Restructuring and Other Charges

We have initiated a series of activities to reengineer business processes and refine our educational delivery structure. The following table details the charges incurred for the three months ended November 30, 2012 and 2011, respectively, and the cumulative costs associated with these activities, all of which are included in restructuring and other charges on our Condensed Consolidated Statements of Income:



	Three Months Ended November 30,				Cumulative Costs for Restructuring Activities
($ in thousands)	2012		2011		Cumulative Costs for Restructuring Activities
Non-cancelable lease obligations and related costs, net	$	10,112	$	5,562	$	45,160
Severance and other employee separation costs	10,943		—		27,676
Other restructuring related costs	3,061		—		12,888
Restructuring and other charges	$	24,116	$	5,562	$	85,724

The following table summarizes the above restructuring and other charges in our segment reporting format:



	Three Months Ended November 30,				Cumulative Costs for Restructuring Activities
($ in thousands)	2012		2011		Cumulative Costs for Restructuring Activities
University of Phoenix	$	16,896	$	5,562	$	59,811
Apollo Global	79		—		5,997
Other	7,141		—		19,916
Restructuring and other charges	$	24,116	$	5,562	$	85,724

The following table details the changes in our restructuring liability by type of cost during the three months ended November 30, 2012:



($ in thousands)	Lease and Related Costs, Net			Severance and Other Employee Separation Costs			Other Restructuring Related Costs			Total
Balance at August 31, 2012⁽¹⁾	$	26,024		$	2,998		$	1,411		$	30,433
Restructuring and other charges⁽²⁾	10,112			10,943			3,061			24,116
Non-cash adjustments⁽³⁾	(9,326		)	(1,065		)	—			(10,391		)
Payments	(2,994		)	(9,111		)	(2,450		)	(14,555		)
Balance at November 30, 2012⁽¹⁾	$	23,816		$	3,765		$	2,022		$	29,603

⁽¹⁾The current portion of our restructuring liability was $11.6 million and $11.3 million as of November 30, 2012 and August 31, 2012, respectively. The majority of these balances are included in accrued and other current liabilities on our Condensed Consolidated Balance Sheets.

⁽²⁾ Restructuring and other charges associated with lease and related costs, net includes $0.3 million of interest accretion related to lease obligations.

⁽³⁾ Non-cash adjustments represents $9.3 million of accelerated depreciation and $1.1 million of share-based compensation.

During the first quarter of fiscal year 2013, we initiated a plan to realign University of Phoenix’s ground locations throughout the U.S. This plan includes closing 115 locations with students directly impacted by the plan being offered support to continue their education at University of Phoenix either online, through alternative on-ground arrangements or, in limited cases, at existing University of Phoenix locations. Following the finalization and approval of this plan, we performed a recoverability analysis for the fixed assets at the designated facilities we have not yet closed. We performed this analysis by comparing the estimated undiscounted cash flows of the locations through their expected closure dates to the carrying amount of the locations’ fixed assets. Based on our analysis, we recorded an insignificant impairment charge. We also revised the useful lives of the fixed assets at each of the designated facilities we have not yet closed through the expected closure dates resulting in $9.3 million of accelerated depreciation during the first quarter of fiscal year 2013. Subject to regulatory approvals, we expect to substantially complete this realignment and incur additional related charges in fiscal year 2013.

During the first quarter of fiscal year 2013, we also initiated a workforce reduction consisting of approximately 800 positions due in part to University of Phoenix’s ground location realignment. We eliminated a portion of these positions during the first quarter of fiscal year 2013 and incurred $10.9 million of severance and other employee separation costs. These costs are included in the reportable segments in which the respective eliminated personnel were employed. We expect to eliminate the remaining positions associated with this workforce reduction and incur related charges in fiscal year 2013.

We incurred $3.1 million of costs during the first quarter of fiscal year 2013 principally attributable to services from consulting firms associated with our initiatives to evaluate and identify operating efficiency and effectiveness opportunities. As these services pertain to all areas of our business, we have not allocated these costs to our reportable segments and they are included in “Other” in our segment reporting.