Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 12, 2015 | Jun. 30, 2014 |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | LOPE | ||
Entity Registrant Name | GRAND CANYON EDUCATION, INC. | ||
Entity Central Index Key | 1434588 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 46,749,781 | ||
Entity Public Float | $2.10 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash and cash equivalents | $65,238 | $55,824 |
Restricted cash, cash equivalents and investments | 67,840 | 64,368 |
Investments | 100,784 | 108,420 |
Accounts receivable, net | 7,605 | 7,217 |
Income taxes receivable | 1 | 3,599 |
Deferred income taxes | 6,149 | 5,159 |
Other current assets | 19,428 | 19,116 |
Total current assets | 267,045 | 263,703 |
Property and equipment, net | 478,170 | 339,596 |
Prepaid royalties | 3,650 | 4,641 |
Goodwill | 2,941 | 2,941 |
Other assets | 3,907 | 5,219 |
Total assets | 755,713 | 616,100 |
Current liabilities | ||
Accounts payable | 22,715 | 24,231 |
Accrued compensation and benefits | 23,995 | 20,093 |
Accrued liabilities | 13,533 | 14,554 |
Income taxes payable | 4,906 | 7 |
Student deposits | 69,584 | 66,772 |
Deferred revenue | 36,868 | 32,816 |
Due to related parties | 403 | 454 |
Current portion of capital lease obligations | 91 | 89 |
Current portion of notes payable | 6,616 | 6,607 |
Total current liabilities | 178,711 | 165,623 |
Capital lease obligations, less current portion | 406 | 497 |
Other noncurrent liabilities | 4,513 | 6,811 |
Deferred income taxes, non-current | 15,974 | 11,832 |
Notes payable, less current portion | 79,877 | 86,493 |
Total liabilities | 279,481 | 271,256 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value, 10,000 shares authorized; 0 shares issued and outstanding at December 31, 2014 and 2013 | ||
Common stock, $0.01 par value, 100,000 shares authorized; 49,746 and 48,890 shares issued and 46,744 and 46,045 shares outstanding at December 31, 2014 and 2013, respectively | 497 | 489 |
Treasury stock, at cost, 3,002 and 2,845 shares of common stock at December 31, 2014 and 2013, respectively | -53,770 | -48,432 |
Additional paid-in capital | 158,549 | 132,904 |
Accumulated other comprehensive (loss) income | -35 | 358 |
Retained earnings | 370,991 | 259,525 |
Total stockholders' equity | 476,232 | 344,844 |
Total liabilities and stockholders' equity | $755,713 | $616,100 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 100,000 | 100,000 |
Shares issued | 49,746 | 48,890 |
Common stock, shares outstanding | 46,744 | 46,045 |
Shares issued | 3,002 | 2,845 |
Consolidated_Income_Statements
Consolidated Income Statements (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||||||||||
Net revenue | $189,973 | $175,056 | $158,594 | $167,432 | $162,443 | $152,399 | $141,463 | $142,030 | $691,055 | $598,335 | $511,257 |
Costs and expenses: | |||||||||||
Instructional costs and services | 78,552 | 71,714 | 67,847 | 70,678 | 67,971 | 64,704 | 61,747 | 59,997 | 288,791 | 254,419 | 220,403 |
Admissions advisory and related, including $2,974 in 2014; $3,412 in 2013; and $2,313 in 2012, respectively, to related parties | 28,774 | 27,324 | 26,208 | 26,261 | 26,160 | 24,578 | 23,346 | 22,993 | 108,567 | 97,077 | 85,917 |
Advertising | 16,854 | 16,491 | 15,751 | 16,712 | 15,038 | 15,498 | 14,520 | 15,929 | 65,808 | 60,985 | 51,023 |
Marketing and promotional | 1,810 | 1,931 | 1,907 | 1,791 | 1,527 | 1,299 | 1,383 | 1,435 | 7,439 | 5,644 | 4,360 |
General and administrative | 10,447 | 11,640 | 8,994 | 8,554 | 10,870 | 9,035 | 8,978 | 8,051 | 39,635 | 36,934 | 35,502 |
Total costs and expenses | 136,437 | 129,100 | 120,707 | 123,996 | 121,566 | 115,114 | 109,974 | 108,405 | 510,240 | 455,059 | 397,205 |
Operating income | 53,536 | 45,956 | 37,887 | 43,436 | 40,877 | 37,285 | 31,489 | 33,625 | 180,815 | 143,276 | 114,052 |
Interest expense | -346 | -576 | -356 | -523 | -609 | -528 | -439 | -668 | -1,801 | -2,244 | -699 |
Interest and other income | 307 | 43 | 197 | 137 | 104 | 1,502 | 62 | 2,195 | 684 | 3,863 | 71 |
Income before income taxes | 53,497 | 45,423 | 37,728 | 43,050 | 40,372 | 38,259 | 31,112 | 35,152 | 179,698 | 144,895 | 113,424 |
Income tax expense | 20,404 | 16,407 | 14,659 | 16,762 | 14,215 | 15,714 | 12,048 | 14,207 | 68,232 | 56,184 | 43,977 |
Net income | $33,093 | $29,016 | $23,069 | $26,288 | $26,157 | $22,545 | $19,064 | $20,945 | $111,466 | $88,711 | $69,447 |
Earnings per share: | |||||||||||
Basic income per share | $0.72 | $0.64 | $0.51 | $0.58 | $0.58 | $0.50 | $0.43 | $0.47 | $2.45 | $1.98 | $1.57 |
Diluted income per share | $0.70 | $0.62 | $0.49 | $0.56 | $0.56 | $0.49 | $0.42 | $0.46 | $2.37 | $1.92 | $1.53 |
Basic weighted average shares outstanding | 45,652 | 45,651 | 45,598 | 45,205 | 45,026 | 44,963 | 44,681 | 44,242 | 45,538 | 44,731 | 44,332 |
Diluted weighted average shares outstanding | 47,097 | 47,051 | 46,990 | 46,841 | 46,712 | 46,424 | 45,929 | 45,449 | 47,006 | 46,131 | 45,251 |
Consolidated_Income_Statements1
Consolidated Income Statements (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||
Admissions advisory and related expenses to related parties | $2,974 | $3,412 | $2,313 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||||||||||
Net income | $33,093 | $29,016 | $23,069 | $26,288 | $26,157 | $22,545 | $19,064 | $20,945 | $111,466 | $88,711 | $69,447 |
Other comprehensive income (loss), net of tax: | |||||||||||
Unrealized (losses) gains on hedging derivatives, net of taxes of $186, $382, and $104 for the years ended December 31, 2014, 2013 and 2012, respectively | -300 | 565 | 137 | ||||||||
Unrealized (losses) gains on available for sale securities, net of taxes of $60 and $11 for the years ended December 31, 2014 and 2013, respectively | -93 | 16 | |||||||||
Comprehensive income | $111,073 | $89,292 | $69,584 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Unrealized (losses) gains on hedging derivatives, taxes | ($186) | $382 | $104 |
Unrealized losses on available for sale securities, taxes | ($60) | $11 |
Consolidated_Statement_of_Stoc
Consolidated Statement of Stockholders' Equity (USD $) | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income [Member] | Retained Earnings [Member] |
In Thousands | ||||||
Beginning Balance at Dec. 31, 2011 | $163,293 | $460 | ($23,894) | $85,720 | ($360) | $101,367 |
Beginning Balance, Shares at Dec. 31, 2011 | 45,955 | 1,657 | ||||
Comprehensive income | 69,584 | 137 | 69,447 | |||
Common stock purchased for treasury | -15,242 | -15,242 | ||||
Common stock purchased for treasury, Shares | 753 | |||||
Share-based compensation | 7,811 | 6 | 7,805 | |||
Share-based compensation, Shares | 570 | |||||
Restricted shares forfeited | 0 | 0 | 0 | 0 | 0 | 0 |
Restricted shares forfeited, Shares | 10 | |||||
Exercise of stock options | 8,049 | 5 | 8,044 | |||
Exercise of stock options, Shares | 611 | |||||
Excess tax benefits | 564 | 564 | ||||
Ending Balance at Dec. 31, 2012 | 234,059 | 471 | -39,136 | 102,133 | -223 | 170,814 |
Ending Balance, Shares at Dec. 31, 2012 | 47,136 | 2,420 | ||||
Comprehensive income | 89,292 | 581 | 88,711 | |||
Common stock purchased for treasury | -8,323 | -8,323 | ||||
Common stock purchased for treasury, Shares | 340 | |||||
Share-based compensation | 8,950 | 6 | -973 | 9,917 | ||
Share-based compensation, Shares | 594 | 40 | ||||
Restricted shares forfeited | 0 | 0 | 0 | 0 | 0 | 0 |
Restricted shares forfeited, Shares | 45 | |||||
Exercise of stock options | 16,278 | 12 | 16,266 | |||
Exercise of stock options, Shares | 1,160 | |||||
Excess tax benefits | 4,588 | 4,588 | ||||
Ending Balance at Dec. 31, 2013 | 344,844 | 489 | -48,432 | 132,904 | 358 | 259,525 |
Ending Balance, Shares at Dec. 31, 2013 | 48,890 | 2,845 | ||||
Comprehensive income | 111,073 | -393 | 111,466 | |||
Common stock purchased for treasury | -1,676 | -1,676 | ||||
Common stock purchased for treasury, Shares | 2,787 | 38 | ||||
Share-based compensation | 6,282 | 3 | -3,662 | 9,941 | ||
Share-based compensation, Shares | 317 | 77 | ||||
Restricted shares forfeited | 0 | 0 | 0 | 0 | 0 | 0 |
Restricted shares forfeited, Shares | 42 | |||||
Exercise of stock options | 7,825 | 5 | 7,820 | |||
Exercise of stock options, Shares | 539 | |||||
Excess tax benefits | 7,884 | 7,884 | ||||
Ending Balance at Dec. 31, 2014 | $476,232 | $497 | ($53,770) | $158,549 | ($35) | $370,991 |
Ending Balance, Shares at Dec. 31, 2014 | 49,746 | 3,002 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows provided by operating activities: | |||
Net income | $111,466 | $88,711 | $69,447 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Share-based compensation | 9,945 | 9,936 | 7,811 |
Excess tax benefits from share-based compensation | -7,637 | -4,469 | -1,427 |
Amortization of notes payable issuance costs | 244 | ||
Provision for bad debts | 15,045 | 19,897 | 18,012 |
Depreciation and amortization | 29,473 | 25,437 | 21,923 |
Gain on note receivable | -3,646 | ||
Loss on asset disposal and fixed asset impairments | 2,475 | 1,106 | |
Deferred income taxes | 2,651 | 5,472 | -518 |
Prepaid royalty impairment | 966 | ||
Changes in assets and liabilities: | |||
Restricted cash, cash equivalents and investments | -3,472 | -8,404 | 151 |
Accounts receivable | -15,433 | -19,163 | -14,148 |
Prepaid expenses and other | 81 | -7,316 | -1,920 |
Due to/from related parties | -51 | -69 | 296 |
Accounts payable | -2,448 | 8,563 | -630 |
Accrued liabilities | 2,991 | -1,756 | 15,719 |
Income taxes receivable/payable | 16,378 | -7,769 | 20,593 |
Deferred rent | -2,298 | -204 | 503 |
Deferred revenue | 4,052 | 4,202 | 6,891 |
Student deposits | 2,812 | 9,027 | 143 |
Net cash provided by operating activities | 166,996 | 118,449 | 144,196 |
Cash flows used in investing activities: | |||
Capital expenditures | -168,646 | -78,948 | -97,653 |
Purchase of land and building related to off-site development | -14,542 | -7,223 | |
Investment in note receivable secured by real estate | -27,000 | ||
Proceeds received from note receivable | 29,187 | ||
Restricted funds held for derivative collateral and legal matter | 225 | 330 | |
Purchases of investments | -114,919 | -168,953 | |
Proceeds from sale or maturity of investments | 122,555 | 60,533 | |
Net cash used in investing activities | -161,010 | -172,498 | -131,546 |
Cash flows provided by financing activities: | |||
Principal payments on notes payable and capital lease obligations | -6,696 | -6,689 | -21,744 |
Proceeds from notes payable | 99,210 | ||
Notes payable modification costs | -428 | ||
Repurchase of common shares including share withheld in lieu of income taxes | -5,338 | -9,296 | -15,242 |
Net proceeds from exercise of stock options | 7,825 | 16,278 | 8,049 |
Excess tax benefits from share-based compensation | 7,637 | 4,469 | 1,427 |
Net cash provided by financing activities | 3,428 | 4,762 | 71,272 |
Net increase (decrease) in cash and cash equivalents | 9,414 | -49,287 | 83,922 |
Cash and cash equivalents, beginning of year | 55,824 | 105,111 | 21,189 |
Cash and cash equivalents, end of year | 65,238 | 55,824 | 105,111 |
Supplemental disclosure of cash flow information | |||
Cash paid during the year for interest | 1,793 | 2,176 | 606 |
Cash paid during the year for income taxes | 48,835 | 59,892 | 32,810 |
Cash received for income tax refunds | 385 | 728 | 7,938 |
Supplemental disclosure of non-cash investing and financing activities | |||
Purchases of property and equipment included in accounts payable | 5,845 | 1,494 | 3,291 |
Shortfall tax expense from share-based compensation | 16 | 209 | 283 |
Tax benefit of Spirit warrant intangible | $260 | $267 | $267 |
Nature_of_Business
Nature of Business | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Nature of Business | 1. Nature of Business |
Grand Canyon Education, Inc. (together with its subsidiaries, the “University”) was formed in Delaware in November 2003 as a limited liability company, under the name Significant Education, LLC, for the purpose of acquiring the assets of Grand Canyon University from a non-profit foundation on February 2, 2004. On August 24, 2005, the University converted from a limited liability company to a corporation and changed its name to Significant Education, Inc. On May 9, 2008, the University changed its name to Grand Canyon Education, Inc. | |
The University is a comprehensive regionally accredited university that offers over 160 graduate and undergraduate degree programs across eight colleges both online and on ground at our approximately 205 acre campus in Phoenix, Arizona, and at facilities we lease and at facilities owned by third party employers. Our undergraduate programs are designed to be innovative and to meet the future needs of employers, while providing students with the needed critical thinking and effective communication skills developed through a Christian, liberal arts foundation. The University is accredited by the Higher Learning Commission. The University’s wholly owned subsidiaries are primarily used to facilitate expansion of the University campus. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | ||||||||||||
Principles of Consolidation | |||||||||||||
The consolidated financial statements include the accounts of Grand Canyon Education, Inc. and its wholly owned subsidiaries. Intercompany transactions have been eliminated in consolidation. | |||||||||||||
Use of Estimates | |||||||||||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | |||||||||||||
Cash and Cash Equivalents | |||||||||||||
The University invests a portion of its cash in excess of current operating requirements in short term certificates of deposit and money market instruments. The University considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. | |||||||||||||
Restricted Cash, Cash Equivalents and Investments | |||||||||||||
A significant portion of the University’s revenue is received from students who participate in government financial aid and assistance programs. Restricted cash, cash equivalents and investments primarily represent amounts received from the federal and state governments under various student aid grant and loan programs, such as Title IV. The University receives these funds subsequent to the completion of the authorization and disbursement process and holds them for the benefit of the student. The U.S. Department of Education (“Department of Education”) requires Title IV funds collected in advance of student billings to be restricted until the course begins. The University records all of these amounts as a current asset in restricted cash, cash equivalents and investments. The majority of these funds remain as restricted for an average of 60 to 90 days from the date of receipt. | |||||||||||||
Investments | |||||||||||||
The University considers its investments in municipal bond, mutual funds and municipal securities as available-for-sale securities. Available-for-sale securities are carried at fair value, determined using Level 2 of the hierarchy of valuation inputs, with the use of inputs other than quoted prices that are observable for the assets, with unrealized gains and losses, net of tax, reported as a separate component of other comprehensive income. Unrealized losses considered to be other-than-temporary are recognized currently in earnings. Amortization of premiums, accretion of discounts, interest and dividend income and realized gains and losses are included in interest and other income. | |||||||||||||
Note Receivable | |||||||||||||
The University purchased a note receivable from a financial institution at fair market value in the fourth quarter of 2012 for $27,000. The note bore interest at 11%, which represented the 6% rate of the loan plus the 5% default rate. The principal and most of the interest due on the note was paid in March 2013, resulting in the full return on investment of the note receivable and an additional gain in interest income and other income of $2,187 on the loan. However, the borrower has disputed certain amounts remaining due under the note agreement, including default interest in the amount of $432, a late payment penalty in the amount of $1,392, and a statutory trustee’s fee in the amount of $139. The funds disputed by the borrower, plus interest thereon, were deposited into an escrow account with the clerk of the Maricopa County Superior Court pending resolution of the disputed issues. In the third quarter of 2013, the court ruled in favor of the University with respect to the late penalty and default interest accrued thereon. Accordingly, the University recorded interest and other income of $1,459 for the year ended December 31, 2013. The court ordered the late penalty funds and interest thereon to be released to the University on October 28, 2013 unless prior to said date, borrower filed with the court a formal notice of appeal and simultaneously deposited an additional $344 into escrow with the clerk of the court representing continued interest accruing on the late penalty pending an appeal. On October 28, 2013 borrower deposited with the clerk of the court the required cash bond in the amount of $344 and filed its formal notice of appeal. The briefing phase of the appeal has been completed and the matter will be scheduled for oral argument at a date and time to be determined by the appellate court. On January 29, 2015, the court ruled in favor of the University with respect to the remaining default interest and interest thereon. | |||||||||||||
Property and Equipment | |||||||||||||
Property and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method. Normal repairs and maintenance are expensed as incurred. Expenditures that materially extend the useful life of an asset are capitalized. Construction in progress represents items not yet placed in service and are not depreciated. Internally developed software represents qualifying salary and consulting costs for time spent on developing internal use software and is included in construction in progress until its completion. The University capitalizes interest using its interest rates on the specific borrowings used to finance the improvements, which approximated 1.9% in 2014, 1.9% in 2013, and 2.2% in 2012. Interest cost capitalized and incurred in the years ended December 31, 2014, 2013, and 2012 are as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Interest incurred | $ | 2,180 | $ | 2,626 | $ | 1,064 | |||||||
Interest capitalized | 379 | 382 | 365 | ||||||||||
Interest expense | $ | 1,801 | $ | 2,244 | $ | 699 | |||||||
Depreciation is provided using the straight-line method over the estimated useful lives of the assets. Furniture and fixtures, computer equipment, and vehicles generally have estimated useful lives of ten, four, and five years, respectively. Leasehold improvements are depreciated over the shorter of their lease term or their useful life. Land improvements and buildings are depreciated over lives ranging from 10 to 40 years. | |||||||||||||
Leases | |||||||||||||
