Segment Reporting

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Reporting

16. SEGMENT REPORTING

Our reporting segments are determined in accordance with FASB ASC Topic 280—Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a group of postsecondary education providers that offer a variety of degree and non-degree academic programs. These segments are organized by key market segments to enhance operational alignment and, for our two universities, to enhance brand focus within each segment to more effectively execute our strategic plan.

Our four reporting segments are described below.

University Group:

☐ Colorado Technical University (CTU) places a strong focus on providing industry-relevant degree programs to meet the needs of our students for career advancement and of employers for a well-educated workforce and offers academic programs in the career-oriented disciplines of business studies, nursing, computer science, engineering, information systems and technology, cybersecurity and healthcare management. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of December 31, 2016, students enrolled at CTU represented approximately 60% of our total enrollments. Approximately 92% of CTU’s enrollments are fully online.

☐ American InterContinental University (AIU) focuses on helping busy professionals get the degree they need to move forward in their career as efficiently as possible and collectively offers academic programs in the career-oriented disciplines of business studies, information technologies, education and criminal justice. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of December 31, 2016, students enrolled at AIU represented approximately 32% of our total enrollments. Approximately 94% of AIU’s enrollments are fully online.

Career Schools Group:

Campuses included in our Career School segments include those which are currently being taught out or those which have completed their teach-out activities or have been sold subsequent to January 1, 2015. As a result of a change in accounting guidance, campuses which have closed or have been sold subsequent to January 1, 2015 no longer meet the criteria for discontinued operations and remain reported within continuing operations on our consolidated financial statements. Campuses in teach-out employ a gradual teach-out process, enabling them to continue to operate while current students have a reasonable opportunity to complete their course of study; they no longer enroll new students.

☐ Culinary Arts includes our Le Cordon Bleu institutions in North America (“LCB”) which offer hands-on educational programs in the career-oriented disciplines of culinary arts and patisserie and baking in the commercial-grade kitchens of Le Cordon Bleu. These campuses are all expected to complete their teach-out activities by the end of 2017. As of December 31, 2016, students enrolled at LCB represented approximately 6% of our total enrollments.

During 2016, we completed the teach-out of one Culinary Arts campus (LCB St. Louis). The results of operations for this campus will remain reported within the Culinary Arts segment as part of continuing operations, in accordance with ASC Topic 360.

☐ Transitional Group includes our non-LCB campuses which are in teach-out or those which have been closed or sold subsequent to January 1, 2015. Our Transitional Group offers academic programs in career-oriented disciplines complemented by certain programs in business studies and information technology. The campuses within the Transitional Group that have not yet ceased operations as of December 31, 2016 will complete their teach-outs on varying dates through 2018. As of December 31, 2016, students enrolled at the Transitional Group campuses represented approximately 2% of our total enrollments.  

During 2016 we completed the teach-out of twelve campuses within our Transitional Group. The results of operations for these campuses will remain reported within the Transitional Group as part of continuing operations, in accordance with ASC Topic 360.

We evaluate segment performance based on operating results. Adjustments to reconcile segment results to consolidated results are included under the caption “Corporate and Other,” which primarily includes unallocated corporate activity and eliminations.

Summary financial information by reporting segment is as follows (dollars in thousands):

	Revenue		Operating (Loss) Income			Depreciation and Amortization		Capital Expenditures		Total Assets
For the Year Ended December 31, 2016 (1)
CTU	$	369,319	$	99,412		$	2,157	$	675	$	76,143
AIU (2)		193,032		(29,598	)		1,687		406		66,081
Total University Group		562,351		69,814			3,844		1,081		142,224
Corporate and Other		-		(25,097	)		7,320		2,512		334,945
Subtotal		562,351		44,717			11,164		3,593		477,169
Culinary Arts (3)		104,452		(20,608	)		6,234		-		57,443
Transitional Group (4)		37,589		(56,453	)		5,349		536		18,736
Discontinued Operations									-		6,253
Total	$	704,392	$	(32,344	)	$	22,747	$	4,129	$	559,601
For the Year Ended December 31, 2015 (1)
CTU	$	348,215	$	87,496		$	2,281	$	1,084	$	76,577
AIU		201,649		5,520			1,636		2,406		53,087
Total University Group		549,864		93,016			3,917		3,490		129,664
Corporate and Other		157		(27,267	)		11,173		4,873		372,405
Subtotal		550,021		65,749			15,090		8,363		502,069
Culinary Arts (5)		170,190		(57,577	)		1		2,352		71,197
Transitional Group (6)		127,062		(100,340	)		9,847		980		28,584
Discontinued Operations									-		9,065
Total	$	847,273	$	(92,168	)	$	24,938	$	11,695	$	610,915
For the Year Ended December 31, 2014 (1)
CTU	$	336,573	$	69,492		$	2,627	$	628
AIU		198,896		(9,412	)		2,329		916
Total University Group		535,469		60,080			4,956		1,544
Corporate and Other  (7)		230		(21,169	)		17,455		4,545
Subtotal		535,699		38,911			22,411		6,089
Culinary Arts (8)		172,606		(66,556	)		17,363		2,292
Transitional Group (9)		205,659		(111,627	)		13,608		4,775
Discontinued Operations									-
Total	$	913,964	$	(139,272	)	$	53,382	$	13,156

(1) The statement of (loss) income and comprehensive (loss) income balances including revenue, operating (loss) income and depreciation and amortization are presented above on a continuing operations basis. Total assets and capital expenditures are presented on a consolidated basis including continuing and discontinued operations.

For the year ended December 31, 2016, segment results included:

(2) AIU: $32.0 million charge related to legal settlements.

(3) Culinary Arts: $16.7 million charge related to remaining lease obligations of vacated space.

(4) Transitional Group: $14.3 million charge related to remaining lease obligations of vacated space.

For the year ended December 31, 2015, segment results included:

(5) Culinary Arts: $35.1 million related to long-lived asset impairment and a $17.0 million trade name impairment charge.

(6) Transitional Group: $6.1million related to long-lived asset impairment and a $1.8 million trade name impairment charge.

For the year ended December 31, 2014, segment results included:

(7) Corporate and Other: $8.6 million of income related to an insurance recovery.

(8) Culinary Arts: $10.3 million related to long-lived asset impairment and an $8.9 million trade name impairment charge.

(9) Transitional Group: $14.5 million related to long-lived asset impairment and a $2.2 million trade name impairment charge.