,535 
5,598 
Prepaid income taxes
3,268 
2,945 
Prepaid insurance
1,266 
1,508 
Interest receivable
520 
424 
Insurance recoverable
2,666 
3,040 
Other current assets
1,149 
803 
Total prepaid expenses and other current assets
$ 22,321 
$ 22,818 
Student Loans Receivable (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Mar. 31, 2015
Student Loans Receivable (Non-tuition Related)
Dec. 31, 2014
Student Loans Receivable (Non-tuition Related)
Mar. 31, 2015
Student Loans Receivable (Tuition Related)
Dec. 31, 2014
Student Loans Receivable (Tuition Related)
Mar. 31, 2015
Repayment Plan One [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
 
 
 
 
 
Loans Receivable, Interest Rate, Stated Percentage
 
 
 
 
 
 
4.50% 
Student loans receivable, short-term
$ 954 
$ 1,135 
$ 476 
$ 509 
$ 478 
$ 626 
 
Less allowance for doubtful accounts, short-term
(95)
(132)
 
 
 
 
 
Student loans receivable, net, short-term
859 
1,003 
 
 
 
 
 
Student loans receivable, long-term
10,483 
10,873 
4,507 
4,805 
5,976 
6,068 
 
Less allowance for doubtful accounts, long-term
(1,337)
(1,363)
 
 
 
 
 
Student loans receivable, net, long-term
$ 9,146 
$ 9,510 
 
 
 
 
 
Other Significant Balance Sheet Accounts (Property and Equipment, Net) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
$ 152,746 
$ 151,358 
Less accumulated depreciation and amortization
(77,018)
(73,139)
Total property and equipment, net
75,728 
78,219 
Land
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
7,091 
7,091 
Buildings
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
29,472 
29,540 
Furniture and office equipment
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
83,800 
81,030 
Software
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
11,190 
12,454 
Leasehold improvements
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
21,046 
21,096 
Vehicles
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
$ 147 
$ 147 
Student Loans Receivable (Change in Allowance) (Details) (Allowance for Notes Receivable, USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Allowance for Notes Receivable
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
Beginning Balance
$ (1,495)
$ (2,144)
Charged to Expense
(63)
120 
Deductions(1)
0 
0 
Ending Balance
$ (1,432)
$ (2,264)
Other Significant Balance Sheet Accounts (Goodwill and Intangibles, Net) (Details) (USD $)
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Dec. 31, 2014
Goodwill and Intangibles [Line Items]
 
 
 
Amortization expense
$ 1,500,000 
$ 1,400,000 
 
Goodwill and Intangibles, Net
 
 
 
Definite-lived intangible assets, gross carrying amount
34,616,000 
 
34,024,000 
Definite-lived intangible assets, accumulated amortization
(13,282,000)
 
(11,816,000)
Definite-lived intangible assets, net carrying amount
21,334,000 
 
22,208,000 
Goodwill and indefinite-lived intangibles
2,567,000 
 
2,567,000 
Total goodwill and intangibles, net
23,901,000 
 
24,775,000 
Future Amortization Expense
 
 
 
2015
4,144,000 
 
 
2016
4,238,000 
 
 
2017
2,664,000 
 
 
2018
1,634,000 
 
 
2019
1,254,000 
 
 
Thereafter
7,400,000 
 
 
Total future amortization expense
21,334,000 
 
 
Capitalized Curriculum Costs
 
 
 
Goodwill and Intangibles, Net
 
 
 
Definite-lived intangible assets, gross carrying amount
18,766,000 
 
18,174,000 
Definite-lived intangible assets, accumulated amortization
(10,685,000)
 
(9,526,000)
Definite-lived intangible assets, net carrying amount
8,081,000 
 
8,648,000 
Purchased Intangible Assets
 
 
 
Goodwill and Intangibles, Net
 
 
 
Definite-lived intangible assets, gross carrying amount
15,850,000 
 
15,850,000 
Definite-lived intangible assets, accumulated amortization
(2,597,000)
 
(2,290,000)
Definite-lived intangible assets, net carrying amount
$ 13,253,000 
 
$ 13,560,000 
Student Loans Receivable (Delinquency Status) (Details) (USD $)
3 Months Ended
Mar. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
Provision for Loan and Lease Losses
$ 400,000 
Loans placed on non-accrual status
4,800,000 
Allowance for Notes Receivable
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
120 days and less
15,030,000 
From 121 - 270 days
1,408,000 
Greater than 270 days
2,460,000 
Total gross student loans receivable
18,898,000 
Less: Amounts reserved or impaired
(6,206,000)
Less: Discount on student loans receivable
(2,687,000)
Total student loans receivable, net
$ 10,005,000 
Other Significant Balance Sheet Accounts (Accrued Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Significant Balance Sheet Accounts [Abstract]
 
