Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 22, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 0-21039 | |
Entity Registrant Name | Strategic Education, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 52-1975978 | |
Entity Address, Address Line One | 2303 Dulles Station Boulevard | |
Entity Address, City or Town | Herndon, | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 20171 | |
City Area Code | 703 | |
Local Phone Number | 247-2500 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | STRA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,600,479 | |
Entity Central Index Key | 0001013934 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 274,774 | $ 187,509 |
Marketable securities | 2,632 | 7,557 |
Tuition receivable, net | 87,123 | 50,169 |
Income taxes receivable | 0 | 1,429 |
Assets held for sale | 2,167 | 0 |
Other current assets | 39,785 | 39,458 |
Total current assets | 406,481 | 286,122 |
Property and equipment, net | 147,246 | 158,854 |
Right-of-use lease assets | 121,818 | 120,687 |
Marketable securities, non-current | 27,567 | 30,270 |
Intangible assets, net | 278,365 | 326,420 |
Goodwill | 1,280,221 | 1,318,526 |
Other assets | 54,424 | 54,928 |
Total assets | 2,316,122 | 2,295,807 |
Current liabilities: | ||
Accounts payable and accrued expenses | 103,383 | 104,742 |
Income taxes payable | 2,622 | 0 |
Contract liabilities | 123,906 | 60,501 |
Lease liabilities | 25,737 | 34,809 |
Total current liabilities | 255,648 | 200,052 |
Long-term debt | 141,593 | 141,823 |
Deferred income tax liabilities | 41,024 | 53,407 |
Lease liabilities, non-current | 139,031 | 106,151 |
Other long-term liabilities | 43,770 | 46,055 |
Total liabilities | 621,066 | 547,488 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, par value $0.01; 32,000,000 shares authorized; 24,418,939 and 24,600,479 shares issued and outstanding at December 31, 2020 and September 30, 2021, respectively | 246 | 244 |
Additional paid-in capital | 1,525,189 | 1,519,549 |
Accumulated other comprehensive income | 1,956 | 48,880 |
Retained earnings | 167,665 | 179,646 |
Total stockholders’ equity | 1,695,056 | 1,748,319 |
Total liabilities and stockholders’ equity | $ 2,316,122 | $ 2,295,807 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 32,000,000 | 32,000,000 |
Common stock, shares issued (in shares) | 24,600,479 | 24,418,939 |
Common stock, shares outstanding (in shares) | 24,600,479 | 24,418,939 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenues | $ 270,078 | $ 239,026 | $ 859,587 | $ 760,159 |
Costs and expenses: | ||||
Instructional and support costs | 153,651 | 127,174 | 459,394 | 385,654 |
General and administration | 95,714 | 74,069 | 275,954 | 210,596 |
Amortization of intangible assets | 8,932 | 15,417 | 47,731 | 46,251 |
Merger and integration costs | 1,111 | 2,920 | 4,060 | 7,858 |
Restructuring costs | 3,322 | 4,024 | 26,400 | 4,024 |
Total costs and expenses | 262,730 | 223,604 | 813,539 | 654,383 |
Income from operations | 7,348 | 15,422 | 46,048 | 105,776 |
Other income (expense) | (1,848) | 912 | 1,076 | 4,674 |
Income before income taxes | 5,500 | 16,334 | 47,124 | 110,450 |
Provision for income taxes | 1,646 | 5,374 | 13,717 | 30,099 |
Net income | $ 3,854 | $ 10,960 | $ 33,407 | $ 80,351 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.16 | $ 0.48 | $ 1.39 | $ 3.62 |
Diluted (in dollars per share) | $ 0.16 | $ 0.47 | $ 1.38 | $ 3.58 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 23,948 | 23,004 | 23,966 | 22,193 |
Diluted (in shares) | 24,113 | 23,214 | 24,131 | 22,432 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 3,854 | $ 10,960 | $ 33,407 | $ 80,351 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment, net of tax | (28,876) | 0 | (46,864) | 0 |
Unrealized gains (losses) on marketable securities, net of tax | 9 | 101 | (60) | 527 |
Comprehensive income (loss) | $ (25,013) | $ 11,061 | $ (13,517) | $ 80,878 |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Cumulative Effect Period of Adoption Adjustment | Cumulative Effect Period of Adoption AdjustmentRetained Earnings |
Beginning balance (in shares) at Dec. 31, 2019 | 21,964,809 | ||||||
Beginning balance at Dec. 31, 2019 | $ 1,462,710 | $ 220 | $ 1,309,438 | $ 152,819 | $ 233 | $ (3,311) | $ (3,311) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock (in shares) | 2,185,000 | ||||||
Issuance of common stock in public offering | 220,248 | $ 22 | 220,226 | ||||
Stock-based compensation | 10,759 | 10,743 | 16 | ||||
Exercise of stock options, net (in shares) | 19,810 | ||||||
Exercise of stock options, net | 1,207 | 1,207 | |||||
Issuance of restricted stock, net (in shares) | 235,514 | ||||||
Issuance of restricted stock, net | (25,845) | $ 2 | (25,847) | ||||
Repurchase of common stock (in shares) | (1,769) | ||||||
Repurchase of common stock | (247) | (105) | (142) | ||||
Common stock dividends | (41,341) | (41,341) | |||||
Foreign currency translation adjustment, net of tax | 0 | ||||||
Unrealized gains (losses) on marketable securities, net of tax | 527 | 527 | |||||
Net income | 80,351 | 80,351 | |||||
Ending balance (in shares) at Sep. 30, 2020 | 24,403,364 | ||||||
Ending balance at Sep. 30, 2020 | 1,705,058 | $ 244 | 1,515,662 | 188,392 | 760 | ||
Beginning balance (in shares) at Jun. 30, 2020 | 22,222,936 | ||||||
Beginning balance at Jun. 30, 2020 | 1,484,550 | $ 222 | 1,291,597 | 192,072 | 659 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock (in shares) | 2,185,000 | ||||||
Issuance of common stock in public offering | 220,248 | $ 22 | 220,226 | ||||
Stock-based compensation | 3,875 | 3,860 | 15 | ||||
Exercise of stock options, net (in shares) | 243 | ||||||
Exercise of stock options, net | 21 | 21 | |||||
Issuance of restricted stock, net (in shares) | (4,815) | ||||||
Issuance of restricted stock, net | (42) | (42) | |||||
Common stock dividends | (14,655) | (14,655) | |||||
Foreign currency translation adjustment, net of tax | 0 | ||||||
Unrealized gains (losses) on marketable securities, net of tax | 101 | 101 | |||||
Net income | 10,960 | 10,960 | |||||
Ending balance (in shares) at Sep. 30, 2020 | 24,403,364 | ||||||
Ending balance at Sep. 30, 2020 | 1,705,058 | $ 244 | 1,515,662 | 188,392 | 760 | ||
Beginning balance (in shares) at Dec. 31, 2020 | 24,418,939 | ||||||
Beginning balance at Dec. 31, 2020 | 1,748,319 | $ 244 | 1,519,549 | 179,646 | 48,880 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation | 12,714 | 12,659 | 55 | ||||
Exercise of stock options, net (in shares) | 1,632 | ||||||
Exercise of stock options, net | 113 | 113 | |||||
Issuance of restricted stock, net (in shares) | 256,877 | ||||||
Issuance of restricted stock, net | (2,339) | $ 3 | (2,342) | ||||
Repurchase of common stock (in shares) | (76,969) | ||||||
Repurchase of common stock | (5,905) | $ (1) | (4,790) | (1,114) | |||
Common stock dividends | (44,329) | (44,329) | |||||
Foreign currency translation adjustment, net of tax | (46,864) | (46,864) | |||||
Unrealized gains (losses) on marketable securities, net of tax | (60) | (60) | |||||
Net income | 33,407 | 33,407 | |||||
Ending balance (in shares) at Sep. 30, 2021 | 24,600,479 | ||||||
Ending balance at Sep. 30, 2021 | 1,695,056 | $ 246 | 1,525,189 | 167,665 | 1,956 | ||
Beginning balance (in shares) at Jun. 30, 2021 | 24,621,111 | ||||||
Beginning balance at Jun. 30, 2021 | 1,733,180 | $ 246 | 1,523,022 | 179,089 | 30,823 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation | 4,646 | 4,624 | 22 | ||||
Issuance of restricted stock, net (in shares) | 18,843 | ||||||
Issuance of restricted stock, net | 1 | $ 1 | |||||
Repurchase of common stock (in shares) | (39,475) | ||||||
Repurchase of common stock | (3,001) | $ (1) | (2,457) | (543) | |||
Common stock dividends | (14,757) | (14,757) | |||||
Foreign currency translation adjustment, net of tax | (28,876) | (28,876) | |||||
Unrealized gains (losses) on marketable securities, net of tax | 9 | 9 | |||||
Net income | 3,854 | 3,854 | |||||
Ending balance (in shares) at Sep. 30, 2021 | 24,600,479 | ||||||
Ending balance at Sep. 30, 2021 | $ 1,695,056 | $ 246 | $ 1,525,189 | $ 167,665 | $ 1,956 |
UNAUDITED CONDENSED CONSOLIDA_6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) - $ / shares | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||||
Common stock dividends (in dollars per share) | $ 0.60 | $ 0.60 | $ 0.60 | $ 1.80 | $ 1.80 |
UNAUDITED CONDENSED CONSOLIDA_7
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 33,407 | $ 80,351 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Loss on sale of marketable securities | 781 | 0 |
Gain on sale of property and equipment | (681) | 0 |
Amortization of deferred financing costs | 414 | 250 |
Amortization of investment discount/premium | 55 | 108 |
Depreciation and amortization | 88,188 | 78,189 |
Deferred income taxes | (12,197) | (12,867) |
Stock-based compensation | 12,714 | 10,759 |
Impairment of right-of-use lease assets | 18,914 | 453 |
Changes in assets and liabilities: | ||
Tuition receivable, net | (38,490) | (1,224) |
Other assets | (6,106) | (8,684) |
Accounts payable and accrued expenses | (253) | 681 |
Income taxes payable and income taxes receivable | 4,050 | 10,674 |
Contract liabilities | 66,022 | 4,540 |
Other liabilities | (5,655) | (4,444) |
Net cash provided by operating activities | 161,163 | 158,786 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (33,632) | (34,787) |
Purchases of marketable securities | 0 | (1,863) |
Proceeds from marketable securities | 9,300 | 22,868 |
Proceeds from sale of property and equipment | 4,328 | 0 |
Other investments | (589) | (768) |
Net cash used in investing activities | (20,593) | (14,550) |
Cash flows from financing activities: | ||
Net proceeds from issuance of common stock | 0 | 220,248 |
Common dividends paid | (44,289) | (41,305) |
Net payments for stock awards | (2,283) | (24,778) |
Repurchase of common stock | (5,905) | (247) |
Net cash provided by (used in) financing activities | (52,477) | 153,918 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (3,280) | 0 |
Net increase in cash, cash equivalents, and restricted cash | 84,813 | 298,154 |
Cash, cash equivalents, and restricted cash — beginning of period | 202,020 | 420,497 |
Cash, cash equivalents, and restricted cash — end of period | 286,833 | 718,651 |
Noncash transactions: | ||
Non-cash additions to property and equipment | 6,849 | 2,496 |
Right-of-use lease assets obtained in exchange for operating lease liabilities | $ 46,213 | $ 12,427 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations Strategic Education, Inc. (“Strategic Education” or the “Company”), a Maryland corporation, is an education services company that provides access to high-quality education through campus-based and online post-secondary education offerings, as well as through programs to develop job-ready skills for high-demand markets. Strategic Education’s portfolio of companies is dedicated to closing the skills gap by placing adults on the most direct path between learning and employment. As discussed in Note 2 and Note 3, the Company completed its acquisition of Torrens University and associated assets in Australia and New Zealand (“ANZ”) on November 3, 2020. As discussed in Note 15, beginning in the first quarter of 2021 the Company changed the way management reports financial information relied on by the Chief Operating Decision Maker (“CODM”) to evaluate performance and allocate the resources of the Company. The Company's revised organizational structure includes the following three operating and reportable segments: (1) U.S. Higher Education, which is primarily comprised of the Company's previous Strayer University and Capella University segments and is focused on providing flexible and affordable certificate and degree programs to working adults; (2) Alternative Learning, a new segment that is primarily focused on developing and maintaining relationships with large employers to build employee education benefits programs; and (3) Australia/New Zealand, which provides certificate and degree programs in Australia and New Zealand. The Australia/New Zealand segment was not changed as a result of the Company's reorganization. Financial reporting under the new structure began in the first quarter of 2021. Prior period segment disclosures have been restated to conform to the current period presentation. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Financial Statement Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. On November 3, 2020, the Company completed its acquisition of ANZ, whereby the Company was deemed the acquirer in the business combination for accounting purposes in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Accordingly, the financial results of the Company as of and for any periods ended prior to November 3, 2020 do not include the financial results of ANZ and therefore are not directly comparable. All information as of September 30, 2020 and 2021, and for the three and nine months ended September 30, 2020 and 2021 is unaudited but, in the opinion of management, contains all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the condensed consolidated financial position, results of operations, and cash flows of the Company. The condensed consolidated balance sheet as of December 31, 2020 has been derived from the audited consolidated financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full fiscal year. Below is a description of the nature of the costs included in the Company’s operating expense categories. Instructional and support costs (“I&SC”) generally contain items of expense directly attributable to activities that support students. This expense category includes salaries and benefits of faculty and academic administrators, as well as admissions and administrative personnel who support and serve student interests. Instructional and support costs also include course development costs and costs associated with delivering course content, including educational supplies, facilities, and all other physical plant and occupancy costs, with the exception of costs attributable to the corporate offices. Bad debt expense incurred on delinquent student account balances is also included in instructional and support costs. General and administration (“G&A”) expenses include salaries and benefits of management and employees engaged in finance, human resources, legal, regulatory compliance, marketing and other corporate functions. Also included are the costs of advertising and production of marketing materials. General and administration expense also includes the facilities occupancy and other related costs attributable to such functions. Amortization of intangible assets consists of amortization and depreciation expense related to intangible assets and software assets acquired through the Company's merger with Capella Education Company (“CEC”) and the Company's acquisition of ANZ. Merger and integration costs include integration expenses associated with the Company's merger with CEC, and transaction and integration expenses associated with the Company's acquisition of ANZ. Restructuring costs include severance and other personnel-related expenses from voluntary and involuntary employee terminations, as well as early lease termination costs and impairments of right-of-use lease assets and fixed assets associated with vacating leased space in connection with the Company's restructuring plans. See Note 5 for additional information. Foreign Currency Translation and Transaction Gains and Losses The United States Dollar (“USD”) is the functional currency of the Company and its subsidiaries operating in the United States. The financial statements of its foreign subsidiaries are maintained in their functional currencies. The functional currency of each of the foreign subsidiaries is the currency of the economic environment in which the subsidiary primarily does business. Financial statements of foreign subsidiaries are translated into USD using the exchange rates applicable to the dates of the financial statements. Assets and liabilities are translated into USD using the period-end spot foreign exchange rates. Income and expenses are translated at the weighted-average exchange rates in effect during the period. Equity accounts are translated at historical exchange rates. The effects of these translation adjustments are reported as a component of accumulated other comprehensive income within shareholders’ equity. For any transaction that is in a currency different from the entity’s functional currency, the Company records a net gain or loss based on the difference between the exchange rate at the transaction date and the exchange rate at the transaction settlement date (or rate at period end, if unsettled), in the unaudited condensed consolidated statements of income. Restricted Cash In the United States, a significant portion of the Company’s revenues are funded by various federal and state government programs. The Company generally does not receive funds from these programs prior to the start of the corresponding academic term. The Company may be required to return certain funds for students who withdraw from a U.S. Higher Education institution during the academic term. The Company had approximately $0.1 million and $1.7 million of these unpaid obligations as of December 31, 2020 and September 30, 2021, respectively. In Australia and New Zealand, advance tuition payments from international students are required to be restricted until that student commences his or her course. In addition, a portion of tuition prepayments from students enrolled in a vocational education and training program are held in trust by a third party law firm to adhere to tuition protection requirements. As of December 31, 2020 and September 30, 2021, the Company had approximately $13.9 million and $9.9 million, respectively, of restricted cash related to these requirements in Australia and New Zealand. These balances are recorded as restricted cash and included in other current assets in the unaudited condensed consolidated balance sheets. As part of commencing operations in Pennsylvania in 2003, the Company is required to maintain a “minimum protective endowment” of at least $0.5 million in an interest-bearing account as long as the Company operates its campuses in the state. The Company holds these funds in an interest-bearing account, which is included in other assets. The following table illustrates the reconciliation of cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statements of cash flows as of September 30, 2020 and 2021 (in thousands): As of September 30, 2020 2021 Cash and cash equivalents $ 717,804 $ 274,774 Restricted cash included in other current assets 347 11,559 Restricted cash included in other assets 500 500 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 718,651 $ 286,833 Tuition Receivable and Allowance for Credit Losses The Company adopted Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASC 326") on January 1, 2020, which revised the accounting requirements related to the measurement of credit losses and requires organizations to measure all expected credit losses for financial assets based on historical experience, current conditions, and reasonable and supportable forecasts about collectability. The Company records tuition receivable and contract liabilities for its students upon the start of the academic term or program. Tuition receivables are not collateralized; however, credit risk is minimized as a result of the diverse nature of the Company's student bases and through the participation of the majority of the students in federally funded financial aid programs. An allowance for credit losses is established based upon historical collection rates by age of receivable and adjusted for reasonable expectations of future collection performance, net of estimated recoveries. These collection rates incorporate historical performance based on a student’s current enrollment status, likelihood of future enrollment, degree mix trends and changes in the overall economic environment. In the event that current collection