0001558370-21-001135 | 10-K | XBRL Viewer | Grand Canyon Education INC

Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Dec. 31, 2020	Feb. 12, 2021	Jun. 30, 2020
Document And Entity Information [Abstract]
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2020
Entity File Number	001-34211
Entity Registrant Name	GRAND CANYON EDUCATION, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-3356009
Entity Address, Address Line One	2600 W. Camelback Road
Entity Address, City or Town	Phoenix
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85017
City Area Code	602
Local Phone Number	247-4400
Title of 12(b) Security	Common Stock
Trading Symbol	LOPE
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		46,873,732
Entity Public Float			$ 4.2
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Central Index Key	0001434588
Amendment Flag	false

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 245,769	$ 122,272
Restricted cash and cash equivalents		300
Investments	10,840	21,601
Accounts receivable, net	62,189	48,939
Interest receivable on Secured Note	5,011	5,011
Income tax receivable	1,294	2,186
Other current assets	8,639	8,035
Total current assets	333,742	208,344
Property and equipment, net	128,657	119,734
Right-of-use assets	61,020	27,770
Secured Note receivable, net	964,912	969,912
Amortizable intangible assets, net	193,638	202,057
Goodwill	160,766	160,766
Other assets	1,844	1,706
Total assets	1,844,579	1,690,289
Current liabilities
Accounts payable	16,583	14,835
Accrued compensation and benefits	34,248	20,800
Accrued liabilities	21,945	16,771
Income taxes payable	5,405	6,576
Deferred revenue		20
Current portion of lease liability	7,393	3,084
Current portion of notes payable	33,144	33,144
Total current liabilities	118,718	95,230
Deferred income taxes, noncurrent	20,288	18,320
Other long-term liability	3	13
Lease liability, less current portion	56,611	25,519
Notes payable, less current portion	74,630	107,774
Total liabilities	270,250	246,856
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 par value, 10,000 shares authorized; 0 shares issued and outstanding at December 31, 2020 and December 31, 2019
Common stock, $0.01 par value, 100,000 shares authorized; 53,277 and 53,054 shares issued and 46,649 and 48,105 shares outstanding at December 31, 2020 and December 31, 2019, respectively	533	531
Treasury stock, at cost, 6,628 and 4,949 shares of common stock at December 31, 2020 and December 31, 2019, respectively	(303,379)	(169,365)
Additional paid-in capital	282,467	270,923
Retained earnings	1,594,708	1,341,344
Total stockholders' equity	1,574,329	1,443,433
Total liabilities and stockholders' equity	$ 1,844,579	$ 1,690,289

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Dec. 31, 2020	Dec. 31, 2019
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
Common stock, shares issued	53,277	53,054
Common stock, shares outstanding	46,649	48,105
Treasury stock, shares	6,628	4,949

Consolidated Income Statements shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($) $ / shares shares
Net revenue	$ 845,501
Costs and expenses:
Technology and academic services	43,574
Counseling services and support	204,690
Marketing and communication	117,420
General and administrative	29,968
University related expenses	173,330
Loss on transaction	18,370
Total costs and expenses	587,352
Operating income	258,149
Interest income on Secured Note	26,947
Interest expense	(1,536)
Investment interest and other	3,440
Income before income taxes	287,000
Income tax expense	57,989
Net income	$ 229,011
Earnings per share:
Basic income per share \| $ / shares	$ 4.81
Diluted income per share \| $ / shares	$ 4.73
Basic weighted average shares outstanding \| shares	47,608
Diluted weighted average shares outstanding \| shares	48,414
Service
Net revenue	$ 333,002
University Related Revenue
Net revenue	$ 512,499

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Consolidated Statements of Comprehensive Income
Net income	$ 259,175	$ 229,011
Other comprehensive income, net of tax:
Unrealized (losses) on hedging derivative, net of taxes of $107 for the year ended December 31, 2019	(390)
Unrealized gain on hedging derivative, net of taxes of $39 for the year ended December 31, 2018		118
Unrealized gains (losses) on available for sale securities, net of taxes of $103 for the year ended December 31, 2018		309
Reclassification of expired interest rate corridor to interest expense, net of taxes of $257 for the year ended December 31, 2019	843
Comprehensive income	$ 259,628	$ 229,438

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Consolidated Statements of Comprehensive Income
Unrealized gains (losses) on hedging derivatives, taxes	$ 107
Unrealized gains (losses) on hedging derivatives, taxes		$ 39
Unrealized gains (losses) on available for sale securities, taxes		$ 103
Reclassification of expired interest rate corridor to interest expense, tax	$ 257

Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings Cumulative Effect of Adoption Adjustment	Retained Earnings	Cumulative Effect of Adoption Adjustment	Total
Beginning Balance (ASU 2014-09) at Dec. 31, 2017					$ (1,174)		$ (1,174)
Beginning Balance at Dec. 31, 2017	$ 523	$ (100,694)	$ 232,670	$ (724)		$ 854,176		$ 985,951
Beginning Balance, Shares at Dec. 31, 2017	52,277	4,152
Comprehensive income				427		229,011		229,438
Adoption impact - ASU 2018-02				(156)		156
Common stock purchased for treasury		$ (9,606)						(9,606)
Common stock acquired, shares		91
Restricted shares forfeited, Shares		95
Share-based compensation	$ 2	$ (15,152)	19,506					4,356
Share-based compensation, Shares	163	151
Exercise of stock options	$ 2		4,630					4,632
Exercise of stock options, Shares	250
Ending Balance at Dec. 31, 2018	$ 527	$ (125,452)	256,806	(453)		1,082,169		1,213,597
Ending Balance, Shares at Dec. 31, 2018	52,690	4,489
Comprehensive income				$ 453		259,175		259,628
Common stock purchased for treasury		$ (35,786)						(35,786)
Common stock acquired, shares		376
Restricted shares forfeited, Shares		16
Share-based compensation	$ 2	$ (8,127)	10,298					2,173
Share-based compensation, Shares	152	68
Exercise of stock options	$ 2		3,819					3,821
Exercise of stock options, Shares	212
Ending Balance (ASU 2016-13) at Dec. 31, 2019					$ (3,832)		$ (3,832)
Ending Balance at Dec. 31, 2019	$ 531	$ (169,365)	270,923			1,341,344		1,443,433
Ending Balance, Shares at Dec. 31, 2019	53,054	4,949
Comprehensive income						257,196		257,196
Common stock purchased for treasury		$ (129,045)						$ (129,045)
Common stock acquired, shares		1,602						1,602
Restricted shares forfeited, Shares		15
Share-based compensation	$ 1	$ (4,969)	10,662					$ 5,694
Share-based compensation, Shares	167	62
Exercise of stock options	$ 1		882					883
Exercise of stock options, Shares	56
Ending Balance at Dec. 31, 2020	$ 533	$ (303,379)	$ 282,467			$ 1,594,708		$ 1,574,329
Ending Balance, Shares at Dec. 31, 2020	53,277	6,628

Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2017
ASU 2014-09
Cumulative effect from the adoption of accounting pronouncements, tax		$ 390
ASU 2016-13
Cumulative effect from the adoption of accounting pronouncements, tax	$ 1,168

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows provided by operating activities:
Net income	$ 257,196	$ 259,175	$ 229,011
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation	10,663	10,300	19,508
Provision for bad debts			8,669
Depreciation and amortization	21,233	18,696	35,673
Amortization of intangible assets	8,419	8,223
Deferred income taxes	3,136	1,670	(11,507)
Loss on transaction		3,966	12,605
Other, including fixed asset impairments	571	(335)	2,101
Changes in assets and liabilities:
Accounts receivable and interest receivable from university partners	(13,250)	766	(51,480)
Accounts receivable			(7,784)
Other assets	(621)	2,136	1,553
Right-of-use assets and lease liabilities	2,151	833
Accounts payable	1,012	(3,095)	(14,306)
Accrued liabilities	18,612	5,078	(15,700)
Income taxes receivable/payable	(279)	(1,044)	(8,662)
Deferred rent	(20)		(189)
Student deposits		(25)	6,881
Deferred revenue			(7,288)
Net cash provided by operating activities	308,823	306,344	199,085
Cash flows used in investing activities:
Capital expenditures	(29,418)	(22,391)	(94,527)
Purchases of land and building improvements related to off-site development			(330)
Additions of amortizable content	(524)	(260)
Acquisition, net of cash acquired		(361,184)
Disposition			(131,550)
Funding to GCU at closing in excess of required capital			(7,377)
Repayment of excess funds by GCU			7,377
Funding to GCU	(75,000)	(169,819)	(29,996)
Repayment by GCU	75,000	100,000
Purchases of investments		(9,384)	(46,948)
Proceeds from sale or maturity of investments	10,591	57,163	65,116
Net cash used in investing activities	(19,351)	(405,875)	(238,235)
Cash flows (used in) provided by financing activities:
Principal payments on notes payable	(33,144)	(92,433)	(6,719)
Debt issuance costs		(2,385)
Proceeds from notes payable		243,750
Net borrowings from revolving line of credit		(68,750)
Repurchase of common shares including shares withheld in lieu of income taxes	(134,014)	(43,913)	(24,758)
Net proceeds from exercise of stock options	883	3,821	4,632
Net cash (used in) provided by financing activities	(166,275)	40,090	(26,845)
Net increase (decrease) in cash and cash equivalents and restricted cash	123,197	(59,441)	(65,995)
Cash and cash equivalents and restricted cash, beginning of period	122,572	182,013	248,008
Cash and cash equivalents and restricted cash, end of period	245,769	122,572	182,013
Supplemental disclosure of cash flow information
Cash paid for interest	4,306	11,516	1,511
Cash paid for income taxes	68,381	59,903	78,195
Supplemental disclosure of non-cash investing and financing activities
Sale transaction to GCU through Secured Note financing			870,097
Purchases of property and equipment included in accounts payable	1,206	469	1,121
Reclassification of capitalized costs - adoption of ASC 606			9,015
Reclassification of deferred revenue - adoption of ASC 606			7,451
Lease adoption - recognition of right of use assets and lease liabilities		498
ROU Asset and Liability recognition	$ 33,250	14,203
Reclassification of interest rate corridor due to expiration		$ 1,100
Reclassification of tax effect within accumulated other comprehensive income			$ 156

Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cumulative net effect of adoption of ASU	$ (1,574,329)				$ (1,443,433)				$ (1,574,329)	$ (1,443,433)	$ (1,213,597)	$ (985,951)
Allowance for credit losses	5,000				5,000				5,000	5,000		5,907
Income tax expense	$ 24,666	$ 13,141	$ 15,346	$ 22,791	17,575	$ 15,171	$ 14,125	$ 11,456	$ 75,944	58,327	$ 57,989
ASU 2014-09
Income taxes												390
ASU 2016-13
Income taxes										1,168
Cumulative Effect of Adoption Adjustment \| ASU 2014-09
Cumulative net effect of adoption of ASU												$ 1,174
Cumulative Effect of Adoption Adjustment \| ASU 2016-13
Cumulative net effect of adoption of ASU					3,832					3,832
Allowance for credit losses					$ 5,000					5,000
Income tax expense										$ 1,168

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

Nature of Business

12 Months Ended

Dec. 31, 2020

Nature of Business

Nature of Business

1. Nature of Business

Grand Canyon Education, Inc. (together with its subsidiaries, the “Company” or “GCE”) is a publicly traded education services company dedicated to serving colleges and universities. GCE has developed significant technological solutions, infrastructure and operational processes to provide services to these institutions on a large scale. GCE’s most significant university partner is Grand Canyon University (“GCU”), an Arizona non-profit corporation that operates a comprehensive regionally accredited university that offers graduate and undergraduate degree programs, emphases and certificates across nine colleges both online and on ground at its campus in Phoenix, Arizona.

Prior to July 1, 2018, GCE owned and operated Grand Canyon University (the “University”). On July 1, 2018, the Company sold the University to GCU. As a result of this transaction (the “Transaction”), GCE became an education services company focused on providing a full array of support services to institutions in the post-secondary education sector. GCE provides education services that include technology and academic services, counseling services and support, marketing and communication services, and for its largest university partner several back-office services such as accounting, reporting, tax, human resources, and procurement services. See Note 2 to our consolidated financial statements for a full description of the Transaction.

In January 2019, GCE began providing education services to numerous university partners across the United States, through our wholly-owned subsidiary, Orbis Education, which we acquired, by merger on January 22, 2019 for $361,184, net of cash acquired (the “Acquisition”). Therefore, the results of operations for the year ended December 31, 2019 include Orbis Education’s financial results for the period from January 22, 2019 to December 31, 2019. The Company financed a portion of the purchase price through a credit facility provided by a consortium of banks led by our existing bank group. See Note 3 to our consolidated financial statement for a full description of the Acquisition.

In the healthcare field, GCE, together with Orbis Education, works in partnership with a growing number of top universities and healthcare networks across the country, offering health care related academic programs at off-campus classroom and laboratory sites located near healthcare providers and developing high-quality, career-ready graduates who enter the workforce ready to meet the demands of the healthcare industry. As of December 31, 2020, GCE provides education services to 25 university partners across the Unites States.