The University enters into various lease agreements in conducting its business. At the inception of each lease, the University evaluates the lease agreement to determine whether the lease is an operating or capital lease. In addition, many of the lease agreements contain renewal options and tenant improvement allowances. When such items are included in a lease agreement, the University records a deferred liability on the balance sheet and records the rent expense evenly over the term of the lease. Leasehold improvements are included as investing activities and are included as additions to property, plant and equipment. For leases with renewal options, the University records rent expense and amortizes the leasehold improvement on a straight-line basis over the initial non-cancelable lease term unless it intends to exercise the renewal option. Once it extends the renewal option, the University amortizes any tenant improvement allowances over the extended lease period as well as the leasehold improvement asset (unless the extended lease term is longer than the economic life of the asset). The University expenses any additional payments under its operating leases for taxes, insurance or other operating expenses as incurred. | |||||||||||||
Other Assets | |||||||||||||
During 2010, the University entered into an agreement with an affiliated entity to develop a new learning management system for use by the University. Through this agreement, the University prepaid perpetual license fees, acquired source code rights for the software developed, and prepaid maintenance and service fees for the first seven years of use for an aggregate amount of $4,900, which was paid in full as of December 31, 2011. The University commenced utilization of this software in October 2011. Included in current other assets is the amount that will be amortized in the next twelve month cycle for maintenance and service fees and included in property and equipment is the amount that will be amortized over fifteen years for the perpetual licenses. | |||||||||||||
Long-Lived Assets | |||||||||||||
The University evaluates the recoverability of its long-lived assets for impairment, other than goodwill, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. | |||||||||||||
Prepaid Royalties | |||||||||||||
In connection with the February 2004 acquisition of the assets of Grand Canyon University from a non-profit foundation, the University entered into a royalty fee arrangement with the former owner in which the University agreed to pay a stated percentage of cash revenue generated by its online programs. The University settled all future royalty obligations with the former owner in April 2008 when it finalized an agreement to pay $22,500 to the former owner. Of this payment $5,920 was considered as settlement of the future royalty payment obligation and is included in the accompanying balance sheet as a component of “Prepaid Royalty” and is being amortized over a period of 20 years. | |||||||||||||
In addition, in June 2004, the University entered into a license agreement relating to the University’s use of the Ken Blanchard name for its College of Business. Under the terms of that agreement the University agreed to pay Blanchard a royalty generated on net tuition from certain programs in the University’s College of Business and to issue Blanchard shares of common stock with the actual number of shares issued to be contingent upon the University’s achievement of stated enrollment levels in its College of Business during the term of the agreement. The fair value of the shares issued to Blanchard as part of the license agreement of $3,394 was determined at the date it became probable that shares would then be earned and then adjusted until the date the shares were earned. During 2014, the University reached an agreement to cease the use of the Ken Blanchard name for its College of Business when it renamed the school the Colangelo School of Business; accordingly the remaining balance of the prepaid royalty was expensed as an impaired asset during the year ended December 31, 2014. | |||||||||||||
Goodwill | |||||||||||||
Goodwill represents the excess of the cost over the fair market value of net assets acquired, including identified intangible assets. Goodwill is tested annually or more frequently if circumstances indicate potential impairment. The Financial Accounting Standards Board (“FASB”) has issued guidance that permits an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. The University performed its annual goodwill impairment test, by performing a qualitative assessment. Following this assessment, the University determined that it is more likely than not that its fair value exceeds its carrying amount. | |||||||||||||
Share-Based Compensation | |||||||||||||
The University measures and recognizes compensation expense for share-based payment awards made to employees, consultants and directors, including employee stock options and restricted stock awards. The University calculates the fair value of share-based awards on the date of grant. The University calculates the fair value of share-based awards to consultants on the date of vesting. The University amortizes the share-based compensation expense over the period that the awards are expected to vest, net of estimated forfeiture rates. If the actual forfeitures differ from management estimates, adjustments to compensation expense are recorded. The University reports cash flows resulting from tax deductions in excess of the compensation cost realized for those options (excess tax benefits) as financing cash flows. The University reports cash flows resulting from tax deductions that are less than the compensation cost realized for those option (tax shortfalls) as a noncash transaction in the consolidated statement of cash flows. | |||||||||||||
For stock options, the University uses the Black-Scholes-Merton option pricing model to estimate fair value. The option pricing model requires the University to estimate certain key assumptions such as expected life, volatility, risk free interest rates, and dividend yield to determine the fair value of share-based awards, based on historical information and management judgment. The assumptions used in calculating the fair value of stock-based awards represent the University’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. The fair value of the University’s restricted stock awards is based on the market price of its common stock on the date of grant. | |||||||||||||
Derivatives and Hedging | |||||||||||||
Derivative financial instruments are recorded on the balance sheet as assets or liabilities and re-measured at fair value at each reporting date. For derivatives designated as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or period during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. | |||||||||||||
Derivative financial instruments enable the University to manage its exposure to interest rate risk. The University does not engage in any derivative instrument trading activity. Credit risk associated with the University’s derivatives is limited to the risk that a derivative counterparty will not perform in accordance with the terms of the contract. Exposure to counterparty credit risk is considered low because these agreements have been entered into with institutions with Aa or higher credit ratings, and they are expected to perform fully under the terms of the agreements. | |||||||||||||
Fair Value of Financial Instruments | |||||||||||||
The carrying value of cash and cash equivalents, accounts receivable, note receivable, accounts payable, accrued compensation and benefits and accrued liabilities approximate their fair value based on the liquidity or the short-term maturities of these instruments. The carrying value of notes payable approximate fair value based on its variable rate index. The carrying value of other notes payable and capital lease obligations approximate fair value based upon market interest rates available to the University for debt of similar risk and maturities. Derivative financial instruments are carried at fair value, determined using Level 2 of the hierarchy of valuation inputs as defined in the FASB Accounting Standards Codification (“Codification”), with the use of inputs other than quoted prices that are observable for the asset or liability. See Note 10, Derivative Instruments. | |||||||||||||
The fair value of investments, primarily municipal securities, including municipal bond portfolios, were determined using Level 2 of the hierarchy of valuation inputs, with the use of inputs other than quoted prices that are observable for the assets. The unit of account used for valuation is the individual underlying security. The municipal securities are comprised of city and county bonds related to schools, water and sewer, utilities, transportation, healthcare and housing. Because these securities are held by the University as investments, assessment of non-performance risk is not applicable as such considerations are only applicable in evaluating the fair value measurements for liabilities. | |||||||||||||
The fair value of the prepaid royalty asset relating to the settlement of future royalty payment obligations to the former owner was determined using an income approach, based on management’s forecasts of revenue to be generated through its online education program using Level 3 of the hierarchy of valuation inputs. The rate utilized to discount net cash flows to their present values was 35%. This discount rate was determined after consideration of the University’s weighted average cost of capital giving effect to estimates of the University’s risk-free rate, beta coefficient, equity risk premium, small size risk premium, and company-specific risk premium. | |||||||||||||
Income Taxes | |||||||||||||
The University accounts for income taxes payable or refundable for the current year and deferred tax assets and liabilities for future tax consequences of events that have been recognized in the University’s consolidated financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the temporary differences are expected to be realized. | |||||||||||||
The University applies a more-likely-than-not threshold for financial statement recognition and measurement of an uncertain tax position taken or expected to be taken in a tax return. The University recognizes interest and penalties related to uncertain tax positions in income tax expense. The University did not record any reserves for uncertain tax positions including interest and penalties as of December 31, 2014 and 2013. | |||||||||||||
The University has deferred tax assets, which are subject to periodic recoverability assessments. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. Realization of the deferred tax assets is principally dependent upon achievement of projected future taxable income. | |||||||||||||
Commitments and Contingencies | |||||||||||||
The University accrues for a contingent obligation when it is probable that a liability has been incurred and the amount is reasonably estimable. When the University becomes aware of a claim or potential claim, the likelihood of any loss exposure is assessed. If it is probable that a loss will result and the amount of the loss is estimable, the University records a liability for the estimated loss. If the loss is not probable or the amount of the potential loss is not estimable, the University will disclose the claim if the likelihood of a potential loss is reasonably possible and the amount of the potential loss could be material. Estimates that are particularly sensitive to future changes include tax, legal, and other regulatory matters, which are subject to change as events evolve, and as additional information becomes available during the administrative and litigation process. The University expenses legal fees as incurred. | |||||||||||||
Revenue Recognition | |||||||||||||
Net revenues consist primarily of tuition and fees derived from courses taught by the University online, at its approximately 205 acre campus in Phoenix, Arizona, and at facilities it leases or those of employers, as well as from related educational resources that the University provides to its students, such as access to online materials. Tuition revenue and most fees from related educational resources are recognized pro-rata over the applicable period of instruction, net of scholarships provided by the University. For the years ended December 31, 2014, 2013 and 2012, the University’s revenue was reduced by approximately $139,962, $111,789 and $94,283, respectively, as a result of scholarships that the University offered to students. The University maintains an institutional tuition refund policy, which provides for all or a portion of tuition to be refunded if a student withdraws during stated refund periods. Certain states in which students reside impose separate, mandatory refund policies, which override the University’s policy to the extent in conflict. If a student withdraws at a time when only a portion, or none of the tuition is refundable, then in accordance with its revenue recognition policy, the University continues to recognize the tuition that was not refunded pro-rata over the applicable period of instruction. However, for students that have taken out financial aid to pay their tuition and for which a Return to Title IV is required as a result of his or her withdrawal, the University recognizes revenue after a student withdraws only at the time of cash collection. Sales tax collected from students is excluded from net revenues. Collected but unremitted sales tax is included as an accrued liability in our consolidated balance sheet. The University also charges online students an upfront learning management fee, which is deferred and recognized over the average expected term of a student. Costs that are direct and incremental to new online students are also deferred and recognized ratably over the average expected term of a student. Deferred revenue and student deposits in any period represent the excess of tuition, fees, and other student payments received as compared to amounts recognized as revenue on the income statement and are reflected as current liabilities in the accompanying consolidated balance sheets. The University’s educational programs have starting and ending dates that differ from its fiscal quarters. Therefore, at the end of each fiscal quarter, a portion of revenue from these programs is not yet earned. Other revenues may be recognized as sales occur or services are performed. | |||||||||||||
Allowance for Doubtful Accounts | |||||||||||||
The University records an allowance for doubtful accounts for estimated losses resulting from the inability, failure or refusal of its students to make required payments, which includes the recovery of financial aid funds advanced to a student for amounts in excess of the student’s cost of tuition and related fees. The University determines the adequacy of its allowance for doubtful accounts based on an analysis of its historical bad debt experience, current economic trends, and the aging of the accounts receivable and student status. The University applies reserves to its receivables based upon an estimate of the risk presented by the age of the receivables and student status. The University writes off accounts receivable balances of active students at the earlier of the time the balances were deemed uncollectible, or one year after the revenue is generated. The University accelerates the write off of inactive student accounts such that the accounts are written off by day 150. The University continues to reflect accounts receivable with an offsetting allowance as long as management believes there is a reasonable possibility of collection. Bad debt expense is recorded as an instructional costs and services expense in the consolidated income statement. | |||||||||||||
Instructional Costs and Services | |||||||||||||
Instructional costs and services consist primarily of costs related to the administration and delivery of the University’s educational programs. This expense category includes salaries, benefits and share-based compensation for full-time and adjunct faculty and administrative personnel, information technology costs, bad debt expense, curriculum and new program development costs (which are expensed as incurred) and costs associated with other support groups that provide services directly to the students. This category also includes an allocation of depreciation, amortization, rent, and occupancy costs attributable to the provision of educational services, primarily at the University’s Phoenix, Arizona campus. | |||||||||||||
Admissions Advisory and Related | |||||||||||||
Admissions advisory and related expenses include salaries and benefits for admissions advisory personnel, and revenue share expense as well as an allocation of depreciation, amortization, rent and occupancy costs attributable to the admissions advisory personnel. | |||||||||||||
Advertising | |||||||||||||
Advertising expenses include brand advertising, marketing leads and other branding activities. Advertising costs are expensed as incurred. | |||||||||||||
Marketing and Promotional | |||||||||||||
Marketing and promotional expenses include salaries, benefits and share-based compensation for marketing personnel, and other promotional expenses. This category also includes an allocation of depreciation, amortization, rent, and occupancy costs attributable to marketing and promotional activities. Marketing and promotional costs are expensed as incurred. | |||||||||||||
General and Administrative | |||||||||||||
General and administrative expenses include salaries, and benefits and share-based compensation of employees engaged in corporate management, finance, human resources, compliance, and other corporate functions. General and administrative expenses also include an allocation of depreciation, amortization, rent, and occupancy costs attributable to the departments providing general and administrative functions. | |||||||||||||
Related party expenses | |||||||||||||
The University is a party to a revenue sharing arrangement (the Collaboration Agreement) with Mind Streams L.L.C. (Mind Streams), a related party, under which the University, in accordance with applicable Department of Education guidance, pays a percentage of net revenue that it receives from applicants recruited by Mind Streams that matriculate at the University. The University terminated the agreement in 2014 and the University is not accepting any new applicants recruited by Mind Streams. The expenses incurred in conjunction with the Collaboration Agreement are included in admissions advisory and related expenses on our Consolidated Income Statement. | |||||||||||||
Insurance/Self-Insurance | |||||||||||||
The University uses a combination of insurance and self-insurance for a number of risks, including claims related to employee health care, workers’ compensation, general liability, and business interruption. Liabilities associated with these risks are estimated based on, among other things, historical claims experience, severity factors, and other actuarial assumptions. The University’s loss exposure related to self-insurance is limited by stop loss coverage on a per occurrence and aggregate basis. Expected loss accruals are based on estimates, and while the University believes the amounts accrued are adequate, the ultimate loss may differ from the amounts provided. | |||||||||||||
Concentration of Credit Risk | |||||||||||||