trends differ from historical trends, an adjustment is made to the allowance for credit losses and bad debt expense. The Company’s tuition receivable and allowance for credit losses were as follows as of December 31, 2020 and September 30, 2021 (in thousands): December 31, 2020 September 30, 2021 Tuition receivable $ 99,942 $ 136,401 Allowance for credit losses (49,773) (49,278) Tuition receivable, net $ 50,169 $ 87,123 Approximately $3.6 million and $2.9 million of tuition receivable are included in other assets as of December 31, 2020 and September 30, 2021, respectively, because these amounts are expected to be collected after 12 months. The following table illustrates changes in the Company’s allowance for credit losses for the three and nine months ended September 30, 2020 and 2021 (in thousands). For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 Allowance for credit losses, beginning of period $ 42,956 $ 49,591 $ 30,931 $ 49,773 Impact of adopting ASC 326 — — 4,571 — Additions charged to expense 11,169 10,291 34,316 30,850 Write-offs, net of recoveries (9,268) (10,604) (24,961) (31,345) Allowance for credit losses, end of period $ 44,857 $ 49,278 $ 44,857 $ 49,278 Assets Held for Sale The Company classifies assets and liabilities as held for sale (“disposal group”) when management, having the authority to approve the action, commits to a plan to sell the disposal group, the sale is probable to be completed within one year, and the disposal group is available for immediate sale in its present condition. The Company also considers whether an active program to locate a buyer has been initiated, whether the disposal group is marketed actively for sale at a price that is reasonable in relation to its current fair value, and whether actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a disposal group that is classified as held for sale at the lower of its carrying amount or fair value less costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Gains are not recognized until the date of sale. Assets are not depreciated or amortized while they are classified as held for sale. Upon determining that a disposal group meets the criteria to be classified as held for sale, the Company reports the assets and liabilities of the disposal group as assets held for sale and liabilities held for sale in its unaudited condensed consolidated balance sheets. During the first six months of 2021, the Company evaluated its leased and owned campus portfolio, which resulted in the decision to downsize or exit several of its underutilized campus locations and to begin marketing the long-lived assets related to two of its owned U.S. Higher Education campus locations for sale. The long-lived assets marketed for sale consist of land, buildings, and building improvements. The Company determined that it met all of the criteria to classify these assets as held for sale as of June 30, 2021. No loss was recorded as the carrying amount of the net assets was less than the fair value less costs to sell. Fair value was determined based upon the anticipated sales price of these assets. During the third quarter of 2021, the Company sold the long-lived assets related to one of these U.S. Higher Education campuses and recognized a $0.7 million gain on sale, which is included in Restructuring costs on the unaudited condensed consolidated statements of income. The long-lived assets associated with the other campus for sale continued to meet all of the criteria to be classified as assets held for sale as of September 30, 2021. On October 15, 2021, the Company completed the sale of these long-lived assets and recognized a gain on the sale at that time. Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed in a business combination. Indefinite-lived intangible assets, which include trade names, are recorded at fair value on their acquisition date. An indefinite life was assigned to the trade names because they have the continued ability to generate cash flows indefinitely. Goodwill and the indefinite-lived intangible assets are assessed at least annually for impairment during the fourth quarter, or more frequently if events occur or circumstances change between annual tests that would more likely than not reduce the fair value of the respective reporting unit or indefinite-lived intangible asset below its carrying amount. The Company identifies its reporting units by assessing whether the components of its operating segments constitute businesses for which discrete financial information is available and management regularly reviews the operating results of those components. Finite-lived intangible assets that are acquired in business combinations are recorded at fair value on their acquisition dates and are amortized on a straight-line basis over the estimated useful life of the asset. Finite-lived intangible assets consist of student relationships. The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are not recoverable, a potential impairment loss is recognized to the extent the carrying amount of the assets exceeds the fair value of the assets. Authorized Stock The Company has authorized 32,000,000 shares of common stock, par value $0.01, of which 24,418,939 and 24,600,479 shares were issued and outstanding as of December 31, 2020 and September 30, 2021, respectively. The Company also has authorized 8,000,000 shares of preferred stock, none of which is issued or outstanding. Before any preferred stock may be issued in the future, the Board of Directors would need to establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, and the terms or conditions of the redemption of the preferred stock. In July 2021, the Company’s Board of Directors declared a regular, quarterly cash dividend of $0.60 per share of common stock. The dividend was paid on September 13, 2021. Net Income Per Share Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the periods. Diluted earnings per share reflects the potential dilution that could occur assuming conversion or exercise of all dilutive unexercised stock options, restricted stock, and restricted stock units. The dilutive effect of stock awards was determined using the treasury stock method. Under the treasury stock method, all of the following are assumed to be used to repurchase shares of the Company’s common stock: (1) the proceeds received from the exercise of stock options, and (2) the amount of compensation cost associated with the stock awards for future service not yet recognized by the Company. Stock options are not included in the computation of diluted earnings per share when the stock option exercise price of an individual grant exceeds the average market price for the period. Set forth below is a reconciliation of shares used to calculate basic and diluted earnings per share for the three and nine months ended September 30, 2020 and 2021 (in thousands): For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 Weighted average shares outstanding used to compute basic earnings per share 23,004 23,948 22,193 23,966 Incremental shares issuable upon the assumed exercise of stock options 12 4 16 5 Unvested restricted stock and restricted stock units 198 161 223 160 Shares used to compute diluted earnings per share 23,214 24,113 22,432 24,131 Anti-dilutive shares excluded from the diluted earnings per share calculation 123 377 42 293 Comprehensive Income Comprehensive income includes net income and all changes in the Company’s equity during a period from non-owner sources, which for the Company consists of unrealized gains and losses on available-for-sale marketable securities, net of tax, and foreign currency translation adjustments. As of December 31, 2020 and September 30, 2021, the balance of accumulated other comprehensive income was $48.9 million, net of tax of $0.3 million, and $2.0 million, net of tax of $0.3 million, respectively. During the nine months ended September 30, 2020, approximately $25,000, net of tax of $10,000, of unrealized gains on available-for-sale marketable securities was reclassified out of accumulated other comprehensive income to Other income (expense) on the unaudited condensed consolidated statements of income. There were no reclassifications out of accumulated other comprehensive income to net income for the three and nine months ended September 30, 2021. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period reported. The most significant management estimates include allowances for credit losses, useful lives of property and equipment and intangible assets, incremental borrowing rates, potential sublease income and vacancy periods, accrued expenses, forfeiture rates and the likelihood of achieving performance criteria for stock-based awards, value of free courses earned by students that will be redeemed in the future, valuation of goodwill and intangible assets, and the provision for income taxes. During the nine months ended September 30, 2020 and 2021, management estimates also include potential impacts the COVID-19 pandemic will have on student enrollment, tuition pricing, and collections in future periods. The duration and severity of the COVID-19 pandemic and its impact on the Company’s condensed consolidated financial statements is subject to uncertainty. Actual results could differ from those estimates. Recently Issued Accounting Standards Not Yet Adopted Accounting Standards Updates recently issued by the FASB but not yet effective are not expected to have a material effect on the Company’s consolidated financial statements. |
Acquisition of Torrens Universi
Acquisition of Torrens University and Associated Assets in Australia and New Zealand | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition of Torrens University and Associated Assets in Australia and New Zealand | Acquisition of Torrens University and Associated Assets in Australia and New Zealand On November 3, 2020, the Company completed its acquisition of Torrens University and associated assets in Australia and New Zealand pursuant to the sale and purchase agreement dated July 29, 2020 (the "Purchase Agreement"). The acquired operations include Torrens University Australia, Think Education, and Media Design School, which together provide diversified student curricula to approximately 19,000 students across five industry verticals, including business, hospitality, health, education, creative technology and design. Pursuant to the Purchase Agreement, the aggregate consideration paid was approximately $658.4 million in cash, which reflected the original agreed upon purchase price of $642.7 million, plus a $15.7 million adjustment reflecting $11.0 million of net cash at close, and $4.7 million related to higher net working capital. The Company applied the acquisition method of accounting to ANZ, whereby the excess of the acquisition date fair value of consideration transferred over the fair value of identifiable net assets was allocated to goodwill. Goodwill reflects workforce and synergies expected from cost savings, operations, and revenue enhancements of the combined company that are expected to result from the acquisition. The goodwill recorded as part of the acquisition was allocated to the Australia/New Zealand reportable segment in the amount of $546.3 million, and is not deductible for tax purposes. Through September 30, 2021, the Company has incurred $8.1 million of acquisition-related costs which have been recognized in Merger and integration costs in the unaudited condensed consolidated statements of income. These costs were primarily attributable to legal, financial, and accounting support services incurred by the Company in connection with the acquisition. The preliminary opening balance sheet is subject to adjustment based on final assessment of the fair values of certain acquired assets and liabilities, primarily intangible assets and income taxes. As the Company finalizes its assessment of the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period. The Company reflects measurement period adjustments in the period in which the adjustments occur. During the first quarter of 2021, the Company recorded a measurement period adjustment that reduced Property and equipment, net by $0.3 million and increased goodwill by $0.3 million. The preliminary fair value of assets acquired and liabilities assumed as well as a reconciliation to consideration transferred is presented in the table below (in thousands): Cash and cash equivalents $ 16,082 Tuition receivable 24,447 Other current assets 17,713 Property and equipment, net 41,508 Right-of-use lease assets 44,229 Intangible assets 103,161 Goodwill 546,315 Other assets 2,799 Total assets acquired 796,254 Accounts payable and accrued expenses (33,876) Income taxes payable (229) Contract liabilities (33,309) Lease liabilities (9,685) Deferred income taxes (18,712) Lease liabilities, non-current (34,544) Other long-term liabilities (7,520) Total liabilities assumed (137,875) Total consideration $ 658,379 The table below presents a summary of intangible assets acquired (in thousands) and the weighted average useful lives of these assets: Fair Value Weighted Average Trade names $ 68,774 Indefinite Student relationships 34,387 3 $ 103,161 The Company determined the fair value of assets acquired and liabilities assumed based on assumptions that reasonable market participants would use while employing the concept of highest and best use of the assets and liabilities. The Company utilized the following assumptions, some of which include significant unobservable inputs which would qualify the valuations as Level 3 measurements, and valuation methodologies to determine fair value: • Intangible assets ▪ Trade names - to determine the fair value of the trade names, the Company used the relief from royalty approach, which involved the use of estimates and assumptions with respect to the timing and amounts of future cash flows, revenue growth rates, royalty rate, and discount rate. Key assumptions used in the valuation included revenue growth rates ranging from 2.5% to 6.3% per year, a royalty rate of 2.5% and a discount rate of 11%. ▪ Student relationships - to determine the fair value of the student relationships, the Company used the excess earnings method, which involved the use of estimates and assumptions with respect to the timing and amounts of future cash flows, earnings before interest and taxes margins, annual attrition rate, and discount rate. Key assumptions used in the valuation included an annual attrition rate of 60% and a discount rate of 11%. • Property and equipment - Included in property and equipment is course content of $10.0 million. To determine the fair value of course content, the Company used the relief from royalty approach, which involved the use of estimates and assumptions with respect to the timing and amounts of future cash flows, revenue growth rates, royalty rate, and discount rate. Key assumptions used in the valuation included revenue growth rates ranging from 5.6% to 6.2%, a royalty rate of 3% and a discount rate of 11%. The course content will be amortized over 3 years. All other property and equipment was valued at estimated cost. • Contract liabilities - The Company estimated the fair value of contract liabilities using the cost build-up method, which represents the cost to deliver the services plus a normal profit margin. Based on this method, fair value of contract liabilities were estimated to be 70% of carrying value as of the acquisition date. • Other current and noncurrent assets and liabilities - The carrying value of all other assets and liabilities approximated fair value at the time of acquisition. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The Company’s revenues primarily consist of tuition revenue arising from educational services provided in the form of classroom instruction and online courses. Tuition revenue is deferred and recognized ratably over the period of instruction, which varies depending on the course format and chosen program of study. Strayer University’s educational programs and Capella University’s GuidedPath classes typically are offered on a quarterly basis, and such periods coincide with the Company’s quarterly financial reporting periods, while Capella University’s FlexPath courses are delivered over a twelve-week subscription period. Torrens University offers the majority of its education programs on a trimester system having three primary academic terms, which all occur within the calendar year. The following table presents the Company’s revenues from contracts with customers disaggregated by material revenue category for the three and nine months ended September 30, 2020 and 2021 (in thousands): For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 U.S. Higher Education Segment Tuition, net of discounts, grants and scholarships $ 221,235 $ 184,126 $ 704,251 $ 605,036 Other (1) 9,076 7,767 28,923 25,611 Total U.S. Higher Education Segment 230,311 191,893 733,174 630,647 Australia/New Zealand Segment Tuition, net of discounts, grants and scholarships — 64,456 — 187,018 Other (1) — 768 — 3,531 Total Australia/New Zealand Segment — 65,224 — 190,549 Alternative Learning Segment (2) 8,715 12,961 26,985 38,391 Consolidated revenue $ 239,026 $ 270,078 $ 760,159 $ 859,587 _________________________________________ (1) Other revenue is primarily comprised of academic fees, sales of course materials, placement fees and other non-tuition revenue streams. (2) Alternative Learning revenue is primarily derived from tuition revenue. Revenues are recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods and services. The Company applies the five-step revenue model under ASC 606 to determine when revenue is earned and recognized. Arrangements with students may have multiple performance obligations. For such arrangements, the Company allocates net tuition revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers and observable market prices. The standalone selling price of material rights to receive free classes in the future is estimated based on class tuition prices and likelihood of redemption based on historical student attendance and completion behavior. At the start of each academic term or program, a contract liability is recorded for academic services to be provided, and a tuition receivable is recorded for the portion of the tuition not paid in advance. Any cash received prior to the start of an academic term or program is recorded as a contract liability. Some students may be eligible for scholarship awards, the estimated value of which will be realized in the future and is deducted from revenue when earned, based on historical student attendance and completion behavior. Contract liabilities are recorded as a current or long-term liability in the unaudited condensed consolidated balance sheets based on when the benefit is expected to be realized. Course materials are available to enable students to access electronically all required materials for courses in which they enroll during the quarter. Revenue derived from course materials is recognized ratably over the duration of the course as the Company provides the student with continuous access to these materials during the term. For sales of certain other course materials, the Company is considered the agent in the transaction, and as such, the Company recognizes revenue net of amounts owed to the vendor at the time of sale. Revenues also include certain academic fees recognized within the quarter of instruction, and certificate revenue and licensing revenue, which are recognized as the services are provided. Contract Liabilities – Graduation Fund Strayer University offers the Graduation Fund, which allows undergraduate and graduate students to earn tuition credits that are redeemable in the final year of a student’s course of study if he or she successfully remains in the program. Students registering in credit-bearing courses in any undergraduate or graduate degree program receive one free course for every three courses that the student successfully completes. To be eligible, students must meet all of Strayer University’s admission requirements and must be enrolled in a bachelor’s or master's degree program. The Company’s employees and their dependents are not eligible for the program. Students who have more than one consecutive term of non-attendance lose any Graduation Fund credits earned to date, but may earn and accumulate new credits if the student is reinstated or readmitted by Strayer University in the future. In response to the COVID-19 pandemic, Strayer University is temporarily allowing students to miss two consecutive terms without losing their Graduation Fund credits. Revenue from students participating in the Graduation Fund is recorded in accordance with ASC 606. The Company defers the value of the related performance obligation associated with the credits estimated to be redeemed in the future based on the underlying revenue transactions that result in progress by the student toward earning the benefit. The Company’s estimate of the benefits that will be redeemed in the future is based on its historical experience of student persistence toward completion of a course of study within this program and similar programs. Each quarter, the Company assesses its methodologies and assumptions underlying these estimates, and to date, any adjustments to the estimates have not been material. The amount estimated to be redeemed in the next 12 months is $19.7 million and is included as a current contract liability in the unaudited condensed consolidated balance sheets. The remainder is expected to be redeemed within two The table below presents activity in the contract liability related to the Graduation Fund (in thousands): For the nine months ended September 30, 2020 2021 Balance at beginning of period $ 49,641 $ 53,314 Revenue deferred 19,044 15,005 Benefit redeemed (17,077) (16,733) Balance at end of period $ 51,608 $ 51,586 Unbilled receivables – Student tuition Academic materials may be shipped to certain new undergraduate students in advance of the term of enrollment. Under ASC 606, the materials represent a performance obligation to which the Company allocates revenue based on the fair value of the materials relative to the total fair value of all performance obligations in the arrangement with the student. When control of the materials passes to the student in advance of the term of enrollment, an unbilled receivable and related revenue are recorded. The balance of unbilled receivables related to such materials was $0.8 million as of September 30, 2021, and is included in tuition receivable. Costs to Obtain a Contract Certain commissions earned by third party international agents are considered incremental and recoverable costs of obtaining a contract with customers of ANZ. These costs are deferred and then amortized over the period of benefit which ranges from one year to two years. |