GCE was formed in Delaware in November 2003 as a limited liability company, under the name Significant Education, LLC, for the purchase of acquiring the assets of the University from a non-profit foundation on February 2, 2004. On August 24, 2005, the Company converted from a limited liability company to a corporation and changed its name to Significant Education, Inc. On May 9, 2008, the Company changed its name to Grand Canyon Education, Inc. The Company’s wholly-owned subsidiaries were historically used to facilitate expansion of the university campus prior to the Transaction.

The Transaction

12 Months Ended

Dec. 31, 2020

The Transaction

The Transaction

2. The Transaction

Asset Purchase Agreement and Related Agreements

On July 1, 2018, the Company consummated an Asset Purchase Agreement (the “Asset Purchase Agreement”) with GCU. In conjunction with the Asset Purchase Agreement, we received a secured note from GCU as consideration for the transferred assets (the “Transferred Assets”) in the initial principal amount of $870,097 (the “Secured Note”). The Secured Note contains customary commercial credit terms, including affirmative and negative covenants applicable to GCU, and provides that the Secured Note bears interest at an annual rate of 6.0%, has a maturity date of June 30, 2025, and is secured by all of the assets of GCU. The Secured Note provides for GCU to make interest only payments during the term, with all principal and accrued and unpaid interest due at maturity and also provides that we may loan additional amounts to GCU to fund approved capital expenditures during the first three years of the term. As of

December 31, 2020, the Company had loaned $99,815 to GCU for capital expenditures, which is net of repayments made by GCU. In connection with the closing of the Asset Purchase Agreement, the Company and GCU entered into a long-term master services agreement pursuant to which the Company provides identified technology and academic services, counseling services and support, marketing and communication services, and several back-office services to GCU in return for 60% of GCU’s tuition and fee revenue.

The Company was a party to a credit agreement with Bank of America, N.A. as Administrative Agent, and other lenders, dated December 21, 2012 and amended as of January 15, 2016. Effective July 1, 2018, the Company and the lenders amended the credit agreement (the “Amendment”) to release the assets pledged as collateral in order to enable GCE to sell them to GCU and complete the Transaction. In connection with the Amendment, GCE provided restricted cash collateral in the amount of $61,667 as of December 31, 2018, which was released on January 22, 2019. See Note 10 to our consolidated financial statements for a full description of our credit agreement.

Disposed Assets, previously Assets and Liabilities Held for Sale

The Company received Board approval to consummate the Transaction on June 28, 2018, and completed the Transaction on July 1, 2018. As a result, the Company determined that it had met the accounting requirements to classify the assets and liabilities to be transferred in the Transaction as assets and liabilities held for sale as of June 30, 2018. The assets and liabilities held for sale were sold as part of the Transaction on July 1, 2018. Accordingly, the following balances were transferred to GCU as of July 1, 2018:


Restricted cash and cash equivalents	$	97,443
Accounts receivable, net of allowance for doubtful accounts of $6,093		9,780
Other assets		7,677
Property and equipment, net of accumulated depreciation of $166,066		870,097
Total assets held for sale, current	$	984,997

Accrued and other liabilities	$	5,025
Student deposits		88,010
Deferred revenue		46,325
Note payable		79
Total liabilities held for sale, current	$	139,439

The Company received a Secured Note for the Transferred Assets. The Company also transferred cash equal to $34,107 representing a working capital adjustment as part of the closing. Except for identified liabilities assumed by GCU, GCE retained responsibility for all liabilities of the business arising from pre-closing operations. For the year ended December 31, 2018 the Company had a loss of $18,370, included in loss on transaction due to transaction costs of $5,765, which includes both disposition and acquisition related transaction costs, and an asset impairment of $3,037. In addition, the Company transferred to GCU cash of $9,568 to fund a deferred compensation plan for GCU employees that were formerly GCE employees (the “Transferred Employees”) and that held unvested restricted stock of GCE that was forfeited upon the Transaction. Included in the university related expenses for the six months ended December 31, 2018 is $7,880 of share-based compensation expense resulting from the modification and vesting of previously issued restricted stock grants held by Transferred Employees, employer tax expense of $191 related to the share-based compensation modification, net of reversals of employee related liabilities that were not part of the Transferred Assets for the Transaction of $1,907.

Variable Interest Entity and Related Party Considerations

ASC 810-10-15-17 provides scope exceptions to the variable interest entity analysis that include a not-for profit entity carve out. GCU is not a related party to the Company in accordance with ASC Topic 850. The following factors were considered:

●

Since GCU is an Arizona non-profit corporation, the Company has no ownership interest or voting rights in GCU.

●

GCU is a separate non-profit entity under the control of an independent board of trustees, none of whose members have ever served in a management or corporate board role at the Company. GCU’s board of trustees has adopted bylaws and a related conflict of interest policy that, among other things, (i) prevents any trustee of GCU from attending any meeting, or voting on any matter, as to which such trustee has a conflict of interest, (ii) establishes a special committee of independent trustees to oversee on behalf of GCU all matters related to the Master Services Agreement and GCU’s relationship with the Company, and (iii) prohibits any trustee from having any financial interest in, or role with, the Company. Accordingly, the Company’s relationship with GCU, both pursuant to the Master Services Agreement and operationally, is no longer as owner and operator, but as a third-party service provider to an independent customer. While the Company believes that its relationship with GCU will remain strong, GCU’s board of trustees and management will have fiduciary and other duties that will require them to focus on the best interests of GCU and over time those interests could diverge from those of the Company.

●

Mr. Brian E. Mueller has served as the Chief Executive Officer of the Company since 2008 and the Chairman of the Board of the Company since 2017 and has also served as the President of the University since 2012. In connection with the Transaction, the Board of Directors of the Company and the board of trustees of GCU each independently determined that Mr. Mueller should retain those roles. Accordingly, Mr. Mueller remains the Chairman of the Board and Chief Executive Officer of the Company and continues to serve as the President of GCU. As noted above, however, Mr. Mueller is prohibited from serving on the board of trustees of GCU. Aside from Mr. Mueller, no other employee of GCU or GCE has a dual role in both organizations. A structure has been put in place that prevents Mr. Mueller from participating in operational matters involving the Company and GCU, including with respect to the Master Services Agreement.

●

The terms of the Master Services Agreement vest in GCU and its board of trustees has full authority over decision making related to the day-to-day operations of GCU, including, without limitation, (i) selecting, hiring and firing its personnel, (ii) selecting and adopting academic programs and courses, (iii) establishing admission standards and admitting students, (iv) overseeing instruction, (v) setting credit and student performance requirements, (vi) determining graduation requirements, and (vii) conferring degrees. Per the terms of the MSA, GCE has no authority over GCU’s day-to-day operations.

●

If GCU were to default under the credit agreement, the Company would be able to pursue assets of GCU, which are pledged as collateral for the Secured Note. However, the Company would not become the owner or operator of GCU.

●

There is no parent entity and subsidiary relationship between the Company and GCU.

●

The Company and GCU both engaged their own outside corporate counsel, outside regulatory counsel, and financial advisors to represent each party’s interest during the Transaction.

Acquisition

12 Months Ended

Dec. 31, 2020

Acquisition

Acquisition

3. Acquisition

On January 22, 2019, GCE acquired Orbis Education for $361,184 (inclusive of closing date adjustments and net of cash acquired). Orbis Education is an education services company that supports healthcare education programs for university partners across the United States. Concurrent with the closing of the Acquisition, GCE entered into an amended and restated credit agreement and used $191,000 from the amended and restated credit agreement and $171,034 of operating cash on hand to complete the purchase. See Note 10 of our consolidated financial statements for a description of the amended and restated credit agreement. The fair value of the assets acquired, less the liabilities assumed exceeded the purchase price by $157,825 which was recorded as goodwill. Transaction costs for the Acquisition for the year ended December 31, 2018 were $808 and for the year ended December 31, 2019 were $3,966, which are included in the loss on transaction in our consolidated income statement.

The Acquisition was accounted for in accordance with the acquisition method of accounting. Under this method the cost of the target is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The following table provides a tabular depiction of the Company’s allocation of the total purchase price to each of the assets acquired and liabilities assumed based on the Company’s fair value estimates.


Assets acquired
Cash, including $300 of pledged collateral	$	4,793
Accounts receivable, net of allowance of $0	$	3,236
Property and equipment	$	5,392
Right-of-use assets	$	13,069
Intangible assets	$	210,280
Other assets	$	2,793
Liabilities assumed
Accounts payable	$	4,308
Accrued and other liabilities	$	4,451
Lease liability	$	13,069
Deferred tax liability	$	9,538
Deferred revenue	$	45
Total net asset or liability purchased and assumed	$	208,152

Purchase price	$	365,977

Excess of fair value of net assets acquired over consideration given	$	157,825

The estimated fair values of current assets and liabilities were based upon their historical costs on the date of acquisition due to their short-term nature. The majority of property and equipment were also estimated based upon historical costs as they approximated fair value. Identified intangible assets of $210,280 consisted primarily of university partner relationships that were valued at $210,000. The fair value of university partner relationships was determined using the multiple-period excess earnings method.

Subsequent to the closing of the Acquisition, the Company revised its allocation of the purchase price by $9,538 during the year ended December 31, 2019, primarily as the result of the tax effect of a lower tax basis in the acquired assets. The Company has completed the allocation of the purchase price of the Acquisition as of December 31, 2019.

The Company has consolidated the results of operations for Orbis Education since its Acquisition on January 22, 2019. Consolidated net revenue and consolidated net income for the year ended December 31, 2019 include $85,869 of service revenue and a loss, net of taxes, of $2,588 from Orbis Education, which includes $8,223 of amortization of

intangible assets. The following table reports pro forma information as if the Acquisition of Orbis Education had been completed at the beginning of the earliest period presented:


	Three Months Ended December 31,				Year Ended December 31,
	2019		2018		2019		2018
Net revenue
As Reported	$	213,247	$	177,548	$	778,643	$	845,501
Pro forma	$	213,247	$	195,656	$	781,893	$	907,960

Net income
As Reported	$	76,669	$	75,531	$	259,175	$	229,011
Pro forma	$	76,669	$	69,551	$	247,930	$	200,264

The pro forma information above for the three months ended and the years ended December 31, 2019 and 2018 includes acquisition related costs in both periods, amortization of intangible assets as a result of the Acquisition, additional interest expense on the debt issued to finance the Acquisition, depreciation expense based on the estimated fair value of the assets acquired, and warrant expense and related tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been consummated on January 1, 2019 and 2018.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

4. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated 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 Company invests a portion of its cash in excess of current operating requirements in short term certificates of deposit and money market instruments. The Company 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 and cash equivalents at December 31, 2019 represents cash pledged for leased office space, which cash was released during the year ended December 31, 2020.

Investments

At December 31, 2020 and 2019, the Company considers its investments in municipal bonds, mutual funds, municipal securities, corporate bonds, collateralized mortgage obligations, certificates of deposit and commercial paper as trading securities based on the Company’s intent for the respective security. Trading securities are carried at fair value determined using Level 1 and Level 2 of the hierarchy of valuation inputs, with the use of quoted market prices and

inputs other than quoted prices that are observable for the assets and unrealized holding gains and losses are included in earnings. As of December 31, 2018, the Company transferred its investments from available-for-sale to trading, due to the Company’s decision to liquidate all investments to fund a portion of the purchase price paid in the Acquisition. Available-for-sale securities are carried at fair value, with unrealized gains and losses, net of tax, reported as a separate component of other comprehensive income. Comprehensive income and 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. As a result of the transfer to trading, the Company recorded a loss of $372 in investment interest and other for the year ended December 31, 2018.

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. The majority of the Company’s historical capitalized interest was related to the construction of the University’s campus improvements. The Company capitalizes interest using its interest rates on the specific borrowings used to finance the improvements, which approximated 3.7% in 2018. Interest cost capitalized and incurred in the years ended December 31, 2020, 2019, and 2018 are as follows:


	Year Ended December 31,
	2020		2019		2018
Interest incurred	$	4,402	$	11,311	$	2,292
Interest capitalized		—		—		756
Interest expense	$	4,402	$	11,311	$	1,536

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.

Internally Developed Technology

The Company capitalizes certain costs related to internal-use software, primarily consisting of direct labor associated with creating the software. Software development projects generally include three stages: the preliminary project stage (all costs are expensed as incurred), the application development stage (certain costs are capitalized and certain costs are expensed as incurred) and the post-implementation or operation stage (all costs are expensed as incurred). Costs capitalized in the application development stage include costs of design, coding, integration, and testing of the software developed. Capitalization of costs requires judgment in determining when a project has reached the application development stage and the period over which we expect to benefit from the use of that software. Once the software is placed in service, these costs are amortized over the estimated useful life of the software, which is generally three years. These assets are a component of our property and equipment, net in our consolidated balance sheet.

Capitalized Content Development

The Company capitalizes certain costs to fulfill a contract related to the development and digital creation of content on a course-by-course basis for each university partner, many times in conjunction with faculty and subject matter experts. The Company is responsible for the conversion of instructional materials to an on-line format, including outlines, quizzes, lectures, and articles in accordance with the educational guidelines provided to us by our university partners, prior to the respective course commencing. We also capitalize the creation of learning objects which are digital assets such as online demonstrations, simulations, and case studies used to obtain learning objectives.