The University believes the credit risk related to cash equivalents and investments is limited due to its adherence to an investment policy that required investments to have a minimum AAA to A rating, depending on the type of security, by one major rating agency at the time of purchase. All of the University’s cash equivalents and investments as of December 31, 2014 and 2013 consist of investments rated A or higher by at least one rating agency. Additionally, the University utilizes more than one financial institution to conduct initial and ongoing credit analysis on its investment portfolio to monitor and lower the potential impact of market risk associated with its cash equivalents and investment portfolio. | |||||||||||||
A majority of the University’s revenues are derived from tuition financed under the Title IV programs of the Higher Education Act of 1965, as amended (the “Higher Education Act”). The financial aid and assistance programs are subject to political and budgetary considerations and are subject to extensive and complex regulations. The University’s administration of these programs is periodically reviewed by various regulatory agencies. Any regulatory violation could be the basis for the initiation of potentially adverse actions including a suspension, limitation, or termination proceeding, which could have a material adverse effect on the University. | |||||||||||||
Students obtain access to federal student financial aid through a Department of Education prescribed application and eligibility certification process. Student financial aid funds are generally made available to students at prescribed intervals throughout their predetermined expected length of study. Students typically apply the funds received from the federal financial aid programs first to pay their tuition and fees. Any remaining funds are distributed directly to the student. | |||||||||||||
Segment Information | |||||||||||||
The University operates as a single educational delivery operation using a core infrastructure that serves the curriculum and educational delivery needs of both its ground and online students regardless of geography. The University’s Chief Executive Officer manages the University’s operations as a whole and no expense or operating income information is generated or evaluated on any component level. | |||||||||||||
Recent Accounting Pronouncements | |||||||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued “Revenue from Contracts with Customers.” The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is not permitted. Accordingly, the standard is effective for us on January 1, 2017. The University is currently evaluating the impact that the standard will have on our financial condition, results of operations and disclosures. | |||||||||||||
The University has determined that no other recent accounting pronouncements apply to its operations or would otherwise have a material impact on its consolidated financial statements. |
Investments
Investments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||
Investments | 3. Investments | ||||||||||||||||
The following is a summary of amounts included in restricted investments of $67,840 as of December 3, 2014 and unrestricted investments as of December 31, 2014 and 2013. In 2014, the University recorded a non-cash transaction to reflect the restriction of $67,840 of investments. The University considered all investments as available for sale. | |||||||||||||||||
As of December 31, 2014 | |||||||||||||||||
Adjusted | Gross | Gross | Estimated | ||||||||||||||
Cost | Unrealized | Unrealized | Fair | ||||||||||||||
Gains | (Losses) | Value | |||||||||||||||
Municipal securities | $ | 83,364 | $ | 51 | $ | (177 | ) | $ | 83,238 | ||||||||
Municipal bond mutual fund | 85,386 | — | — | 85,386 | |||||||||||||
Total restricted and unrestricted investments | $ | 168,750 | $ | 51 | $ | (177 | ) | $ | 168,624 | ||||||||
As of December 31, 2013 | |||||||||||||||||
Adjusted | Gross | Gross | Estimated | ||||||||||||||
Cost | Unrealized | Unrealized | Fair | ||||||||||||||
Gains | (Losses) | Value | |||||||||||||||
Municipal securities | $ | 83,368 | $ | 35 | $ | (8 | ) | $ | 83,395 | ||||||||
Municipal bond mutual fund | 25,025 | — | — | 25,025 | |||||||||||||
Total unrestricted investments | $ | 108,393 | $ | 35 | $ | (8 | ) | $ | 108,420 | ||||||||
The cash flows of municipal securities are backed by the issuing municipality’s credit worthiness. All municipal securities are due in one year or less as of December 31, 2014. For the years ended December 31, 2014 and 2013, the net unrealized (losses) or gains on available-for-sale securities were ($93) and $16, net of taxes, respectively. | |||||||||||||||||
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||
Valuation and Qualifying Accounts | 4. Valuation and Qualifying Accounts | ||||||||||||||||
Balance at | Charged to | Deductions(1) | Balance at | ||||||||||||||
Beginning of | Expense | End of | |||||||||||||||
Year | Year | ||||||||||||||||
Allowance for doubtful accounts receivable: | |||||||||||||||||
Year ended December 31, 2014 | $ | 9,678 | 15,045 | (18,251 | ) | $ | 6,472 | ||||||||||
Year ended December 31, 2013 | $ | 8,657 | 19,897 | (18,876 | ) | $ | 9,678 | ||||||||||
Year ended December 31, 2012 | $ | 11,706 | 18,012 | (21,061 | ) | $ | 8,657 | ||||||||||
-1 | Deductions represent accounts written off, net of recoveries. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property and Equipment | 5. Property and Equipment | ||||||||
Property and equipment consist of the following: | |||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Land | $ | 76,537 | $ | 21,820 | |||||
Land improvements | 8,800 | 5,176 | |||||||
Buildings | 298,124 | 222,402 | |||||||
Building and leasehold improvements | 45,855 | 32,243 | |||||||
Equipment under capital leases | 5,310 | 5,310 | |||||||
Computer equipment | 75,990 | 64,773 | |||||||
Furniture, fixtures and equipment | 38,162 | 32,583 | |||||||
Internally developed software | 20,813 | 15,606 | |||||||
Other | 1,099 | 1,099 | |||||||
Construction in progress | 20,693 | 23,467 | |||||||
591,383 | 424,479 | ||||||||
Less accumulated depreciation and amortization | (113,213 | ) | (84,883 | ) | |||||
Property and equipment, net | $ | 478,170 | $ | 339,596 | |||||
Depreciation and amortization expense associated with property and equipment, including assets under capital lease, totaled $28,529, $24,546, and $21,264 for the years ended December 31, 2014, 2013, and 2012, respectively. |
Notes_Payable_and_Other_Noncur
Notes Payable and Other Noncurrent Liabilities | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Notes Payable and Other Noncurrent Liabilities | 6. Notes Payable and Other Noncurrent Liabilities | ||||||||
In December 2012, the University entered into a credit agreement with Bank of America, N.A. as Administrative Agent and other lenders (the “Agreement”). The Agreement provides the University a note payable and a revolving line of credit in the amount of $50,000 through December 2017 to be utilized for working capital, capital expenditures, share repurchases and other general corporate purposes. The Agreement contains standard covenants, that, among other things, restrict the University’s ability to incur additional debt or make certain investments, require the University to maintain compliance with certain applicable regulatory standards, and require the University to achieve certain financial ratios and maintain a certain financial condition. Indebtedness under the Agreement is secured by the University’s assets and is guaranteed by certain of the University’s subsidiaries. As of December 31, 2014, the University is in compliance with its debt covenants. Under the loan covenant computation as of December 31, 2014, $50,000 is available to be borrowed on the revolving line of credit although none has been drawn as of December 31, 2014. | |||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Notes Payable | |||||||||
Note payable, monthly payment of $556; interest at 30 day LIBOR plus 1.75% (1.92% at December 31, 2014) through December 31, 2019 | $ | 86,049 | $ | 92,573 | |||||
Various Gift Annuities; quarterly payments of $34 extending through 2019; interest at 10% | 444 | 527 | |||||||
86,493 | 93,100 | ||||||||
Less: Current portion | 6,616 | 6,607 | |||||||
$ | 79,877 | $ | 86,493 | ||||||
Payments due under the notes payable obligations are as follows as of December 31, 2014: | |||||||||
2015 | $ | 6,616 | |||||||
2016 | 6,625 | ||||||||
2017 | 6,636 | ||||||||
2018 | 6,691 | ||||||||
2019 | 59,925 | ||||||||
Thereafter | — | ||||||||
$ | 86,493 | ||||||||
Long-term deferred rent included in other noncurrent liabilities as of December 31, 2014 and 2013 was $4,513 and $6,811, respectively. |
Capital_Lease_Obligations
Capital Lease Obligations | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Leases [Abstract] | |||||||||
Capital Lease Obligations | 7. Capital Lease Obligations | ||||||||
Capital lease obligations consist of the following: | |||||||||
As of | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Capital Lease Obligations | |||||||||
Capital lease for equipment, monthly payments totaling $8; interest rate at 2.2%, through 2016 | $ | 497 | $ | 586 | |||||
Less: Current portion of capital lease obligations | 91 | 89 | |||||||
$ | 406 | $ | 497 | ||||||
Payments due under future minimum lease payments under the capital lease obligations are as follows as of December 31, 2014: | |||||||||
2015 | $ | 101 | |||||||
2016 | 410 | ||||||||
511 | |||||||||
Less: Portion representing interest | 14 | ||||||||
Present value of minimum lease payments | $ | 497 | |||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies | 8. Commitments and Contingencies | ||||
Leases | |||||
The University leases certain land, buildings and equipment under non-cancelable operating leases expiring at various dates through 2021. Future minimum lease payments under operating leases due each year are as follows at December 31, 2014: | |||||
2015 | $ | 7,100 | |||
2016 | 5,308 | ||||
2017 | 3,933 | ||||
2018 | 3,430 | ||||
2019 | 3,020 | ||||
Thereafter | 4,935 | ||||
Total minimum payments | $ | 27,726 | |||
Total rent expense and related taxes and operating expenses under operating leases for the years ended December 31, 2014, 2013 and 2012 was $8,409, $7,074, and $7,635, respectively. | |||||
Legal Matters | |||||
From time to time, the University is party to various lawsuits, claims, and other legal proceedings that arise in the ordinary course of business, some of which are covered by insurance. When the University is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the University records a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the University discloses the nature of the specific claim if the likelihood of a potential loss is reasonably possible and the amount involved is material. With respect to the majority of pending litigation matters, the University’s ultimate legal and financial responsibility, if any, cannot be estimated with certainty and, in most cases, any potential losses related to those matters are not considered probable. | |||||
Upon resolution of any pending legal matters, the University may incur charges in excess of presently established reserves. Management does not believe that any such charges would, individually or in the aggregate, have a material adverse effect on the University’s financial condition, results of operations or cash flows. | |||||
Tax Reserves, Non-Income Tax Related | |||||
From time to time the University has exposure to various non-income tax related matters that arise in the ordinary course of business. At December 31, 2014 and 2013, the University has reserved approximately $659 and $729 for tax matters where its ultimate exposure is considered probable and the potential loss can be reasonably estimated. |
Derivative_Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 9. Derivative Instruments |
On June 30, 2009 and February 27, 2013, respectively, the University entered into an interest rate swap and an interest rate corridor to manage its 30 Day LIBOR interest exposure related to its variable rate debt. Neither of these instruments contained financing elements. The contractual terms of the University’s derivative instruments have not been structured such that net payments made by one party in the earlier periods are to be subsequently returned by the counterparty in later periods of the derivative’s term. Neither of the University’s derivative instruments have been amended or modified since their inception. The fair value of the interest rate corridor instrument as of December 31, 2014 and 2013 was $1,332 and $1,917, respectively, which is included in other assets. The fair value of the interest rate swap was a liability of $111 as of December 31, 2013, which is included in accrued liabilities but was terminated upon its expiration date in April 2014. The fair values of each derivative instrument were determined using a hypothetical derivative transaction and Level 2 of the hierarchy of valuation inputs. These derivative instruments were originally designated as cash flow hedges of variable rate debt obligations. The adjustments of $486, $947, and $241 for the years ended December 31, 2014, 2013 and 2012, respectively, for the effective portion of the gain/loss on the derivatives is included as a component of other comprehensive income, net of taxes. | |
The interest rate corridor instrument reduces variable interest rate risk starting March 1, 2013 through December 20, 2019 with a notional amount of $86,667 as of December 31, 2014. The corridor instrument’s terms permit the University to hedge its interest rate risk at several thresholds; the University pays variable interest monthly based on the 30-day LIBOR rates until that index reaches 1.5%. If 30-day LIBOR is equal to 1.5% through 3.0%, the University pays 1.5%. If 30-day LIBOR exceeds 3.0%, the University pays actual 30-day LIBOR less 1.5%. Therefore, the University has hedged its exposure to future variable rate cash flows through December 20, 2019. | |
As of December 31, 2014 no derivative ineffectiveness was identified. Any ineffectiveness in the University’s derivative instruments designated as hedges would be reported in interest expense in the income statement. As of December 31, 2014, $13 of credit default risk interest income was recorded in interest expense in the income statement. At December 31, 2014, the University does not expect to reclassify any gains or losses on derivative instruments from accumulated other comprehensive income (loss) into earnings during the next 12 months. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Earnings Per Share | 10. Earnings Per Share | ||||||||||||
Basic earnings per common share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the assumed conversion of all potentially dilutive securities, consisting of stock options, for which the estimated fair value exceeds the exercise price, less shares which could have been purchased with the related proceeds, unless anti-dilutive. For employee equity awards, repurchased shares are also included for any unearned compensation adjusted for tax. | |||||||||||||
The table below reflects the calculation of the weighted average number of common shares outstanding, on an as if converted basis, used in computing basic and diluted earnings per common share. | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Denominator: | |||||||||||||
Basic common shares outstanding | 45,538 | 44,731 | 44,332 | ||||||||||
Effect of dilutive stock options and restricted stock | 1,468 | 1,400 | 919 | ||||||||||
Diluted common shares outstanding | 47,006 | 46,131 | 45,251 | ||||||||||
Diluted weighted average shares outstanding exclude the incremental effect of shares that would be issued upon the assumed exercise of stock options and vesting of restricted stock. For each of the years ended December 31, 2014, 2013 and 2012, approximately 174, 134 and 1,599, respectively, of the University’s stock options and restricted stock awards outstanding were excluded from the calculation of diluted earnings per share as their inclusion would have been anti-dilutive. These options and restricted stock awards could be dilutive in the future. |
Equity_Transactions
Equity Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Equity Transactions | 11. Equity Transactions |
Preferred Stock | |
As of December 31, 2014 and 2013, the University had 10,000 shares of authorized but unissued and undesignated preferred stock. The University’s charter provides that the board of directors has authority to issue preferred stock, with voting powers, designations, preferences, and special rights, qualifications, limitation, or restrictions as permitted by law as determined by the board of directors, without stockholder approval. The board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of the common stock. | |
Treasury Stock | |
The Board of Directors has authorized the University to repurchase up to $75,000 in aggregate of common stock, from time to time, depending on market conditions and other considerations. On September 23, 2014, our Board of Directors extended the expiration date on the repurchase authorization to September 30, 2015. Repurchases occur at the University’s discretion. Repurchases may be made in the open market or in privately negotiated transactions, pursuant to the applicable Securities and Exchange Commission rules. The amount and timing of future share repurchases, if any, will be made as market and business conditions warrant. Since its approval of the share repurchase plan, the University has purchased 2,787 shares of common stock at an aggregate cost of $49,135, which includes 38 shares of common stock at an aggregate cost of $1,676 during the year ended December 31, 2014, which are recorded at cost in the accompanying December 31, 2014 consolidated balance sheet and statement of stockholders’ equity. At December 31, 2014, there remained $25,865 available under its current share repurchase authorization. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | 12. Income Taxes | ||||||||||||
The University has deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets are subject to periodic recoverability assessments. Realization of the deferred tax assets, net of deferred tax liabilities is principally dependent upon achievement of projected future taxable income. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more-likely-than-not that the University will realize the benefits of these deductible differences. The University has no valuation allowance at December 31, 2014 and 2013. | |||||||||||||
The components of income tax expense (benefit) are as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current: | |||||||||||||
Federal | $ | 50,980 | $ | 40,949 | $ | 36,367 | |||||||
State | 6,216 | 5,540 | 7,462 | ||||||||||
57,196 | 46,489 | 43,829 | |||||||||||
Deferred: | |||||||||||||
Federal | 2,734 | 4,209 | (448 | ) | |||||||||
State | 418 | 898 | 32 | ||||||||||
3,152 | 5,107 | (416 | ) | ||||||||||
Tax expense recorded as an increase of paid-in capital | 7,884 | 4,588 | 564 | ||||||||||
$ | 68,232 | $ | 56,184 | $ | 43,977 | ||||||||
A reconciliation of income tax computed at the U.S. statutory rate to the effective income tax rate is as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Statutory U.S. federal income tax rate | 35 | % | 35 | % | 35 | % | |||||||
State income taxes, net of federal tax benefit | 4.3 | 5.5 | 5.9 | ||||||||||
State tax credits, net of federal effect | (1.5 | ) | (1.8 | ) | (1.6 | ) | |||||||