Restructuring and Related Charg
Restructuring and Related Charges | 9 Months Ended |
Sep. 30, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Charges | Restructuring and Related Charges In 2018 and 2019, the Company incurred personnel-related restructuring charges due to cost reduction efforts and management changes. These changes related to the integration of CEC in order to establish an efficient ongoing cost structure for the Company. The severance and other employee separation costs incurred in connection with the integration of CEC are included in Merger and integration costs on the unaudited condensed consolidated statements of income. In the third quarter of 2020, the Company began implementing a restructuring plan in an effort to reduce the ongoing operating costs of the Company to align with changes in enrollment following the COVID-19 pandemic. Under this plan, the Company incurred severance and other employee separation costs related to voluntary and involuntary employee terminations. The following details the changes in the Company’s severance and other employee separation costs restructuring liabilities during the nine months ended September 30, 2020 and 2021 (in thousands): CEC 2020 Total Balance at December 31, 2019 $ 8,283 $ — $ 8,283 Restructuring and other charges — 4,024 4,024 Payments (5,401) (34) (5,435) Adjustments — — — Balance at September 30, 2020 $ 2,882 $ 3,990 $ 6,872 Balance at December 31, 2020 (1) $ 1,835 $ 1,287 $ 3,122 Restructuring and other charges — 3,737 3,737 Payments (1,835) (4,227) (6,062) Adjustments — — — Balance at September 30, 2021 (1) $ — $ 797 $ 797 _____________________________________ (1) Restructuring liabilities are included in accounts payable and accrued expenses. In addition, the 2020 restructuring plan included an evaluation of the Company's owned and leased real estate portfolio, which resulted in the closure and sale of underutilized campus and corporate offices. During the three and nine months ended September 30, 2021, the Company recorded right-of-use lease asset charges of approximately $1.9 million and $18.9 million, respectively, related to the campus and corporate locations closed as a result of the restructuring plan. The Company also recorded fixed asset impairment charges of approximately $0.6 million and $2.6 million during the three and nine months ended September 30, 2021, respectively. During the three and nine months ended September 30, 2021, the Company recorded a $0.7 million gain from the sale of property and equipment of an owned campus that was closed in connection with the 2020 restructuring plan. All severance and other employee separation charges, right-of-use lease asset and fixed asset impairment charges, and gains on the sale of property and equipment related to the 2020 restructuring plan are included in Restructuring costs on the unaudited condensed consolidated statements of income. |
Marketable Securities
Marketable Securities | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Marketable Securities The following is a summary of available-for-sale securities as of September 30, 2021 (in thousands): Amortized Cost Gross Unrealized Gain Gross Unrealized (Losses) Estimated Fair Value Tax-exempt municipal securities $ 18,520 $ 465 $ — $ 18,985 Corporate debt securities 10,940 274 — 11,214 Total $ 29,460 $ 739 $ — $ 30,199 The following is a summary of available-for-sale securities as of December 31, 2020 (in thousands): Amortized Cost Gross Unrealized Gain Gross Unrealized (Losses) Estimated Fair Value Tax-exempt municipal securities $ 19,924 $ 365 $ — $ 20,289 Corporate debt securities 17,086 452 — 17,538 Total $ 37,010 $ 817 $ — $ 37,827 The unrealized gains on the Company’s investments in corporate debt and municipal securities as of December 31, 2020 and September 30, 2021 were caused by changes in market values primarily due to interest rate changes. As of September 30, 2021, there were no securities in an unrealized loss position for a period longer than twelve months. The Company has no allowance for credit losses related to its available-for-sale securities as all investments are in investment grade securities. The Company does not intend to sell these securities, and it is not more likely than not that the Company will be required to sell these securities prior to the recovery of their amortized cost basis, which may be at maturity. No impairment charges were recorded during the three and nine months ended September 30, 2020 and 2021. The following table summarizes the maturities of the Company’s marketable securities as of December 31, 2020 and September 30, 2021 (in thousands): December 31, 2020 September 30, 2021 Due within one year $ 7,557 $ 2,632 Due after one year through five years 30,270 27,567 Total $ 37,827 $ 30,199 The following table summarizes the proceeds from the maturities and sales of available-for-sale securities for the three and nine months ended September 30, 2020 and 2021 (in thousands): For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 Maturities of marketable securities $ 3,999 $ 1,900 $ 21,404 $ 7,495 Sales of marketable securities — 1,805 1,464 1,805 Total $ 3,999 $ 3,705 $ 22,868 $ 9,300 The Company recorded approximately $35,000 in gross realized gains in net income during the nine months ended September 30, 2020 and approximately $0.8 million in gross realized losses in net income during the three and nine months ended September 30, 2021 related to the sales of marketable securities. |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement Assets and liabilities measured at fair value on a recurring basis consist of the following as of September 30, 2021 (in thousands): Fair Value Measurements at Reporting Date Using September 30, 2021 Quoted Prices in Significant Significant Assets: Money market funds $ 3,916 $ 3,916 $ — $ — Marketable securities: Tax-exempt municipal securities 18,985 — 18,985 — Corporate debt securities 11,214 — 11,214 — Total assets at fair value on a recurring basis $ 34,115 $ 3,916 $ 30,199 $ — Liabilities: Deferred payments $ 646 $ — $ — $ 646 Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2020 (in thousands): Fair Value Measurements at Reporting Date Using December 31, 2020 Quoted Prices in Significant Significant Assets: Money market funds $ 2,841 $ 2,841 $ — $ — Marketable securities: Tax-exempt municipal securities 20,289 — 20,289 — Corporate debt securities 17,538 — 17,538 — Total assets at fair value on a recurring basis $ 40,668 $ 2,841 $ 37,827 $ — Liabilities: Deferred payments $ 1,658 $ — $ — $ 1,658 The Company measures the above items on a recurring basis at fair value as follows: • Money market funds – Classified in Level 1 is excess cash the Company holds in both taxable and tax-exempt money market funds, which are included in cash and cash equivalents in the accompanying unaudited condensed consolidated balance sheets. The Company records any net unrealized gains and losses for changes in fair value as a component of accumulated other comprehensive income in stockholders' equity. The Company's cash and cash equivalents held at December 31, 2020 and September 30, 2021 approximate fair value and are not disclosed in the above tables because of the short-term nature of the financial instruments. • Marketable securities – Classified in Level 2 and valued using readily available pricing sources for comparable instruments utilizing observable inputs from active markets. The Company does not hold securities in inactive markets. • Deferred payments – The Company acquired certain assets and entered into deferred payment arrangements with the sellers in transactions that occurred in 2011. The deferred payments are classified within Level 3 as there is no liquid market for similarly priced instruments and are valued using discounted cash flow models that encompass significant unobservable inputs. The assumptions used to prepare the discounted cash flows include estimates for interest rates, enrollment growth, retention rates, and pricing strategies. These assumptions are subject to change as the underlying data sources evolve and the programs mature. The short-term portion of deferred payments was $0.6 million as of September 30, 2021 and is included in accounts payable and accrued expense. The Company did not change its valuation techniques associated with recurring fair value measurements from prior periods and did not transfer assets or liabilities between levels of the fair value hierarchy during the nine months ended September 30, 2020 and 2021. Changes in the fair value of the Company’s Level 3 liabilities during the nine months ended September 30, 2020 and 2021 are as follows (in thousands): As of September 30, 2020 2021 Balance as of the beginning of period $ 3,257 $ 1,658 Amounts paid (1,628) (1,470) Other adjustments to fair value 374 458 Balance at end of period $ 2,003 $ 646 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill During the first quarter of 2021, the Company reallocated a portion of its goodwill to the Alternative Learning segment based on a relative fair value analysis performed using several probability weighted scenarios. The following table presents changes in the carrying value of goodwill by segment for the nine months ended September 30, 2021 (in thousands): U.S. Higher Education Australia / Alternative Learning Total Balance as of December 31, 2020 $ 732,075 $ 586,451 $ — $ 1,318,526 Reporting unit reallocation (1) (100,000) — 100,000 — Additions — — — — Impairments — — — — Currency translation adjustments — (38,567) — (38,567) Adjustments to prior acquisitions (2) — 262 — 262 Balance as of September 30, 2021 $ 632,075 $ 548,146 $ 100,000 $ 1,280,221 _____________________________________ (1) Represents the reallocation of goodwill as a result of the Company reorganizing its segments in the first quarter of 2021. (2) Represents a measurement period adjustment recorded in the first quarter of 2021, as discussed in Note 3. The Company assesses goodwill at least annually for impairment during the fourth quarter, or more frequently if events occur or circumstances change between annual tests that would more likely than not reduce the fair value of the respective reporting unit below its carrying amount. No events or circumstances occurred in the three and nine months ended September 30, 2021 to indicate an impairment to goodwill at any of its segments. There were no impairment charges related to goodwill recorded during the three and nine month periods ended September 30, 2020 and 2021. Intangible Assets The following table represents the balance of the Company’s intangible assets as of December 31, 2020 and September 30, 2021 (in thousands): December 31, 2020 September 30, 2021 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Subject to amortization Student relationships $ 202,861 $ (135,703) $ 67,158 $ 201,052 $ (177,091) $ 23,961 Not subject to amortization Trade names 259,262 — 259,262 254,404 — 254,404 Total $ 462,123 $ (135,703) $ 326,420 $ 455,456 $ (177,091) $ 278,365 The Company’s finite-lived intangible assets are comprised of student relationships, which are being amortized on a straight-line basis over a three year useful life. Straight-line amortization expense for finite-lived intangible assets reflects the pattern in which the economic benefits of the assets are consumed over their estimated useful lives. Amortization expense related to finite-lived intangible assets was $41.5 million and $41.4 million for the nine months ended September 30, 2020 and 2021, respectively. Indefinite-lived intangible assets not subject to amortization consist of trade names. The Company assigned an indefinite useful life to its trade name intangible assets, as it is believed these assets have the ability to generate cash flows indefinitely. In addition, there are no legal, regulatory, contractual, economic, or other factors to limit the useful life of the trade name intangibles. The Company assesses indefinite-lived intangible assets at least annually for impairment during the fourth quarter, or more frequently if events occur or circumstances change between annual tests that would more likely than not reduce the fair value of the respective indefinite-lived intangible asset below its carrying amount. No events or circumstances occurred in the three and nine months ended September 30, 2021 to indicate an impairment to indefinite-lived intangible assets. There was no impairment charge related to indefinite-lived intangible assets recorded during the three and nine months ended September 30, 2020 and 2021. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets Other assets consist of the following as of December 31, 2020 and September 30, 2021 (in thousands): December 31, 2020 September 30, 2021 Prepaid expenses, net of current portion $ 22,418 $ 20,606 Equity method investments 15,795 14,532 Cloud computing arrangements 6,385 6,665 Other investments 2,527 2,999 Tuition receivable, non-current 3,585 2,912 Other 4,218 6,710 Other assets $ 54,928 $ 54,424 Prepaid Expenses Long-term prepaid expenses primarily relate to payments that have been made for future services to be provided after one year. In the fourth quarter of 2020, pursuant to the terms of the perpetual license agreement associated with the Jack Welch Management Institute (“JWMI”), the Company made a final one-time cash payment of approximately $25.3 million for the right to continue to use the Jack Welch name and likeness. As of September 30, 2021, $19.5 million of this payment is included in the prepaid expenses, net of current portion balance, as the payment is being amortized over an estimated useful life of 15 years. Equity Method Investments The Company holds investments in certain limited partnerships that invest in various innovative companies in the health care and education-related technology fields. The Company has commitments to invest up to an additional $3.2 million across these partnerships through 2031. The Company's investments range from 3%-5% of any partnership’s interest and are accounted for under the equity method. The following table illustrates changes in the Company’s limited partnership investments for the three and nine months ended September 30, 2020 and 2021 (in thousands): For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 Limited partnership investments, beginning of period $ 16,990 $ 17,401 $ 15,795 $ 15,795 Capital contributions 75 327 368 589 Pro-rata share in the net income (loss) of limited partnerships 370 (610) 1,612 2,993 Distributions (701) (2,586) (1,041) (4,845) Limited partnership investments, end of period $ 16,734 $ 14,532 $ 16,734 $ 14,532 Cloud Computing Arrangements The Company defers implementation costs incurred in cloud computing arrangements and amortizes these costs over the term of the arrangement. Other Investments The Company's venture fund, SEI Ventures, makes investments in education tech start-ups focused on transformational technologies that improve student success. These investments are accounted for at cost less impairment as they do not have readily determinable fair value. Tuition Receivable Non-current tuition receivable represents tuition that the Company expects to collect, but not within the next 12 months. Other Other is comprised primarily of deferred financing costs associated with the Company's credit facility, deferred contract costs related to commissions paid by ANZ to third party international agents, and refundable security deposits associated with the Company's leased campus and office space. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following as of December 31, 2020 and September 30, 2021 (in thousands): December 31, 2020 September 30, 2021 Trade payables $ 64,049 $ 57,687 Accrued compensation and benefits 33,160 32,897 Accrued student obligations 4,017 9,262 Other 3,516 3,537 Accounts payable and accrued expenses $ 104,742 $ 103,383 |
Long Term Debt