Costs that are capitalized include payroll and payroll-related costs for employees who are directly associated and spend time producing content and payments to faculty and subject matter experts involved in the process. The Company starts capitalizing content costs when it begins to develop or to convert a particular course, resources have been assigned and a timeline has been set. The content asset is placed in service when all work is complete and the curriculum could be used for instruction. Capitalized content development assets are included in other assets in our consolidated balance sheets. The Company has concluded that the most appropriate method to amortize the deferred content assets is on a straight-line basis over the estimated life of the course, which is generally four years which corresponds with course’s review and major revision cycle. As of December 31, 2020 and 2019, $1,198 and $1,077, respectively, net of amortization, of deferred content assets are included in other assets in the Company’s consolidated balance sheets and amortization is included in technical and academic services where the costs originated.

Long-Lived Assets

The Company evaluates the recoverability of its long-lived assets for impairment, other than goodwill, 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.

Leases

The Company determines if an arrangement is a lease at inception and evaluates the lease agreement to determine whether the lease is a finance or operating lease. Right-of-use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement to determine the present value of lease payments over the lease term. At lease inception, the Company determines the lease term by assuming no exercises of renewal options, due to the Company’s constantly changing geographical needs for its university partners. Leases with an initial term of 12 months or less are not recorded in the consolidated balance sheets and are recognized as lease expense on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, and the non-lease components are accounted for separately and not included in our ROU assets and lease liabilities. Leases primarily consist of off-campus classroom and laboratory site locations and office space.

Other Assets

The Company developed its online delivery platform with a third-party and put this platform into full production in 2011. The Company has prepaid perpetual license fees and source code rights for the software developed, and has prepaid maintenance and service fees. 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.

Prepaid Royalty

In connection with its February 2004 acquisition of the assets of the University from a non-profit foundation, the Company recorded a future royalty payment obligation that was included in the Prepaid Royalty in the accompanying consolidated balance sheet, which was being amortized over a 20 year period. This asset was to be expensed over the periods that online education revenues were earned. At the completion of the Transaction on July 1, 2018, the remaining prepaid royalty assets were deemed impaired and $3,037 was expensed and included in loss on transaction in the consolidated income statement.

Business Combinations

The purchase price of an acquisition is allocated to the assets acquired, including tangible and intangible assets, and liabilities assumed, based on their respective fair values at the acquisition date. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. Transaction costs associated with business combinations are expensed as incurred and are recorded in the loss on transaction in the consolidated financial statements. The determination of the value and useful lives of the intangible assets acquired involves certain judgments and estimates. These judgments can include, but are not limited to, the cash flows that an asset is expected to generate in the future and the appropriate weighted average cost of capital. The net assets and result of operations of an acquired entity are included on the Company's consolidated financial statements from the acquisition date.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the tangible and intangible assets acquired and liabilities assumed. Goodwill is assessed at least annually for impairment during the fourth quarter, or more frequently if circumstances indicate potential impairment. Goodwill is allocated to our reporting unit at the education services segment, which is the same as the entity as a whole (entity level reporting unit). The Company has concluded there is one operating segment and one reporting unit for goodwill impairment consideration. 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 Company performed its annual goodwill impairment test, by performing a qualitative assessment. Following this assessment, the Company determined that it is more likely than not that its fair value exceeds its carrying amount.

Finite-lived intangible assets that are acquired in business combinations are recorded at fair value on their acquisition dates and are amortized on a straight-line basis over the estimated useful life of the intangible asset. Finite-lived intangible assets consist of university partner relationships and trade names. The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. There were no indicators that the carrying amount of the finite-lived intangible assets were impaired. 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 intangible assets are not recoverable, a potential impairment loss is recognized to the extent the carrying amounts of the assets exceeds the fair value of the assets.

Share-Based Compensation

The Company measures and recognizes compensation expense for share-based payment awards made to employees and directors. The fair value of the Company’s restricted stock awards is based on the market price of its common stock on the date of grant. Stock-based compensation expense related to restricted stock grants is expensed over the vesting period using the straight-line method for Company employees and the Company’s board of directors. The Company recognizes forfeitures as they occur.

Derivatives and Hedging

Derivative financial instruments are recorded on the consolidated 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.

Although the Company currently does not have any derivative financial instruments, derivative financial instruments have been used in the past to manage its exposure to interest rate risk. The Company does not engage in any derivative instrument trading activity.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, accounts 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. As of December 31, 2020 the carrying value and fair value of the Company’s Secured Note was $964,912 and $1,049,458, respectively. Fair value of the Secured Note was estimated based upon average yields of similar debt arrangements in the marketplace. As of December 31, 2019, the Secured Note approximated fair market value since it was recently negotiated in the Transaction at the fair market value. The carrying value of notes payable approximate fair value based on its variable rate index. 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 12, Derivative Instruments.

The fair value of investments was determined using Level 1 and 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 and corporate securities consisting of bank and financial institution bonds and securities.

Income Taxes

The Company 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 Company’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 Company 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 Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2020 and 2019, the Company has reserved approximately $11,318 and $6,773, respectively, for uncertain tax positions, including interest and penalties, which is classified within accrued liabilities on the accompanying consolidated balance sheet.

The Company 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 Company accrues for a contingent obligation when it is probable that a liability has been incurred and the amount is reasonably estimable. When the Company 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 Company records a liability for the estimated loss. If the loss is not probable or the amount of the potential loss is not estimable, the Company 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 Company expenses legal fees as incurred.

Revenue Recognition

University related revenue – prior to July 1, 2018

On January 1, 2018, the Company adopted “Revenue from Contracts with Customers” using the modified retrospective method applied to all contracts. Prior to the Transaction on July 1, 2018, net revenues consisted primarily of tuition, net of scholarships, and fees derived from courses taught by the University online, on ground, and at facilities it leased or those of employers, as well as from related educational resources that the University provided to its students, such as access to online materials. Tuition revenue was recognized pro-rata over the applicable period of instruction. A contract was entered into with a student and covered a course or semester. Revenue recognition occurred once a student started attending a course. The University also charged online students an upfront learning management fee, which was deferred and recognized over the initial course. The University had no costs that were capitalized to obtain or to fulfill a contract with a customer. Ancillary revenues included housing and fee revenues that were recognized over the period the services were provided and also included revenues from sales and services such as food and beverage, merchandise, hotel, golf and arena events that were recognized as sales occurred or services were performed as these services were transferred at a point in time. For the six months ended June 30, 2018, the Company’s revenue was reduced by approximately $101,176 as a result of scholarships that the Company offered to students. 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 following table presents our revenues disaggregated by the nature of transfer of services for the six months ended June 30, 2018:


Tuition revenues	$	522,430
Ancillary revenues (housing, meals, fees, golf, hotel, arena, other)		91,245
Total revenues		613,675
Scholarships		(101,176)
Net Revenues	$	512,499

The Company’s receivables represented unconditional rights to consideration from its contracts with students; accordingly, students were not billed until they started attending a course and the revenue recognition process had commenced. Once a student had been invoiced, payment was due immediately. Included in each invoice to the student were all educational related items including tuition, net of scholarships, housing, educational materials, fees, etc. The Company did not have any contract assets. The Company’s contract liabilities were reported as deferred revenue and student deposits in the consolidated balance sheets. Deferred revenue and student deposits in any period represented the excess of tuition, fees, and other student payments received as compared to amounts recognized as revenue on the consolidated income statement and were reflected as current liabilities in the accompanying consolidated balance sheets. The Company’s education programs had 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 was not yet earned. The majority of the University’s traditional ground students did not attend courses during the summer months (May through August), which affected our results for our second and third fiscal quarters.

The Company had identified a performance obligation associated with the provision of its educational instruction and other educational services, housing services, and other academic related services and used the output measure for recognition as the period of time over which the services were provided to our students. The Company had identified performance obligations related to its hotel, golf course, restaurants, sale of branded promotional items and other ancillary activities and recognized revenue at the point in time goods or services were provided to its customers. The Company maintained an institutional tuition refund policy, which provided for all or a portion of tuition to be refunded if a student withdrew during stated refund periods. Certain states in which students reside impose separate, mandatory refund policies, which overrode the Company’s policy to the extent in conflict. If a student withdrew at a time when only a portion, or none of the tuition was refundable, then in accordance with its revenue recognition policy, the Company

continued to recognize the tuition that was not refunded pro-rata over the applicable period of instruction. The Company did not record revenue on amounts that may be refunded. However, for students that had taken out financial aid to pay their tuition and for which a return of such money to ED under Title IV was required as a result of his or her withdrawal, the Company reassessed collectability for these students each quarter for the estimated revenue that will be returned and recognized the revenue in future periods when payment was received. The Company had elected the short-term contract exemption with respect to its performance obligations under its contracts with students as all such contracts had original terms of less than one year.

Service revenue commenced July 1, 2018

Starting July 1, 2018, the Company generates all of its revenue through services agreements with its university partners (“Services Agreements”), pursuant to which the Company provides integrated technology and academic services, marketing and communication services, and back office services to its university partners in return for a percentage of tuition and fee revenue.

The Company’s Services Agreements have initial terms ranging from 7-15 years, subject to renewal options, although certain agreements may give the university partners the right to terminate early if certain conditions are met. The Company’s Services Agreements have a single performance obligation, as the promises to provide the identified services are not distinct within the context of these agreements. The single performance obligation is delivered as our partners receive and consume benefits, which occurs ratably over a series of distinct service periods (daily or semester). Service revenue is recognized over time using the output method of measuring progress towards complete satisfaction of the single performance obligation. The output method provides a faithful depiction of the performance toward complete satisfaction of the performance obligation and can be tied to the time elapsed which is consumed evenly over the service period and is a direct measurement of the value provided to our partners. The service fees received from our partners over the term of the agreement are variable in nature in that they are dependent upon the number of students attending the university partner’s program and revenues generated from those students during the service period. Due to the variable nature of the consideration over the life of the service arrangement, the Company considered forming an expectation of the variable consideration to be received over the service life of this one performance obligation. However, since the performance obligation represents a series of distinct services, the Company recognizes the variable consideration that becomes known and billable because these fees relate to the distinct service period in which the fees are earned. The Company meets the criteria in the standard and exercises the practical expedient to not disclose the aggregate amount of the transaction price allocated to the single performance obligation that is unsatisfied as of the end of the reporting period. The Company does not disclose the value of unsatisfied performance obligations because the directly allocable variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service that forms part of a single performance obligation. The service fees are calculated and settled per the terms of the Services Agreements and result in a settlement duration of less than one year for all partners. There are no refunds or return rights under the Services Agreements.

The Company’s receivables represent unconditional rights to consideration from our Services Agreements with our university partners. Accounts receivable, net is stated at net realizable value and contains billed and unbilled revenue. The Company utilizes the allowance method to provide for doubtful accounts based on its evaluation of the collectability of the amounts due. There have been no amounts written off and no reserves established as of December 31, 2020 given historical collection experience. The Company will continue to review and revise its allowance methodology based on its collection experience with its partners.

For our partners with unbilled revenue, revenue recognition occurs in advance of billings. Billings for some university partners do not occur until after the service period has commenced and final enrollment information is available. Our unbilled revenue of $294 and $118 as of December 31, 2020 and 2019, respectively, are included in accounts receivable in our consolidated balance sheets. Deferred revenue represents the excess of amounts received as compared to amounts recognized in revenue on our consolidated statements of income as of the end of the reporting period, and such amounts are reflected as a current liability on our consolidated balance sheets. We generally receive

payments for our services billed within 30 days of invoice. These payments are recorded as deferred revenue until the services are delivered and revenue is recognized.

Allowance for Credit Losses

The Company records its accounts receivable and Secured Note receivable at the net amount expected to be collected. Our accounts receivable are derived through education services provided to university partners. Our Secured Note receivable was derived through the sale of university-related assets to our most significant university partner, GCU. The Company maintains an allowance for credit losses resulting from our university partners not making payments. The Company determines the adequacy of the allowance by periodically evaluating each university partner’s balance, considering their financial condition and credit history, and considering current and forecasted economic conditions. Since our transition to an education services company on July 1, 2018 through December 31, 2019, and continued growth to 25 university partners, the Company has no credit losses with any of our university partners. In the first quarter of 2020, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments using a modified retrospective approach. This model requires consideration of a broader range of reasonable and supportable information and requires the Company to estimate expected credit losses including a measure of the expected risk of credit loss even if that risk is remote over the lifetime of the asset. Upon adoption, the Company recorded a reserve of $5,000 on its long-term Secured Note receivable. The cumulative effect for the Company upon adoption of this new standard was $3,832, net of taxes of $1,168. Bad debt expense is recorded as a technology and academic services expense in the consolidated income statement. The Company will continue to actively monitor the impact of the COVID-19 pandemic on expected credit losses.