Nondeductible expenses | 0.1 | 0.3 | 0.2 | ||||||||||
Other | 0.1 | (0.2 | ) | (0.7 | ) | ||||||||
Effective income tax rate | 38 | % | 38.8 | % | 38.8 | % | |||||||
Significant components of the University’s deferred income tax assets and liabilities are as follows: | |||||||||||||
As of December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets: | |||||||||||||
Allowance for doubtful accounts | $ | 2,654 | $ | 3,870 | |||||||||
Share-based compensation | 8,487 | 7,987 | |||||||||||
Deferred rent | 1,290 | 2,290 | |||||||||||
Intangibles | 3,312 | 3,669 | |||||||||||
Other | 4,440 | 2,016 | |||||||||||
Deferred tax assets | 20,183 | 19,832 | |||||||||||
Deferred tax liability: | |||||||||||||
Property and equipment | (28,203 | ) | (24,952 | ) | |||||||||
Other | (1,805 | ) | (1,553 | ) | |||||||||
Deferred tax liability | (30,008 | ) | (26,505 | ) | |||||||||
Net deferred tax liability | $ | (9,825 | ) | $ | (6,673 | ) | |||||||
The deferred tax amounts above have been classified in the University’s balance sheets as follows: | |||||||||||||
As of December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred income taxes, current | $ | 6,149 | $ | 5,159 | |||||||||
Deferred income taxes, non-current | (15,974 | ) | (11,832 | ) | |||||||||
Net deferred tax liability | $ | (9,825 | ) | $ | (6,673 | ) | |||||||
The University recognizes the impact of a tax position in its financial statements if that position is more-likely-than-not to be sustained on audit, based on the technical merits of the position. The University discloses all unrecognized tax benefits, which includes the reserves recorded for uncertain tax positions on filed tax returns and the unrecognized portion of affirmative claims. The University recognizes interest and penalties related to uncertain tax positions in income tax expense. | |||||||||||||
There were no unrecognized tax benefits at December 31, 2014 or 2013. During the year ended December 31, 2012, the University recognized approximately $87 in interest and penalties. At December 31, 2014 and 2013, the University had no accrued interest or penalties. It is reasonably possible that the unrecognized tax benefits will change during the next 12 months, however management does not expect the potential amount to have a material effect on the results of operations or financial position. | |||||||||||||
The University is subject to taxation in the United States, in states with an income tax and in several local jurisdictions. During the second quarter ended June 30, 2014, the Internal Revenue Service (“IRS”) commenced an examination of the University’s 2011 income tax return. The IRS concluded its audit of the University’s 2011 income tax return with no changes to our reported tax or tax liability. As of December 31, 2014, the earliest tax year still subject to examination for federal and state purposes is 2011 and 2005, respectively. |
Regulatory
Regulatory | 12 Months Ended |
Dec. 31, 2014 | |
Text Block [Abstract] | |
Regulatory | 13. Regulatory |
The University is subject to extensive regulation by federal and state governmental agencies and accrediting bodies. In particular, the Higher Education Act of 1965, as amended (the “Higher Education Act”), and the regulations promulgated thereunder by the Department of Education, subject the University to significant regulatory scrutiny on the basis of numerous standards that schools must satisfy in order to participate in the various federal student financial assistance programs under Title IV of the Higher Education Act. | |
To participate in the Title IV programs, an institution must be authorized to offer its programs of instruction by the relevant agency of the state in which it is located, accredited by an accrediting agency recognized by the Department of Education and certified as eligible by the Department of Education. The Department of Education will certify an institution to participate in the Title IV programs only after the institution has demonstrated compliance with the Higher Education Act and the Department of Education’s extensive regulations regarding institutional eligibility. An institution must also demonstrate its compliance to the Department of Education on an ongoing basis. As of December 31, 2014, management believes the University is in compliance with the applicable regulations in all material respects. | |
Because the University operates in a highly regulated industry, it, like other industry participants, may be subject from time to time to investigations, claims of non-compliance, or lawsuits by governmental agencies or third parties, which allege statutory violations, regulatory infractions, or common law causes of action. While there can be no assurance that regulatory agencies or third parties will not undertake investigations or make claims against the University, or that such claims, if made, will not have a material adverse effect on the University’s business, results of operations or financial condition, management believes the University is in compliance with applicable regulations in all material respects. | |
In connection with its administration of the Title IV federal student financial aid programs, the Department of Education periodically conducts program reviews at selected schools that receive Title IV funds. In July 2010, the Department of Education initiated a program review of the University covering the 2008-2009 and 2009-2010 award years. On September 27, 2013, the University and the Department of Education entered into an agreement that fully resolved the findings in the preliminary program review report and closed the program review. In connection with this closure, the University paid a total of $7,387, the majority of which consisted of returns of Title IV funds to the lenders of our students, related to the inadequate procedures related to non-passing grade finding. Although when the University makes a return to Title IV the applicable student is obligated to repay the University for the amounts returned, the University agreed that it would not seek reimbursement from these students. | |
A second program review, focused on the University’s administration of the Title IV programs in which it participates, its administration of the Clery Act and related regulations, and its compliance with the requirements of the Drug-Free Schools and Communities Act for the 2012-2013 and 2013-2014 award years, was initiated in April 2014. The final program review determination letter received in June 2014 set forth three findings, each of which involved individual student-specific information gathering and/or reporting errors and all of which the University promptly corrected to the Department of Education’s satisfaction. Accordingly, the final program review determination letter concluded that the University had taken all corrective actions necessary to resolve the findings and that the program review had been closed with no further action required. | |
Since 2004 we had been certified on a provisional basis to participate in the Title IV programs. In July 2013 we submitted our complete application for full certification and on October 28, 2013, the University received a new program participation agreement with full certification from the Department of Education, which gives the University the ability to participate in the Title IV programs through September 30, 2017. | |
90/10 Disclosure | |
The University derives a substantial portion of its revenues from student financial aid received by its students under the Title IV programs administered by the Department of Education pursuant to the Higher Education Act. To continue to participate in the student financial aid programs the University must comply with the regulations promulgated under the Higher Education Act. The regulations restrict the proportion of cash receipts for tuition and fees from eligible programs to not more than 90 percent from Title IV programs (the “90/10 revenue test”). If an institution fails to satisfy the test for one year, its participation status becomes provisional for two consecutive fiscal years. If the test is not satisfied for two consecutive years, eligibility to participate in Title IV programs is lost for at least two fiscal years. Using the Department of Education’s cash-basis, regulatory formula under the 90/10 Rule as currently in effect, for its 2014, 2013, and 2012 fiscal years, the University derived 76.5%, 78.5%, and 80.3%, respectively, for its 90/10 revenue from Title IV program funds. |
ShareBased_Compensation_Plans
Share-Based Compensation Plans | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Share-Based Compensation Plans | 14. Share-Based Compensation Plans | ||||||||||||||||
Adoption of Equity Plans | |||||||||||||||||
On September 27, 2008 the University’s shareholders approved the adoption of the 2008 Equity Incentive Plan (“Incentive Plan”) and the 2008 Employee Stock Purchase (“ESPP”). A total of 4,200 shares of the University’s common stock was originally authorized for issuance under the Incentive Plan. On January 1 of each subsequent year in accordance with the terms of the Incentive Plan, the number of shares authorized for issuance under the Incentive Plan automatically increased by 2.5% of the number of shares of common stock issued and outstanding on December 31, raising the total number of shares of common stock authorized for issuance under the Incentive Plan to 12,167 shares effective January 1, 2015. Although the ESPP has not yet been implemented, a total of 1,050 shares of the University’s common stock have been authorized for sale under the ESPP. | |||||||||||||||||
Incentive Plan | |||||||||||||||||
Restricted Stock | |||||||||||||||||
During fiscal year 2014, 2013 and 2012, the University granted 308, 575 and 552 shares of common stock, respectively, with a service vesting condition to certain of its executives, officers, faculty and employees. The restricted shares have voting rights and vest evenly at 20% over each of the next five years. Upon vesting, shares will be held in lieu of taxes equivalent to the minimum statutory tax withholding required to be paid when the restricted stock vests. In 2014, 2013, and 2012 the University granted 9, 11, and 11 shares of common stock, respectively, to certain of the non-employee members of the University’s board of directors. The restricted shares have voting rights and vest within one year of the date of grant. In addition, in 2013 the University granted 8 shares of common stock to a consultant. The restricted shares have voting rights and vest evenly at a rate of 20% per year over each of the next five years. | |||||||||||||||||
A summary of the activity related to restricted stock granted under the University’s Incentive Plan is as follows: | |||||||||||||||||
Total | Weighted | ||||||||||||||||
Shares | Average | ||||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
per Share | |||||||||||||||||
Outstanding as of December 31, 2011 | 6 | $ | 13.88 | ||||||||||||||
Granted | 563 | $ | 17.04 | ||||||||||||||
Vested | (6 | ) | $ | 13.88 | |||||||||||||
Forfeited, canceled or expired | (10 | ) | $ | 17.03 | |||||||||||||
Outstanding as of December 31, 2012 | 553 | $ | 17.04 | ||||||||||||||
Granted | 594 | $ | 24.44 | ||||||||||||||
Vested | (119 | ) | $ | 17.13 | |||||||||||||
Forfeited, canceled or expired | (45 | ) | $ | 20.57 | |||||||||||||
Outstanding as of December 31, 2013 | 983 | $ | 21.34 | ||||||||||||||
Granted | 317 | $ | 46.02 | ||||||||||||||
Vested | (225 | ) | $ | 21.27 | |||||||||||||
Forfeited, canceled or expired | (42 | ) | $ | 27.36 | |||||||||||||
Outstanding as of December 31, 2014 | 1,033 | $ | 28.75 | ||||||||||||||
As of December 31, 2014, there was approximately $23,344 of total unrecognized share-based compensation cost, net of estimated forfeitures, related to unvested restricted stock awards. These costs are expected to be recognized over a weighted average period of 2.22 years. | |||||||||||||||||
Stock Options | |||||||||||||||||
No options were granted in 2014 and 2012. During 2013, the University granted time vested options to purchase shares of common stock with an exercise price equal to the fair market value on the date of grant to an employee. The time vested options vest ratably over a period of four years and expire ten years from the date of grant. Prior to 2012, the University granted time vested options to purchase shares of common stock with an exercise price equal to the fair market value on the date of grant to employees. These time vested options vest ratably over a period of five years and expire ten years from the date of grant. A summary of the activity related to stock options granted under the University’s Incentive Plan is as follows: | |||||||||||||||||
Summary of Stock Options Outstanding | |||||||||||||||||
Total | Weighted | Weighted | Aggregate | ||||||||||||||
Shares | Average | Average | Intrinsic | ||||||||||||||
Exercise | Remaining | Value ($)(1) | |||||||||||||||
Price | Contractual | ||||||||||||||||
per | Term (Years) | ||||||||||||||||
Share | |||||||||||||||||
Outstanding as of December 31, 2011 | 4,964 | $ | 14.47 | ||||||||||||||
Granted | — | $ | — | ||||||||||||||
Exercised | (611 | ) | $ | 13.16 | |||||||||||||
Forfeited, canceled or expired | (124 | ) | $ | 17.63 | |||||||||||||
Outstanding as of December 31, 2012 | 4,229 | $ | 14.57 | ||||||||||||||
Granted | 25 | $ | 24.97 | ||||||||||||||
Exercised | (1,160 | ) | $ | 14.03 | |||||||||||||
Forfeited, canceled or expired | (71 | ) | $ | 17.22 | |||||||||||||
Outstanding as of December 31, 2013 | 3,023 | $ | 14.8 | ||||||||||||||
Granted | — | $ | — | ||||||||||||||
Exercised | (539 | ) | $ | 14.51 | |||||||||||||
Forfeited, canceled or expired | (32 | ) | $ | 16.93 | |||||||||||||
Outstanding as of December 31, 2014 | 2,452 | $ | 14.83 | 4.86 | $ | 78,045 | |||||||||||
Exercisable as of December 31, 2014 | 1,897 | $ | 14.19 | 4.53 | $ | 61,608 | |||||||||||
Available for issuance as of December 31, 2014 | 2,143 | ||||||||||||||||
-1 | Aggregate intrinsic value represents the value of the University’s closing stock price on December 31, 2014 ($46.66) in excess of the exercise price multiplied by the number of options outstanding or exercisable. | ||||||||||||||||
As of December 31, 2014, there was approximately $2,069 of total unrecognized share-based compensation cost, net of estimated forfeitures, related to unvested stock options. These costs are expected to be recognized over a weighted average period of 0.96 years. | |||||||||||||||||
The following table summarizes information related to stock options exercised for years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Amounts related to options exercised: | |||||||||||||||||
Intrinsic value realized by optionee | $ | 27,499 | $ | 20,364 | $ | 4,683 | |||||||||||
Actual tax benefit realized by the University for tax deductions | $ | 11,000 | $ | 8,145 | $ | 1,873 | |||||||||||
Cash received from stock option exercises during fiscal year 2014, 2013 and 2012 totaled approximately $7,825, $16,278 and $8,049, respectively. | |||||||||||||||||
Share-based Compensation | |||||||||||||||||
Share-based Compensation Expense Assumptions – Restricted Stock Awards | |||||||||||||||||
The University measures and recognizes compensation expense for share-based payment awards made to employees, consultants and directors. The University calculates the fair value of share-based awards on the date of grant for employees and directors. The University calculates the fair value of share-based awards to consultants on the date of vesting. Stock-based compensation expense related to restricted stock grants is expensed over the vesting period using the straight-line method for University employees, the University’s board of directors and the consultant, net of estimated forfeitures. The restricted shares have voting rights. | |||||||||||||||||
Share-based Compensation Expense Assumptions – Stock Options | |||||||||||||||||
The University granted stock options in 2013. No stock options were granted in 2014 or 2012. | |||||||||||||||||
Fair Value. The University uses the Black-Scholes-Merton option pricing model to estimate the fair value of the University’s options as of the grant dates using the following weighted average assumptions: | |||||||||||||||||
Year Ended December 31, | 2013 | ||||||||||||||||
Weighted average fair value | $ | 8.2 | |||||||||||||||
Expected volatility | 39.86 | % | |||||||||||||||
Expected life (years) | 4.25 | ||||||||||||||||
Risk-free interest rate | 0.65 | % | |||||||||||||||
Dividend yield | 0 | % | |||||||||||||||
Expected Volatility. The University believes that the use of Grand Canyon Education, Inc.’s historical stock price provides an accurate estimate of expected volatility. Therefore, the expected volatility assumption for the year ended December 31, 2013 is based upon the University’s historical stock price. | |||||||||||||||||
Expected Life (years). In 2013, the University determined it now has enough historical option exercise information to be able to accurately estimate an expected term, and as such, its computation of expected term was calculated using its own historical data. Prior to 2013, the University used the simplified method to estimate the expected term of stock options under certain circumstances. The simplified method for estimating expected term is to use the mid-point between the vesting term and the contractual term of the share option. The University previously analyzed the circumstances in which the use of the simplified method was allowed. The University elected to use the simplified method for options granted prior to 2013 because the University did not have historical exercise data to estimate expected term due to the limited time period its shares had been publicly traded. | |||||||||||||||||
Risk-Free Interest Rate. The risk-free interest rate assumption is based upon the U.S. constant maturity treasury rates as the risk-free rate interpolated between the years commensurate with the expected life of the options. | |||||||||||||||||
Dividend Yield. The dividend yield assumption is zero since the University does not expect to declare or pay dividends in the foreseeable future. | |||||||||||||||||
Forfeitures. Forfeitures are estimated at the time of grant based on historical retention of employees. If necessary, management estimates are adjusted at the end of each reporting period if actual forfeitures differ from those estimates. | |||||||||||||||||
Expected Vesting Period. The University amortizes the share-based compensation expense, net of forfeitures, over the expected vesting period using the straight-line method. | |||||||||||||||||
The table below outlines share-based compensation expense for the fiscal years ended December 31, 2014, 2013 and 2012 related to restricted stock and stock options granted: | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Instructional costs and services | $ | 5,921 | $ | 5,246 | $ | 3,809 | |||||||||||
Admissions advisory and related | 166 | 134 | 224 | ||||||||||||||
Marketing and promotional | 220 | 229 | 169 | ||||||||||||||
General and administrative | 3,638 | 4,327 | 3,609 | ||||||||||||||
Share-based compensation expense included in operating expenses | 9,945 | 9,936 | 7,811 | ||||||||||||||
Tax effect of share-based compensation | (3,978 | ) | (3,974 | ) | (3,124 | ) | |||||||||||