Long Term Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Long Term Debt | Long-Term Debt On November 3, 2020, the Company entered into an amended credit facility ("Amended Credit Facility"), which provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of up to $350 million. The Amended Credit Facility provides the Company with an option, subject to obtaining additional loan commitments and satisfaction of certain conditions, to increase the commitments under the Revolving Credit Facility or establish one or more incremental term loans (each, an “Incremental Facility”) in the future in an aggregate amount of up to the sum of (x) the greater of (A) $300 million and (B) 100% of the Company’s consolidated EBITDA (earnings before interest, taxes, depreciation, amortization, and noncash charges, such as stock-based compensation) calculated on a trailing four-quarter basis and on a pro forma basis, and (y) if such Incremental Facility is incurred in connection with a permitted acquisition or other permitted investment, any amounts so long as the Company's leverage ratio (calculated on a trailing four-quarter basis) on a pro forma basis will be no greater than 1.75:1.00. In addition, the Amended Credit Facility provides for a subfacility for borrowings in certain foreign currencies in an amount equal to the U.S. dollar equivalent of $150 million. The maturity date of the Amended Credit Facility is November 3, 2025. The Company paid approximately $1.9 million in debt financing costs associated with the Amended Credit Facility, and these costs are being amortized on a straight-line basis over the five-year term of the Amended Credit Facility. Borrowings under the Revolving Credit Facility bear interest at a per annum rate equal to LIBOR or a base rate, plus a margin ranging from 1.50% to 2.00% depending on the Company’s leverage ratio. The Company also is subject to a quarterly unused commitment fee ranging from 0.20% to 0.30% per annum depending on the Company’s leverage ratio, times the daily unused amount under the Revolving Credit Facility. The Amended Credit Facility is guaranteed by all domestic subsidiaries, subject to certain exceptions, and secured by substantially all of the assets of the Company and its subsidiary guarantors. The Amended Credit Facility contains customary affirmative and negative covenants, representations, warranties, events of default, and remedies upon default, including acceleration and rights to foreclose on the collateral securing the Amended Credit Facility. In addition, the Amended Credit Facility requires that the Company satisfy certain financial maintenance covenants, including: • A leverage ratio of not greater than 2.00 to 1.00. Leverage ratio is defined as the ratio of total debt (net of unrestricted cash in an amount not to exceed $150 million) to trailing four-quarter EBITDA. • A coverage ratio of not less than 1.75 to 1.00. Coverage ratio is defined as the ratio of trailing four-quarter EBITDA and rent expense to trailing four-quarter interest and rent expense. • A U.S. Department of Education (the “Department” or "Department of Education") Financial Responsibility Composite Score of not less than 1.0 for any fiscal year and not less than 1.5 for any two consecutive fiscal years. The Company was in compliance with all the terms of the Amended Credit Facility as of September 30, 2021. As of December 31, 2020 and September 30, 2021, the Company had approximately $141.8 million and $141.6 million, respectively, outstanding under the Revolving Credit Facility. Approximately $3.8 million and $3.6 million was denominated in Australian dollars as of December 31, 2020 and September 30, 2021, respectively. |
Other Long-Term Liabilities
Other Long-Term Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Other Liabilities, Noncurrent [Abstract] | |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consist of the following as of December 31, 2020 and September 30, 2021 (in thousands): December 31, 2020 September 30, 2021 Contract liabilities, net of current portion $ 34,866 $ 33,201 Asset retirement obligations 7,647 7,944 Deferred payments related to acquisitions 715 — Other 2,827 2,625 Other long-term liabilities $ 46,055 $ 43,770 Contract Liabilities As discussed in Note 4, in connection with its student tuition contracts, the Company has an obligation to provide free classes in the future should certain eligibility conditions be maintained (the Graduation Fund). Long-term contract liabilities represent the amount of revenue under these arrangements that the Company expects will be realized after one year. Asset Retirement Obligations Certain of the Company's lease agreements require the leased premises to be returned in a predetermined condition. Deferred Payments Related to Acquisitions In connection with previous acquisitions, the Company acquired certain assets and entered into deferred payment arrangements with the sellers. |
Equity Awards
Equity Awards | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity Awards | Equity Awards The following table sets forth the amount of stock-based compensation expense recorded in each of the expense line items for the three and nine months ended September 30, 2020 and 2021 (in thousands): For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 Instructional and support costs $ 1,390 $ 1,365 $ 3,776 $ 3,871 General and administration 2,485 3,503 6,983 9,546 Restructuring costs — (222) — (703) Stock-based compensation expense included in operating expense 3,875 4,646 10,759 12,714 Tax benefit 997 1,228 2,767 3,359 Stock-based compensation expense, net of tax $ 2,878 $ 3,418 $ 7,992 $ 9,355 During the nine months ended September 30, 2020 and 2021, the Company recognized a $2.8 million windfall tax benefit and a $26,000 tax shortfall, respectively, related to share-based payment arrangements, which was recorded as an adjustment to the provision for income taxes. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes During the nine months ended September 30, 2020 and 2021, the Company recorded income tax expense of $30.1 million and $13.7 million, reflecting an effective tax rate of 27.3% and 29.1%, respectively. The Company had $0.3 million of unrecognized tax benefits as of December 31, 2020 and September 30, 2021. Interest and penalties, including those related to uncertain tax positions, are included in the provision for income taxes in the unaudited condensed consolidated statements of income. The Company paid $32.4 million and $21.8 million in income taxes during the nine months ended September 30, 2020 and 2021, respectively. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Strategic Education is an educational services company that provides access to high-quality education through campus-based and online post-secondary education offerings, as well as through programs to develop job-ready skills for high-demand markets. Strategic Education’s portfolio of companies is dedicated to closing the skills gap by placing adults on the most direct path between learning and employment. In the first quarter of 2021, the Company changed the way management reports financial information relied on by the Chief Operating Decision Maker (“CODM”) to evaluate performance and allocate the resources of the Company. The Company’s revised organizational structure includes three operating and reportable segments: U.S. Higher Education (“USHE”), which is primarily comprised of the Company's previous Strayer University and Capella University segments, Alternative Learning, and Australia/New Zealand. Financial reporting under the new organizational structure began in the first quarter of 2021. Prior period segment disclosures have been recast to conform to the current period presentation. The USHE segment provides flexible and affordable certificate and degree programs to working adults primarily through Strayer University and Capella University, including the Jack Welch Management Institute MBA, which is a unit of Strayer University. USHE also operates non-degree web and mobile application development courses through Hackbright Academy and Devmountain, which are units of Strayer University. The Alternative Learning segment is primarily focused on developing and maintaining relationships with large employers to build employee education benefits programs that provide employees with access to affordable and industry relevant training, certificate, and degree programs. The employer relationships developed by the Alternative Learning division are an important source of student enrollment for Capella University and Strayer University, and the majority of the revenue attributed to the Alternative Learning division is driven by the volume of enrollment derived from these employer relationships. Alternative Learning also generates revenue through Workforce Edge, a platform which provides employers a full-service education benefits administration solution. Lastly, Alternative Learning generates revenue through Sophia Learning, a provider of low-cost online general education courses recommended by the American Council on Education for transfer credit to other colleges and universities, and Digital Enablement Partnerships, which provide online course delivery and support capabilities related to online course delivery to other higher education institutions. The Australia/New Zealand segment is comprised of Torrens University, Think Education and Media Design School in Australia and New Zealand, which collectively offer certificate and degree programs in business, design, education, hospitality, healthcare, and technology through campuses in Australia, New Zealand, and online. Revenue and operating expenses are generally directly attributable to the segments. Inter-segment revenues are not presented separately, as these amounts are immaterial. The Company’s CODM does not evaluate operating segments using asset information. A summary of financial information by reportable segment for the three and nine months ended September 30, 2020 and 2021 is presented in the following table (in thousands): For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 Revenues U.S. Higher Education $ 230,311 $ 191,893 $ 733,174 $ 630,647 Australia/New Zealand — 65,224 — 190,549 Alternative Learning 8,715 12,961 26,985 38,391 Consolidated revenues $ 239,026 $ 270,078 $ 760,159 $ 859,587 Income from operations U.S. Higher Education $ 33,672 $ 5,168 $ 149,180 $ 84,981 Australia/New Zealand — 10,364 — 23,016 Alternative Learning 4,111 5,181 14,729 16,242 Amortization of intangible assets (15,417) (8,932) (46,251) (47,731) Merger and integration costs (2,920) (1,111) (7,858) (4,060) Restructuring costs (4,024) (3,322) (4,024) (26,400) Consolidated income from operations $ 15,422 $ 7,348 $ 105,776 $ 46,048 |
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation The Company is involved in litigation and other legal proceedings arising out of the ordinary course of its business. Certain of these matters are discussed below. From time to time, certain matters may arise that are other than ordinary and routine. The outcome of such matters is uncertain, and the Company may incur costs in the future to defend, settle, or otherwise resolve them. The Company accrues for estimated costs related to existing lawsuits, claims and proceedings when it is probable that it will incur these costs in the future and the costs are reasonably estimable. The Company currently believes that the ultimate outcome of such matters will not, individually or in the aggregate, have a material adverse effect on its consolidated financial position, results of operations or cash flows. However, depending on the amount and timing, an unfavorable resolution of some or all of these matters could materially affect future results of operations in a particular period. On April 20, 2021, Capella University received a letter from the Department of Education referencing the Wright matter (described below), and indicating that the Department will require a fact-finding process pursuant to the borrower defense to repayment regulations to determine the validity of more than 1,000 borrower defense applications that have been submitted regarding Capella. According to the Department, some of the applications allege similar claims as in the Wright matter concerning alleged misrepresentations of the length of time to complete doctoral programs. Capella has since received approximately 500 applications for borrower defense to repayment and is cooperating with the Department’s fact-finding process. At this time, the Company is unable to predict the outcome of the Department's fact-finding process or the resolution of the borrower defense applications. |
Regulation
Regulation | 9 Months Ended |
Sep. 30, 2021 | |
Regulation [Abstract] | |
Regulation | Regulation United States Regulation American Rescue Plan Act of 2021 On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021. Similar to previous stimulus packages, this legislation provided additional funding for the Higher Education Emergency Relief Fund. A small portion of the $39.6 billion allocated for institutions of higher education has been made available for student emergency aid for students at for-profit institutions. Capella University disbursed $184,323 to students of the highest need in June 2021, and Strayer University disbursed $2,554,682 to students of the highest need in July 2021. The legislation also amends the “90/10 Rule” to include “all federal education assistance” in the “90” side of the ratio calculation. See “Item 1. Business – Regulation – U.S. Regulatory Environment – The 90/10 Rule” of the Company’s Annual Report on Form 10-K for a description of the 90/10 Rule. The legislation requires the Department to conduct a negotiated rulemaking process to modify related Department regulations, which the Department has announced its intent to convene beginning no earlier than January 2022. This rulemaking process may result in a definition of “federal education assistance” that will include tuition assistance programs offered by the U.S. Department of Defense and U.S. Department of Veterans Affairs, in addition to the Title IV programs already covered by the 90/10 Rule. Under the legislation, these revisions to the 90/10 Rule would apply to institutional fiscal years beginning on or after January 1, 2023. Further legislation has been introduced in both chambers of Congress that seeks to modify the 90/10 Rule further, including proposals to change the ratio requirement to 85/15 (federal to nonfederal revenue). We cannot predict whether Congress will pass any of these legislative proposals . Consolidated Appropriations Act, 2021 On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act of 2021. Among other things, this package funded the government through September 2021, provided additional COVID-related relief, and made a number of U.S. higher education changes. The legislation includes a number of tax provisions, including replacing the tuition deduction with an expanded Lifetime Learning Credit, which now shares the higher income limitations of the American Opportunity Tax Credit. The legislation also extends until January 1, 2026 expanded employer-provided educational assistance permitting employers to pay up to $5,250 toward an employee’s federal student loans as a tax-free benefit. The legislation also includes a number of higher education-related provisions, including: eliminating the “expected family contribution” from the Free Application for Federal Student Aid (“FAFSA”) and replacing it with a “Student Aid Index;” expanding eligibility for Pell Grants; restoring Pell Grant eligibility for incarcerated students attending non-profit institutions; restoring quarters/semesters of Pell eligibility to students who have successfully asserted a borrower defense to repayment; repealing the limitation on lifetime subsidized loan eligibility (known as “Subsidized Usage Limit Applies,” or SULA); and significantly simplifying the FAFSA form. The Department is expected to provide, but has not yet provided, institutions with guidance on the higher education provisions included in the Consolidated Appropriations Act of 2021, which take effect on July 1, 2023. Additionally, the bill provides $22.7 billion for higher education institutions and students impacted by COVID-19, including $680.9 million (3 percent of the total) for student emergency aid for students at for-profit institutions. In January 2021, the Department released a table of institutional allocation of funds which indicated that Capella University was eligible for $328,602 and Strayer University was eligible for $5,831,606, all of which was disbursed to students with the highest need, in the form of direct grants in spring 2021. Veterans Health Care and Benefits Improvement Act of 2020 On January 5, 2021, President Trump signed into law the Veterans Health Care and Benefits Improvement Act of 2020, which expands student veterans’ protections. Among other things, the legislation requires a risk-based review of schools if an institution is operating under Heightened Cash Monitoring 2 or provisional approval status by the Department of Education, is subject to any punitive action by a federal or state entity, faces the loss or risk of loss of accreditation, or has converted from for-profit to non-profit status. The legislation also restores veterans benefits to students whose school closed, as long as the student transferred fewer than 12 credits from the closed school or program; protects students from debt collection by the Department of Veterans Affairs (“VA”) for overpaid tuition benefits; and establishes a number of institutional requirements, including: providing clear disclosures about cost, loan debt, graduation and job placement rates, and acceptance of transfer credit; ensuring institutions are accommodating short absences due to service; prohibiting same-day recruitment and registration; and prohibiting more than three unsolicited recruiting contacts during any 1-month period. The legislation will require guidance from the VA, and most provisions are effective August 1, 2021. Institutions were permitted to seek waivers for certain sections of the new law if they were not able to satisfy compliance requirements by August 1, 2021, but neither Strayer University nor Capella University sought a waiver. THRIVE Act On June 8, 2021, President Biden signed into law the Training in High-Demand Roles to Improve Veteran Employment Act (the “THRIVE Act”), which amended provisions of the Veterans Health Care and Benefits Improvement Act and the American Rescue Plan Act. The law requires the Department of Labor and VA to collaborate on a list of high-demand occupations for a rapid retraining assistance program. Additionally, the law requires the Government Accountability Office to report on the outcomes and effectiveness of retraining programs. The THRIVE Act amends the Veterans Health Care and Benefits Improvement Act by clarifying that programs pursued solely through distance education on a half-time basis or less are not eligible for the housing stipend that is generally available for retraining programs. As noted above, the Veterans Health Care and Benefits Improvement Act prohibits certain high-pressure recruiting tactics. The THRIVE Act requires the VA to take disciplinary action if a person with whom an institution has a recruiting or educational services agreement violates the VA’s incentive compensation bans. CARES Act On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. Among other things, the $2.2 trillion bill established some flexibilities related to the processing of federal student financial aid, established a higher education emergency fund, and created relief for some federal student loan borrowers. Through the CARES Act, Congress provided institutions of higher education relief from conducting a return to Title IV (R2T4) calculation in cases where the student withdrew because of COVID-19, including removing the requirement that the institution return unearned funds to the Department of Education and providing loan cancellation for the portion of the Direct Loan associated with a payment period that the student did not complete due to COVID-19. The CARES Act also allows institutions to exclude from satisfactory academic progress calculations any attempted credits that the student did not complete due to COVID-19, without requiring an appeal from the student. Additionally, under the legislation, institutions are permitted to transfer up to 100% of Federal Work Study funds into their Federal Supplemental Educational Opportunity Grant allocation and are granted a waiver of the 2019/2020 and 2020/2021 non-federal share institutional match. Institutions may continue to make Federal Work Study payments to student employees who are unable to meet their employment obligations due to COVID-19. The CARES Act also suspended payments and interest accrual on federal student loans until September 30, 2020, in addition to suspending involuntary collections such as wage garnishment, tax refund reductions, and reductions of federal benefits like Social Security benefits during the same timeframe. Through a series of administrative actions, the Secretary of Education extended CARES Act student loan relief through January 31, 2022. The Department of Education noted in an August 6, 2021 announcement that this would be the final extension of the student loan payment pause. On March 30, 2021, the Secretary of Education also extended student loan