Technology and Academic Services

Technology and academic services consist primarily of costs related to ongoing maintenance of educational infrastructure, including online course delivery and management, student records, assessment, customer relations management and other internal administrative systems. This also includes costs to provide support for content development, faculty training, development and other faculty support, technology support, rent and occupancy costs for university partners’ off-campus locations, and assistance with state compliance. This expense category includes salaries, benefits and share-based compensation, information technology costs, amortization of content development costs and other costs associated with these support services. This category also includes an allocation of depreciation, amortization, and occupancy costs attributable to the provision of these services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations.

Counseling Services and Support

Counseling services and support consist primarily of costs including team-based counseling and other support to prospective and current students as well as financial aid processing. This expense category includes salaries, benefits and share-based compensation, and other costs such as dues, fees and subscriptions and travel costs. This category also includes an allocation of depreciation, amortization, rent, and occupancy costs attributable to the provision of these services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations.

Marketing and Communication

Marketing and communication includes lead acquisition, digital communication strategies, brand identity advertising, media planning and strategy, video, data science and analysis, marketing to potential students and other promotional and communication services. This expense category includes salaries, benefits and share-based compensation for marketing and communication personnel, brand advertising, marketing leads and other promotional and communication expenses. This category also includes an allocation of depreciation, amortization, lease expense, and occupancy costs attributable to the provision of these services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations. Advertising costs are expensed as incurred.

General and Administrative

General and administrative expenses include salaries, benefits and share-based compensation of employees engaged in corporate management, finance, human resources, compliance, and other corporate functions. This category also includes an allocation of depreciation, amortization, lease expense, and occupancy costs attributable to the provision of these services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations.

University related expenses

University related expenses represent the costs that were transferred to GCU in the Transaction and that are no longer incurred by the Company.

Insurance/Self-Insurance

The Company 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 Company’s loss exposure related to self-insurance is limited by stop loss coverage on a per occurrence and aggregate basis. The Company regularly analyzes its reserves for incurred but not reported claims, and for reported but not paid claims related to self-funded insurance programs. While the Company believes reserves are adequate, significant judgment is involved in assessing these reserves such as assessing historical paid claims, average lags between the claims’ incurred date, reported dates and paid dates, and the frequency and severity of claims. There may be differences between actual settlement amounts and recorded reserves and any resulting adjustments are included in expense once a probable amount is known.

Concentration of Credit Risk

The Company 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 BBB rating, depending on the type of security, by one major rating agency at the time of purchase. All of the Company’s cash equivalents and investments as of December 31, 2020 and 2019 consist of investments rated BBB or higher by at least one rating agency. Additionally, the Company 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. The Company is also subject to credit risk for its accounts receivable balance and its Secured Note. The Company has not experienced any losses on accounts receivables since July 1, 2018, the date the Company transitioned to an education service company. To manage accounts receivable risk, the Company maintains an allowance for doubtful accounts, if needed. The Company monitors the credit risk exposure of the counterparty of the Secured Note to determine whether an adjustment to allowance for credit loss is necessary. A significant deterioration in the financial viability of our counterparty and corresponding decline in the fair value of the collateralized assets could impact the collectability risk of the Secured Note. Our dependence on our largest university partner, which is also the counterparty to the Secured Note, with 86.8% and 89.0% of total service revenue for the years ended December 31, 2020 and 2019, respectively, subjects us to the risk that declines in our customer’s operations would result in a sustained reduction in service revenue and interest income on Secured Note for the Company.

Segment Information

The Company operates as a single education services company using a core infrastructure that serves the curriculum and educational delivery needs of its university partners. The Company’s Chief Executive Officer manages the Company’s operations as a whole and no expense or operating income information is generated or evaluated on any component level.

Accounting Pronouncements Adopted in 2020

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments. Under this guidance, the Company is required to utilize an “expected credit loss model” on certain financial instruments, including receivables and the Secured note receivable. This model requires consideration of a broader range of reasonable and supportable information and requires the Company to estimate expected credit losses including a measure of the expected risk of credit loss even if that risk is remote over the lifetime of the asset. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Accordingly, the standard was adopted by the Company as of January 1, 2020 using a modified retrospective approach. Upon adoption, the Company recorded a reserve of $5,000 on its long-term Secured Note receivable. The cumulative effect for the Company upon adoption of this new standard was $3,832, net of tax. The adoption of this guidance did not have a material impact on the Company’s financial condition, results of operations or statements of cash flows. The Company will continue to actively monitor the impact of the COVID-19 pandemic on expected credit losses.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The amendments in the ASU improve the Codification by eliminating inconsistencies and providing clarifications. Under this guidance, the Company made an election not to measure an allowance for credit losses on its accrued interest receivable amounts earned on the Secured Note receivable. The Company will write off any uncollectible accrued interest in a timely manner. The adoption of this guidance did not have a material impact on the Company’s financial condition, results of operations or statements of cash flows.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350); Simplifying the Test for Goodwill Impairment, which eliminated step two from the goodwill impairment test and requires an entity to recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value, up to the amount of goodwill allocated to that reporting unit. The amendments in this standard are effective for fiscal years beginning after December 15, 2019, with early adoption permitted. Accordingly, the standard was adopted by us as of January 1, 2020. The adoption of this guidance did not have a material impact on the Company’s financial condition, results of operations or statements of cash flows.

Recent Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifying certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for annual periods beginning after December 15, 2020 and interim periods within those annual periods, with early adoption permitted. An entity that elects early adoption must adopt all the amendments in the same period. Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company is currently evaluating the impact of the new standard on our consolidated financial statements and related disclosures.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effect of) reference rate reform on financial reporting. It provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. The Company plans to elect the optional expedient for its credit facility by prospectively adjusting the effective interest rate if the cessation of the London Interbank Offered Rate (LIBOR) occurs. The Company does not believe the adoption

of the reference rate reform will have a material impact on the Company’s financial condition, results of operations or statements of cash flows.

The Company has determined that no other recent accounting pronouncements apply to its operations or could otherwise have a material impact on its consolidated financial statements.

Investments

12 Months Ended

Dec. 31, 2020

Investments

Investments

5. Investments

The Company classifies its investments as trading. At December 31, 2020 and 2019, the Company had $10,840 and $21,601, respectively, of investments. These investments were held in municipal and corporate securities as of December 31, 2020 and 2019. The cash flows of municipal securities are backed by the issuing municipality’s credit worthiness. All municipal securities and certificate of deposit are due in one year or less as of December 31, 2020.

Allowance for Credit Losses

12 Months Ended

Dec. 31, 2020

Allowance for Credit Losses

Allowance for Credit Losses

6. Allowance for Credit Losses


	Balance at				Balance at
	Beginning of		Charged to	Deductions/	End of
	Period⁽¹⁾		Expense	Transfers⁽²⁾⁽³⁾	Period
Allowance for credit losses
Year ended December 31, 2020	$	5,000	—	—	$	5,000
Year ended December 31, 2019	$	—	—	—	$	—
Year ended December 31, 2018	$	5,907	8,669	(14,576)	$	—

(1)	Amount in the year ended December 31, 2020 represents the cumulative effect of the adoption of ASU No. 2016-13 on the Secured Note receivable.

(2)	Deductions represent accounts written off, net of recoveries.

(3)	$6,093 included in the deductions column for the year ended December 31, 2018, represents the allowance that was transferred to GCU with other educational assets and liabilities on July 1, 2018. See Note 2.

- Definition

The entire disclosure for credit loss on financial instrument measured at amortized cost basis, net investment in lease, off-balance sheet credit exposure, and available-for-sale debt security.

+ References + Details

Property and Equipment

12 Months Ended

Dec. 31, 2020

Property and Equipment

Property and Equipment

7. Property and Equipment

Property and equipment consist of the following:


	As of December 31,
	2020		2019
Land	$	5,579	$	5,579
Land improvements		2,242		2,242
Buildings		51,399		51,399
Buildings and leasehold improvements		14,352		11,691
Computer equipment		100,575		95,020
Furniture, fixtures and equipment		15,439		10,423
Internally developed software		46,981		37,175
Construction in progress		5,043		3,238
		241,610		216,767
Less accumulated depreciation and amortization		(112,953)		(97,033)
Property and equipment, net	$	128,657	$	119,734

Depreciation expense associated with property and equipment totaled $20,830 and $18,393 for the years ended December 31, 2020 and 2019, respectively. Depreciation and amortization expense associated with property and equipment, including assets under capital lease, totaled $35,525 for the year ended December 31, 2018.

Intangible Assets

12 Months Ended

Dec. 31, 2020

Intangible Assets

Intangible Assets

8. Intangible Assets

Amortizable intangible assets consist of the following as of:


	December 31, 2020
	Estimated	Gross				Net
	Average Useful	Carrying		Accumulated		Carrying
	Life (in years)	Amount		Amortization		Amount
University partner relationships	25	$	210,000		(16,362)	$	193,638
Trade names	1		280		(280)		—
Total amortizable intangible assets, net		$	210,280		(16,642)	$	193,638

Amortization expense for university partner relationships and trade names for the years ending December 31:


2021	$	8,419
2022		8,419
2023		8,419
2024		8,419
2025		8,419
Thereafter		151,543
	$	193,638

Leases

12 Months Ended

Dec. 31, 2020

Leases

Leases

9. Leases

The Company has operating leases for off-campus classroom and laboratory site locations, office space, office equipment, and optical fiber communication lines. These leases have terms that range from 1.5 years to 11 years. At lease inception, we determine the lease term by assuming no exercises of renewal options, due to the Company’s constantly changing geographical needs for its university partners. Leases with an initial term of 12 months or less are not recorded in the consolidated balance sheets and we recognize lease expense for these leases on a straight-line basis over the lease term. The Company has operating lease costs of $7,594, $4,084 and $827 for the years ended December 31, 2020, 2019 and 2018, respectively. The consolidated financial statements for years before January 1, 2019 are not presented on the same accounting basis with respect to leases. There was an immaterial amount of future lease obligations as of December 31, 2018. The majority of leases that existed for the year ended December 31, 2018 were assigned to GCU in the Transaction that occurred on July 1, 2018.

The Company’s weighted-average remaining lease term relating to its operating leases is 8.5 years, with a weighted-average discount rate of 3.27%. As of December 31, 2020, the Company had no financing leases.

Future payment obligations with respect to the Company’s operating leases, which were existing at December 31, 2020, by year and in the aggregate, are as follows:


Year Ending December 31,	Amount
2021	$	9,278
2022		8,938
2023		8,436
2024		7,920
2025		7,584
Thereafter		31,034
Total lease payments	$	73,190
Less interest		9,186
Present value of lease liabilities	$	64,004

Notes Payable and Other Noncurrent Liabilities

12 Months Ended

Dec. 31, 2020

Notes Payable and Other Noncurrent Liabilities

Notes Payable and Other Noncurrent Liabilities

10. Notes Payable and Other Noncurrent Liabilities

We entered into an amended and restated credit agreement dated January 22, 2019 and two related amendments dated January 31, 2019 and dated February 1, 2019, respectively, that together provide a credit facility of $325,000 comprised of a term loan facility of $243,750 and a revolving credit facility of $81,250, both with a five-year maturity date. The term facility is subject to quarterly amortization of principal, commencing with the fiscal quarter ended June 30, 2019, in equal installments of 5% of the principal amount of the term facility per quarter. Both the term loan and revolver have monthly interest payments currently at 30 Day LIBOR plus an applicable margin of 2%. The proceeds of the term loan, together with $6,250 drawn under the revolver and operating cash on hand were used to complete the Acquisition. Concurrent with the amendment of the credit agreement and Acquisition, we repaid our existing term loan of $59,850 and our cash collateral of $61,667 was released. The Company concluded that the amended and restated credit agreement is considered a loan modification. Accordingly, the Company allocated the costs paid to the bank consortium based on the borrowing dollars and has recorded an asset of $596 and a contra liability of $1,639, which are related to our revolver and term loan, respectively, that is being amortized to interest expense over the five-year maturity date. Additionally, the Company expensed $150 of third-party costs in the first quarter related to this loan modification.

The Company entered into a further amendment for the credit facility on October 31, 2019. This amendment increased the revolving commitment by $68,750 to $150,000, while reducing the term loan by the same $68,750 to $150,625. The Company concluded that this amendment is considered a loan modification. The amended and restated credit agreement contains standard covenants that, among other things, restrict the Company’s ability to incur additional debt or make certain investments, and require the Company to achieve certain financial ratios and maintain certain financial conditions. The Company’s obligations under the credit facility are secured by its assets, including all rights, benefits and payments under the Secured Note and the Services Agreements. As of December 31, 2020, the Company is in compliance with its debt covenants.


	As of December 31,		As of December 31,
	2020		2019
Notes Payable
Note payable, quarterly payment of $8,368 starting December 31, 2019; interest at 30-Day LIBOR plus 2.00% (2.15% at December 31, 2020) through January 22, 2024	$	107,774	$	140,918
Revolving line of credit; interest at 30-Day LIBOR plus 2.0% (2.15% at December 31, 2020)		—		—
		107,774		140,918
Less: Current portion		33,144		33,144
	$	74,630	$	107,774

Payments due under the notes payable obligations are as follows as of December 31, 2020:


2021	$	33,144
2022		33,144
2023		33,145
2024		8,341
2025		—
Total	$	107,774

Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies

Commitments and Contingencies

11. Commitments and Contingencies

Legal Matters

From time to time, the Company 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 Company 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 Company records a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company 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 Company’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 Company 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 Company’s financial condition, results of operations or cash flows.