Share-based compensation expense, net of tax | $ | 5,967 | $ | 5,962 | $ | 4,687 | |||||||||||
401(k) Plan | |||||||||||||||||
The University has established a 401(k) Defined Contribution Benefit Plan (the “Plan”). The Plan provides eligible employees, upon date of hire, with an opportunity to make tax-deferred contributions into a long-term investment and savings program. All employees over the age of 21 are eligible to participate in the plan. The Plan allows eligible employees to contribute to the Plan subject to Internal Revenue Code restrictions and the Plan allows the University to make discretionary matching contributions. The University plans to make a matching contribution to the Plan of approximately $1,600 for the year ended December 31, 2014. The University made discretionary matching contributions to the Plan of $1,298 and $1,080 for the years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 15. Related Party Transactions |
Related party transactions include transactions between the University and certain of its affiliates. The following transactions were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the parties. | |
As of and for the years ended December 31, 2014, 2013, and 2012, related party transactions consisted of the following: | |
Affiliates | |
Mind Streams, LLC (“Mind Streams”) — Mind Streams is owned and operated, in part, by the father of the University’s Executive Chairman. See further discussion in Note 2, Summary of Significant Accounting Policies — Related party expenses. | |
Grand Canyon University Foundation (“GCUF”) — GCUF was formed in 2010 to support public charities. The University’s President, CEO and Director serves as the president of GCUF. All of the board seats are taken by University executives and employees. The University is not the primary beneficiary of GCUF, and accordingly, the University does not consolidate GCUF’s statement of activities with its financial results. The University contributed $200 for the year ended December 31, 2012, of which no amounts were owed at December 31, 2014 and 2013, respectively. | |
LOPE Kingdom Fund (“LKF”) — LKF was formed in 2014 to provide seed funding for entrepreneurial ventures initiated by the University’s students. The University’s President, CEO and Director serves as the president of LKF. All of the board seats are taken by University executives. The University is not the primary beneficiary of LKF, and accordingly, the University does not consolidate LKF’s statement of activities with its financial results. The University contributed $500 for the year ended December 31, 2014, of which no amounts were owed at December 31, 2014. |
Quarterly_Results_of_Operation
Quarterly Results of Operations (Unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Quarterly Results of Operations (Unaudited) | 16. Quarterly Results of Operations (Unaudited) | ||||||||||||||||
The following table summarizes the unaudited quarterly results of operations for 2014 and 2013 and should be read in conjunction with other information included in the accompanying consolidated financial statements. | |||||||||||||||||
2014 | |||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||||
Net revenue | $ | 167,432 | $ | 158,594 | $ | 175,056 | $ | 189,973 | |||||||||
Costs and expenses: | |||||||||||||||||
Instructional costs and services | 70,678 | 67,847 | 71,714 | 78,552 | |||||||||||||
Admissions advisory and related | 26,261 | 26,208 | 27,324 | 28,774 | |||||||||||||
Advertising | 16,712 | 15,751 | 16,491 | 16,854 | |||||||||||||
Marketing and promotional | 1,791 | 1,907 | 1,931 | 1,810 | |||||||||||||
General and administrative | 8,554 | 8,994 | 11,640 | 10,447 | |||||||||||||
Total costs and expenses | 123,996 | 120,707 | 129,100 | 136,437 | |||||||||||||
Operating income | 43,436 | 37,887 | 45,956 | 53,536 | |||||||||||||
Interest expense | (523 | ) | (356 | ) | (576 | ) | (346 | ) | |||||||||
Interest income and other | 137 | 197 | 43 | 307 | |||||||||||||
Income before income taxes | 43,050 | 37,728 | 45,423 | 53,497 | |||||||||||||
Income tax expense | 16,762 | 14,659 | 16,407 | 20,404 | |||||||||||||
Net income | $ | 26,288 | $ | 23,069 | $ | 29,016 | $ | 33,093 | |||||||||
Earnings per share: | |||||||||||||||||
Basic income per share(1) | $ | 0.58 | $ | 0.51 | $ | 0.64 | $ | 0.72 | |||||||||
Diluted income per share(1) | $ | 0.56 | $ | 0.49 | $ | 0.62 | $ | 0.7 | |||||||||
Basic weighted average shares outstanding | 45,205 | 45,598 | 45,651 | 45,652 | |||||||||||||
Diluted weighted average shares outstanding | 46,841 | 46,990 | 47,051 | 47,097 | |||||||||||||
-1 | The sum of quarterly income per share may not equal annual income per share due to rounding. | ||||||||||||||||
2013 | |||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||||
Net revenue | $ | 142,030 | $ | 141,463 | $ | 152,399 | $ | 162,443 | |||||||||
Costs and expenses: | |||||||||||||||||
Instructional costs and services | 59,997 | 61,747 | 64,704 | 67,971 | |||||||||||||
Admissions advisory and related | 22,993 | 23,346 | 24,578 | 26,160 | |||||||||||||
Advertising | 15,929 | 14,520 | 15,498 | 15,038 | |||||||||||||
Marketing and promotional | 1,435 | 1,383 | 1,299 | 1,527 | |||||||||||||
General and administrative | 8,051 | 8,978 | 9,035 | 10,870 | |||||||||||||
Total costs and expenses | 108,405 | 109,974 | 115,114 | 121,566 | |||||||||||||
Operating income | 33,625 | 31,489 | 37,285 | 40,877 | |||||||||||||
Interest expense | (668 | ) | (439 | ) | (528 | ) | (609 | ) | |||||||||
Interest income and other | 2,195 | 62 | 1,502 | 104 | |||||||||||||
Income before income taxes | 35,152 | 31,112 | 38,259 | 40,372 | |||||||||||||
Income tax expense | 14,207 | 12,048 | 15,714 | 14,215 | |||||||||||||
Net income | $ | 20,945 | $ | 19,064 | $ | 22,545 | $ | 26,157 | |||||||||
Earnings per share: | |||||||||||||||||
Basic income per share(1) | $ | 0.47 | $ | 0.43 | $ | 0.5 | $ | 0.58 | |||||||||
Diluted income per share(1) | $ | 0.46 | $ | 0.42 | $ | 0.49 | $ | 0.56 | |||||||||
Basic weighted average shares outstanding | 44,242 | 44,681 | 44,963 | 45,026 | |||||||||||||
Diluted weighted average shares outstanding | 45,449 | 45,929 | 46,424 | 46,712 | |||||||||||||
-1 | The sum of quarterly income per share may not equal annual income per share due to rounding. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Principles of Consolidation | Principles of Consolidation | ||||||||||||
The consolidated financial statements include the accounts of Grand Canyon Education, Inc. and its wholly owned subsidiaries. Intercompany transactions have been eliminated in consolidation. | |||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | |||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||
The University invests a portion of its cash in excess of current operating requirements in short term certificates of deposit and money market instruments. The University considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. | |||||||||||||
Restricted Cash and Cash Equivalents | Restricted Cash, Cash Equivalents and Investments | ||||||||||||
A significant portion of the University’s revenue is received from students who participate in government financial aid and assistance programs. Restricted cash, cash equivalents and investments primarily represent amounts received from the federal and state governments under various student aid grant and loan programs, such as Title IV. The University receives these funds subsequent to the completion of the authorization and disbursement process and holds them for the benefit of the student. The U.S. Department of Education (“Department of Education”) requires Title IV funds collected in advance of student billings to be restricted until the course begins. The University records all of these amounts as a current asset in restricted cash, cash equivalents and investments. The majority of these funds remain as restricted for an average of 60 to 90 days from the date of receipt. | |||||||||||||
Investments | Investments | ||||||||||||
The University considers its investments in municipal bond, mutual funds and municipal securities as available-for-sale securities. Available-for-sale securities are carried at fair value, determined using Level 2 of the hierarchy of valuation inputs, with the use of inputs other than quoted prices that are observable for the assets, with unrealized gains and losses, net of tax, reported as a separate component of other comprehensive income. Unrealized losses considered to be other-than-temporary are recognized currently in earnings. Amortization of premiums, accretion of discounts, interest and dividend income and realized gains and losses are included in interest and other income. | |||||||||||||
Note Receivable | Note Receivable | ||||||||||||
The University purchased a note receivable from a financial institution at fair market value in the fourth quarter of 2012 for $27,000. The note bore interest at 11%, which represented the 6% rate of the loan plus the 5% default rate. The principal and most of the interest due on the note was paid in March 2013, resulting in the full return on investment of the note receivable and an additional gain in interest income and other income of $2,187 on the loan. However, the borrower has disputed certain amounts remaining due under the note agreement, including default interest in the amount of $432, a late payment penalty in the amount of $1,392, and a statutory trustee’s fee in the amount of $139. The funds disputed by the borrower, plus interest thereon, were deposited into an escrow account with the clerk of the Maricopa County Superior Court pending resolution of the disputed issues. In the third quarter of 2013, the court ruled in favor of the University with respect to the late penalty and default interest accrued thereon. Accordingly, the University recorded interest and other income of $1,459 for the year ended December 31, 2013. The court ordered the late penalty funds and interest thereon to be released to the University on October 28, 2013 unless prior to said date, borrower filed with the court a formal notice of appeal and simultaneously deposited an additional $344 into escrow with the clerk of the court representing continued interest accruing on the late penalty pending an appeal. On October 28, 2013 borrower deposited with the clerk of the court the required cash bond in the amount of $344 and filed its formal notice of appeal. The briefing phase of the appeal has been completed and the matter will be scheduled for oral argument at a date and time to be determined by the appellate court. On January 29, 2015, the court ruled in favor of the University with respect to the remaining default interest and interest thereon. | |||||||||||||
Property and Equipment | Property and Equipment | ||||||||||||
Property and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method. Normal repairs and maintenance are expensed as incurred. Expenditures that materially extend the useful life of an asset are capitalized. Construction in progress represents items not yet placed in service and are not depreciated. Internally developed software represents qualifying salary and consulting costs for time spent on developing internal use software and is included in construction in progress until its completion. The University capitalizes interest using its interest rates on the specific borrowings used to finance the improvements, which approximated 1.9% in 2014, 1.9% in 2013, and 2.2% in 2012. Interest cost capitalized and incurred in the years ended December 31, 2014, 2013, and 2012 are as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Interest incurred | $ | 2,180 | $ | 2,626 | $ | 1,064 | |||||||
Interest capitalized | 379 | 382 | 365 | ||||||||||
Interest expense | $ | 1,801 | $ | 2,244 | $ | 699 | |||||||
Depreciation is provided using the straight-line method over the estimated useful lives of the assets. Furniture and fixtures, computer equipment, and vehicles generally have estimated useful lives of ten, four, and five years, respectively. Leasehold improvements are depreciated over the shorter of their lease term or their useful life. Land improvements and buildings are depreciated over lives ranging from 10 to 40 years. | |||||||||||||
Leases | |||||||||||||
Leases | |||||||||||||
The University enters into various lease agreements in conducting its business. At the inception of each lease, the University evaluates the lease agreement to determine whether the lease is an operating or capital lease. In addition, many of the lease agreements contain renewal options and tenant improvement allowances. When such items are included in a lease agreement, the University records a deferred liability on the balance sheet and records the rent expense evenly over the term of the lease. Leasehold improvements are included as investing activities and are included as additions to property, plant and equipment. For leases with renewal options, the University records rent expense and amortizes the leasehold improvement on a straight-line basis over the initial non-cancelable lease term unless it intends to exercise the renewal option. Once it extends the renewal option, the University amortizes any tenant improvement allowances over the extended lease period as well as the leasehold improvement asset (unless the extended lease term is longer than the economic life of the asset). The University expenses any additional payments under its operating leases for taxes, insurance or other operating expenses as incurred. | |||||||||||||
Other Assets | Other Assets | ||||||||||||
During 2010, the University entered into an agreement with an affiliated entity to develop a new learning management system for use by the University. Through this agreement, the University prepaid perpetual license fees, acquired source code rights for the software developed, and prepaid maintenance and service fees for the first seven years of use for an aggregate amount of $4,900, which was paid in full as of December 31, 2011. The University commenced utilization of this software in October 2011. Included in current other assets is the amount that will be amortized in the next twelve month cycle for maintenance and service fees and included in property and equipment is the amount that will be amortized over fifteen years for the perpetual licenses. | |||||||||||||
Long-Lived Assets | Long-Lived Assets | ||||||||||||
The University evaluates the recoverability of its long-lived assets for impairment, other than goodwill, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. | |||||||||||||
Prepaid Royalties | Prepaid Royalties | ||||||||||||
In connection with the February 2004 acquisition of the assets of Grand Canyon University from a non-profit foundation, the University entered into a royalty fee arrangement with the former owner in which the University agreed to pay a stated percentage of cash revenue generated by its online programs. The University settled all future royalty obligations with the former owner in April 2008 when it finalized an agreement to pay $22,500 to the former owner. Of this payment $5,920 was considered as settlement of the future royalty payment obligation and is included in the accompanying balance sheet as a component of “Prepaid Royalty” and is being amortized over a period of 20 years. | |||||||||||||
In addition, in June 2004, the University entered into a license agreement relating to the University’s use of the Ken Blanchard name for its College of Business. Under the terms of that agreement the University agreed to pay Blanchard a royalty generated on net tuition from certain programs in the University’s College of Business and to issue Blanchard shares of common stock with the actual number of shares issued to be contingent upon the University’s achievement of stated enrollment levels in its College of Business during the term of the agreement. The fair value of the shares issued to Blanchard as part of the license agreement of $3,394 was determined at the date it became probable that shares would then be earned and then adjusted until the date the shares were earned. During 2014, the University reached an agreement to cease the use of the Ken Blanchard name for its College of Business when it renamed the school the Colangelo School of Business; accordingly the remaining balance of the prepaid royalty was expensed as an impaired asset during the year ended December 31, 2014. | |||||||||||||
Goodwill | Goodwill | ||||||||||||
Goodwill represents the excess of the cost over the fair market value of net assets acquired, including identified intangible assets. Goodwill is tested annually or more frequently if circumstances indicate potential impairment. The Financial Accounting Standards Board (“FASB”) has issued guidance that permits an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. The University performed its annual goodwill impairment test, by performing a qualitative assessment. Following this assessment, the University determined that it is more likely than not that its fair value exceeds its carrying amount. | |||||||||||||
Share-Based Compensation | Share-Based Compensation | ||||||||||||
The University measures and recognizes compensation expense for share-based payment awards made to employees, consultants and directors, including employee stock options and restricted stock awards. The University calculates the fair value of share-based awards on the date of grant. The University calculates the fair value of share-based awards to consultants on the date of vesting. The University amortizes the share-based compensation expense over the period that the awards are expected to vest, net of estimated forfeiture rates. If the actual forfeitures differ from management estimates, adjustments to compensation expense are recorded. The University reports cash flows resulting from tax deductions in excess of the compensation cost realized for those options (excess tax benefits) as financing cash flows. The University reports cash flows resulting from tax deductions that are less than the compensation cost realized for those option (tax shortfalls) as a noncash transaction in the consolidated statement of cash flows. | |||||||||||||
For stock options, the University uses the Black-Scholes-Merton option pricing model to estimate fair value. The option pricing model requires the University to estimate certain key assumptions such as expected life, volatility, risk free interest rates, and dividend yield to determine the fair value of share-based awards, based on historical information and management judgment. The assumptions used in calculating the fair value of stock-based awards represent the University’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. The fair value of the University’s restricted stock awards is based on the market price of its common stock on the date of grant. | |||||||||||||
Derivatives and Hedging | Derivatives and Hedging | ||||||||||||
Derivative financial instruments are recorded on the balance sheet as assets or liabilities and re-measured at fair value at each reporting date. For derivatives designated as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or period during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. | |||||||||||||