 
Accrued salaries and wages
$ 13,553 
$ 8,250 
Accrued bonus
2,204 
2,720 
Accrued vacation
10,481 
9,771 
Accrued litigation and fees
600 
542 
Accrued expenses
17,483 
16,623 
Rent liability
7,358 
8,528 
Accrued insurance liability
4,307 
4,520 
Accrued income taxes payable
0 
449 
Total accrued liabilities
$ 55,986 
$ 51,403 
Other Significant Balance Sheet Accounts (Deferred Revenue) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Deferred Revenue [Abstract]
 
 
Deferred revenue
$ 41,413 
$ 26,445 
Student deposits
61,275 
81,603 
Total deferred revenue and student deposits
$ 102,688 
$ 108,048 
Other Significant Balance Sheet Accounts (Other Long-term Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Other Long-Term Liabilities [Abstract]
 
 
Uncertain tax positions
$ 7,634 
$ 7,586 
Legal settlements
857 
1,000 
Other long-term liabilities
1,237 
1,066 
Total other long-term liabilities
$ 9,728 
$ 9,652 
Credit Facilities (Details) (USD $)
0 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Apr. 13, 2012
April 2012 Credit Facility
Mar. 31, 2015
April 2012 Credit Facility
Mar. 31, 2015
Land
Dec. 31, 2014
Land
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, maximum borrowing capacity
 
 
100,000,000 
 
 
 
Revolving line of credit, maximum swing-line advances
 
 
3,000,000 
 
 
 
Commitment fee, percentage on undrawn amount of letter of credit
 
 
1.50% 
 
 
 
Revolving line of credit, facility fee, percentage
 
 
0.25% 
 
 
 
Property and equipment, gross
152,746,000 
151,358,000 
 
 
7,091,000 
7,091,000 
Revolving line of credit, amount outstanding
 
 
 
0 
 
 
Revolving line of credit, letters of credit outstanding
 
 
 
6,600,000 
 
 
Surety Bond Facility [Abstract]
 
 
 
 
 
 
Surety bond facility, available amount
12,000,000 
 
 
 
 
 
Surety bond facility, issued amount
$ 5,400,000 
 
 
 
 
 
Earnings Per Share (Basic and Diluted Earnings Per Share) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Numerator:
 
 
Net loss
$ (371)
$ (4,330)
Denominator:
 
 
Weighted average number of common shares outstanding (in shares)
45,428 
44,897 
Effect of dilutive options and restricted stock units (in shares)
0 
0 
Diluted weighted average number of common shares outstanding (in shares)
45,428 
44,897 
Earnings (loss) per share:
 
 
Basic (in usd per share)
$ (0.01)
$ (0.10)
Diluted (in usd per share)
$ (0.01)
$ (0.10)
Earnings Per Share (Anti-dilutive Securities) (Details)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Options
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Antidilutive securities excluded from computation of dilutive common shares outstanding
4,889 
2,792 
Stock units
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Antidilutive securities excluded from computation of dilutive common shares outstanding
558 
350 
Stock-Based Compensation (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Stock-based compensation expense
$ 2.2 
$ 1.9 
Income tax benefit of stock-based compensation expense
0.8 
0.7 
Unrecognized compensation cost related to unvested options and RSUs
$ 27.6 
 
Restricted Stock Units
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Non-option equity instruments granted during the period
800,000 
 
Grant date fair value
$ 9.43 
 
Equity instruments other than options vested during period
300,000 
 
Performance Shares [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Non-option equity instruments granted during the period
600,000 
 
Grant date fair value
$ 8.18 
 
Equity instruments other than options vested during period
0 
 
Options
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Number of shares available for grant
400,000 
 
Stock options exercised
100,000 
 
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Income Tax Disclosure [Abstract]
 
 
Estimated annual effective tax rate
43.70% 
 
Effective income tax rate
27.40% 
 
Gross unrecognized tax benefits
$ 20.4 
$ 20.9 
Gross unrecognized tax benefits that would impact effective tax rate if recognized
13.3 
13.6 
Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority
 
12.6 
Accrued interest and penalties related to uncertain tax positions
$ 1.9 
$ 1.9 
Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2013
Loss Contingencies [Line Items]
 
 
Estimated litigation liability
$ 1.5 
$ 9.0