COVID-19 Considerations

In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious outbreak and the related adverse public health developments, including orders to shelter-in-place, travel restrictions and mandated non-essential business closures, have adversely affected our business, primarily through reduced room and board and other ancillary revenue at our most significant partner, GCU and as a result of certain other partner institutions’ students deferring the start of their program in the Summer and Fall semesters. The pandemic could result in further reductions in education service revenue, operating income and margins in the Spring of 2021. At this time there remains considerable uncertainty around the duration of the COVID-19 pandemic. If some of our university partners are not able to allow their students to return to their campus locations in the Spring of 2021 this will have a further impact on our service revenue, operating income and margins. These factors, and/or material changes in the fair value of the collateral underlying our Secured Note receivable and accounts receivable, could also materially impact the allowance for expected credit losses on our Secured Note receivable and our accounts receivable. However, the related financial impact and duration of the COVID-19 pandemic cannot be reasonably estimated at this time.

Tax, Income Tax Related

During the first quarter of 2019, the Company reached an agreement with the Arizona Department of Revenue regarding previously filed refund claims related to income tax obligations for calendar year 2008 through calendar year 2013. As a result of the agreement, the Company received a refund of $7,500, inclusive of both tax and interest. Net of the federal tax benefit, the refund has a favorable tax impact of $5,925. The Company recorded the impact of this discrete tax item in its first quarter 2019 financials.

Tax Reserves, Non-Income Tax Related

From time to time the Company has exposure to various non-income tax related matters that arise in the ordinary course of business. At both December 31, 2020 and 2019, the Company has no reserve for tax matters where its ultimate exposure is considered probable and the potential loss can be reasonably estimated.

Derivative Instruments

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

12. Derivative Instruments

In 2013, the Company entered into an interest rate corridor to manage its 30-day LIBOR interest exposure related to its variable rate debt. In December 2019 this cash flow hedge expired, and $1,100 was reclassified from accumulated other comprehensive income into interest expense in the consolidated income statement. The fair value of the derivative

instrument was determined using a hypothetical derivative transaction and Level 2 of the hierarchy of valuation inputs. The adjustments of $497 and $157 for the years ended December 31, 2019 and 2018, respectively, for the effective portion of the gain/loss on the derivative are included as a component of other comprehensive income, net of taxes.

The interest rate corridor instrument reduced variable interest rate risk starting March 1, 2013 through December 20, 2019. The corridor instrument’s terms permitted the Company to hedge its interest rate risk at several thresholds; the Company paid variable interest monthly based on the 30-day LIBOR rates until that index reached 1.5%. If 30-day LIBOR was equal to 1.5% through 3.0%, the Company paid 1.5%. If 30-day LIBOR exceeded 3.0%, the Company paid actual 30-day LIBOR less 1.5%. Therefore, the Company hedged its exposure to future variable rate cash flows through December 20, 2019.

Earnings Per Share

12 Months Ended

Dec. 31, 2020

Earnings Per Share

Earnings Per Share

13. 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 and restricted stock awards, 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,
	2020	2019	2018
Denominator:
Basic weighted average shares outstanding	46,880	47,814	47,608
Effect of dilutive stock options and restricted stock	285	452	806
Diluted weighted average shares outstanding	47,165	48,266	48,414

Diluted weighted average shares outstanding excludes the incremental effect of unvested restricted stock and shares that would be issued upon the assumed exercise of stock options in accordance with the treasury stock method. For each of the years ended December 31, 2020, 2019 and 2018, approximately 142, 1, and 0, respectively, of the Company’s 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

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Equity Transactions

14. Equity Transactions

Preferred Stock

As of December 31, 2020 and 2019, the Company had 10,000 shares of authorized but unissued and undesignated preferred stock. The Company’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

In July 2020, December 2020 and January 2021, the Board of Directors increased the authorization under our existing stock repurchase program by $50,000, $100,000 and $100,000, respectively, reflecting an aggregate authorization for share repurchases since the initiation of our program of $500,000. The expiration date on the repurchase authorization is December 31, 2021. Repurchases occur at the Company’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. During the year ended December 31, 2020 the Company repurchased 1,602 shares of common stock at an aggregate cost of $129,045. At December 31, 2020, there remained $148,271 available under its current share repurchase authorization (which authorization was increased to $248,271 in January 2021). Shares repurchased in lieu of taxes are not included in the repurchase plan totals as they were approved in conjunction with the restricted share awards.

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Taxes

Income Taxes

15. Income Taxes

The Company 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 Company will realize the benefits of these deductible differences. The Company has no valuation allowance at December 31, 2020 and 2019.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. For businesses, the Act reduces the corporate federal tax rate from a maximum of 35% to a flat 21% rate. The rate reduction took effect on January 1, 2018. The Company concluded that the Act caused the Company’s deferred tax assets and liabilities to be revalued. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted though income tax expense.

The components of income tax expense (benefit) are as follows:


	Year Ended December 31,
	2020		2019		2018
Current:
Federal	$	63,932	$	57,354	$	60,764
State		8,875		(1,344)		8,732
		72,807		56,010		69,496
Deferred:
Federal		2,842		2,804		(10,708)
State		295		(487)		(799)
		3,137		2,317		(11,507)
Tax expense recorded as an increase of paid-in capital		—		—		—
	$	75,944	$	58,327	$	57,989

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,
	2020		2019		2018
Statutory U.S. federal income tax rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal tax benefit	2.4		2.4		4.0
State tax credits, net of federal effect	(1.2)		(1.0)		(1.0)
Excess tax benefits	(0.4)		(2.3)		(3.7)
Nondeductible expenses	—		0.1		0.4
Other	1.0		(1.8)		(0.5)
Effective income tax rate	22.8	%	18.4	%	20.2	%

Significant components of the Company’s deferred income tax assets and liabilities, included in Deferred income taxes, non-current on the consolidated balance sheets are as follows:


	As of December 31,		As of December 31,
	2020		2019
Deferred tax assets:
Share-based compensation	$	2,535	$	2,499
Employee compensation		832		614
Allowance for credit losses		1,200		—
Intangibles		20,633		23,693
State taxes		2,787		1,764
Other		964		432
Deferred tax assets		28,951		29,002

Deferred tax liability:
Property and equipment		(12,764)		(10,865)
Goodwill		(36,295)		(36,295)
Other		(180)		(162)
Deferred tax liability		(49,239)		(47,322)
Net deferred tax liability	$	(20,288)	$	(18,320)

The net deferred tax liability on the accompanying consolidated balance sheet is comprised of the following:


	As of December 31,		As of December 31,
	2020		2019
Deferred income taxes, current	$	4,639	$	2,215
Deferred income taxes, non-current		(24,927)		(20,535)
Net deferred tax liability	$	(20,288)	$	(18,320)

The Company 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 Company 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 Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Unrecognized tax benefits as of December 31, 2020 and 2019 were $11,318 and $6,773, respectively.

The reconciliation of the beginning and ending balance of unrecognized tax benefits at December 31, is as follows:


	2020		2019
Unrecognized tax benefits, beginning of year	$	6,773	$	1,960
Tax positions taken during the current year
Increases		4,521		5,671
Decreases		—		—
Tax positions taken during a prior year
Increases		962		96
Decreases		—		—
Decreases for settlements during the period		(235)		—
Reductions for lapses of applicable statute of limitations		(703)		(954)
Unrecognized tax benefits, end of year	$	11,318	$	6,773

As of December 31, 2020 and 2019, the unrecognized tax benefit recorded of $11,318 and $6,773, respectively, if reversed, would impact the effective tax rate. At December 31, 2020 and 2019, the Company had accrued $46 and $153, respectively, in interest and $0, in penalties. It is reasonably possible that the amount of the unrecognized tax benefit will change during the next 12 months, however management does not expect the potential change to have a material effect on the results of operations or financial position.

The Company’s uncertain tax positions were related to tax years that remained subject to examination by tax authorities. As of December 31, 2020, the earliest tax year still subject to examination for federal and state purposes is 2017 and 2016, respectively.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Share-Based Compensation

12 Months Ended

Dec. 31, 2020

Share-Based Compensation

Share-Based Compensation

16. Share-Based Compensation Plans

Incentive Plans

Prior to June 2017, the Company made grants of restricted stock and stock options under its 2008 Equity Incentive Plan (the “2008 Plan”). In January 2017, the Board of Directors of the Company approved, and at the Company’s 2017 annual meeting of stockholders held on June 14, 2017, the Company’s stockholders adopted a 2017 Equity Incentive Plan (the “2017 Plan”) under which a maximum of 3,000 shares may be granted. As of December 31, 2020, 1,599 shares were available for grants under the 2017 Plan. All grants of equity incentives made after June 2017 have been made from the 2017 Plan.

Restricted Stock

During fiscal years 2020, 2019, and 2018, the Company granted 164, 149, and 160 shares of common stock, respectively, with a service vesting condition to certain of its executives, officers, 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 statutory tax withholding required to be paid when the restricted stock vests. During the years ended December 31, 2020, 2019 and 2018, the Company withheld 62, 68, and 151 shares of common stock in lieu of taxes at a cost of $4,969, $8,127, and $15,152, on the restricted stock vesting dates, respectively. During 2020, 2019 and 2018, following the annual stockholders meeting, the Company granted 3, 3 and 3 shares of common stock to the non-employee members of the Company’s Board of Directors. The restricted shares granted to these directors have voting rights and vest on the earlier of (a) the one year anniversary of the date of grant or (b) immediately prior to the following year’s annual stockholders’ meeting. Included in the 2019 amount are shares of common stock granted in August 2019 to two new non-employee members of the Company’s Board of Directors. The restricted shares granted to these directors have voting rights and vest on the one year anniversary of the date of grant.

In conjunction with the GCU Transaction, the Compensation Committee of the Company’s Board of Directors decided to modify the vesting condition for certain restricted stock awards for approximately 100 Transferred Employees who transferred employment from GCE to GCU, with the acceleration being contingent upon the closing of the Transaction on July 1, 2018. Refer to Note 2 for further discussion on the Transaction. As a result, the incremental share-based compensation expense from the modification on 82 restricted stock awards for the accelerated vesting date was $7,880 and is included in the university related expenses in the consolidated income statement. Additionally, the Company transferred cash to GCU totaling $9,568 to fund a deferred compensation plan in an amount equal to the value of the 86 shares forfeited by the Transferred Employees at the closing of the Transaction. This amount is included in the loss on transaction in the consolidated income statement.

A summary of the activity related to restricted stock granted under the Company’s Incentive Plan is as follows:


		Weighted Average
	Total	Grant Date
	Shares	Fair Value per Share
Outstanding as of December 31, 2017	776	$	49.16
Granted	163	$	92.34
Vested	(384)	$	65.57
Forfeited, canceled or expired	(95)	$	71.60
Outstanding as of December 31, 2018	460	$	63.28
Granted	152	$	93.62
Vested	(174)	$	56.14
Forfeited, canceled or expired	(16)	$	82.11
Outstanding as of December 31, 2019	422	$	76.43
Granted	167	$	84.31
Vested	(155)	$	65.19
Forfeited, canceled or expired	(15)	$	84.64
Outstanding as of December 31, 2020	419	$	83.43

As of December 31, 2020, there was approximately $25,332 of total unrecognized share-based compensation cost related to unvested restricted stock awards. These costs are expected to be recognized over a weighted average period of 2.09 years.

Stock Options

No options were granted in 2020, 2019 and 2018. Prior to 2012, the Company 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 Company’s Incentive Plan is as follows:


	Summary of Stock Options Outstanding
		Weighted		Weighted
		Average		Average
		Exercise		Remaining	Aggregate
	Total	Price per		Contractual	Intrinsic
	Shares	Share		Term (Years)	Value ($)⁽¹⁾
Outstanding as of December 31, 2017	694	$	17.31
Granted	—	$	—
Exercised	(250)	$	18.47
Forfeited, canceled or expired	—	$	—
Outstanding as of December 31, 2018	444	$	16.66
Granted	—	$	—
Exercised	(212)	$	18.01
Forfeited, canceled or expired	—	$	—
Outstanding as of December 31, 2019	232	$	15.42
Granted	—	$	—
Exercised	(56)	$	15.66
Forfeited, canceled or expired	—	$	—
Outstanding as of December 31, 2020	176	$	15.34	0.19	$	13,586
Exercisable as of December 31, 2020	176	$	15.34	0.19	$	13,586

(1)

Aggregate intrinsic value represents the value of the Company’s closing stock price on December 31, 2020 ($93.11) in excess of the exercise price multiplied by the number of options outstanding or exercisable.