Derivative financial instruments enable the University to manage its exposure to interest rate risk. The University does not engage in any derivative instrument trading activity. Credit risk associated with the University’s derivatives is limited to the risk that a derivative counterparty will not perform in accordance with the terms of the contract. Exposure to counterparty credit risk is considered low because these agreements have been entered into with institutions with Aa or higher credit ratings, and they are expected to perform fully under the terms of the agreements. | |||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||||||||||
The carrying value of cash and cash equivalents, accounts receivable, note receivable, accounts payable, accrued compensation and benefits and accrued liabilities approximate their fair value based on the liquidity or the short-term maturities of these instruments. The carrying value of notes payable approximate fair value based on its variable rate index. The carrying value of other notes payable and capital lease obligations approximate fair value based upon market interest rates available to the University for debt of similar risk and maturities. Derivative financial instruments are carried at fair value, determined using Level 2 of the hierarchy of valuation inputs as defined in the FASB Accounting Standards Codification (“Codification”), with the use of inputs other than quoted prices that are observable for the asset or liability. See Note 10, Derivative Instruments. | |||||||||||||
The fair value of investments, primarily municipal securities, including municipal bond portfolios, were determined using Level 2 of the hierarchy of valuation inputs, with the use of inputs other than quoted prices that are observable for the assets. The unit of account used for valuation is the individual underlying security. The municipal securities are comprised of city and county bonds related to schools, water and sewer, utilities, transportation, healthcare and housing. Because these securities are held by the University as investments, assessment of non-performance risk is not applicable as such considerations are only applicable in evaluating the fair value measurements for liabilities. | |||||||||||||
The fair value of the prepaid royalty asset relating to the settlement of future royalty payment obligations to the former owner was determined using an income approach, based on management’s forecasts of revenue to be generated through its online education program using Level 3 of the hierarchy of valuation inputs. The rate utilized to discount net cash flows to their present values was 35%. This discount rate was determined after consideration of the University’s weighted average cost of capital giving effect to estimates of the University’s risk-free rate, beta coefficient, equity risk premium, small size risk premium, and company-specific risk premium. | |||||||||||||
Income Taxes | Income Taxes | ||||||||||||
The University accounts for income taxes payable or refundable for the current year and deferred tax assets and liabilities for future tax consequences of events that have been recognized in the University’s consolidated financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the temporary differences are expected to be realized. | |||||||||||||
The University applies a more-likely-than-not threshold for financial statement recognition and measurement of an uncertain tax position taken or expected to be taken in a tax return. The University recognizes interest and penalties related to uncertain tax positions in income tax expense. The University did not record any reserves for uncertain tax positions including interest and penalties as of December 31, 2014 and 2013. | |||||||||||||
The University has deferred tax assets, which are subject to periodic recoverability assessments. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. Realization of the deferred tax assets is principally dependent upon achievement of projected future taxable income. | |||||||||||||
Commitments and Contingencies | Commitments and Contingencies | ||||||||||||
The University accrues for a contingent obligation when it is probable that a liability has been incurred and the amount is reasonably estimable. When the University becomes aware of a claim or potential claim, the likelihood of any loss exposure is assessed. If it is probable that a loss will result and the amount of the loss is estimable, the University records a liability for the estimated loss. If the loss is not probable or the amount of the potential loss is not estimable, the University will disclose the claim if the likelihood of a potential loss is reasonably possible and the amount of the potential loss could be material. Estimates that are particularly sensitive to future changes include tax, legal, and other regulatory matters, which are subject to change as events evolve, and as additional information becomes available during the administrative and litigation process. The University expenses legal fees as incurred. | |||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||
Net revenues consist primarily of tuition and fees derived from courses taught by the University online, at its approximately 205 acre campus in Phoenix, Arizona, and at facilities it leases or those of employers, as well as from related educational resources that the University provides to its students, such as access to online materials. Tuition revenue and most fees from related educational resources are recognized pro-rata over the applicable period of instruction, net of scholarships provided by the University. For the years ended December 31, 2014, 2013 and 2012, the University’s revenue was reduced by approximately $139,962, $111,789 and $94,283, respectively, as a result of scholarships that the University offered to students. The University maintains an institutional tuition refund policy, which provides for all or a portion of tuition to be refunded if a student withdraws during stated refund periods. Certain states in which students reside impose separate, mandatory refund policies, which override the University’s policy to the extent in conflict. If a student withdraws at a time when only a portion, or none of the tuition is refundable, then in accordance with its revenue recognition policy, the University continues to recognize the tuition that was not refunded pro-rata over the applicable period of instruction. However, for students that have taken out financial aid to pay their tuition and for which a Return to Title IV is required as a result of his or her withdrawal, the University recognizes revenue after a student withdraws only at the time of cash collection. Sales tax collected from students is excluded from net revenues. Collected but unremitted sales tax is included as an accrued liability in our consolidated balance sheet. The University also charges online students an upfront learning management fee, which is deferred and recognized over the average expected term of a student. Costs that are direct and incremental to new online students are also deferred and recognized ratably over the average expected term of a student. Deferred revenue and student deposits in any period represent the excess of tuition, fees, and other student payments received as compared to amounts recognized as revenue on the income statement and are reflected as current liabilities in the accompanying consolidated balance sheets. The University’s educational programs have starting and ending dates that differ from its fiscal quarters. Therefore, at the end of each fiscal quarter, a portion of revenue from these programs is not yet earned. Other revenues may be recognized as sales occur or services are performed. | |||||||||||||
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts | ||||||||||||
The University records an allowance for doubtful accounts for estimated losses resulting from the inability, failure or refusal of its students to make required payments, which includes the recovery of financial aid funds advanced to a student for amounts in excess of the student’s cost of tuition and related fees. The University determines the adequacy of its allowance for doubtful accounts based on an analysis of its historical bad debt experience, current economic trends, and the aging of the accounts receivable and student status. The University applies reserves to its receivables based upon an estimate of the risk presented by the age of the receivables and student status. The University writes off accounts receivable balances of active students at the earlier of the time the balances were deemed uncollectible, or one year after the revenue is generated. The University accelerates the write off of inactive student accounts such that the accounts are written off by day 150. The University continues to reflect accounts receivable with an offsetting allowance as long as management believes there is a reasonable possibility of collection. Bad debt expense is recorded as an instructional costs and services expense in the consolidated income statement. | |||||||||||||
Instructional Costs and Services | Instructional Costs and Services | ||||||||||||
Instructional costs and services consist primarily of costs related to the administration and delivery of the University’s educational programs. This expense category includes salaries, benefits and share-based compensation for full-time and adjunct faculty and administrative personnel, information technology costs, bad debt expense, curriculum and new program development costs (which are expensed as incurred) and costs associated with other support groups that provide services directly to the students. This category also includes an allocation of depreciation, amortization, rent, and occupancy costs attributable to the provision of educational services, primarily at the University’s Phoenix, Arizona campus. | |||||||||||||
Admissions Advisory and Related | Admissions Advisory and Related | ||||||||||||
Admissions advisory and related expenses include salaries and benefits for admissions advisory personnel, and revenue share expense as well as an allocation of depreciation, amortization, rent and occupancy costs attributable to the admissions advisory personnel. | |||||||||||||
Advertising | Advertising | ||||||||||||
Advertising expenses include brand advertising, marketing leads and other branding activities. Advertising costs are expensed as incurred. | |||||||||||||
Marketing and Promotional | Marketing and Promotional | ||||||||||||
Marketing and promotional expenses include salaries, benefits and share-based compensation for marketing personnel, and other promotional expenses. This category also includes an allocation of depreciation, amortization, rent, and occupancy costs attributable to marketing and promotional activities. Marketing and promotional costs are expensed as incurred. | |||||||||||||
General and Administrative | General and Administrative | ||||||||||||
General and administrative expenses include salaries, and benefits and share-based compensation of employees engaged in corporate management, finance, human resources, compliance, and other corporate functions. General and administrative expenses also include an allocation of depreciation, amortization, rent, and occupancy costs attributable to the departments providing general and administrative functions. | |||||||||||||
Related party expenses | Related party expenses | ||||||||||||
The University is a party to a revenue sharing arrangement (the Collaboration Agreement) with Mind Streams L.L.C. (Mind Streams), a related party, under which the University, in accordance with applicable Department of Education guidance, pays a percentage of net revenue that it receives from applicants recruited by Mind Streams that matriculate at the University. The University terminated the agreement in 2014 and the University is not accepting any new applicants recruited by Mind Streams. The expenses incurred in conjunction with the Collaboration Agreement are included in admissions advisory and related expenses on our Consolidated Income Statement. | |||||||||||||
Insurance/Self-Insurance | Insurance/Self-Insurance | ||||||||||||
The University uses a combination of insurance and self-insurance for a number of risks, including claims related to employee health care, workers’ compensation, general liability, and business interruption. Liabilities associated with these risks are estimated based on, among other things, historical claims experience, severity factors, and other actuarial assumptions. The University’s loss exposure related to self-insurance is limited by stop loss coverage on a per occurrence and aggregate basis. Expected loss accruals are based on estimates, and while the University believes the amounts accrued are adequate, the ultimate loss may differ from the amounts provided. | |||||||||||||
Concentration of Credit Risk | Concentration of Credit Risk | ||||||||||||
The University believes the credit risk related to cash equivalents and investments is limited due to its adherence to an investment policy that required investments to have a minimum AAA to A rating, depending on the type of security, by one major rating agency at the time of purchase. All of the University’s cash equivalents and investments as of December 31, 2014 and 2013 consist of investments rated A or higher by at least one rating agency. Additionally, the University utilizes more than one financial institution to conduct initial and ongoing credit analysis on its investment portfolio to monitor and lower the potential impact of market risk associated with its cash equivalents and investment portfolio. | |||||||||||||
A majority of the University’s revenues are derived from tuition financed under the Title IV programs of the Higher Education Act of 1965, as amended (the “Higher Education Act”). The financial aid and assistance programs are subject to political and budgetary considerations and are subject to extensive and complex regulations. The University’s administration of these programs is periodically reviewed by various regulatory agencies. Any regulatory violation could be the basis for the initiation of potentially adverse actions including a suspension, limitation, or termination proceeding, which could have a material adverse effect on the University. | |||||||||||||
Students obtain access to federal student financial aid through a Department of Education prescribed application and eligibility certification process. Student financial aid funds are generally made available to students at prescribed intervals throughout their predetermined expected length of study. Students typically apply the funds received from the federal financial aid programs first to pay their tuition and fees. Any remaining funds are distributed directly to the student. | |||||||||||||
Segment Information | Segment Information | ||||||||||||
The University operates as a single educational delivery operation using a core infrastructure that serves the curriculum and educational delivery needs of both its ground and online students regardless of geography. The University’s Chief Executive Officer manages the University’s operations as a whole and no expense or operating income information is generated or evaluated on any component level. | |||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued “Revenue from Contracts with Customers.” The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is not permitted. Accordingly, the standard is effective for us on January 1, 2017. The University is currently evaluating the impact that the standard will have on our financial condition, results of operations and disclosures. | |||||||||||||
The University has determined that no other recent accounting pronouncements apply to its operations or would otherwise have a material impact on its consolidated financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Interest Cost Capitalized and Incurred | approximated 1.9% in 2014, 1.9% in 2013, and 2.2% in 2012. Interest cost capitalized and incurred in the years ended December 31, 2014, 2013, and 2012 are as follows: | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Interest incurred | $ | 2,180 | $ | 2,626 | $ | 1,064 | |||||||
Interest capitalized | 379 | 382 | 365 | ||||||||||
Interest expense | $ | 1,801 | $ | 2,244 | $ | 699 | |||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||
Summary of Amounts Included in Restricted Investments and Unrestricted Investments | The following is a summary of amounts included in restricted investments of $67,840 as of December 3, 2014 and unrestricted investments as of December 31, 2014 and 2013. In 2014, the University recorded a non-cash transaction to reflect the restriction of $67,840 of investments. The University considered all investments as available for sale. | ||||||||||||||||
As of December 31, 2014 | |||||||||||||||||
Adjusted | Gross | Gross | Estimated | ||||||||||||||
Cost | Unrealized | Unrealized | Fair | ||||||||||||||
Gains | (Losses) | Value | |||||||||||||||
Municipal securities | $ | 83,364 | $ | 51 | $ | (177 | ) | $ | 83,238 | ||||||||
Municipal bond mutual fund | 85,386 | — | — | 85,386 | |||||||||||||
Total restricted and unrestricted investments | $ | 168,750 | $ | 51 | $ | (177 | ) | $ | 168,624 | ||||||||
As of December 31, 2013 | |||||||||||||||||
Adjusted | Gross | Gross | Estimated | ||||||||||||||
Cost | Unrealized | Unrealized | Fair | ||||||||||||||
Gains | (Losses) | Value | |||||||||||||||
Municipal securities | $ | 83,368 | $ | 35 | $ | (8 | ) | $ | 83,395 | ||||||||
Municipal bond mutual fund | 25,025 | — | — | 25,025 | |||||||||||||
Total unrestricted investments | $ | 108,393 | $ | 35 | $ | (8 | ) | $ | 108,420 | ||||||||
Valuation_and_Qualifying_Accou1
Valuation and Qualifying Accounts (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||
Schedule of Valuation and Qualifying Accounts | |||||||||||||||||
Balance at | Charged to | Deductions(1) | Balance at | ||||||||||||||
Beginning of | Expense | End of | |||||||||||||||
Year | Year | ||||||||||||||||
Allowance for doubtful accounts receivable: | |||||||||||||||||
Year ended December 31, 2014 | $ | 9,678 | 15,045 | (18,251 | ) | $ | 6,472 | ||||||||||
Year ended December 31, 2013 | $ | 8,657 | 19,897 | (18,876 | ) | $ | 9,678 | ||||||||||
Year ended December 31, 2012 | $ | 11,706 | 18,012 | (21,061 | ) | $ | 8,657 | ||||||||||
-1 | Deductions represent accounts written off, net of recoveries. |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Summary of Property and Equipment | Property and equipment consist of the following: | ||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Land | $ | 76,537 | $ | 21,820 | |||||
Land improvements | 8,800 | 5,176 | |||||||
Buildings | 298,124 | 222,402 | |||||||
Building and leasehold improvements | 45,855 | 32,243 | |||||||
Equipment under capital leases | 5,310 | 5,310 | |||||||
Computer equipment | 75,990 | 64,773 | |||||||
Furniture, fixtures and equipment | 38,162 | 32,583 | |||||||
Internally developed software | 20,813 | 15,606 | |||||||
Other | 1,099 | 1,099 | |||||||
Construction in progress | 20,693 | 23,467 | |||||||
591,383 | 424,479 | ||||||||
Less accumulated depreciation and amortization | (113,213 | ) | (84,883 | ) | |||||
Property and equipment, net | $ | 478,170 | $ | 339,596 | |||||
Notes_Payable_and_Other_Noncur1