relief to Federal Family Education Loans (“FFEL”) that are in default. The extension for FFEL also expires on January 31, 2022. The Department issued sub-regulatory guidance to institutions regarding implementation of the provisions included in the CARES Act. Finally, the CARES Act allocated $14 billion to higher education through the creation of the Education Stabilization Fund. Fifty percent of the emergency funds received by institutions must go directly to students in the form of emergency financial aid grants to cover expenses related to the disruption of campus operations due to COVID-19. Students who were previously enrolled in exclusively online courses prior to March 13, 2020 are not eligible for these grants. Institutions may use remaining emergency funds not given to students for costs associated with significant changes to the delivery of instruction due to COVID-19, as long as such costs do not include payment to contractors for the provision of pre-enrollment recruitment activities, including marketing and advertising; endowments; or capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship. Institutions received funds under the Education Stabilization Fund based on a formula that factors in their relative percentage of full-time, Federal Pell Grant-eligible students who were not exclusively enrolled in online education prior to the emergency period. On April 9, 2020, the Department published guidance and funding levels for the Education Stabilization Fund, indicating that Strayer University was eligible to receive $5,792,122. Given that Strayer University is predominantly online, and very few students take only on-ground classes, Strayer declined to accept the funds allocated to it because most students would not have expenses related to the disruption of campus operations. Instead, Strayer University provided a $500 tuition grant for all students who had enrolled in on-ground classes for the Spring term, prior to the classes being converted to online. Because Capella University’s students are exclusively online, Capella was ineligible for Education Stabilization funding. Congressional Spending Bills Congress has introduced several large spending bills that include provisions relevant to higher education institutions. Since the Consolidated Appropriations Act, 2021 funded the federal government only through September 2021, Congress has continued to debate appropriations for fiscal year 2022 (October 1, 2021 through September 30, 2022). In order to continue funding the federal government while the full budget is still under negotiation, Congress passed a Continuing Resolution providing funding for the federal government until December 3, 2021. This Continuing Resolution prevented a federal government shutdown. Additionally, Congress temporarily increased the debt ceiling in October 2021, which allows the federal government to avoid default until at least December 2021. In addition to the appropriations bill that sets the annual budget, Congress is also examining a social spending bill and an infrastructure bill. One provision of the social spending bill proposes to increase the maximum amount of an individual student’s Pell Grant by $550, resulting in a new maximum award of $7,045. However, the additional $550 would only apply for students attending non-profit institutions. Gainful Employment Under the Higher Education Act ("HEA"), a proprietary institution offering programs of study other than a baccalaureate degree in liberal arts (for which there is a limited statutory exception) must prepare students for gainful employment in a recognized occupation. The Department of Education published final regulations related to gainful employment that went into effect on July 1, 2015, with the additional disclosure requirements that became effective January 1, 2017 and July 1, 2019 (the “2015 Regulations”). On July 1, 2019, the Department of Education released final gainful employment regulations, which contained a full repeal of the 2015 Regulations and became effective on July 1, 2020. Both Capella University and Strayer University implemented the July 2019 regulations early, by means permitted by the Secretary, and accordingly were not required to report gainful employment data for the 2018-2019 award year. For the period between July 2019 and July 1, 2020, Capella University and Strayer University were not required to comply with gainful employment disclosure and template publication requirements and were not required to comply with the regulation’s certification requirements with respect to programmatic accreditation and program satisfaction of prerequisites for professional licensure/state certification. On May 26, 2021, the Department announced its intention to establish negotiated rulemaking committees to prepare proposed regulations for gainful employment and other topics related to programs authorized under Title IV of the Higher Education Act of 1965, as amended, but has not yet convened a committee on gainful employment regulations. See “Current Negotiated Rulemaking” below. We cannot predict the outcome of the negotiated rulemaking process. Borrower Defenses to Repayment On September 23, 2019, the Department published final Borrower Defense to Repayment regulations (the “2019 BDTR Rule”), which governs borrower defense to repayment claims in connection with loans first disbursed on or after July 1, 2020, the date the 2019 BDTR Rule became effective. The 2019 BDTR Rule supplants the 2016 Borrower Defense to Repayment rule. Under the 2019 BDTR Rule, an individual borrower can assert a defense to repayment and be eligible for relief if she or he establishes, by a preponderance of the evidence, that (1) the institution at which the borrower enrolled made a misrepresentation of material fact upon which the borrower reasonably relied in deciding to obtain a Direct Loan or a loan repaid by a Direct Consolidation Loan; (2) the misrepresentation directly and clearly related to the borrower’s enrollment or continuing enrollment at the institution or the institution’s provision of education services for which the loan was made; and (3) the borrower was financially harmed by the misrepresentation. The Department will grant forbearance on all loans related to a claim at the time the claim is made. The 2019 BDTR Rule defines “financial harm” as the amount of monetary loss that a borrower incurs as a consequence of a misrepresentation. The Department will determine financial harm based upon individual earnings and circumstances, which must include consideration of the individual borrower’s career experience subsequent to enrollment and may include, among other factors, evidence of program-level median or mean earnings. “Financial harm” does not include damages for non-monetary loss, and the act of taking out a Direct Loan, alone, does not constitute evidence of financial harm. Financial harm also cannot be predominantly due to intervening local, regional, national economic or labor market conditions, nor can it arise from the borrower’s voluntary change in occupation or decision to pursue less than full-time work or decision not to work. The 2019 BDTR Rule contains certain limitations and procedural protections. Among the most prominent of these restrictions, the regulation contains a three-year limitation period of claims, measured from the student’s separation from the institution, does not permit claims to be filed on behalf of groups, and requires that institutions receive access to any evidence in the Department’s possession to inform its response. The 2019 BDTR Rule permits the usage of pre-dispute arbitration agreements and class action waivers as conditions of enrollment, so long as the institution provides plain-language disclosures to students and the disclosures are placed on the institution’s website. The regulations also allow for a borrower to choose whether to apply for a closed school loan discharge or accept a teach-out opportunity. In addition, the closed school discharge window is expanded from 120 days to 180 days prior to the school’s closure, though the final rule does not allow for an automatic closed school loan discharge. Institutions are required to accept responsibility for the repayment of amounts discharged by the Secretary pursuant to the borrower defense to repayment, closed school discharge, false certification discharge, and unpaid refund discharge regulations. If the Secretary discharges a loan in whole or in part, the Department of Education may require the school to repay the amount of the discharged loan. On December 10, 2019, the Secretary of Education released a formula to calculate the amount of relief a borrower may receive for a successful BDTR application. This formula analyzed a borrower’s earnings as compared to median earnings of comparable programs to determine the amount of loans that would be discharged. Under this formula, even successful BDTR applicants may receive only a partial loan discharge. On March 11, 2020, the 116th Congress passed a joint resolution providing for Congressional disapproval of the 2019 BDTR Rule. President Trump vetoed the joint resolution on May 29, 2020, and the House subsequently failed to override the veto during a vote on June 26, 2020. On March 18, 2021, the Department revised its BDTR review process and repealed the previous administration’s partial relief formula. Under the new BDTR procedures, the Department will grant full loan relief to borrowers with approved BDTR applications. Additionally, the Department has eliminated certain evidentiary requirements for borrowers who have received a loan cancellation due to total or permanent disability. These borrowers will no longer be required to provide proof of insufficient income for the relief program for the three years after discharge of their loans. On August 10, 2021, the Department announced its intention to establish a negotiated rulemaking committee to prepare proposed regulations for borrower defenses to repayment and other topics related to programs authorized under Title IV of the Higher Education Act of 1965, as amended, and solicited negotiator nominations. Negotiated rulemaking for the Affordability and Student Loans Committee began October 4, 2021 and is scheduled to conclude December 10, 2021. See “Current Negotiated Rulemaking” below. We cannot predict the outcome of the negotiated rulemaking process. Accrediting Agencies and State Authorization On November 1, 2019, the Department of Education published final rules amending regulations governing the recognition of accrediting agencies, certain student assistance provisions including state authorization rules, and institutional eligibility. Among other changes, the final rules revise the definition of “state authorization reciprocity agreement” such that member states may enforce their own general-purpose state laws and regulations, but may not impose additional requirements related to state authorization of distance education directed at all or a subgroup of educational institutions. The regulations also clarify that state authorization requirements related to distance education courses are based on the state where a student is “located,” as determined by the institution, and not the state of the student’s “residence.” In addition, the final rules remove certain disclosure requirements related to programs offered solely through distance education, and they replace those requirements with certain disclosure requirements applicable to all programs that lead to professional licensure or certification, regardless of the delivery modality of those programs. The Department’s new rules also refine the process for recognition and review of accrediting agencies, the criteria used by the Department to recognize accrediting agencies, and the Department’s requirements for accrediting agencies in terms of their oversight of accredited institutions and programs. The final regulations became effective on July 1, 2020, excepting certain provisions which were eligible to be implemented early by institutions, and certain provisions relating to recognition of accrediting agencies effective January 1 and July 1, 2021. On July 29, 2020, the National Advisory Committee on Institutional Quality and Integrity (“NACIQI”) held a meeting to review compliance by the Higher Learning Commission (“HLC”) with Department of Education requirements for recognized accrediting agencies. HLC is the institutional accreditor for Capella University. On June 30, 2020, the Department released a staff report that outlined HLC’s alleged noncompliance with its own policies and the Department’s regulations with regard to a change of ownership approval process for the acquisition of the Art Institute of Colorado and the Illinois Institute of Art, by Dream Center Educational Holdings. The staff report noted noncompliance in the areas of due process, consistency in decision making, and proper appeals procedures. The staff report proposed a one-year prohibition on HLC accrediting new institutions and a required compliance report on HLC’s remedial actions. NACIQI voted 9-2 to reject the staff report’s proposed sanctions, but NACIQI’s recommendation was non-binding. On October 26, 2020, a Senior Department Official (“SDO”) found HLC non-compliant, in part. While the SDO required that HLC submit periodic reporting for twelve months, the SDO did not restrict HLC's scope of accreditation or ability to accredit new institutions. HLC did not appeal the Secretary's decision. Distance Education and Innovation On August 24, 2020, the Department of Education published final rules related to distance education and innovation to amend the sections of the institutional eligibility regulations issued under the HEA regarding establishing eligibility, maintaining eligibility, and losing eligibility. Among other changes, the final rules establish an updated definition of distance education; amend the existing definition of the credit hour; create a definition of academic engagement; and update eligibility and program design, for programs offered through the direct assessment of learning. The final rules also make operational changes to several financial aid awarding, disbursing and refunding rules, including how aid can be delivered to students enrolled in subscription period programs, such as Capella’s FlexPath offerings. The final rule became effective July 1, 2021. Title IX On May 6, 2020, the Department of Education published final rules related to implementation of Title IX of the Education Amendments of 1972 (“Title IX”), which prohibits discrimination on the basis of sex in education programs that receive funding from the federal government. The final rules define what constitutes sexual harassment for purposes of Title IX in the administrative enforcement context, describe what actions trigger an institution’s obligation to respond to incidents of alleged sexual harassment, and specify how an institution must respond to allegations of sexual harassment. Among other things, the new rules include a requirement for live hearings on Title IX sexual harassment claims, which includes direct and cross-examination of parties, university-provided advisors (in the event a student or party does not provide an advisor), rulings on questions of relevance by decision-makers, and the creation and maintenance of a record of the live hearing proceedings. The final rule became effective August 14, 2020. On March 8, 2021, President Biden signed an executive order that requires the Secretary of Education and the Attorney General to review the previous administration’s rulemakings and guidance documents related to Title IX. In June 2021, the Department of Education held virtual public hearings to gather information for providing enforcement of Title IX, as part of the Office for Civil Rights’ (“OCR”) comprehensive review of the regulation. After the public hearings, the Department of Education indicated that it plans to introduce proposed rule changes for Title IX in May 2022. On June 16, 2021, the OCR issued a notice of interpretation clarifying that the Department interprets Title IX and its enforcement authority under the regulation to include the prohibition of sex discrimination based on sexual orientation and gender identity. On July 20, 2021, the Department of Education released a Questions and Answers document outlining the OCR's interpretation of the Title IX regulations related to sexual harassment. On August 24, 2021, OCR, in alignment with recent federal court decisions, issued guidance indicating it would cease enforcement of Title IX’s current prohibition against consideration of statements made by individuals failing to submit to cross-examination. Current Negotiated Rulemaking On May 26, 2021, the Department announced its intention to establish negotiated rulemaking committees to prepare proposed regulations for programs authorized under Title IV of the Higher Education Act of 1965, as amended. As part of the notice, the Department suggested the following topics for regulation: change of ownership and change in control of institutions of higher education under 34 CFR 600.31; certification procedures for participation in Title IV, HEA programs under 34 CFR 668.13; standards of administrative capability under 34 CFR 668.16; ability to benefit under 34 CFR 668.156; borrower defense to repayment under 34 CFR 682.410, 668.411, 685.206, and 685.222; discharges for borrowers with a total and permanent disability under 34 CFR 674.61, 682.402, and 685.213; closed school discharges under 34 CFR 685.214 and 682.402; discharges for false certification of student eligibility under 34 CFR 685.215(a)(1) and 682.402; loan repayment plans under 34 CFR 682.209, 682.215, 685.208, and 685.209; the Public Service Loan Forgiveness program under 34 CFR 685.219; mandatory pre-dispute arbitration and prohibition of class action lawsuits provisions in institutions’ enrollment agreements (formerly under 34 CFR 685.300) and associated counseling about such arrangements under 34 CFR 685.304; financial responsibility for participating institutions of higher education under 34 CFR subpart L, such as events that indicate heightened financial risk; gainful employment (formerly located in 34 CFR subpart Q); and Pell Grant eligibility for prison education programs under 34 CFR part 690. Additionally, the Department invited public input on how it could address, through regulations, gaps in postsecondary outcomes such as retention, completion, loan repayment, and student loan default by race, ethnicity, gender, and other key student characteristics. To support this work, the Department held a series of virtual public hearings in June 2021, as well as accepted written comments. At the virtual public hearings and via written comments, members of the public discussed proposed changes for all of the issues noted above, as well as comments addressing data transparency, including disclosures of outcomes for veteran students. The Department has indicated its intention to convene multiple committees, including the Affordability and Student Loans Committee. See “Affordability and Student Loans Committee” below. On October 4, 2021 the Department announced its intention to establish a negotiated rulemaking committee to prepare proposed regulations affecting institutional and programmatic eligibility, including the 90/10 rule. As part of the notice, the Department announced public hearings on October 26 and October 27, with negotiations scheduled to begin no earlier than January 2022. We cannot predict the outcome of the negotiated rulemaking process. Affordability and Student Loans Committee On August 10, 2021, the Department announced its intention to establish the Affordability and Student Loans committee, to prepare proposed regulations to address the following topics: borrower defense to repayment, closed school discharges, discharges for borrowers with a total and permanent disability, discharges for false certification of student eligibility, loan repayment plans, interest capitalization, mandatory pre-dispute arbitration and prohibition of class action