Share-based Compensation

Share-based Compensation Expense Assumptions – Restricted Stock Awards

The table below outlines share-based compensation expense for the fiscal years ended December 31, 2020, 2019 and 2018 related to restricted stock and stock options granted:


	2020		2019		2018
Technology and academic services	$	2,049	$	1,721	$	1,585
Counseling services and support		5,364		5,297		4,926
Marketing and communication		100		87		48
General and administrative		3,150		3,195		3,355
University related expenses		—		—		9,594
Share-based compensation expense included in operating expenses		10,663		10,300		19,508
Tax effect of share-based compensation		(2,666)		(2,575)		(4,877)
Share-based compensation expense, net of tax	$	7,997	$	7,725	$	14,631

401(k) Plan

The Company 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 Company to make discretionary matching contributions. The Company plans to make a matching contribution to the Plan of approximately $2,225 for the year ended December 31, 2020. The Company made discretionary matching contributions to the Plan of $2,529 and $1,625 for the years ended December 31, 2019 and 2018, respectively.

Related Party Transactions

12 Months Ended

Dec. 31, 2020

Related Party Transactions

Related Party Transactions

17. Related Party Transactions

Related party transactions include transactions between the Company 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, 2020, 2019 and 2018, related party transactions consisted of the following:

Affiliates

GCE Community Fund (“GCECF”) - GCECF was initially formed in 2014. GCECF makes grants for charitable, educational, literary, religious or scientific purposes within the meaning of Section 501(c ) (3) of the Internal Revenue Code, including for such purposes as the making of distributions to organizations that qualify as exempt organizations under Section 501 (c ) (3) of the Code. The Company’s CEO and Director serves as the president of GCECF. All of the board seats are taken by Company executives. The Company is not the primary beneficiary of GCECF, and accordingly, the Company does not consolidate GCECF’s statement of activities with its financial results. The Company contributed $1,100 for the year ended December 31, 2020, of which no amounts were owed at December 31, 2020.

Quarterly Results of Operations (Unaudited)

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results of Operations (Unaudited)

18. Quarterly Results of Operations (Unaudited)

The following table summarizes the unaudited quarterly results of operations for 2020 and 2019 and should be read in conjunction with other information included in the accompanying consolidated financial statements.


	2020
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Service revenue	$	221,655	$	185,768	$	198,384	$	238,289
Costs and expenses:
Technology and academic services		26,277		27,151		30,751		31,833
Counseling services and support		60,219		57,596		58,214		58,505
Marketing and communication		42,693		41,105		42,244		38,292
General and administrative		9,565		9,501		14,031		10,263
Amortization of intangible assets		2,105		2,105		2,105		2,104
Loss on transaction		—		—		—		—
Total costs and expenses		140,859		137,458		147,345		140,997
Operating income		80,796		48,310		51,039		97,292
Interest income on Secured Note		14,710		14,723		14,885		14,872
Interest expense		(1,546)		(1,073)		(918)		(865)
Investment interest and other		216		396		181		122
Income before income taxes		94,176		62,356		65,187		111,421
Income tax expense		22,791		15,346		13,141		24,666
Net income	$	71,385	$	47,010	$	52,046	$	86,755
Earnings per share:
Basic income per share⁽¹⁾	$	1.50	$	1.00	$	1.11	$	1.87
Diluted income per share⁽¹⁾	$	1.49	$	1.00	$	1.11	$	1.86
Basic weighted average shares outstanding		47,455		46,893		46,808		46,369
Diluted weighted average shares outstanding		47,764		47,151		47,095		46,655

(1)

The sum of quarterly income per share may not equal annual income per share due to rounding.


	2019
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Service revenue	$	197,287	$	174,820	$	193,289	$	213,247
Costs and expenses:
Technology and academic services		18,625		22,528		24,231		25,128
Counseling services and support		53,093		54,299		56,249		59,957
Marketing and communication		35,967		35,726		37,340		33,863
General and administrative		11,397		9,216		13,556		10,148
Amortization of intangible assets		1,686		2,179		2,179		2,179
Loss on transaction		4,088		(122)		—		—
Total costs and expenses		124,856		123,826		133,555		131,275
Operating income		72,431		50,994		59,734		81,972
Interest income on Secured Note		13,735		14,482		16,208		14,872
Interest expense		(2,586)		(2,907)		(2,875)		(2,943)
Investment interest and other		1,119		2,668		255		343
Income before income taxes		84,699		65,237		73,322		94,244
Income tax expense		11,456		14,125		15,171		17,575
Net income	$	73,243	$	51,112	$	58,151	$	76,669
Earnings per share:
Basic income per share⁽¹⁾	$	1.54	$	1.07	$	1.21	$	1.61
Diluted income per share⁽¹⁾	$	1.52	$	1.06	$	1.20	$	1.59
Basic weighted average shares outstanding		47,699		47,851		47,920		47,758
Diluted weighted average shares outstanding		48,274		48,313		48,337		48,112

(1)

The sum of quarterly income per share may not equal annual income per share due to rounding.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions have been eliminated in consolidation.

Use of Estimates

Cash and Cash Equivalents

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents at December 31, 2019 represents cash pledged for leased office space, which cash was released during the year ended December 31, 2020.

Investments

Property and Equipment


	Year Ended December 31,
	2020		2019		2018
Interest incurred	$	4,402	$	11,311	$	2,292
Interest capitalized		—		—		756
Interest expense	$	4,402	$	11,311	$	1,536

Internally Developed Technology

Capitalized Content Development

Other Assets

Business Combinations

Goodwill and Intangible Assets

Share-Based Compensation

Derivatives and Hedging

Fair Value of Financial Instruments

Income Taxes

Commitments and Contingencies

Revenue Recognition

University related revenue – prior to July 1, 2018

The following table presents our revenues disaggregated by the nature of transfer of services for the six months ended June 30, 2018:


Tuition revenues	$	522,430
Ancillary revenues (housing, meals, fees, golf, hotel, arena, other)		91,245
Total revenues		613,675
Scholarships		(101,176)
Net Revenues	$	512,499

Service revenue commenced July 1, 2018

payments for our services billed within 30 days of invoice. These payments are recorded as deferred revenue until the services are delivered and revenue is recognized.

Allowance for Credit Losses

Technology and Academic Services

Counseling Services and Support

Marketing and Communication

General and Administrative

University related expenses

University related expenses represent the costs that were transferred to GCU in the Transaction and that are no longer incurred by the Company.

Insurance/Self-Insurance

Concentration of Credit Risk

Segment Information

Accounting Pronouncements Adopted in 2020 and Recent Accounting Pronouncements

Accounting Pronouncements Adopted in 2020

Recent Accounting Pronouncements

of the reference rate reform will have a material impact on the Company’s financial condition, results of operations or statements of cash flows.

The Company has determined that no other recent accounting pronouncements apply to its operations or could otherwise have a material impact on its consolidated financial statements.

The Transaction (Tables)

12 Months Ended

Dec. 31, 2020

The Transaction

Summary of balances transferred to GCU


Restricted cash and cash equivalents	$	97,443
Accounts receivable, net of allowance for doubtful accounts of $6,093		9,780
Other assets		7,677
Property and equipment, net of accumulated depreciation of $166,066		870,097
Total assets held for sale, current	$	984,997

Accrued and other liabilities	$	5,025
Student deposits		88,010
Deferred revenue		46,325
Note payable		79
Total liabilities held for sale, current	$	139,439

Acquisition (Tables)

12 Months Ended

Dec. 31, 2020

Acquisition

Schedule of allocation of total purchase price to assets acquired and liabilities assumed


Assets acquired
Cash, including $300 of pledged collateral	$	4,793
Accounts receivable, net of allowance of $0	$	3,236
Property and equipment	$	5,392
Right-of-use assets	$	13,069
Intangible assets	$	210,280
Other assets	$	2,793
Liabilities assumed
Accounts payable	$	4,308
Accrued and other liabilities	$	4,451
Lease liability	$	13,069
Deferred tax liability	$	9,538
Deferred revenue	$	45
Total net asset or liability purchased and assumed	$	208,152

Purchase price	$	365,977

Excess of fair value of net assets acquired over consideration given	$	157,825

Schedule of pro forma information related to acquisition of Orbis Education


	Three Months Ended December 31,				Year Ended December 31,
	2019		2018		2019		2018
Net revenue
As Reported	$	213,247	$	177,548	$	778,643	$	845,501
Pro forma	$	213,247	$	195,656	$	781,893	$	907,960

Net income
As Reported	$	76,669	$	75,531	$	259,175	$	229,011
Pro forma	$	76,669	$	69,551	$	247,930	$	200,264

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies

Schedule of interest cost capitalized and incurred


	Year Ended December 31,
	2020		2019		2018
Interest incurred	$	4,402	$	11,311	$	2,292
Interest capitalized		—		—		756
Interest expense	$	4,402	$	11,311	$	1,536

Schedule of revenues disaggregated by nature of transfer of services

The following table presents our revenues disaggregated by the nature of transfer of services for the six months ended June 30, 2018:


Tuition revenues	$	522,430
Ancillary revenues (housing, meals, fees, golf, hotel, arena, other)		91,245
Total revenues		613,675
Scholarships		(101,176)
Net Revenues	$	512,499

Allowance for Credit Losses (Tables)

12 Months Ended

Dec. 31, 2020

Allowance for Credit Losses

Schedule of allowance for credit losses


	Balance at				Balance at
	Beginning of		Charged to	Deductions/	End of
	Period⁽¹⁾		Expense	Transfers⁽²⁾⁽³⁾	Period
Allowance for credit losses
Year ended December 31, 2020	$	5,000	—	—	$	5,000
Year ended December 31, 2019	$	—	—	—	$	—
Year ended December 31, 2018	$	5,907	8,669	(14,576)	$	—

(1)	Amount in the year ended December 31, 2020 represents the cumulative effect of the adoption of ASU No. 2016-13 on the Secured Note receivable.

(2)	Deductions represent accounts written off, net of recoveries.

(3)	$6,093 included in the deductions column for the year ended December 31, 2018, represents the allowance that was transferred to GCU with other educational assets and liabilities on July 1, 2018. See Note 2.

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2020

Property and Equipment

Schedule of property and equipment


	As of December 31,
	2020		2019
Land	$	5,579	$	5,579
Land improvements		2,242		2,242
Buildings		51,399		51,399
Buildings and leasehold improvements		14,352		11,691
Computer equipment		100,575		95,020
Furniture, fixtures and equipment		15,439		10,423
Internally developed software		46,981		37,175
Construction in progress		5,043		3,238
		241,610		216,767
Less accumulated depreciation and amortization		(112,953)		(97,033)
Property and equipment, net	$	128,657	$	119,734

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2020

Intangible Assets

Summary of amortizable intangible assets


	December 31, 2020
	Estimated	Gross				Net
	Average Useful	Carrying		Accumulated		Carrying
	Life (in years)	Amount		Amortization		Amount
University partner relationships	25	$	210,000		(16,362)	$	193,638
Trade names	1		280		(280)		—
Total amortizable intangible assets, net		$	210,280		(16,642)	$	193,638

Schedule of amortization expense for university partner relationships and trade names


2021	$	8,419
2022		8,419
2023		8,419
2024		8,419
2025		8,419
Thereafter		151,543
	$	193,638

Leases (Tables)

12 Months Ended

Dec. 31, 2020

Leases

Schedule of future payment obligations with respect to operating leases


Year Ending December 31,	Amount
2021	$	9,278
2022		8,938
2023		8,436
2024		7,920
2025		7,584
Thereafter		31,034
Total lease payments	$	73,190
Less interest		9,186
Present value of lease liabilities	$	64,004

Notes Payable and Other Noncurrent Liabilities (Tables)

12 Months Ended

Dec. 31, 2020

Notes Payable and Other Noncurrent Liabilities

Schedule of notes payable


	As of December 31,		As of December 31,
	2020		2019
Notes Payable
Note payable, quarterly payment of $8,368 starting December 31, 2019; interest at 30-Day LIBOR plus 2.00% (2.15% at December 31, 2020) through January 22, 2024	$	107,774	$	140,918
Revolving line of credit; interest at 30-Day LIBOR plus 2.0% (2.15% at December 31, 2020)		—		—
		107,774		140,918
Less: Current portion		33,144		33,144
	$	74,630	$	107,774

Schedule of payments due under notes payable obligations


2021	$	33,144
2022		33,144
2023		33,145
2024		8,341
2025		—
Total	$	107,774

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2020

Earnings Per Share

Schedule of weighted average number of common shares outstanding



	Year Ended December 31,
	2020	2019	2018
Denominator:
Basic weighted average shares outstanding	46,880	47,814	47,608
Effect of dilutive stock options and restricted stock	285	452	806
Diluted weighted average shares outstanding	47,165	48,266	48,414

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Taxes

Schedule of components of income tax expense (benefit)


	Year Ended December 31,
	2020		2019		2018
Current:
Federal	$	63,932	$	57,354	$	60,764
State		8,875		(1,344)		8,732
		72,807		56,010		69,496
Deferred:
Federal		2,842		2,804		(10,708)
State		295		(487)		(799)
		3,137		2,317		(11,507)
Tax expense recorded as an increase of paid-in capital		—		—		—
	$	75,944	$	58,327	$	57,989

Schedule of effective income tax rate reconciliation


	Year Ended December 31,
	2020		2019		2018
Statutory U.S. federal income tax rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal tax benefit	2.4		2.4		4.0
State tax credits, net of federal effect	(1.2)		(1.0)		(1.0)
Excess tax benefits	(0.4)		(2.3)		(3.7)
Nondeductible expenses	—		0.1		0.4
Other	1.0		(1.8)		(0.5)
Effective income tax rate	22.8	%	18.4	%	20.2	%