Notes Payable and Other Noncurrent Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Notes Payable | As of December 31, 2014, the University is in compliance with its debt covenants. Under the loan covenant computation as of December 31, 2014, $50,000 is available to be borrowed on the revolving line of credit although none has been drawn as of December 31, 2014. | ||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Notes Payable | |||||||||
Note payable, monthly payment of $556; interest at 30 day LIBOR plus 1.75% (1.92% at December 31, 2014) through December 31, 2019 | $ | 86,049 | $ | 92,573 | |||||
Various Gift Annuities; quarterly payments of $34 extending through 2019; interest at 10% | 444 | 527 | |||||||
86,493 | 93,100 | ||||||||
Less: Current portion | 6,616 | 6,607 | |||||||
$ | 79,877 | $ | 86,493 | ||||||
Payments Due under Notes Payable | Payments due under the notes payable obligations are as follows as of December 31, 2014: | ||||||||
2015 | $ | 6,616 | |||||||
2016 | 6,625 | ||||||||
2017 | 6,636 | ||||||||
2018 | 6,691 | ||||||||
2019 | 59,925 | ||||||||
Thereafter | — | ||||||||
$ | 86,493 | ||||||||
Capital_Lease_Obligations_Tabl
Capital Lease Obligations (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Leases [Abstract] | |||||||||
Components of Capital Lease Obligations | Capital lease obligations consist of the following: | ||||||||
As of | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Capital Lease Obligations | |||||||||
Capital lease for equipment, monthly payments totaling $8; interest rate at 2.2%, through 2016 | $ | 497 | $ | 586 | |||||
Less: Current portion of capital lease obligations | 91 | 89 | |||||||
$ | 406 | $ | 497 | ||||||
Payments Due under Future Minimum Lease Payments under Capital Lease Obligations | Payments due under future minimum lease payments under the capital lease obligations are as follows as of December 31, 2014: | ||||||||
2015 | $ | 101 | |||||||
2016 | 410 | ||||||||
511 | |||||||||
Less: Portion representing interest | 14 | ||||||||
Present value of minimum lease payments | $ | 497 | |||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Future Minimum Lease Payments under Operating Leases | Future minimum lease payments under operating leases due each year are as follows at December 31, 2014: | ||||
2015 | $ | 7,100 | |||
2016 | 5,308 | ||||
2017 | 3,933 | ||||
2018 | 3,430 | ||||
2019 | 3,020 | ||||
Thereafter | 4,935 | ||||
Total minimum payments | $ | 27,726 | |||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Summary of Weighted Average Number of Common Shares Outstanding | The table below reflects the calculation of the weighted average number of common shares outstanding, on an as if converted basis, used in computing basic and diluted earnings per common share. | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Denominator: | |||||||||||||
Basic common shares outstanding | 45,538 | 44,731 | 44,332 | ||||||||||
Effect of dilutive stock options and restricted stock | 1,468 | 1,400 | 919 | ||||||||||
Diluted common shares outstanding | 47,006 | 46,131 | 45,251 | ||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Components of Income Tax Expense (Benefit) | The components of income tax expense (benefit) are as follows: | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current: | |||||||||||||
Federal | $ | 50,980 | $ | 40,949 | $ | 36,367 | |||||||
State | 6,216 | 5,540 | 7,462 | ||||||||||
57,196 | 46,489 | 43,829 | |||||||||||
Deferred: | |||||||||||||
Federal | 2,734 | 4,209 | (448 | ) | |||||||||
State | 418 | 898 | 32 | ||||||||||
3,152 | 5,107 | (416 | ) | ||||||||||
Tax expense recorded as an increase of paid-in capital | 7,884 | 4,588 | 564 | ||||||||||
$ | 68,232 | $ | 56,184 | $ | 43,977 | ||||||||
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of income tax computed at the U.S. statutory rate to the effective income tax rate is as follows: | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Statutory U.S. federal income tax rate | 35 | % | 35 | % | 35 | % | |||||||
State income taxes, net of federal tax benefit | 4.3 | 5.5 | 5.9 | ||||||||||
State tax credits, net of federal effect | (1.5 | ) | (1.8 | ) | (1.6 | ) | |||||||
Nondeductible expenses | 0.1 | 0.3 | 0.2 | ||||||||||
Other | 0.1 | (0.2 | ) | (0.7 | ) | ||||||||
Effective income tax rate | 38 | % | 38.8 | % | 38.8 | % | |||||||
Significant Components of Deferred Income Tax Assets and Liabilities | Significant components of the University’s deferred income tax assets and liabilities are as follows: | ||||||||||||
As of December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets: | |||||||||||||
Allowance for doubtful accounts | $ | 2,654 | $ | 3,870 | |||||||||
Share-based compensation | 8,487 | 7,987 | |||||||||||
Deferred rent | 1,290 | 2,290 | |||||||||||
Intangibles | 3,312 | 3,669 | |||||||||||
Other | 4,440 | 2,016 | |||||||||||
Deferred tax assets | 20,183 | 19,832 | |||||||||||
Deferred tax liability: | |||||||||||||
Property and equipment | (28,203 | ) | (24,952 | ) | |||||||||
Other | (1,805 | ) | (1,553 | ) | |||||||||
Deferred tax liability | (30,008 | ) | (26,505 | ) | |||||||||
Net deferred tax liability | $ | (9,825 | ) | $ | (6,673 | ) | |||||||
The deferred tax amounts above have been classified in the University’s balance sheets as follows: | |||||||||||||
As of December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred income taxes, current | $ | 6,149 | $ | 5,159 | |||||||||
Deferred income taxes, non-current | (15,974 | ) | (11,832 | ) | |||||||||
Net deferred tax liability | $ | (9,825 | ) | $ | (6,673 | ) | |||||||
ShareBased_Compensation_Plans_
Share-Based Compensation Plans (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Summary of Activity Related to Restricted Stock Granted under Incentive Plan | A summary of the activity related to restricted stock granted under the University’s Incentive Plan is as follows: | ||||||||||||||||
Total | Weighted | ||||||||||||||||
Shares | Average | ||||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
per Share | |||||||||||||||||
Outstanding as of December 31, 2011 | 6 | $ | 13.88 | ||||||||||||||
Granted | 563 | $ | 17.04 | ||||||||||||||
Vested | (6 | ) | $ | 13.88 | |||||||||||||
Forfeited, canceled or expired | (10 | ) | $ | 17.03 | |||||||||||||
Outstanding as of December 31, 2012 | 553 | $ | 17.04 | ||||||||||||||
Granted | 594 | $ | 24.44 | ||||||||||||||
Vested | (119 | ) | $ | 17.13 | |||||||||||||
Forfeited, canceled or expired | (45 | ) | $ | 20.57 | |||||||||||||
Outstanding as of December 31, 2013 | 983 | $ | 21.34 | ||||||||||||||
Granted | 317 | $ | 46.02 | ||||||||||||||
Vested | (225 | ) | $ | 21.27 | |||||||||||||
Forfeited, canceled or expired | (42 | ) | $ | 27.36 | |||||||||||||
Outstanding as of December 31, 2014 | 1,033 | $ | 28.75 | ||||||||||||||
Summary of Activity Related to Stock Options Granted under Company's Incentive Plan | A summary of the activity related to stock options granted under the University’s Incentive Plan is as follows: | ||||||||||||||||
Summary of Stock Options Outstanding | |||||||||||||||||
Total | Weighted | Weighted | Aggregate | ||||||||||||||
Shares | Average | Average | Intrinsic | ||||||||||||||
Exercise | Remaining | Value ($)(1) | |||||||||||||||
Price | Contractual | ||||||||||||||||
per | Term (Years) | ||||||||||||||||
Share | |||||||||||||||||
Outstanding as of December 31, 2011 | 4,964 | $ | 14.47 | ||||||||||||||
Granted | — | $ | — | ||||||||||||||
Exercised | (611 | ) | $ | 13.16 | |||||||||||||
Forfeited, canceled or expired | (124 | ) | $ | 17.63 | |||||||||||||
Outstanding as of December 31, 2012 | 4,229 | $ | 14.57 | ||||||||||||||
Granted | 25 | $ | 24.97 | ||||||||||||||
Exercised | (1,160 | ) | $ | 14.03 | |||||||||||||
Forfeited, canceled or expired | (71 | ) | $ | 17.22 | |||||||||||||
Outstanding as of December 31, 2013 | 3,023 | $ | 14.8 | ||||||||||||||
Granted | — | $ | — | ||||||||||||||
Exercised | (539 | ) | $ | 14.51 | |||||||||||||
Forfeited, canceled or expired | (32 | ) | $ | 16.93 | |||||||||||||
Outstanding as of December 31, 2014 | 2,452 | $ | 14.83 | 4.86 | $ | 78,045 | |||||||||||
Exercisable as of December 31, 2014 | 1,897 | $ | 14.19 | 4.53 | $ | 61,608 | |||||||||||
Available for issuance as of December 31, 2014 | 2,143 | ||||||||||||||||
-1 | Aggregate intrinsic value represents the value of the University’s closing stock price on December 31, 2014 ($46.66) in excess of the exercise price multiplied by the number of options outstanding or exercisable. | ||||||||||||||||
Amounts Related to Options Exercised | The following table summarizes information related to stock options exercised for years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Amounts related to options exercised: | |||||||||||||||||
Intrinsic value realized by optionee | $ | 27,499 | $ | 20,364 | $ | 4,683 | |||||||||||
Actual tax benefit realized by the University for tax deductions | $ | 11,000 | $ | 8,145 | $ | 1,873 | |||||||||||
Fair Value of Options as of Grant Dates Using Weighted Average Assumptions | The University uses the Black-Scholes-Merton option pricing model to estimate the fair value of the University’s options as of the grant dates using the following weighted average assumptions: | ||||||||||||||||
Year Ended December 31, | 2013 | ||||||||||||||||
Weighted average fair value | $ | 8.2 | |||||||||||||||
Expected volatility | 39.86 | % | |||||||||||||||
Expected life (years) | 4.25 | ||||||||||||||||
Risk-free interest rate | 0.65 | % | |||||||||||||||
Dividend yield | 0 | % | |||||||||||||||
Share-Based Compensation Expense | The table below outlines share-based compensation expense for the fiscal years ended December 31, 2014, 2013 and 2012 related to restricted stock and stock options granted: | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Instructional costs and services | $ | 5,921 | $ | 5,246 | $ | 3,809 | |||||||||||
Admissions advisory and related | 166 | 134 | 224 | ||||||||||||||
Marketing and promotional | 220 | 229 | 169 | ||||||||||||||
General and administrative | 3,638 | 4,327 | 3,609 | ||||||||||||||
Share-based compensation expense included in operating expenses | 9,945 | 9,936 | 7,811 | ||||||||||||||
Tax effect of share-based compensation | (3,978 | ) | (3,974 | ) | (3,124 | ) | |||||||||||
Share-based compensation expense, net of tax | $ | 5,967 | $ | 5,962 | $ | 4,687 | |||||||||||
Quarterly_Results_of_Operation1
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Summarizes the Unaudited Quarterly Results of Operations | The following table summarizes the unaudited quarterly results of operations for 2014 and 2013 and should be read in conjunction with other information included in the accompanying consolidated financial statements. | ||||||||||||||||
2014 | |||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||||
Net revenue | $ | 167,432 | $ | 158,594 | $ | 175,056 | $ | 189,973 | |||||||||
Costs and expenses: | |||||||||||||||||
Instructional costs and services | 70,678 | 67,847 | 71,714 | 78,552 | |||||||||||||
Admissions advisory and related | 26,261 | 26,208 | 27,324 | 28,774 | |||||||||||||
Advertising | 16,712 | 15,751 | 16,491 | 16,854 | |||||||||||||
Marketing and promotional | 1,791 | 1,907 | 1,931 | 1,810 | |||||||||||||
General and administrative | 8,554 | 8,994 | 11,640 | 10,447 | |||||||||||||
Total costs and expenses | 123,996 | 120,707 | 129,100 | 136,437 | |||||||||||||
Operating income | 43,436 | 37,887 | 45,956 | 53,536 | |||||||||||||
Interest expense | (523 | ) | (356 | ) | (576 | ) | (346 | ) | |||||||||
Interest income and other | 137 | 197 | 43 | 307 | |||||||||||||
Income before income taxes | 43,050 | 37,728 | 45,423 | 53,497 | |||||||||||||
Income tax expense | 16,762 | 14,659 | 16,407 | 20,404 | |||||||||||||
Net income | $ | 26,288 | $ | 23,069 | $ | 29,016 | $ | 33,093 | |||||||||
Earnings per share: | |||||||||||||||||
Basic income per share(1) | $ | 0.58 | $ | 0.51 | $ | 0.64 | $ | 0.72 | |||||||||
Diluted income per share(1) | $ | 0.56 | $ | 0.49 | $ | 0.62 | $ | 0.7 | |||||||||
Basic weighted average shares outstanding | 45,205 | 45,598 | 45,651 | 45,652 | |||||||||||||
Diluted weighted average shares outstanding | 46,841 | 46,990 | 47,051 | 47,097 | |||||||||||||
-1 | The sum of quarterly income per share may not equal annual income per share due to rounding. | ||||||||||||||||
2013 | |||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||||
Net revenue | $ | 142,030 | $ | 141,463 | $ | 152,399 | $ | 162,443 | |||||||||
Costs and expenses: | |||||||||||||||||
Instructional costs and services | 59,997 | 61,747 | 64,704 | 67,971 | |||||||||||||
Admissions advisory and related | 22,993 | 23,346 | 24,578 | 26,160 | |||||||||||||
Advertising | 15,929 | 14,520 | 15,498 | 15,038 | |||||||||||||
Marketing and promotional | 1,435 | 1,383 | 1,299 | 1,527 | |||||||||||||
General and administrative | 8,051 | 8,978 | 9,035 | 10,870 | |||||||||||||
Total costs and expenses | 108,405 | 109,974 | 115,114 | 121,566 | |||||||||||||
Operating income | 33,625 | 31,489 | 37,285 | 40,877 | |||||||||||||
Interest expense | (668 | ) | (439 | ) | (528 | ) | (609 | ) | |||||||||
Interest income and other | 2,195 | 62 | 1,502 | 104 | |||||||||||||
Income before income taxes | 35,152 | 31,112 | 38,259 | 40,372 | |||||||||||||
Income tax expense | 14,207 | 12,048 | 15,714 | 14,215 | |||||||||||||
Net income | $ | 20,945 | $ | 19,064 | $ | 22,545 | $ | 26,157 | |||||||||
Earnings per share: | |||||||||||||||||
Basic income per share(1) | $ | 0.47 | $ | 0.43 | $ | 0.5 | $ | 0.58 | |||||||||
Diluted income per share(1) | $ | 0.46 | $ | 0.42 | $ | 0.49 | $ | 0.56 | |||||||||
Basic weighted average shares outstanding | 44,242 | 44,681 | 44,963 | 45,026 | |||||||||||||
Diluted weighted average shares outstanding | 45,449 | 45,929 | 46,424 | 46,712 | |||||||||||||
-1 | The sum of quarterly income per share may not equal annual income per share due to rounding. |
Nature_of_Business_Additional_
Nature of Business - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Degrees | |
Colleges | |
acre | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Area of the company's campus in Phoenix, Arizona | 205 |
Number of colleges in Phoenix, Arizona | 8 |
Number of degree programs offered in Phoenix, Arizona and online | 160 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2008 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
acre | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Average days from the date of receipt in which funds remain as restricted cash and cash equivalents | 60 to 90 days | ||||
Note receivable from a financial institution at fair market value | $27,000,000 | ||||
Interest rate on notes | 11.00% | ||||
Interest rate on loan | 6.00% | ||||
Default rate | 5.00% | ||||
Interest income and other income on the loan | 2,187,000 | 1,459,000 | |||
Default interest amount | 432,000 | ||||
Late payment penalty amount | 1,392,000 | ||||
Statutory trustee's fee amount | 139,000 | ||||
Additional amount deposited in escrow | 344,000 | ||||
Date of order for late penalty funds | 28-Oct-13 | ||||
Capitalized interest rate on borrowings to finance improvements | 1.90% | 1.90% | 2.20% | ||
Property and equipment, useful life | 15 years | ||||
Prepaid maintenance and service fees | 4,900,000 | ||||
Agreement period of acquired source code rights for the software developed, prepaid maintenance and service fee | 7 years | ||||
Amortization of other current assets | Next twelve month cycle | ||||
Agreement to pay former owner royalty amount | 22,500,000 | ||||
Settlement of future royalty payment obligation | 5,920,000 | ||||
Royalty amortization period | 20 years | ||||
Fair value of the shares issued of the license agreement | 3,394,000 | ||||
Discount net cash flows | 35.00% | ||||
Reserve for uncertain tax positions including interest and penalties | 0 | 0 | |||
Area of the company's campus in Phoenix, Arizona | 205 | ||||
Reduction in revenue due to scholarships offered to students | $139,962,000 | $111,789,000 | $94,283,000 | ||
Period for write off of inactive student accounts | 150 days | ||||
Furniture, Fixtures and Equipment [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, useful life | 10 years | ||||
Computer Equipment [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, useful life | 4 years | ||||
Vehicles [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, useful life | 5 years | ||||
Minimum [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of days from the date of receipt in which funds remain as restricted cash and cash equivalents | 60 days | ||||
Minimum [Member] | Land Improvements and Buildings [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, useful life | 10 years | ||||
Maximum [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of days from the date of receipt in which funds remain as restricted cash and cash equivalents | 90 days | ||||
Maximum [Member] | Land Improvements and Buildings [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, useful life | 40 years |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Interest Cost Capitalized and Incurred (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | |||||||||||
Interest incurred | $2,180 | $2,626 | $1,064 | ||||||||
Interest capitalized | 379 | 382 | 365 | ||||||||
Interest expense | $346 | $576 | $356 | $523 | $609 | $528 | $439 | $668 | $1,801 | $2,244 | $699 |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 03, 2014 |
Schedule of Available-for-sale Securities [Line Items] | |||
Amount of restricted investments | $67,840 | ||
Unrealized net (losses) gains on available-for-sale securities | ($93) | $16 | |
Municipal Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Maturity period of investments | One year or less |
Investments_Summary_of_Amounts
Investments - Summary of Amounts Included in Restricted Investments and Unrestricted Investments (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | $168,750 | $108,393 |
Gross Unrealized Gains | 51 | 35 |
Gross Unrealized (Losses) | -177 | -8 |
Estimated Fair Value | 100,784 | 108,420 |
Municipal Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 83,364 | 83,368 |
Gross Unrealized Gains | 51 | 35 |
Gross Unrealized (Losses) | -177 | -8 |
Estimated Fair Value | 83,238 | 83,395 |
Municipal Bond Mutual Fund [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 85,386 | 25,025 |
Estimated Fair Value | $85,386 | $25,025 |
Valuation_and_Qualifying_Accou2
Valuation and Qualifying Accounts - Schedule of Valuation and Qualifying Accounts (Detail) (Allowance for Doubtful Accounts Receivable [Member], USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for Doubtful Accounts Receivable [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Year | $9,678 | $8,657 | $11,706 |
Charged to Expense | 15,045 | 19,897 | 18,012 |
Deductions | -18,251 | -18,876 | -21,061 |
Balance at End of Year | $6,472 | $9,678 | $8,657 |
Property_and_Equipment_Summary
Property and Equipment - Summary of Property and Equipment (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $591,383 | $424,479 |
Less accumulated depreciation and amortization | -113,213 | -84,883 |
Property and equipment, net | 478,170 | 339,596 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 76,537 | 21,820 |
Land Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 8,800 | 5,176 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 298,124 | 222,402 |