lawsuits provisions in institutions’ enrollment agreements and associated counseling about such arrangements, Pell Grant eligibility or prison education programs, and the Public Service Loan Forgiveness program. The Department also announced the formation of a Prison Education Program Subcommittee. The Department selected negotiators in September 2021, with the first session of negotiated rulemaking occurring October 4-8, 2021. Negotiations were also held November 1-5 and will continue December 6-10, 2021. Issue papers provided by the Department prior to the first negotiated rulemaking session indicate the Department is considering changes to borrower to defense to repayment regulations that include eliminating a limitations period on claims, making the group claims process the default process for loan relief, establishing the borrower defense application as a form of evidence, and adding aggressive recruitment and adjudications as additional categories of acts that could lead to a borrower defense claim. See “Current Negotiated Rulemaking” above. We cannot predict the outcome of the negotiated rulemaking process. Public Service Loan Forgiveness Program On October 6, 2021, the Department of Education announced new changes and initiatives related to the Public Service Loan Forgiveness (“PSLF”) program. This announcement aimed to make discharge of federal student loans easier for those that participate in the PSLF. One such way the Department of Education is streamlining the PSLF process is by implementing a time-limited waiver, which gives borrowers flexibility in counting prior payments towards PSLF, even if the previous payments were for different loan programs such as FFEL or if the payments were partial payments. Borrowers with Direct Loans will be able to seek this waiver prior to October 31, 2022. The Department of Education announced that the waiver will help over 550,000 borrowers progress towards loan relief under PSLF. Additionally, the Department of Education plans to automate aspects of the PSLF process for federal employees and military service members. The Department of Education plans to pair these changes to the program with increased support and communications to borrowers who may benefit from PSLF. Compliance Reviews Strayer University and Capella University are subject to announced and unannounced compliance reviews and audits by various external agencies, including the Department, its Office of Inspector General, state licensing agencies, guaranty agencies, and accrediting agencies. In June 2019, the Department conducted an announced, on-site program review at Capella University, focused on Capella University’s FlexPath program. The review covered the 2017-2018 and 2018-2019 federal student financial aid years. The Department issued its preliminary report on November 13, 2020, and Capella University responded to the report. On February 9, 2021, Capella University received the Department’s Final Program Review Determination, which closed the Program Review without further action required on the part of Capella University. On March 17, 2021, the Department informed Strayer University that it planned to conduct an announced, remote program review. The review commenced on April 19, 2021 and covered the 2019-2020 and 2020-2021 federal student financial aid years. On September 21, 2021, Strayer University received the Department’s Final Program Review Determination, which closed the Program Review without further action required on the part of Strayer University. Program Participation Agreeme |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Financial Statement Presentation | Financial Statement Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. On November 3, 2020, the Company completed its acquisition of ANZ, whereby the Company was deemed the acquirer in the business combination for accounting purposes in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Accordingly, the financial results of the Company as of and for any periods ended prior to November 3, 2020 do not include the financial results of ANZ and therefore are not directly comparable. All information as of September 30, 2020 and 2021, and for the three and nine months ended September 30, 2020 and 2021 is unaudited but, in the opinion of management, contains all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the condensed consolidated financial position, results of operations, and cash flows of the Company. The condensed consolidated balance sheet as of December 31, 2020 has been derived from the audited consolidated financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full fiscal year. Below is a description of the nature of the costs included in the Company’s operating expense categories. Instructional and support costs (“I&SC”) generally contain items of expense directly attributable to activities that support students. This expense category includes salaries and benefits of faculty and academic administrators, as well as admissions and administrative personnel who support and serve student interests. Instructional and support costs also include course development costs and costs associated with delivering course content, including educational supplies, facilities, and all other physical plant and occupancy costs, with the exception of costs attributable to the corporate offices. Bad debt expense incurred on delinquent student account balances is also included in instructional and support costs. General and administration (“G&A”) expenses include salaries and benefits of management and employees engaged in finance, human resources, legal, regulatory compliance, marketing and other corporate functions. Also included are the costs of advertising and production of marketing materials. General and administration expense also includes the facilities occupancy and other related costs attributable to such functions. Amortization of intangible assets consists of amortization and depreciation expense related to intangible assets and software assets acquired through the Company's merger with Capella Education Company (“CEC”) and the Company's acquisition of ANZ. Merger and integration costs include integration expenses associated with the Company's merger with CEC, and transaction and integration expenses associated with the Company's acquisition of ANZ. Restructuring costs include severance and other personnel-related expenses from voluntary and involuntary employee terminations, as well as early lease termination costs and impairments of right-of-use lease assets and fixed assets associated with vacating leased space in connection with the Company's restructuring plans. See Note 5 for additional information. |
Foreign Currency Translation and Transaction Gains and Losses | Foreign Currency Translation and Transaction Gains and Losses The United States Dollar (“USD”) is the functional currency of the Company and its subsidiaries operating in the United States. The financial statements of its foreign subsidiaries are maintained in their functional currencies. The functional currency of each of the foreign subsidiaries is the currency of the economic environment in which the subsidiary primarily does business. Financial statements of foreign subsidiaries are translated into USD using the exchange rates applicable to the dates of the financial statements. Assets and liabilities are translated into USD using the period-end spot foreign exchange rates. Income and expenses are translated at the weighted-average exchange rates in effect during the period. Equity accounts are translated at historical exchange rates. The effects of these translation adjustments are reported as a component of accumulated other comprehensive income within shareholders’ equity. |
Restricted Cash | Restricted CashIn the United States, a significant portion of the Company’s revenues are funded by various federal and state government programs. The Company generally does not receive funds from these programs prior to the start of the corresponding academic term. The Company may be required to return certain funds for students who withdraw from a U.S. Higher Education institution during the academic term.In Australia and New Zealand, advance tuition payments from international students are required to be restricted until that student commences his or her course. In addition, a portion of tuition prepayments from students enrolled in a vocational education and training program are held in trust by a third party law firm to adhere to tuition protection requirements.These balances are recorded as restricted cash and included in other current assets in the unaudited condensed consolidated balance sheets. |
Tuition Receivable and Allowance for Credit Losses | Tuition Receivable and Allowance for Credit Losses The Company adopted Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASC 326") on January 1, 2020, which revised the accounting requirements related to the measurement of credit losses and requires organizations to measure all expected credit losses for financial assets based on historical experience, current conditions, and reasonable and supportable forecasts about collectability. |
Assets Held for Sale | Assets Held for Sale The Company classifies assets and liabilities as held for sale (“disposal group”) when management, having the authority to approve the action, commits to a plan to sell the disposal group, the sale is probable to be completed within one year, and the disposal group is available for immediate sale in its present condition. The Company also considers whether an active program to locate a buyer has been initiated, whether the disposal group is marketed actively for sale at a price that is reasonable in relation to its current fair value, and whether actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a disposal group that is classified as held for sale at the lower of its carrying amount or fair value less costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Gains are not recognized until the date of sale. Assets are not depreciated or amortized while they are classified as held for sale. Upon determining that a disposal group meets the criteria to be classified as held for sale, the Company reports the assets and liabilities of the disposal group as assets held for sale and liabilities held for sale in its unaudited condensed consolidated balance sheets. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed in a business combination. Indefinite-lived intangible assets, which include trade names, are recorded at fair value on their acquisition date. An indefinite life was assigned to the trade names because they have the continued ability to generate cash flows indefinitely. Goodwill and the indefinite-lived intangible assets are assessed at least annually for impairment during the fourth quarter, or more frequently if events occur or circumstances change between annual tests that would more likely than not reduce the fair value of the respective reporting unit or indefinite-lived intangible asset below its carrying amount. The Company identifies its reporting units by assessing whether the components of its operating segments constitute businesses for which discrete financial information is available and management regularly reviews the operating results of those components. Finite-lived intangible assets that are acquired in business combinations are recorded at fair value on their acquisition dates and are amortized on a straight-line basis over the estimated useful life of the asset. Finite-lived intangible assets consist of student relationships. The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are not recoverable, a potential impairment loss is recognized to the extent the carrying amount of the assets exceeds the fair value of the assets. |
Authorized Stock | Authorized Stock The Company has authorized 32,000,000 shares of common stock, par value $0.01, of which 24,418,939 and 24,600,479 shares were issued and outstanding as of December 31, 2020 and September 30, 2021, respectively. The Company also has authorized 8,000,000 shares of preferred stock, none of which is issued or outstanding. Before any preferred stock may be issued in the future, the Board of Directors would need to establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, and the terms or conditions of the redemption of the preferred stock. In July 2021, the Company’s Board of Directors declared a regular, quarterly cash dividend of $0.60 per share of common stock. The dividend was paid on September 13, 2021. |
Net Income Per Share | Net Income Per Share Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the periods. Diluted earnings per share reflects the potential dilution that could occur assuming conversion or exercise of all dilutive unexercised stock options, restricted stock, and restricted stock units. The dilutive effect of stock awards was determined using the treasury stock method. Under the treasury stock method, all of the following are assumed to be used to repurchase shares of the Company’s common stock: (1) the proceeds received from the exercise of stock options, and (2) the amount of compensation cost associated with the stock awards for future service not yet recognized by the Company. Stock options are not included in the computation of diluted earnings per share when the stock option exercise price of an individual grant exceeds the average market price for the period. |
Comprehensive Income | Comprehensive IncomeComprehensive income includes net income and all changes in the Company’s equity during a period from non-owner sources, which for the Company consists of unrealized gains and losses on available-for-sale marketable securities, net of tax, and foreign currency translation adjustments. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period reported. The most significant management estimates include allowances for credit losses, useful lives of property and equipment and intangible assets, incremental borrowing rates, potential sublease income and vacancy periods, accrued expenses, forfeiture rates and the likelihood of achieving performance criteria for stock-based awards, value of free courses earned by students that will be redeemed in the future, valuation of goodwill and intangible assets, and the provision for income taxes. During the nine months ended September 30, 2020 and 2021, management estimates also include potential impacts the COVID-19 pandemic will have on student enrollment, tuition pricing, and collections in future periods. The duration and severity of the COVID-19 pandemic and its impact on the Company’s condensed consolidated financial statements is subject to uncertainty. Actual results could differ from those estimates. |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted Accounting Standards Updates recently issued by the FASB but not yet effective are not expected to have a material effect on the Company’s consolidated financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Cash, Cash Equivalents, and Restricted Cash | The following table illustrates the reconciliation of cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statements of cash flows as of September 30, 2020 and 2021 (in thousands): As of September 30, 2020 2021 Cash and cash equivalents $ 717,804 $ 274,774 Restricted cash included in other current assets 347 11,559 Restricted cash included in other assets 500 500 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 718,651 $ 286,833 |
Schedule of Tuition Receivable and Allowance for Credit Losses | The Company’s tuition receivable and allowance for credit losses were as follows as of December 31, 2020 and September 30, 2021 (in thousands): December 31, 2020 September 30, 2021 Tuition receivable $ 99,942 $ 136,401 Allowance for credit losses (49,773) (49,278) Tuition receivable, net $ 50,169 $ 87,123 |
Schedule of Allowance for Credit Losses | The following table illustrates changes in the Company’s allowance for credit losses for the three and nine months ended September 30, 2020 and 2021 (in thousands). For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 Allowance for credit losses, beginning of period $ 42,956 $ 49,591 $ 30,931 $ 49,773 Impact of adopting ASC 326 — — 4,571 — Additions charged to expense 11,169 10,291 34,316 30,850 Write-offs, net of recoveries (9,268) (10,604) (24,961) (31,345) Allowance for credit losses, end of period $ 44,857 $ 49,278 $ 44,857 $ 49,278 |
Schedule of Reconciliation of Shares Used to Calculate Basic and Diluted Earnings per Share | Set forth below is a reconciliation of shares used to calculate basic and diluted earnings per share for the three and nine months ended September 30, 2020 and 2021 (in thousands): For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 Weighted average shares outstanding used to compute basic earnings per share 23,004 23,948 22,193 23,966 Incremental shares issuable upon the assumed exercise of stock options 12 4 16 5 Unvested restricted stock and restricted stock units 198 161 223 160 Shares used to compute diluted earnings per share 23,214 24,113 22,432 24,131 Anti-dilutive shares excluded from the diluted earnings per share calculation 123 377 42 293 |
Acquisition of Torrens Univer_2
Acquisition of Torrens University and Associated Assets in Australia and New Zealand (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Preliminary Fair Value of Assets and Liabilities Assumed | The preliminary fair value of assets acquired and liabilities assumed as well as a reconciliation to consideration transferred is presented in the table below (in thousands): Cash and cash equivalents $ 16,082 Tuition receivable 24,447 Other current assets 17,713 Property and equipment, net 41,508 Right-of-use lease assets 44,229 Intangible assets 103,161 Goodwill 546,315 Other assets 2,799 Total assets acquired 796,254 Accounts payable and accrued expenses (33,876) Income taxes payable (229) Contract liabilities (33,309) Lease liabilities (9,685) Deferred income taxes (18,712) Lease liabilities, non-current (34,544) Other long-term liabilities (7,520) Total liabilities assumed (137,875) Total consideration $ 658,379 |
Schedule of Intangible Assets Acquired and Weighted Average Useful Lives | The table below presents a summary of intangible assets acquired (in thousands) and the weighted average useful lives of these assets: Fair Value Weighted Average Trade names $ 68,774 Indefinite Student relationships 34,387 3 $ 103,161 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation of Revenue from Contracts with Customers | The following table presents the Company’s revenues from contracts with customers disaggregated by material revenue category for the three and nine months ended September 30, 2020 and 2021 (in thousands): For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 U.S. Higher Education Segment Tuition, net of discounts, grants and scholarships $ 221,235 $ 184,126 $ 704,251 $ 605,036 Other (1) 9,076 7,767 28,923 25,611 Total U.S. Higher Education Segment 230,311 191,893 733,174 630,647 Australia/New Zealand Segment Tuition, net of discounts, grants and scholarships — 64,456 — 187,018 Other (1) — 768 — 3,531 Total Australia/New Zealand Segment — 65,224 — 190,549 Alternative Learning Segment (2) 8,715 12,961 26,985 38,391 Consolidated revenue $ 239,026 $ 270,078 $ 760,159 $ 859,587 _________________________________________ (1) Other revenue is primarily comprised of academic fees, sales of course materials, placement fees and other non-tuition revenue streams. (2) Alternative Learning revenue is primarily derived from tuition revenue. |
Schedule of Graduation Fund liability | The table below presents activity in the contract liability related to the Graduation Fund (in thousands): For the nine months ended September 30, 2020 2021 Balance at beginning of period $ 49,641 $ 53,314 Revenue deferred 19,044 15,005 Benefit redeemed (17,077) (16,733) Balance at end of period $ 51,608 $ 51,586 |
Restructuring and Related Cha_2
