Restructuring and Related Charges

12 Months Ended

Dec. 31, 2021

Restructuring and Related Activities [Abstract]

In 2018 and 2019, the Company incurred personnel-related restructuring charges due to cost reduction efforts and management changes. These changes related to the integration of Capella Education Company in order to establish an efficient ongoing cost structure for the Company. The severance and other employee separation costs incurred in connection with the integration of CEC are included in Merger and integration costs on the consolidated statements of income.

In the third quarter of 2020, the Company began implementing a restructuring plan in an effort to reduce the ongoing operating costs of the Company to align with changes in enrollment following the COVID-19 pandemic. Under this plan, the Company incurred severance and other employee separation costs related to voluntary and involuntary employee terminations.

In addition, the 2020 restructuring plan included an evaluation of the Company's owned and leased real estate portfolio, which resulted in the consolidation and sale of underutilized facilities. During the years ended December 31, 2020 and 2021, the Company recorded right-of-use lease asset charges of approximately $0.4 million and $18.9 million, respectively, related to facilities consolidated as a result of the restructuring plan. The Company also recorded fixed asset impairment charges of approximately $2.7 million during the year ended December 31, 2021. During the year ended December 31, 2021, the Company recorded a $2.7 million gain from the sale of property and equipment of owned campuses that were closed in connection with the 2020 restructuring plan. All severance and other employee separation charges, right-of-use lease asset and fixed asset impairment charges, and gains on the sale of property and equipment related to the 2020 restructuring plan are included in Restructuring costs on the consolidated statements of income.

The following details the changes in the Company’s severance and other employee separation costs restructuring liabilities for the years ended December 31, 2019, 2020, and 2021 (in thousands):


	CEC Integration Plan		2020 Restructuring Plan		Total
Balance at December 31, 2018	$	14,347	$	—	$	14,347
Restructuring and other charges	3,920		—		3,920
Payments	(9,984)		—		(9,984)
Adjustments	—		—		—
Balance at December 31, 2019	8,283		—		8,283
Restructuring and other charges	—		11,967		11,967
Payments	(6,448)		(10,680)		(17,128)
Adjustments	—		—		—
Balance at December 31, 2020(1)	1,835		1,287		3,122
Restructuring and other charges	—		4,618		4,618
Payments	(1,835)		(4,293)		(6,128)
Adjustments	—		—		—
Balance at December 31, 2021(1)	$	—	$	1,612	$	1,612

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(1)Restructuring liabilities are included in accounts payable and accrued expenses.