Building and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 45,855 | 32,243 |
Equipment under Capital Leases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 5,310 | 5,310 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 75,990 | 64,773 |
Furniture, Fixtures and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 38,162 | 32,583 |
Internally Developed Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 20,813 | 15,606 |
Other [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,099 | 1,099 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $20,693 | $23,467 |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense including assets under capital lease | $28,529 | $24,546 | $21,264 |
Notes_Payable_and_Other_Noncur2
Notes Payable and Other Noncurrent Liabilities - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 |
Debt Disclosure [Abstract] | |||
Amount of revolving line of credit | $50,000 | ||
Revolving line of credit facility, expiration date | 31-Dec-17 | ||
Amount available to be borrowed on the line of credit | 50,000 | ||
Long-term deferred rent | $4,513 | $6,811 |
Notes_Payable_and_Other_Noncur3
Notes Payable and Other Noncurrent Liabilities - Notes Payable (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Line of Credit Facility [Line Items] | ||
Less: Current portion | $6,616 | $6,607 |
Notes Payable, Non-current | 79,877 | 86,493 |
Notes payable | 86,493 | 93,100 |
Notes Payable through December 2019 [Member] | ||
Line of Credit Facility [Line Items] | ||
Notes payable | 86,049 | 92,573 |
Gift Annuities Extending through 2019 [Member] | ||
Line of Credit Facility [Line Items] | ||
Notes payable | $444 | $527 |
Notes_Payable_and_Other_Noncur4
Notes Payable and Other Noncurrent Liabilities - Notes Payable (Parenthetical) (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Notes Payable through December 2019 [Member] | |
Line of Credit Facility [Line Items] | |
Monthly payment of notes payable | $556 |
Number of days of bank operating rate to calculate interest on notes payable | 30 days |
Interest rate of notes payable, Minimum | 1.92% |
Notes Payable through December 2019 [Member] | LIBOR [Member] | |
Line of Credit Facility [Line Items] | |
Interest rate of notes payable | 1.75% |
Gift Annuities Extending through 2019 [Member] | |
Line of Credit Facility [Line Items] | |
Quarterly payment of notes payable | $34 |
Interest rate of notes payable, Minimum | 10.00% |
Notes_Payable_and_Other_Noncur5
Notes Payable and Other Noncurrent Liabilities - Payments Due under Notes Payable (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Disclosure [Abstract] | ||
2015 | $6,616 | |
2016 | 6,625 | |
2017 | 6,636 | |
2018 | 6,691 | |
2019 | 59,925 | |
Thereafter | 0 | |
Notes payable | $86,493 | $93,100 |
Capital_Lease_Obligations_Comp
Capital Lease Obligations - Components of Capital Lease Obligations (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Leases [Abstract] | ||
Capital lease for equipment | $497 | $586 |
Less: Current portion of capital lease obligations | 91 | 89 |
Capital lease obligations, less current portion | $406 | $497 |
Capital_Lease_Obligations_Comp1
Capital Lease Obligations - Components of Capital Lease Obligations (Parenthetical) (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Leases [Abstract] | |
Monthly payments on capital leases | $8 |
Implicit interest rate on capital leases, maximum | 2.20% |
Capital_Lease_Obligations_Paym
Capital Lease Obligations - Payments Due under Future Minimum Lease Payments under Capital Lease Obligations (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Leases [Abstract] | |
2015 | $101 |
2016 | 410 |
Total | 511 |
Less: Portion representing interest | 14 |
Present value of minimum lease payments | $497 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Future Minimum Lease Payments under Operating Leases (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | |
2015 | $7,100 |
2016 | 5,308 |
2017 | 3,933 |
2018 | 3,430 |
2019 | 3,020 |
Thereafter | 4,935 |
Total minimum payments | $27,726 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Commitments and Contingencies Disclosure [Abstract] | |||
Total rent expense and related taxes and operating expenses, under operating leases | $8,409 | $7,074 | $7,635 |
Tax reserves, non-income tax related | $659 | $729 |
Derivative_Instruments_Additio
Derivative Instruments - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Derivative [Line Items] | |||
Period of LIBOR interest rate | 30 days | ||
Effective portion of gain/loss on derivatives included as a component of other comprehensive income, net of taxes | ($300) | $565 | $137 |
Other Assets [Member] | |||
Derivative [Line Items] | |||
Fair value of interest rate corridor instrument | 1,332 | 1,917 | |
Interest Rate Corridor [Member] | |||
Derivative [Line Items] | |||
Notional amount of interest rate swap | 86,667 | ||
Description of interest rate risk hedge at several thresholds | The University pays variable interest monthly based on the 30-day LIBOR rates until that index reaches 1.5%. If 30-day LIBOR is equal to 1.5% through 3.0%, the University pays 1.5%. If 30-day LIBOR exceeds 3.0%, the University pays actual 30-day LIBOR less 1.5% | ||
Maximum percentage of variable interest rates based on LIBOR | 1.50% | ||
Debt instrument, description of variable rate basis | LIBOR | ||
Percentage of amount paid by University | 1.50% | ||
Minimum percentage of LIBOR | 1.50% | ||
Maximum percentage of LIBOR | 3.00% | ||
Percentage deducted from LIBOR for actual payment | 1.50% | ||
Interest expense on derivatives related to credit risk | 13 | ||
Interest Rate Swap [Member] | Accrued Liabilities [Member] | |||
Derivative [Line Items] | |||
Fair value of the interest rate swap liability | 111 | ||
Fair value of the interest rate swap liability expiration date | 2014-04 | ||
Cash Flow Hedging [Member] | |||
Derivative [Line Items] | |||
Effective portion of gain/loss on derivatives included as a component of other comprehensive income, net of taxes | $486 | $947 | $241 |
Earnings_Per_Share_Summary_of_
Earnings Per Share - Summary of Weighted Average Number of Common Shares Outstanding (Detail) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Denominator: | |||||||||||
Basic common shares outstanding | 45,652 | 45,651 | 45,598 | 45,205 | 45,026 | 44,963 | 44,681 | 44,242 | 45,538 | 44,731 | 44,332 |
Effect of dilutive stock options and restricted stock | 1,468 | 1,400 | 919 | ||||||||
Diluted common shares outstanding | 47,097 | 47,051 | 46,990 | 46,841 | 46,712 | 46,424 | 45,929 | 45,449 | 47,006 | 46,131 | 45,251 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) (Stock Option And Restricted Stock Awards [Member]) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock Option And Restricted Stock Awards [Member] | |||
Dilutive Securities Included And Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
University's stock options and restricted stock awards outstanding were excluded from the calculation of diluted earnings | 174 | 134 | 1,599 |
Equity_Transactions_Additional
Equity Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stockholders Equity [Line Items] | |||
Preferred stock authorized but unissued and undesignated | 10,000 | 10,000 | |
Expiration date on repurchase authorizations | 30-Sep-15 | ||
Aggregate cost shares of common stock | $1,676 | $8,323 | $15,242 |
Common stock acquired, shares | 38 | ||
Maximum [Member] | |||
Stockholders Equity [Line Items] | |||
Authorization amount for repurchase of common stock | 75,000 | ||
Common Stock [Member] | |||
Stockholders Equity [Line Items] | |||
Common stock acquired, shares | 2,787 | ||
Since Approval of Share Repurchase Plan [Member] | |||
Stockholders Equity [Line Items] | |||
Aggregate cost shares of common stock | 49,135 | ||
Remaining authorized repurchase amount | $25,865 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |||
Valuation allowance | $0 | $0 | |
Interest and penalties | 0 | 0 | 87,000 |
Accrued interest | 0 | 0 | |
Accrued penalties | 0 | 0 | |
Unrecognized tax benefits | $0 | $0 |
Income_Taxes_Components_of_Inc
Income Taxes - Components of Income Tax Expense (Benefit) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current: | |||||||||||
Federal | $50,980 | $40,949 | $36,367 | ||||||||
State | 6,216 | 5,540 | 7,462 | ||||||||
Current Income Tax Expense (Benefit), Total | 57,196 | 46,489 | 43,829 | ||||||||
Deferred: | |||||||||||
Federal | 2,734 | 4,209 | -448 | ||||||||
State | 418 | 898 | 32 | ||||||||
Deferred Income Tax Expense (Benefit) | 3,152 | 5,107 | -416 | ||||||||
Tax expense recorded as an increase of paid-in capital | 7,884 | 4,588 | 564 | ||||||||
Income Tax Expense (Benefit), Total | $20,404 | $16,407 | $14,659 | $16,762 | $14,215 | $15,714 | $12,048 | $14,207 | $68,232 | $56,184 | $43,977 |
Income_Taxes_Schedule_of_Effec
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. federal income tax rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal tax benefit | 4.30% | 5.50% | 5.90% |
State tax credits, net of federal effect | -1.50% | -1.80% | -1.60% |
Nondeductible expenses | 0.10% | 0.30% | 0.20% |
Other | 0.10% | -0.20% | -0.70% |
Effective income tax rate | 38.00% | 38.80% | 38.80% |
Income_Taxes_Significant_Compo
Income Taxes - Significant Components of Deferred Income Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
Allowance for doubtful accounts | $2,654 | $3,870 |
Share-based compensation | 8,487 | 7,987 |
Deferred rent | 1,290 | 2,290 |
Intangibles | 3,312 | 3,669 |
Other | 4,440 | 2,016 |
Deferred tax assets | 20,183 | 19,832 |
Deferred tax liability: | ||
Property and equipment | -28,203 | -24,952 |
Other | -1,805 | -1,553 |
Deferred tax liability | -30,008 | -26,505 |
Net deferred tax liability | ($9,825) | ($6,673) |
Income_Taxes_Significant_Compo1
Income Taxes - Significant Components of Deferred Income Tax Assets and Liabilities Classified (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ||
Deferred income taxes, current | $6,149 | $5,159 |
Deferred income taxes, non-current | -15,974 | -11,832 |
Net deferred tax liability | ($9,825) | ($6,673) |
Regulatory_Additional_Informat
Regulatory - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 27, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Regulated Operations [Abstract] | ||||
University paid | $7,387 | |||
Revenue from Title IV program funds | 76.50% | 78.50% | 80.30% |
ShareBased_Compensation_Plans_1
Share-Based Compensation Plans - Additional Information (Detail) (USD $) | 12 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 27, 2008 |
Age | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Cash received from stock option exercises | $7,825 | $16,278 | $8,049 | ||
Dividend yield assumption | 0.00% | 0.00% | 0.00% | ||
Minimum eligible age to participate in the plan | 21 | ||||
University made discretionary matching contributions | 1,600 | 1,298 | 1,080 | ||
Restricted Stock Grants [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted | 317,000 | 594,000 | 563,000 | ||
Unrecognized share-based compensation cost | 23,344 | ||||
Costs are expected to be recognized over a weighted average period | 2 years 2 months 19 days | ||||
Restricted Stock Grants [Member] | Executive Officers [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted | 308,000 | 575,000 | 552,000 | ||
Percentage of shares to vest each year | 20.00% | ||||
Vesting period | 5 years | ||||
Restricted Stock Grants [Member] | Non-Employee Members of Board of Directors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted | 9,000 | 11,000 | 11,000 | ||
Vesting period | 1 year | ||||
Restricted Stock Grants [Member] | Consultant [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted | 8,000 | ||||
Employee Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | 5 years | |||
Unrecognized share-based compensation cost | $2,069 | ||||
Costs are expected to be recognized over a weighted average period | 11 months 16 days | ||||
Expiration period of options | 10 years | 10 years | |||
Options granted | 0 | 25,000 | 0 | ||
Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock authorized | 12,167,000 | 4,200,000 | |||
Percentage increase in the number of shares authorized for issuance under the Incentive Plan | 2.50% | ||||
Employee Stock Purchase Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock authorized | 1,050,000 |
ShareBased_Compensation_Plans_2
Share-Based Compensation Plans - Summary of Activity Related to Restricted Stock Granted under Incentive Plan (Detail) (Restricted Stock Grants [Member], USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Restricted Stock Grants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Shares, Outstanding, Beginning Balance | 983 | 553 | 6 |
Total Shares, Granted | 317 | 594 | 563 |
Total Shares, Vested | -225 | -119 | -6 |
Total Shares, Forfeited, canceled or expired | -42 | -45 | -10 |
Total Shares, Outstanding, Ending Balance | 1,033 | 983 | 553 |
Weighted Average Grant Date Fair Value, Beginning Balance | $21.34 | $17.04 | $13.88 |
Weighted Average Grant Date Fair Value, Granted | $46.02 | $24.44 | $17.04 |
Weighted Average Grant Date Fair Value, Vested | $21.27 | $17.13 | $13.88 |
Weighted Average Grant Date Fair Value, Forfeited, cancelled or expired | $27.36 | $20.57 | $17.03 |
Weighted Average Grant Date Fair Value, Ending Balance | $28.75 | $21.34 | $17.04 |
ShareBased_Compensation_Plans_3
Share-Based Compensation Plans - Summary of Activity Related to Stock Options Granted under Company's Incentive Plan (Detail) (Employee Stock Option [Member], USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Shares outstanding, Beginning balance | 3,023,000 | 4,229,000 | 4,964,000 |
Total Shares, Granted | 0 | 25,000 | 0 |
Total Shares, Exercised | -539,000 | -1,160,000 | -611,000 |
Total Shares, Forfeited, canceled or expired | -32,000 | -71,000 | -124,000 |
Total Shares outstanding, Ending balance | 2,452,000 | 3,023,000 | 4,229,000 |
Weighted Average Exercise Price per Share Outstanding, Beginning balance | $14.80 | $14.57 | $14.47 |
Total Shares, Exercisable | 1,897,000 | ||
Weighted Average Exercise Price per Share, Granted | $24.97 | ||
Total Shares, Available for issuance | 2,143,000 | ||
Weighted Average Exercise Price per Share, Exercised | $14.51 | $14.03 | $13.16 |
Weighted Average Exercise Price per Share, Forfeited, canceled or expired | $16.93 | $17.22 | $17.63 |
Weighted Average Exercise Price per Share Outstanding, Ending balance | $14.83 | $14.80 | $14.57 |
Weighted Average Exercise Price per Share, Exercisable | $14.19 | ||
Weighted Average Remaining Contractual Term (Years), Outstanding | 4 years 10 months 10 days | ||
Weighted Average Remaining Contractual Term (Years), Exercisable | 4 years 6 months 11 days | ||
Aggregate Intrinsic Value, Outstanding | $78,045 | ||
Aggregate Intrinsic Value, Exercisable | $61,608 |
ShareBased_Compensation_Plans_4
Share-Based Compensation Plans - Summary of Activity Related to Stock Options Granted under Company's Incentive Plan (Parenthetical) (Detail) (USD $) | Dec. 31, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Value of closing stock price | $46.66 |
ShareBased_Compensation_Plans_5
Share-Based Compensation Plans - Amounts Related to Options Exercised (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Amounts related to options exercised: | |||
Intrinsic value realized by optionee | $27,499 | $20,364 | $4,683 |
Actual tax benefit realized by the University for tax deductions | $11,000 | $8,145 | $1,873 |
ShareBased_Compensation_Plans_6
Share-Based Compensation Plans - Fair Value of Options as of Grant Dates Using Weighted Average Assumptions (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Weighted average fair value | $8.20 | ||
Expected volatility | 39.86% | ||
Expected life (years) | 4 years 3 months | ||
Risk-free interest rate | 0.65% | ||
Dividend yield | 0.00% | 0.00% | 0.00% |
ShareBased_Compensation_Plans_7
Share-Based Compensation Plans - Share-Based Compensation Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $9,945 | $9,936 | $7,811 |
Tax effect of share-based compensation | -3,978 | -3,974 | -3,124 |
Share-based compensation expense, net of tax | 5,967 | 5,962 | 4,687 |
Instructional Costs and Services [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 5,921 | 5,246 | 3,809 |
Admissions Advisory and Related [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 166 | 134 | 224 |
Marketing and Promotional [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 220 | 229 | 169 |
General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $3,638 | $4,327 | $3,609 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | |||
Amounts owed to related party | $403,000 | $454,000 | |
GCUF [Member] | |||
Related Party Transaction [Line Items] | |||
Contribution by University | 200,000 | ||
Amounts owed to related party | 0 | 0 | |
LKF [Member] | |||
Related Party Transaction [Line Items] | |||
Contribution by University | 500,000 | ||
Amounts owed to related party | $0 |
Quarterly_Results_of_Operation2
Quarterly Results of Operations (Unaudited) - Summarizes the Unaudited Quarterly Results of Operations (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||||||||||
Net revenue | $189,973 | $175,056 | $158,594 | $167,432 | $162,443 | $152,399 | $141,463 | $142,030 | $691,055 | $598,335 | $511,257 |
Costs and expenses: | |||||||||||
Instructional costs and services | 78,552 | 71,714 | 67,847 | 70,678 | 67,971 | 64,704 | 61,747 | 59,997 | 288,791 | 254,419 | 220,403 |
Admissions advisory and related | 28,774 | 27,324 | 26,208 | 26,261 | 26,160 | 24,578 | 23,346 | 22,993 | 108,567 | 97,077 | 85,917 |
Advertising | 16,854 | 16,491 | 15,751 | 16,712 | 15,038 | 15,498 | 14,520 | 15,929 | 65,808 | 60,985 | 51,023 |
Marketing and promotional | 1,810 | 1,931 | 1,907 | 1,791 | 1,527 | 1,299 | 1,383 | 1,435 | 7,439 | 5,644 | 4,360 |
General and administrative | 10,447 | 11,640 | 8,994 | 8,554 | 10,870 | 9,035 | 8,978 | 8,051 | 39,635 | 36,934 | 35,502 |
Total costs and expenses | 136,437 | 129,100 | 120,707 | 123,996 | 121,566 | 115,114 | 109,974 | 108,405 | 510,240 | 455,059 | 397,205 |
Operating income | 53,536 | 45,956 | 37,887 | 43,436 | 40,877 | 37,285 | 31,489 | 33,625 | 180,815 | 143,276 | 114,052 |
Interest expense | -346 | -576 | -356 | -523 | -609 | -528 | -439 | -668 | -1,801 | -2,244 | -699 |
Interest income and other | 307 | 43 | 197 | 137 | 104 | 1,502 | 62 | 2,195 | 684 | 3,863 | 71 |
Income before income taxes | 53,497 | 45,423 | 37,728 | 43,050 | 40,372 | 38,259 | 31,112 | 35,152 | 179,698 | 144,895 | 113,424 |
Income tax expense | 20,404 | 16,407 | 14,659 | 16,762 | 14,215 | 15,714 | 12,048 | 14,207 | 68,232 | 56,184 | 43,977 |
Net income | $33,093 | $29,016 | $23,069 | $26,288 | $26,157 | $22,545 | $19,064 | $20,945 | $111,466 | $88,711 | $69,447 |
Earnings per share: | |||||||||||
Basic income per share | $0.72 | $0.64 | $0.51 | $0.58 | $0.58 | $0.50 | $0.43 | $0.47 | $2.45 | $1.98 | $1.57 |
Diluted income per share | $0.70 | $0.62 | $0.49 | $0.56 | $0.56 | $0.49 | $0.42 | $0.46 | $2.37 | $1.92 | $1.53 |
Basic weighted average shares outstanding | 45,652 | 45,651 | 45,598 | 45,205 | 45,026 | 44,963 | 44,681 | 44,242 | 45,538 | 44,731 | 44,332 |
Diluted weighted average shares outstanding | 47,097 | 47,051 | 46,990 | 46,841 | 46,712 | 46,424 | 45,929 | 45,449 | 47,006 | 46,131 | 45,251 |