Restructuring and Related Charges (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring liability by type of cost | The following details the changes in the Company’s severance and other employee separation costs restructuring liabilities during the nine months ended September 30, 2020 and 2021 (in thousands): CEC 2020 Total Balance at December 31, 2019 $ 8,283 $ — $ 8,283 Restructuring and other charges — 4,024 4,024 Payments (5,401) (34) (5,435) Adjustments — — — Balance at September 30, 2020 $ 2,882 $ 3,990 $ 6,872 Balance at December 31, 2020 (1) $ 1,835 $ 1,287 $ 3,122 Restructuring and other charges — 3,737 3,737 Payments (1,835) (4,227) (6,062) Adjustments — — — Balance at September 30, 2021 (1) $ — $ 797 $ 797 _____________________________________ |
Marketable Securities (Tables)
Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule for Available-for-Sale Securities | The following is a summary of available-for-sale securities as of September 30, 2021 (in thousands): Amortized Cost Gross Unrealized Gain Gross Unrealized (Losses) Estimated Fair Value Tax-exempt municipal securities $ 18,520 $ 465 $ — $ 18,985 Corporate debt securities 10,940 274 — 11,214 Total $ 29,460 $ 739 $ — $ 30,199 The following is a summary of available-for-sale securities as of December 31, 2020 (in thousands): Amortized Cost Gross Unrealized Gain Gross Unrealized (Losses) Estimated Fair Value Tax-exempt municipal securities $ 19,924 $ 365 $ — $ 20,289 Corporate debt securities 17,086 452 — 17,538 Total $ 37,010 $ 817 $ — $ 37,827 |
Schedule of Maturities of Marketable Securities | The following table summarizes the maturities of the Company’s marketable securities as of December 31, 2020 and September 30, 2021 (in thousands): December 31, 2020 September 30, 2021 Due within one year $ 7,557 $ 2,632 Due after one year through five years 30,270 27,567 Total $ 37,827 $ 30,199 |
Schedule of Proceeds from the Maturities of Available-for-Sale Securities | The following table summarizes the proceeds from the maturities and sales of available-for-sale securities for the three and nine months ended September 30, 2020 and 2021 (in thousands): For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 Maturities of marketable securities $ 3,999 $ 1,900 $ 21,404 $ 7,495 Sales of marketable securities — 1,805 1,464 1,805 Total $ 3,999 $ 3,705 $ 22,868 $ 9,300 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | Assets and liabilities measured at fair value on a recurring basis consist of the following as of September 30, 2021 (in thousands): Fair Value Measurements at Reporting Date Using September 30, 2021 Quoted Prices in Significant Significant Assets: Money market funds $ 3,916 $ 3,916 $ — $ — Marketable securities: Tax-exempt municipal securities 18,985 — 18,985 — Corporate debt securities 11,214 — 11,214 — Total assets at fair value on a recurring basis $ 34,115 $ 3,916 $ 30,199 $ — Liabilities: Deferred payments $ 646 $ — $ — $ 646 Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2020 (in thousands): Fair Value Measurements at Reporting Date Using December 31, 2020 Quoted Prices in Significant Significant Assets: Money market funds $ 2,841 $ 2,841 $ — $ — Marketable securities: Tax-exempt municipal securities 20,289 — 20,289 — Corporate debt securities 17,538 — 17,538 — Total assets at fair value on a recurring basis $ 40,668 $ 2,841 $ 37,827 $ — Liabilities: Deferred payments $ 1,658 $ — $ — $ 1,658 |
Schedule of Changes in Fair Value of Level 3 Liability | Changes in the fair value of the Company’s Level 3 liabilities during the nine months ended September 30, 2020 and 2021 are as follows (in thousands): As of September 30, 2020 2021 Balance as of the beginning of period $ 3,257 $ 1,658 Amounts paid (1,628) (1,470) Other adjustments to fair value 374 458 Balance at end of period $ 2,003 $ 646 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | The following table presents changes in the carrying value of goodwill by segment for the nine months ended September 30, 2021 (in thousands): U.S. Higher Education Australia / Alternative Learning Total Balance as of December 31, 2020 $ 732,075 $ 586,451 $ — $ 1,318,526 Reporting unit reallocation (1) (100,000) — 100,000 — Additions — — — — Impairments — — — — Currency translation adjustments — (38,567) — (38,567) Adjustments to prior acquisitions (2) — 262 — 262 Balance as of September 30, 2021 $ 632,075 $ 548,146 $ 100,000 $ 1,280,221 _____________________________________ (1) Represents the reallocation of goodwill as a result of the Company reorganizing its segments in the first quarter of 2021. (2) Represents a measurement period adjustment recorded in the first quarter of 2021, as discussed in Note 3. |
Schedule of Intangible Assets | The following table represents the balance of the Company’s intangible assets as of December 31, 2020 and September 30, 2021 (in thousands): December 31, 2020 September 30, 2021 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Subject to amortization Student relationships $ 202,861 $ (135,703) $ 67,158 $ 201,052 $ (177,091) $ 23,961 Not subject to amortization Trade names 259,262 — 259,262 254,404 — 254,404 Total $ 462,123 $ (135,703) $ 326,420 $ 455,456 $ (177,091) $ 278,365 |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | Other assets consist of the following as of December 31, 2020 and September 30, 2021 (in thousands): December 31, 2020 September 30, 2021 Prepaid expenses, net of current portion $ 22,418 $ 20,606 Equity method investments 15,795 14,532 Cloud computing arrangements 6,385 6,665 Other investments 2,527 2,999 Tuition receivable, non-current 3,585 2,912 Other 4,218 6,710 Other assets $ 54,928 $ 54,424 |
Changes in Company's Limited Partnership Investments | The following table illustrates changes in the Company’s limited partnership investments for the three and nine months ended September 30, 2020 and 2021 (in thousands): For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 Limited partnership investments, beginning of period $ 16,990 $ 17,401 $ 15,795 $ 15,795 Capital contributions 75 327 368 589 Pro-rata share in the net income (loss) of limited partnerships 370 (610) 1,612 2,993 Distributions (701) (2,586) (1,041) (4,845) Limited partnership investments, end of period $ 16,734 $ 14,532 $ 16,734 $ 14,532 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payables and Accrued Expenses | Accounts payable and accrued expenses consist of the following as of December 31, 2020 and September 30, 2021 (in thousands): December 31, 2020 September 30, 2021 Trade payables $ 64,049 $ 57,687 Accrued compensation and benefits 33,160 32,897 Accrued student obligations 4,017 9,262 Other 3,516 3,537 Accounts payable and accrued expenses $ 104,742 $ 103,383 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Liabilities, Noncurrent [Abstract] | |
Schedule of Other Long-term Liabilities | Other long-term liabilities consist of the following as of December 31, 2020 and September 30, 2021 (in thousands): December 31, 2020 September 30, 2021 Contract liabilities, net of current portion $ 34,866 $ 33,201 Asset retirement obligations 7,647 7,944 Deferred payments related to acquisitions 715 — Other 2,827 2,625 Other long-term liabilities $ 46,055 $ 43,770 |
Equity Awards (Tables)
Equity Awards (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | The following table sets forth the amount of stock-based compensation expense recorded in each of the expense line items for the three and nine months ended September 30, 2020 and 2021 (in thousands): For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 Instructional and support costs $ 1,390 $ 1,365 $ 3,776 $ 3,871 General and administration 2,485 3,503 6,983 9,546 Restructuring costs — (222) — (703) Stock-based compensation expense included in operating expense 3,875 4,646 10,759 12,714 Tax benefit 997 1,228 2,767 3,359 Stock-based compensation expense, net of tax $ 2,878 $ 3,418 $ 7,992 $ 9,355 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Summary of Financial Information by Reportable Segment | A summary of financial information by reportable segment for the three and nine months ended September 30, 2020 and 2021 is presented in the following table (in thousands): For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 Revenues U.S. Higher Education $ 230,311 $ 191,893 $ 733,174 $ 630,647 Australia/New Zealand — 65,224 — 190,549 Alternative Learning 8,715 12,961 26,985 38,391 Consolidated revenues $ 239,026 $ 270,078 $ 760,159 $ 859,587 Income from operations U.S. Higher Education $ 33,672 $ 5,168 $ 149,180 $ 84,981 Australia/New Zealand — 10,364 — 23,016 Alternative Learning 4,111 5,181 14,729 16,242 Amortization of intangible assets (15,417) (8,932) (46,251) (47,731) Merger and integration costs (2,920) (1,111) (7,858) (4,060) Restructuring costs (4,024) (3,322) (4,024) (26,400) Consolidated income from operations $ 15,422 $ 7,348 $ 105,776 $ 46,048 |
Nature of Operations - Addition
Nature of Operations - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2021segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reporting segments | 3 |
Number of operating segments | 3 |
Significant Accounting Polici_4
Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash included in other current assets | $ 11,559 | $ 347 | ||
Minimum protective endowment held in an interest-bearing account | 500 | 500 | ||
Restricted cash | ||||
Cash and cash equivalents | 274,774 | $ 187,509 | 717,804 | |
Restricted cash included in other current assets | 11,559 | 347 | ||
Restricted cash included in other assets | 500 | 500 | ||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | 286,833 | 202,020 | $ 718,651 | $ 420,497 |
United States | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash included in other current assets | 1,700 | 100 | ||
Restricted cash | ||||
Restricted cash included in other current assets | 1,700 | 100 | ||
Australia and New Zealand | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash included in other current assets | 9,900 | 13,900 | ||
Restricted cash | ||||
Restricted cash included in other current assets | $ 9,900 | $ 13,900 |
Significant Accounting Polici_5
Significant Accounting Policies - Tuition Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Tuition receivable | $ 136,401 | $ 99,942 |
Allowance for credit losses | (49,278) | (49,773) |
Tuition receivable, net | 87,123 | 50,169 |
Tuition receivable, noncurrent | 2,912 | 3,585 |
Other Assets | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Tuition receivable, noncurrent | $ 2,900 | $ 3,600 |
Significant Accounting Polici_6
Significant Accounting Policies - Doubtful Accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
After Adoption of ASC 326 [Roll Forward] | ||||
Allowance for credit losses, beginning of period | $ 49,591 | $ 42,956 | $ 49,773 | $ 30,931 |
Additions charged to expense | 10,291 | 11,169 | 30,850 | 34,316 |
Write-offs, net of recoveries | (10,604) | (9,268) | (31,345) | (24,961) |
Allowance for credit losses, end of period | 49,278 | 44,857 | 49,278 | 44,857 |
Cumulative Effect Period of Adoption Adjustment | ||||
After Adoption of ASC 326 [Roll Forward] | ||||
Allowance for credit losses, beginning of period | $ 0 | $ 0 | $ 0 | $ 4,571 |
Significant Accounting Polici_7
Significant Accounting Policies - Narrative (Details) | Sep. 13, 2021$ / shares | Jul. 31, 2021$ / shares | Sep. 30, 2021USD ($)uSHigherEducationCampus$ / sharesshares | Sep. 30, 2020$ / shares | Jun. 30, 2021USD ($)uSHigherEducationCampus | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($)$ / shares | Dec. 31, 2020USD ($)$ / sharesshares |
Long Lived Assets Held-for-sale [Line Items] | ||||||||
Number of long-lived assets marketed for sale | uSHigherEducationCampus | 2 | |||||||
Impairment of fixed asset impairment charges | $ 600,000 | $ 2,600,000 | ||||||
Number of long-lived assets sold | uSHigherEducationCampus | 1 | |||||||
Gain on sale of asset | $ 700,000 | |||||||
Common stock, shares authorized (in shares) | shares | 32,000,000 | 32,000,000 | 32,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Common stock, shares issued (in shares) | shares | 24,600,479 | 24,600,479 | 24,418,939 | |||||
Common stock, shares outstanding (in shares) | shares | 24,600,479 | 24,600,479 | 24,418,939 | |||||
Preferred stock, shares authorized (in shares) | shares | 8,000,000 | 8,000,000 | 8,000,000 | |||||
Issued shares of preferred stock (in shares) | shares | 0 | 0 | 0 | |||||
Outstanding shares of preferred stock (in shares) | shares | 0 | 0 | 0 | |||||
Common stock dividends declared (in dollars per share) | $ / shares | $ 0.60 | $ 0.60 | $ 0.60 | $ 1.80 | $ 1.80 | |||
Common stock dividends paid (in dollars per share) | $ / shares | $ 0.60 | |||||||
Accumulated other comprehensive income net of tax | $ 1,956,000 | $ 1,956,000 | $ 48,880,000 | |||||
Tax from unrealized gains and losses on marketable securities | 300,000 | $ 300,000 | ||||||
Reclassifications from AOCI | $ 0 | $ 0 | $ 25,000 | |||||
Reclassifications from AOCI, tax | $ 10,000 | |||||||
Two U.S. Higher Education Campus Locations | ||||||||
Long Lived Assets Held-for-sale [Line Items] | ||||||||
Impairment of fixed asset impairment charges | $ 0 |
Significant Accounting Polici_8
Significant Accounting Policies - Net Income (Loss) Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of reconciliation of shares used to calculate basic and diluted earnings per share | ||||
Weighted average shares outstanding used to compute basic earnings per share (in shares) | 23,948 | 23,004 | 23,966 | 22,193 |
Incremental shares issuable upon the assumed exercise of stock options (in shares) | 4 | 12 | 5 | 16 |
Unvested restricted stock and restricted stock units (in shares) | 161 | 198 | 160 | 223 |
Shares used to compute diluted earnings per share (in shares) | 24,113 | 23,214 | 24,131 | 22,432 |
Anti-dilutive shares excluded from the diluted earnings per share calculation (in shares) | 377 | 123 | 293 | 42 |
Acquisition of Torrens Univer_3
Acquisition of Torrens University and Associated Assets in Australia and New Zealand - Narrative (Details) $ in Thousands | Nov. 03, 2020USD ($)studentindustryVertical | Mar. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,280,221 | $ 1,318,526 | ||
Measurement period adjustment, goodwill | 262 | |||
Torrens University and Related Assets in Australia and New Zealand (ANZ) | ||||
Business Acquisition [Line Items] | ||||
Number of students | student | 19,000 | |||
Number of industries | industryVertical | 5 | |||
Purchase price paid in cash at closing | $ 658,400 | |||
Value of business acquisition agreement | 642,700 | |||
Purchase price adjustment | 15,700 | |||
Net cash increase at closing | 11,000 | |||
Working capital increase at closing | 4,700 | |||
Goodwill | $ 546,315 | |||
Acquisition related costs | $ 8,100 | |||
Measurement period adjustment, property and equipment | $ 300 | |||
Measurement period adjustment, goodwill | $ 300 |
Acquisition of Torrens Univer_4
Acquisition of Torrens University and Associated Assets in Australia and New Zealand - Fair Value of Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Nov. 03, 2020 |
Preliminary fair value of assets and liabilities | |||
Goodwill | $ 1,280,221 | $ 1,318,526 | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | |||
Preliminary fair value of assets and liabilities | |||
Cash and cash equivalents | $ 16,082 | ||
Tuition receivable | 24,447 | ||
Other current assets | 17,713 | ||
Property and equipment, net | 41,508 | ||
Right-of-use lease assets | 44,229 | ||
Intangible assets | 103,161 | ||
Goodwill | 546,315 | ||
Other assets | 2,799 | ||
Total assets acquired | 796,254 | ||
Accounts payable and accrued expenses | (33,876) | ||
Income taxes payable | (229) | ||
Contract liabilities | (33,309) | ||
Lease liabilities | (9,685) | ||
Deferred income taxes | (18,712) | ||
Lease liabilities, non-current | (34,544) | ||
Other long-term liabilities | (7,520) | ||
Total liabilities assumed | (137,875) | ||
Total consideration | $ 658,379 |
Acquisition of Torrens Univer_5
Acquisition of Torrens University and Associated Assets in Australia and New Zealand - Intangible Assets Acquired (Details) - USD ($) $ in Thousands | Nov. 03, 2020 | Sep. 30, 2021 |
Business Acquisition [Line Items] | ||
Weighted Average Useful Life in Years | 3 years | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | ||
Business Acquisition [Line Items] | ||
Total intangible assets | $ 103,161 | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | Student relationships | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets, fair value | $ 34,387 | |
Weighted Average Useful Life in Years | 3 years | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | Trade names | ||
Business Acquisition [Line Items] | ||
Indefinite lived intangible assets, fair value | $ 68,774 |
Acquisition of Torrens Univer_6
Acquisition of Torrens University and Associated Assets in Australia and New Zealand - Valuation Methodology (Details) - USD ($) $ in Thousands | Nov. 03, 2020 | Sep. 30, 2021 |
Business Acquisition [Line Items] | ||
Weighted Average Useful Life in Years | 3 years | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | ||
Business Acquisition [Line Items] | ||
Property and equipment, net | $ 41,508 | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | Relief From Royalty Approach Valuation Technique | Course Content | ||
Business Acquisition [Line Items] | ||
Property and equipment, net | $ 10,000 | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | Relief From Royalty Approach Valuation Technique | Measurement Input, Long-term Revenue Growth Rate | Course Content | Minimum | ||
Business Acquisition [Line Items] | ||
Property, plant and equipment, measurement input | 5.60% | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | Relief From Royalty Approach Valuation Technique | Measurement Input, Long-term Revenue Growth Rate | Course Content | Maximum | ||
Business Acquisition [Line Items] | ||
Property, plant and equipment, measurement input | 6.20% | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | Relief From Royalty Approach Valuation Technique | Measurement Input, Long-term Revenue Growth Rate | Trade names | Minimum | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangible asset, measurement input | 2.50% | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | Relief From Royalty Approach Valuation Technique | Measurement Input, Long-term Revenue Growth Rate | Trade names | Maximum | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangible asset, measurement input | 6.30% | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | Relief From Royalty Approach Valuation Technique | Measurement Input, Royalty Rate | Course Content | ||
Business Acquisition [Line Items] | ||
Property, plant and equipment, measurement input | 3.00% | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | Relief From Royalty Approach Valuation Technique | Measurement Input, Royalty Rate | Trade names | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangible asset, measurement input | 2.50% | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | Relief From Royalty Approach Valuation Technique | Measurement Input, Discount Rate | Course Content | ||
Business Acquisition [Line Items] | ||
Property, plant and equipment, measurement input | 11.00% | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | Relief From Royalty Approach Valuation Technique | Measurement Input, Discount Rate | Trade names | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangible asset, measurement input | 11.00% | |
Torrens University and Related Assets in Australia and New Zealand (ANZ) | Valuation, Cost Approach | ||
Business Acquisition [Line Items] | ||
Contract liabilities fair value, percentage of carrying value | 70.00% | |
Student relationships | Torrens University and Related Assets in Australia and New Zealand (ANZ) | ||
Business Acquisition [Line Items] | ||
Weighted Average Useful Life in Years | 3 years | |
Student relationships | Torrens University and Related Assets in Australia and New Zealand (ANZ) | Relief From Royalty Approach Valuation Technique | Course Content | ||
Business Acquisition [Line Items] | ||
Weighted Average Useful Life in Years | 3 years | |
Student relationships | Torrens University and Related Assets in Australia and New Zealand (ANZ) | Valuation Technique, Excess Earnings Method | Measurement Input, Discount Rate | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible asset, measurement input | 11.00% | |
Student relationships | Torrens University and Related Assets in Australia and New Zealand (ANZ) | Valuation Technique, Excess Earnings Method | Measurement Input, Annual Attrition Rate | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible asset, measurement input | 60.00% |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 270,078 | $ 239,026 | $ 859,587 | $ 760,159 |
U.S. Higher Education Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 191,893 | 230,311 | 630,647 | 733,174 |
U.S. Higher Education Segment | Tuition, net of discounts, grants and scholarships | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 184,126 | 221,235 | 605,036 | 704,251 |
U.S. Higher Education Segment | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 7,767 | 9,076 | 25,611 | 28,923 |
Australia/New Zealand Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 65,224 | 0 | 190,549 | 0 |
Australia/New Zealand Segment | Tuition, net of discounts, grants and scholarships | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 64,456 | 0 | 187,018 | 0 |
Australia/New Zealand Segment | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 768 | 0 | 3,531 | 0 |
Alternative Learning | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 12,961 | $ 8,715 | $ 38,391 | $ 26,985 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($)courseterm | |
Graduation Fund [Line Items] | |
Number of free courses | course | 1 |
Number of successfully completed courses | course | 3 |
Consecutive terms of non attendance in which Graduation Fund credits will be lost | term | 1 |
Expected collection period of current tuition receivable | 12 months |
Graduation fund estimated to be redeemed | $ | $ 19.7 |
Unbilled receivables | $ | $ 0.8 |
Minimum | |
Graduation Fund [Line Items] | |
Expected collection period of noncurrent tuition receivable | 2 years |
Deferred acquisition costs, amortization period | 1 year |
Maximum | |
Graduation Fund [Line Items] | |
Expected collection period of noncurrent tuition receivable | 4 years |
Deferred acquisition costs, amortization period | 2 years |
Revenue Recognition - Graduatio
Revenue Recognition - Graduation Fund (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Graduation Fund [Roll Forward] | ||
Balance at beginning of period | $ 53,314 | $ 49,641 |
Revenue deferred | 15,005 | 19,044 |
Benefit redeemed | (16,733) | (17,077) |
Balance at end of period | $ 51,586 | $ 51,608 |
Restructuring and Related Cha_3
Restructuring and Related Charges - Restructuring liability (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of restructuring liability | ||
Beginning balance | $ 3,122 | $ 8,283 |
Restructuring and other charges | 3,737 | 4,024 |
Payments | (6,062) | (5,435) |
Adjustments | 0 | 0 |
Ending balance | 797 | 6,872 |
Severance And Other Employee Separation Costs | CEC Integration Plan | ||
Schedule of restructuring liability | ||
Beginning balance | 1,835 | 8,283 |
Restructuring and other charges | 0 | 0 |
Payments | (1,835) | (5,401) |
Adjustments | 0 | 0 |
Ending balance | 0 | 2,882 |
Severance And Other Employee Separation Costs | 2020 Restructuring Plan | ||
Schedule of restructuring liability | ||
Beginning balance | 1,287 | 0 |
Restructuring and other charges | 3,737 | 4,024 |
Payments | (4,227) | (34) |
Adjustments | 0 | 0 |
Ending balance | $ 797 | $ 3,990 |
Restructuring and Related Cha_4
Restructuring and Related Charges - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Impairment of right-of-use lease assets | $ 1,900 | $ 18,914 | $ 453 |
Impairment of fixed asset impairment charges | 600 | 2,600 | |
Gain on sale of property and equipment | 681 | $ 0 | |
2020 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Gain on sale of property and equipment | $ 700 | $ 700 |
Marketable Securities - Availab
Marketable Securities - Available-For-Sale Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Available-For-Sale Securities | ||
Amortized Cost | $ 29,460 | $ 37,010 |
Gross Unrealized Gain | 739 | 817 |
Gross Unrealized (Losses) | 0 | 0 |
Estimated Fair Value | 30,199 | 37,827 |
Tax-exempt municipal securities | ||
Available-For-Sale Securities | ||
Amortized Cost | 18,520 | 19,924 |
Gross Unrealized Gain | 465 | 365 |
Gross Unrealized (Losses) | 0 | 0 |
Estimated Fair Value | 18,985 | 20,289 |
Corporate debt securities | ||
Available-For-Sale Securities | ||
Amortized Cost | 10,940 | 17,086 |
Gross Unrealized Gain | 274 | 452 |
Gross Unrealized (Losses) | 0 | 0 |
Estimated Fair Value | $ 11,214 | $ 17,538 |
Marketable Securities - Narrati
Marketable Securities - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Unrealized loss position for a period longer than twelve months | $ 0 | $ 0 | ||
Allowance for credit losses | 0 | 0 | ||
Impairment charges | 0 | $ 0 | 0 | $ 0 |
Gross realized gain (loss) related to the sale of marketable securities | $ (800,000) | $ (800,000) | $ 35,000 |
Marketable Securities - Maturit
Marketable Securities - Maturities of Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Summary of maturities of marketable securities | ||
Due within one year | $ 2,632 | $ 7,557 |
Due after one year through five years | 27,567 | 30,270 |
Total | $ 30,199 | $ 37,827 |
Marketable Securities - Proceed
Marketable Securities - Proceeds From Maturities of Available-For-Sale Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Maturities of marketable securities | $ 1,900 | $ 3,999 | $ 7,495 | $ 21,404 |
Sales of marketable securities | 1,805 | 0 | 1,805 | 1,464 |
Total | $ 3,705 | $ 3,999 | $ 9,300 | $ 22,868 |
Fair Value Measurement - Assets
Fair Value Measurement - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Assets: | |||
Money market funds | $ 274,774 | $ 187,509 | $ 717,804 |
Marketable securities: | 30,199 | 37,827 | |
Liabilities: | |||
Deferred payments | 103,383 | 104,742 | |
Recurring | |||
Assets: | |||
Total assets at fair value on a recurring basis | 34,115 | 40,668 | |
Money market funds | Recurring | |||
Assets: | |||
Money market funds | 3,916 | 2,841 | |
Tax-exempt municipal securities | |||
Assets: | |||
Marketable securities: | 18,985 | 20,289 | |
Tax-exempt municipal securities | Recurring | |||
Assets: | |||
Marketable securities: | 18,985 | 20,289 | |
Corporate debt securities | |||
Assets: | |||
Marketable securities: | 11,214 | 17,538 | |
Corporate debt securities | Recurring | |||
Assets: | |||
Marketable securities: | 11,214 | 17,538 | |
Deferred payments | Recurring | |||
Liabilities: | |||
Deferred payments | 646 | 1,658 | |
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Recurring | |||
Assets: | |||
Total assets at fair value on a recurring basis | 3,916 | 2,841 | |
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Money market funds | Recurring | |||
Assets: | |||
Money market funds | 3,916 | 2,841 | |
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Tax-exempt municipal securities | Recurring | |||
Assets: | |||
Marketable securities: | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Corporate debt securities | Recurring | |||
Assets: | |||
Marketable securities: | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Deferred payments | Recurring | |||
Liabilities: | |||
Deferred payments | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Recurring | |||
Assets: | |||
Total assets at fair value on a recurring basis | 30,199 | 37,827 | |
Significant Other Observable Inputs (Level 2) | Money market funds | Recurring | |||
Assets: | |||
Money market funds | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Tax-exempt municipal securities | Recurring | |||
Assets: | |||
Marketable securities: | 18,985 | 20,289 | |
Significant Other Observable Inputs (Level 2) | Corporate debt securities | Recurring | |||
Assets: | |||
Marketable securities: | 11,214 | 17,538 | |
Significant Other Observable Inputs (Level 2) | Deferred payments | Recurring | |||
Liabilities: | |||
Deferred payments | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Recurring | |||
Assets: | |||
Total assets at fair value on a recurring basis | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Money market funds | Recurring | |||
Assets: | |||
Money market funds | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Tax-exempt municipal securities | Recurring | |||
Assets: | |||
Marketable securities: | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Corporate debt securities | Recurring | |||
Assets: | |||
Marketable securities: | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Deferred payments | Recurring | |||
Liabilities: | |||
Deferred payments | $ 646 | $ 1,658 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Details) $ in Millions | Sep. 30, 2021USD ($) |
Accounts Payable and Accrued Liabilities | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Short-term portion of deferred payments | $ 0.6 |
Fair Value Measurement - Change
Fair Value Measurement - Change in Fair Value of Level 3 Liability (Details) - Deferred Payments - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance as of the beginning of period | $ 1,658 | $ 3,257 |
Amounts paid | (1,470) | (1,628) |
Other adjustments to fair value | 458 | 374 |
Balance at end of period | $ 646 | $ 2,003 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Changes in carrying amount | ||||
Balance, beginning of period | $ 1,318,526,000 | |||
Reporting unit reallocation | 0 | |||
Additions | 0 | |||
Impairments | $ 0 | $ 0 | 0 | $ 0 |
Currency translation adjustments | (38,567,000) | |||
Adjustments to prior acquisitions | 262,000 | |||
Balance, end of period | 1,280,221,000 | 1,280,221,000 | ||
U.S. Higher Education | ||||
Changes in carrying amount | ||||
Balance, beginning of period | 732,075,000 | |||
Reporting unit reallocation | (100,000,000) | |||
Additions | 0 | |||
Impairments | 0 | |||
Currency translation adjustments | 0 | |||
Adjustments to prior acquisitions | 0 | |||
Balance, end of period | 632,075,000 | 632,075,000 | ||
Australia / New Zealand | ||||
Changes in carrying amount | ||||
Balance, beginning of period | 586,451,000 | |||
Reporting unit reallocation | 0 | |||
Additions | 0 | |||
Impairments | 0 | |||
Currency translation adjustments | (38,567,000) | |||
Adjustments to prior acquisitions | 262,000 | |||
Balance, end of period | 548,146,000 | 548,146,000 | ||
Alternative Learning | ||||
Changes in carrying amount | ||||
Balance, beginning of period | 0 | |||
Reporting unit reallocation | 100,000,000 | |||
Additions | 0 | |||
Impairments | 0 | |||
Currency translation adjustments | 0 | |||
Adjustments to prior acquisitions | 0 | |||
Balance, end of period | $ 100,000,000 | $ 100,000,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impairment of goodwill | $ 0 | $ 0 | $ 0 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Subject to amortization | ||
Accumulated amortization | $ (177,091) | $ (135,703) |
Total | ||
Intangible assets, gross | 455,456 | 462,123 |
Intangible assets, net | 278,365 | 326,420 |
Trade names | ||
Not Subject to amortization | ||
Indefinite-lived intangible assets | 254,404 | 259,262 |
Student relationships | ||
Subject to amortization | ||
Gross carrying amount | 201,052 | 202,861 |
Accumulated amortization | (177,091) | (135,703) |
Net | $ 23,961 | $ 67,158 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||||
Useful life - acquired | 3 years | |||
Amortization expenses | $ 8,932,000 | $ 15,417,000 | $ 47,731,000 | $ 46,251,000 |
Trade names | ||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||||
Impairment of intangible assets | $ 0 | $ 0 | 0 | 0 |
Student relationships | ||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||||
Amortization expenses | $ 41,400,000 | $ 41,500,000 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||||
Prepaid expenses, net of current portion | $ 20,606 | $ 22,418 | ||||
Equity method investments | 14,532 | $ 17,401 | 15,795 | $ 16,734 | $ 16,990 | $ 15,795 |
Cloud computing arrangements | 6,665 | 6,385 | ||||
Other investments | 2,999 | 2,527 | ||||
Tuition receivable, non-current | 2,912 | 3,585 | ||||
Other | 6,710 | 4,218 | ||||
Other assets | $ 54,424 | $ 54,928 |
Other Assets - Additional Infor
Other Assets - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2031 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Schedule of Other Assets [Line Items] | ||||||
Prepaid expenses, net of current portion | $ 20,606 | $ 20,606 | $ 22,418 | |||
Capital contributions | $ 327 | $ 75 | $ 589 | $ 368 | ||
Minimum | ||||||
Schedule of Other Assets [Line Items] | ||||||
Ownership percentage | 3.00% | 3.00% | ||||
Maximum | ||||||
Schedule of Other Assets [Line Items] | ||||||
Ownership percentage | 5.00% | 5.00% | ||||
Scenario, Forecast | ||||||
Schedule of Other Assets [Line Items] | ||||||
Capital contributions | $ 3,200 | |||||
Jack Welch Management Institute | ||||||
Schedule of Other Assets [Line Items] | ||||||
Commitment for future services under the perpetual license agreement | $ 25,300 | |||||
Prepaid expenses, net of current portion | $ 19,500 | $ 19,500 | ||||
Prepaid expense, amortization period | 15 years |
Other Assets - Schedule of Chan
Other Assets - Schedule of Changes in Company's Limited Partnership Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Equity Method Investment Summarized Financial Information Assets [Roll Forward] | ||||
Limited partnership investments | $ 17,401 | $ 16,990 | $ 15,795 | $ 15,795 |
Capital contributions | 327 | 75 | 589 | 368 |
Pro-rata share in the net income (loss) of limited partnerships | (610) | 370 | 2,993 | 1,612 |
Distributions | (2,586) | (701) | (4,845) | (1,041) |
Limited partnership investments | $ 14,532 | $ 16,734 | $ 14,532 | $ 16,734 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Trade payables | $ 57,687 | $ 64,049 |
Accrued compensation and benefits | 32,897 | 33,160 |
Accrued student obligations | 9,262 | 4,017 |
Other | 3,537 | 3,516 |
Accounts payable and accrued expenses | $ 103,383 | $ 104,742 |
Long Term Debt (Details)
Long Term Debt (Details) - USD ($) | Nov. 03, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||||
Money market funds | $ 274,774,000 | $ 717,804,000 | $ 187,509,000 | |
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility, outstanding | 141,600,000 | 141,800,000 | ||
Interest paid | 2,100,000 | $ 400,000 | ||
Revolving Credit Facility | Australia, Dollars | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility, outstanding | $ 3,600,000 | $ 3,800,000 | ||
Revolving Credit Facility | Minimum | ||||
Debt Instrument [Line Items] | ||||
Margin rate | 1.50% | |||
Unused commitment fee | 0.20% | |||
Revolving Credit Facility | Maximum | ||||
Debt Instrument [Line Items] | ||||
Margin rate | 2.00% | |||
Unused commitment fee | 0.30% | |||
Amended Credit Facility | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility, value | $ 350,000,000 | |||
Maximum aggregate incremental term loans | $ 300,000,000 | |||
Percentage of consolidated EBITDA to be funded | 100.00% | |||
Maximum leverage ratio allowed in order to increase obligation | 1.75 | |||
Debt financing costs | $ 1,900,000 | |||
Debt instrument term | 5 years | |||
Maximum total leverage ratio | 2 | |||
Money market funds | $ 150,000,000 | |||
Minimum coverage ratio | 1.75 | |||
Minimum department of education financial composite score | 1 | |||
Minimum department of education financial composite score for two consecutive fiscal years | 1.5 | |||
Amendment to the Credit Facility, Subfacility for Borrowings in Foreign Currencies | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility, value | $ 150,000,000 |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Other Liabilities, Noncurrent [Abstract] | ||
Contract liabilities, net of current portion | $ 33,201 | $ 34,866 |
Asset retirement obligations | 7,944 | 7,647 |
Deferred payments related to acquisitions | 0 | 715 |
Other | 2,625 | 2,827 |
Other long-term liabilities | $ 43,770 | $ 46,055 |
Equity Awards - Stock-based com
Equity Awards - Stock-based compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of stock-based compensation expense | ||||
Stock-based compensation expense included in operating expense | $ 4,646 | $ 3,875 | $ 12,714 | $ 10,759 |
Tax benefit | 1,228 | 997 | 3,359 | 2,767 |
Stock-based compensation expense, net of tax | 3,418 | 2,878 | 9,355 | 7,992 |
Instructional and support costs | ||||
Schedule of stock-based compensation expense | ||||
Stock-based compensation expense included in operating expense | 1,365 | 1,390 | 3,871 | 3,776 |
General and administration | ||||
Schedule of stock-based compensation expense | ||||
Stock-based compensation expense included in operating expense | 3,503 | 2,485 | 9,546 | 6,983 |
Restructuring costs | ||||
Schedule of stock-based compensation expense | ||||
Stock-based compensation expense included in operating expense | $ (222) | $ 0 | $ (703) | $ 0 |
Equity Awards - Additional Info
Equity Awards - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Tax windfall related to share-based payment arrangements | $ 26 | $ 2,800 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 1,646 | $ 5,374 | $ 13,717 | $ 30,099 | |
Effective income tax rate | 29.10% | 27.30% | |||
Unrecognized tax benefits | $ 300 | $ 300 | $ 300 | ||
Cash payments for income taxes | $ 21,800 | $ 32,400 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2021segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Number of reporting segments | 3 |
Segment Reporting - Financial I
Segment Reporting - Financial Information by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues | ||||
Revenues | $ 270,078 | $ 239,026 | $ 859,587 | $ 760,159 |
Income from operations | ||||
Income from operations | 7,348 | 15,422 | 46,048 | 105,776 |
Amortization of intangible assets | (8,932) | (15,417) | (47,731) | (46,251) |
Merger and integration costs | (1,111) | (2,920) | (4,060) | (7,858) |
Restructuring costs | (3,322) | (4,024) | (26,400) | (4,024) |
U.S. Higher Education | ||||
Revenues | ||||
Revenues | 191,893 | 230,311 | 630,647 | 733,174 |
Income from operations | ||||
Income from operations | 5,168 | 33,672 | 84,981 | 149,180 |
Australia / New Zealand | ||||
Revenues | ||||
Revenues | 65,224 | 0 | 190,549 | 0 |
Income from operations | ||||
Income from operations | 10,364 | 0 | 23,016 | 0 |
Alternative Learning | ||||
Revenues | ||||
Revenues | 12,961 | 8,715 | 38,391 | 26,985 |
Income from operations | ||||
Income from operations | $ 5,181 | $ 4,111 | $ 16,242 | $ 14,729 |
Litigation - Narratives (Detail
Litigation - Narratives (Details) | Oct. 05, 2021plaintiff | Apr. 02, 2021plaintiff | Apr. 20, 2021borrowerDefenseApplication |
Loss Contingencies [Line Items] | |||
Number of borrower defense applications submitted (more than) | borrowerDefenseApplication | 1,000 | ||
Number of borrower defense applications submitted received for repayment (approximately) | borrowerDefenseApplication | 500 | ||
Number of plaintiffs | plaintiff | 6 | ||
Subsequent Event | |||
Loss Contingencies [Line Items] | |||
Number of plaintiffs | plaintiff | 6 |
Regulation (Details)
Regulation (Details) | Sep. 30, 2021educational_institution | Jul. 31, 2021USD ($) | Jun. 30, 2021USD ($) | Jan. 31, 2021USD ($) | Apr. 09, 2020USD ($) |
Capella University | |||||
Unusual or Infrequent Item, or Both [Line Items] | |||||
American Rescue Plan Act of 2021, grant | $ 184,323 | ||||
Consolidation Appropriations Act of 2021, eligible grant | $ 328,602 | ||||
Strayer University | |||||
Unusual or Infrequent Item, or Both [Line Items] | |||||
American Rescue Plan Act of 2021, grant | $ 2,554,682 | ||||
Consolidation Appropriations Act of 2021, eligible grant | $ 5,831,606 | ||||
Education stabilization grant | $ 5,792,122 | ||||
Tuition grant | $ 500 | ||||
AUSTRALIA | |||||
Unusual or Infrequent Item, or Both [Line Items] | |||||
Number of operating post-secondary educational institutions | educational_institution | 2 |