Schedule of deferred tax assets and liabilities

Significant components of the Company’s deferred income tax assets and liabilities, included in Deferred income taxes, non-current on the consolidated balance sheets are as follows:


	As of December 31,		As of December 31,
	2020		2019
Deferred tax assets:
Share-based compensation	$	2,535	$	2,499
Employee compensation		832		614
Allowance for credit losses		1,200		—
Intangibles		20,633		23,693
State taxes		2,787		1,764
Other		964		432
Deferred tax assets		28,951		29,002

Deferred tax liability:
Property and equipment		(12,764)		(10,865)
Goodwill		(36,295)		(36,295)
Other		(180)		(162)
Deferred tax liability		(49,239)		(47,322)
Net deferred tax liability	$	(20,288)	$	(18,320)

The net deferred tax liability on the accompanying consolidated balance sheet is comprised of the following:


	As of December 31,		As of December 31,
	2020		2019
Deferred income taxes, current	$	4,639	$	2,215
Deferred income taxes, non-current		(24,927)		(20,535)
Net deferred tax liability	$	(20,288)	$	(18,320)

Reconciliation of the beginning and ending balance of unrecognized tax benefits


	2020		2019
Unrecognized tax benefits, beginning of year	$	6,773	$	1,960
Tax positions taken during the current year
Increases		4,521		5,671
Decreases		—		—
Tax positions taken during a prior year
Increases		962		96
Decreases		—		—
Decreases for settlements during the period		(235)		—
Reductions for lapses of applicable statute of limitations		(703)		(954)
Unrecognized tax benefits, end of year	$	11,318	$	6,773

Share-Based Compensation Plans (Tables)

12 Months Ended

Dec. 31, 2020

Share-Based Compensation

Schedule of activity related to restricted stock granted under company's incentive plan


		Weighted Average
	Total	Grant Date
	Shares	Fair Value per Share
Outstanding as of December 31, 2017	776	$	49.16
Granted	163	$	92.34
Vested	(384)	$	65.57
Forfeited, canceled or expired	(95)	$	71.60
Outstanding as of December 31, 2018	460	$	63.28
Granted	152	$	93.62
Vested	(174)	$	56.14
Forfeited, canceled or expired	(16)	$	82.11
Outstanding as of December 31, 2019	422	$	76.43
Granted	167	$	84.31
Vested	(155)	$	65.19
Forfeited, canceled or expired	(15)	$	84.64
Outstanding as of December 31, 2020	419	$	83.43

Schedule of activity related to stock options granted under company's incentive plan


	Summary of Stock Options Outstanding
		Weighted		Weighted
		Average		Average
		Exercise		Remaining	Aggregate
	Total	Price per		Contractual	Intrinsic
	Shares	Share		Term (Years)	Value ($)⁽¹⁾
Outstanding as of December 31, 2017	694	$	17.31
Granted	—	$	—
Exercised	(250)	$	18.47
Forfeited, canceled or expired	—	$	—
Outstanding as of December 31, 2018	444	$	16.66
Granted	—	$	—
Exercised	(212)	$	18.01
Forfeited, canceled or expired	—	$	—
Outstanding as of December 31, 2019	232	$	15.42
Granted	—	$	—
Exercised	(56)	$	15.66
Forfeited, canceled or expired	—	$	—
Outstanding as of December 31, 2020	176	$	15.34	0.19	$	13,586
Exercisable as of December 31, 2020	176	$	15.34	0.19	$	13,586

(1)

Schedule of share-based compensation expense


	2020		2019		2018
Technology and academic services	$	2,049	$	1,721	$	1,585
Counseling services and support		5,364		5,297		4,926
Marketing and communication		100		87		48
General and administrative		3,150		3,195		3,355
University related expenses		—		—		9,594
Share-based compensation expense included in operating expenses		10,663		10,300		19,508
Tax effect of share-based compensation		(2,666)		(2,575)		(4,877)
Share-based compensation expense, net of tax	$	7,997	$	7,725	$	14,631

Quarterly Results of Operations (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

Schedule of summarizes the unaudited quarterly results of operations


	2020
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Service revenue	$	221,655	$	185,768	$	198,384	$	238,289
Costs and expenses:
Technology and academic services		26,277		27,151		30,751		31,833
Counseling services and support		60,219		57,596		58,214		58,505
Marketing and communication		42,693		41,105		42,244		38,292
General and administrative		9,565		9,501		14,031		10,263
Amortization of intangible assets		2,105		2,105		2,105		2,104
Loss on transaction		—		—		—		—
Total costs and expenses		140,859		137,458		147,345		140,997
Operating income		80,796		48,310		51,039		97,292
Interest income on Secured Note		14,710		14,723		14,885		14,872
Interest expense		(1,546)		(1,073)		(918)		(865)
Investment interest and other		216		396		181		122
Income before income taxes		94,176		62,356		65,187		111,421
Income tax expense		22,791		15,346		13,141		24,666
Net income	$	71,385	$	47,010	$	52,046	$	86,755
Earnings per share:
Basic income per share⁽¹⁾	$	1.50	$	1.00	$	1.11	$	1.87
Diluted income per share⁽¹⁾	$	1.49	$	1.00	$	1.11	$	1.86
Basic weighted average shares outstanding		47,455		46,893		46,808		46,369
Diluted weighted average shares outstanding		47,764		47,151		47,095		46,655

(1)

The sum of quarterly income per share may not equal annual income per share due to rounding.


	2019
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Service revenue	$	197,287	$	174,820	$	193,289	$	213,247
Costs and expenses:
Technology and academic services		18,625		22,528		24,231		25,128
Counseling services and support		53,093		54,299		56,249		59,957
Marketing and communication		35,967		35,726		37,340		33,863
General and administrative		11,397		9,216		13,556		10,148
Amortization of intangible assets		1,686		2,179		2,179		2,179
Loss on transaction		4,088		(122)		—		—
Total costs and expenses		124,856		123,826		133,555		131,275
Operating income		72,431		50,994		59,734		81,972
Interest income on Secured Note		13,735		14,482		16,208		14,872
Interest expense		(2,586)		(2,907)		(2,875)		(2,943)
Investment interest and other		1,119		2,668		255		343
Income before income taxes		84,699		65,237		73,322		94,244
Income tax expense		11,456		14,125		15,171		17,575
Net income	$	73,243	$	51,112	$	58,151	$	76,669
Earnings per share:
Basic income per share⁽¹⁾	$	1.54	$	1.07	$	1.21	$	1.61
Diluted income per share⁽¹⁾	$	1.52	$	1.06	$	1.20	$	1.59
Basic weighted average shares outstanding		47,699		47,851		47,920		47,758
Diluted weighted average shares outstanding		48,274		48,313		48,337		48,112

(1)

The sum of quarterly income per share may not equal annual income per share due to rounding.

Nature of Business (Details) $ in Thousands	Jan. 22, 2019 USD ($)	Dec. 31, 2020 item
Nature Of Operations [Line Items]
Number of university partners		25
Orbis Education
Nature Of Operations [Line Items]
Purchase price \| $	$ 361,184
Grand Canyon University
Nature Of Operations [Line Items]
Number of colleges operated		9

The Transaction - Additional Information (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2020	Dec. 31, 2018
Amended and restated credit agreement
The Transaction
Restricted collateral			$ 61,667
Grand Canyon University \| Master Services Agreement
The Transaction
Percentage of tuition and fee revenue used for closing of purchase agreement	60.00%
Grand Canyon University \| Disposed of by Sale \| Asset Purchase Agreement
The Transaction
Purchase price of assets	$ 870,097
Additional amount of funding provided to GCU for capital expenditures		$ 99,815
Interest rate on Secured Note	6.00%
Term of additional lending to GCU for approved capital expenditures	3 years

The Transaction - Summary of Disposed Assets, Previously Assets and Liabilities Held for Sale Transferred to GCU (Details) - Grand Canyon University - Disposed of by Sale $ in Thousands	Jul. 01, 2018 USD ($)
The Transaction
Restricted cash and cash equivalents	$ 97,443
Accounts receivable, net	9,780
Other assets	7,677
Property and equipment, net	870,097
Total assets, current	984,997
Accrued and other liabilities	5,025
Student deposits	88,010
Deferred revenue	46,325
Note payable	79
Total liabilities, current	139,439
Allowance for doubtful accounts	6,093
Accumulated depreciation on property and equipment	$ 166,066

The Transaction - Summary of Disposed Assets, previously Assets and Liabilities Held for Sale Transferred to GCU - Additional Information (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended	12 Months Ended
	Jul. 01, 2018	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
The Transaction
Loss on Transaction		$ (122)	$ 4,088		$ 3,966	$ 18,370
Asset impairment	$ 3,037
Grand Canyon University \| Disposed of by Sale
The Transaction
Cash transferred at closing	$ 34,107
Loss on Transaction						18,370
Transaction costs						5,765
Asset impairment						3,037
Deferred compensation expense						$ 9,568
Grand Canyon University \| Disposed of by Sale \| University related expenses
The Transaction
Share-based compensation expense related to modification and vesting of awards held by transferred employees				$ 7,880
Employer tax expense related to share-based compensation				191
Reversals of employee related liabilities				$ 1,907

Acquisition (Details) $ in Thousands		3 Months Ended									6 Months Ended	12 Months Ended
Acquisition (Details) $ in Thousands	Jan. 22, 2019 USD ($)	Dec. 31, 2020 USD ($) item	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Acquisition
Number of university partners \| item		25										25
Goodwill		$ 160,766				$ 160,766						$ 160,766	$ 160,766
Pro forma information
Net revenue						213,247				$ 177,548	$ 512,499	844,096	778,643	$ 845,501
Pro forma, net revenue						213,247				195,656			781,893	907,960
Net income		86,755	$ 52,046	$ 47,010	$ 71,385	76,669	$ 58,151	$ 51,112	$ 73,243	75,531		257,196	259,175	229,011
Pro forma, net income						76,669				$ 69,551			247,930	200,264
Amortization of intangible assets		2,104	2,105	2,105	2,105	2,179	2,179	2,179	1,686			8,419	8,223
Prior period adjustments
Technology and academic services		31,833	30,751	27,151	26,277	25,128	24,231	22,528	18,625			116,012	90,512	43,574
General and administrative		10,263	14,031	9,501	9,565	10,148	13,556	9,216	11,397			43,360	44,317	29,968
Marketing and communication		$ 38,292	$ 42,244	$ 41,105	$ 42,693	33,863	$ 37,340	$ 35,726	$ 35,967			$ 164,334	142,896	117,420
Orbis Education
Acquisition
Purchase price	$ 361,184
Operating cash on hand used for acquisition	171,034
Goodwill	157,825
Transaction costs													3,966	$ 808
Assets acquired
Cash	4,793
Cash, pledged collateral	300
Accounts receivable, net of allowance of $0	3,236
Accounts receivable, allowance	0
Property and equipment	5,392
Right-of-use assets	13,069
Intangible assets	210,280
Other assets	2,793
Liabilities assumed
Accounts payable	4,308
Accrued and other liabilities	4,451
Lease liability	13,069
Deferred tax liability	9,538					$ 9,538							9,538
Deferred revenue	45
Total net asset or liability purchased and assumed	208,152
Purchase price	365,977
Orbis Education \| University partner relationships
Assets acquired
Intangible assets	210,000
Orbis Education \| Credit facility
Acquisition
Purchase price	$ 191,000
Orbis Education
Pro forma information
Net revenue													85,869
Net income													(2,588)
Amortization of intangible assets													$ 8,223

Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands		3 Months Ended								6 Months Ended	12 Months Ended
	Jul. 01, 2018 USD ($)	Dec. 31, 2020 USD ($) item Agency project	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2020 USD ($) segment item Agency project	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Other assets		$ 1,844				$ 1,706					$ 1,844	$ 1,706
Number of operating segments \| segment											1
Number of reporting units \| segment											1
Costs capitalized to obtain or fulfill contracts with customers										$ 0
Reduction in revenue due to scholarships offered to students										$ 101,176
Unbilled revenue amounts		294				118					$ 294	118
Amounts written off											0
Allowance for doubtful accounts		0									0
Lease liabilities		64,004									$ 64,004
Loss in investment interest and other													$ 372
Capitalized interest rate on borrowings to finance improvements													3.70%
Property and equipment, useful life											15 years
Royalty amortization period											20 years
Remaining prepaid royalty assets impaired	$ 3,037
Secured Note receivable, carrying value		964,912				969,912					$ 964,912	969,912
Secured Note receivable, fair value		1,049,458									1,049,458
Reserve for uncertain tax positions including interest and penalties		$ 11,318				6,773					$ 11,318	6,773
Amortization of other current assets											12 months
Number of stages of software development projects \| project		3									3
Number of university partners \| item		25									25
Accounts receivable credit losses											$ 0
Allowance for credit losses		$ 5,000				5,000					5,000	5,000		$ 5,907
Cumulative net effect of adoption of ASU		(1,574,329)				(1,443,433)					(1,574,329)	(1,443,433)	$ (1,213,597)	(985,951)
Income tax expense		24,666	$ 13,141	$ 15,346	$ 22,791	17,575	$ 15,171	$ 14,125	$ 11,456		$ 75,944	$ 58,327	$ 57,989
Revenue Benchmark \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage											86.80%	89.00%
Computer Software
Summary Of Significant Accounting Policies [Line Items]
Estimated average useful life											3 years
Capitalized Content Development
Summary Of Significant Accounting Policies [Line Items]
Estimated average useful life											4 years
Other assets		$ 1,198				1,077					$ 1,198	$ 1,077
Cash Flow Hedging
Summary Of Significant Accounting Policies [Line Items]
Effective portion of losses on derivatives included as a component of other comprehensive income, net of taxes												(497)
Furniture, Fixtures and Equipment
Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life											10 years
Computer Equipment
Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life											4 years
Vehicles
Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life											5 years
Minimum
Summary Of Significant Accounting Policies [Line Items]
Initial contract terms											7 years
Number of major rating agencies reporting credit ratings \| Agency		1									1
Minimum \| Land Improvements and Buildings
Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life											10 years
Maximum
Summary Of Significant Accounting Policies [Line Items]
Initial contract terms											15 years
Maximum \| Land Improvements and Buildings
Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life											40 years
Master Services Agreement \| Grand Canyon University
Summary Of Significant Accounting Policies [Line Items]
Percentage of tuition and fee revenue used for closing of purchase agreement	60.00%
Cumulative Effect of Adoption Adjustment \| ASU 2014-09
Summary Of Significant Accounting Policies [Line Items]
Cumulative net effect of adoption of ASU														$ 1,174
Cumulative Effect of Adoption Adjustment \| ASU 2016-13
Summary Of Significant Accounting Policies [Line Items]
Allowance for credit losses						5,000						5,000
Cumulative net effect of adoption of ASU						$ 3,832						3,832
Income tax expense												$ 1,168

Summary of Significant Accounting Policies - Interest Cost Capitalized and Incurred (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Summary of Significant Accounting Policies
Interest incurred									$ 4,402	$ 11,311	$ 2,292
Interest capitalized											756
Interest expense	$ 865	$ 918	$ 1,073	$ 1,546	$ 2,943	$ 2,875	$ 2,907	$ 2,586	$ 4,402	$ 11,311	$ 1,536

Summary of Significant Accounting Policies - Summary of Revenues Disaggregated by Nature of Transfer of Services (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Disaggregation of Revenue [Line Items]
Total revenues			$ 613,675
Scholarships			(101,176)
Net Revenues	$ 213,247	$ 177,548	512,499	$ 844,096	$ 778,643	$ 845,501
Tuition Revenues
Disaggregation of Revenue [Line Items]
Total revenues			522,430
Ancillary Revenues
Disaggregation of Revenue [Line Items]
Total revenues			$ 91,245

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-Paragraph 22
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
-Paragraph 22
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
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-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Investments (Details) - USD ($) $ in Thousands	12 Months Ended
Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2020	Dec. 31, 2019
Investments
Investments.		$ 10,840	$ 21,601
Loss in investment interest and other	$ 372

Allowance for Credit Losses (Details) $ in Thousands	12 Months Ended
Allowance for Credit Losses (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Allowance for credit losses
Balance at Beginning of Period	$ 5,907
Charged to Expense	8,669
Deductions/Transfers	(14,576)
Grand Canyon University
Allowance for credit losses
Deductions/Transfers	$ 6,093

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property and Equipment
Property and equipment	$ 241,610	$ 216,767
Less accumulated depreciation and amortization	(112,953)	(97,033)
Property and equipment, net	128,657	119,734
Depreciation and amortization expense	20,830	18,393	$ 35,525
Land
Property and Equipment
Property and equipment	5,579	5,579
Land Improvements
Property and Equipment
Property and equipment	2,242	2,242
Buildings
Property and Equipment
Property and equipment	51,399	51,399
Buildings and Leasehold Improvements
Property and Equipment
Property and equipment	14,352	11,691
Computer Equipment
Property and Equipment
Property and equipment	100,575	95,020
Furniture, Fixtures and Equipment
Property and Equipment
Property and equipment	15,439	10,423
Internally Developed Software
Property and Equipment
Property and equipment	46,981	37,175
Construction in Progress [Member]
Property and Equipment
Property and equipment	$ 5,043	$ 3,238

Intangible Assets - Net Intangible Assets (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Intangible Assets
Gross Carrying Amount	$ 210,280
Accumulated Amortization	(16,642)
Net Carrying Amount	$ 193,638
University partner relationships
Intangible Assets
Estimated average useful life	25 years
Gross Carrying Amount	$ 210,000
Accumulated Amortization	(16,362)
Net Carrying Amount	$ 193,638
Trade names
Intangible Assets
Estimated average useful life	1 year
Gross Carrying Amount	$ 280
Accumulated Amortization	$ (280)

Intangible Assets - Amortization Expense for Developed Curricula and Student Relationships (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Amortization expense
2021	$ 8,419
2022	8,419
2023	8,419
2024	8,419
2025	8,419
Thereafter	151,543
Net Carrying Amount	$ 193,638

Leases (Details) $ in Thousands	12 Months Ended
Leases (Details) $ in Thousands	Dec. 31, 2020 USD ($) lease	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Leases
Lessee, Operating Lease, Existence of Option to Extend [true false]	false
Operating lease costs	$ 7,594	$ 4,084
Operating lease costs			$ 827
Weighted-average remaining lease term	8 years 6 months
Weighted-average discount rate of operating leases	3.27%
Number of financing leases \| lease	0
Minimum
Leases
Term of operating leases	1 year 6 months
Maximum
Leases
Term of operating leases	11 years

Leases - Future Payment Obligations (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Leases
2021	$ 9,278
2022	8,938
2023	8,436
2024	7,920
2025	7,584
Thereafter	31,034
Total lease payments	73,190
Less interest	9,186
Present value of lease liabilities	$ 64,004

Notes Payable and Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands			3 Months Ended	12 Months Ended
	Oct. 31, 2019	Jan. 22, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Notes Payable and Other Noncurrent Liabilities
Repayments of term loan		$ 59,850
Cash collateral released on repayment of debt		61,667
Credit facility
Notes Payable and Other Noncurrent Liabilities
Amount of credit facilities		$ 325,000
Term of credit facility		5 years
Loan modification costs expensed			$ 150
Credit facility \| 30-Day LIBOR
Notes Payable and Other Noncurrent Liabilities
Margin on variable interest rate		2.00%
Term loan facility
Notes Payable and Other Noncurrent Liabilities
Amount of credit facilities		$ 243,750
Installment payment as a percentage of principal amount		5.00%
Loan modification costs		$ 1,639
Term loan facility \| 30-Day LIBOR
Notes Payable and Other Noncurrent Liabilities
Margin on variable interest rate				2.00%	2.00%
Interest rate of notes payable				2.15%
Revolving credit facility
Notes Payable and Other Noncurrent Liabilities
Amount of credit facilities		81,250
Loan modification costs		596
Revolving credit facility \| Orbis Education
Notes Payable and Other Noncurrent Liabilities
Acquisition consideration funded by credit agreement		$ 6,250
Revolving credit facility \| 30-Day LIBOR
Notes Payable and Other Noncurrent Liabilities
Margin on variable interest rate				2.00%	2.00%
Interest rate of notes payable				2.15%
Amendment - October 31, 2019 \| Term loan facility
Notes Payable and Other Noncurrent Liabilities
Amount of credit facilities	$ 150,625
Increase (decrease) in facility	(68,750)
Amendment - October 31, 2019 \| Revolving credit facility
Notes Payable and Other Noncurrent Liabilities
Amount of credit facilities	150,000
Increase (decrease) in facility	$ 68,750

Notes Payable and Other Noncurrent Liabilities - Current and Noncurrent Portions of Notes Payable (Details) - USD ($) $ in Thousands		12 Months Ended
	Jan. 22, 2019	Dec. 31, 2020	Dec. 31, 2019
Notes Payable and Other Noncurrent Liabilities
Less: Current portion		$ 33,144	$ 33,144
Notes payable, less current portion		74,630	107,774
Credit facility
Notes Payable and Other Noncurrent Liabilities
Notes payable including current portion		107,774	140,918
Less: Current portion		33,144	33,144
Notes payable, less current portion		74,630	107,774
Credit facility \| 30-Day LIBOR
Notes Payable and Other Noncurrent Liabilities
Margin on variable interest rate	2.00%
Term loan facility
Notes Payable and Other Noncurrent Liabilities
Quarterly payment of notes payable		8,368
Notes payable including current portion		$ 107,774	$ 140,918
Term loan facility \| 30-Day LIBOR
Notes Payable and Other Noncurrent Liabilities
Margin on variable interest rate		2.00%	2.00%
Interest rate of notes payable		2.15%
Revolving credit facility \| 30-Day LIBOR
Notes Payable and Other Noncurrent Liabilities
Margin on variable interest rate		2.00%	2.00%
Interest rate of notes payable		2.15%

Notes Payable and Other Noncurrent Liabilities - Payments Due Under Notes Payable Obligations (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Payments due under notes payable obligations:
2021	$ 33,144
2022	33,144
2023	33,145
2024	8,341
Total	$ 107,774

Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Commitments and Contingencies
Accrual for Taxes Other than Income Taxes, Current		$ 0	$ 0
Income tax refund related to agreement on previously filed refund claims	$ 7,500
Favorable tax impact of refund	$ 5,925

Derivative Instruments (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
Derivative Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Derivative Instruments
Expired cash flow hedge reclassified from AOCI to interest expense	$ (1,100)	$ 1,100
Interest Rate Corridor
Derivative Instruments
Description of interest rate risk hedge at several thresholds		Company paid variable interest monthly based on the 30-day LIBOR rates until that index reached 1.5%. If 30-day LIBOR was equal to 1.5% through 3.0%, the Company paid 1.5%. If 30-day LIBOR exceeded 3.0%, the Company paid actual 30-day LIBOR less 1.5%.
Interest Rate Corridor \| 30-day LIBOR
Derivative Instruments
LIBOR interest rate at which the cash flow hedge interest rate corridor terms become effective		1.50%
Interest rate to be paid when variable base rate falls within the interest rate corridor		1.50%
Percentage deducted from LIBOR to determine interest rate to be paid when LIBOR rate exceeds the interest rate corridor		1.50%
Interest Rate Corridor \| 30-day LIBOR \| Minimum
Derivative Instruments
Variable interest rate corridor percentage		1.50%
Interest Rate Corridor \| 30-day LIBOR \| Maximum
Derivative Instruments
Variable interest rate corridor percentage		3.00%
Cash Flow Hedging
Derivative Instruments
Effective portion of losses on derivatives included as a component of other comprehensive income, net of taxes		$ (497)
Effective portion of gain (loss) on derivatives included as a component of other comprehensive income			$ 157

Earnings Per Share - Summary of Weighted Average Number of Common Shares Outstanding (Details) - shares shares in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Denominator:
Basic weighted average shares outstanding	46,369	46,808	46,893	47,455	47,758	47,920	47,851	47,699	46,880	47,814	47,608
Effect of dilutive stock options and restricted stock									285	452	806
Diluted weighted average shares outstanding	46,655	47,095	47,151	47,764	48,112	48,337	48,313	48,274	47,165	48,266	48,414

Earnings Per Share - Additional Information (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Stock Option And Restricted Stock Awards
Antidilutive securities excluded from computation of earnings per share
Stock awards outstanding excluded from the calculation of diluted earnings	142	1	0

Equity Transactions (Details) - USD ($) shares in Thousands, $ in Thousands	1 Months Ended			12 Months Ended
	Jan. 31, 2021	Dec. 31, 2020	Jul. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Equity [Abstract]
Preferred stock, shares authorized		10,000		10,000	10,000
Increase in stock repurchase plan authorized	$ 100,000	$ 100,000	$ 50,000
Authorized amount for repurchase of common stock	500,000
Expiration date on repurchase authorizations				Dec. 31, 2021
Common stock acquired, shares				1,602
Common stock acquired, cost				$ 129,045	$ 35,786	$ 9,606
Remaining authorized repurchase amount	$ 248,271	$ 148,271		$ 148,271

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Taxes
Valuation allowance	$ 0	$ 0
Corporate federal tax rate	21.00%	21.00%	21.00%	35.00%
Unrecognized tax benefits	$ 11,318	$ 6,773	$ 1,960

Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Current:
Federal									$ 63,932	$ 57,354	$ 60,764
State									8,875	(1,344)	8,732
Current Income Tax Expense (Benefit), Total									72,807	56,010	69,496
Deferred:
Federal									2,842	2,804	(10,708)
State									295	(487)	(799)
Deferred Income Tax Expense (Benefit)									3,137	2,317	(11,507)
Income Tax Expense (Benefit), Total	$ 24,666	$ 13,141	$ 15,346	$ 22,791	$ 17,575	$ 15,171	$ 14,125	$ 11,456	$ 75,944	$ 58,327	$ 57,989

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Taxes
Statutory U.S. federal income tax rate	21.00%	21.00%	21.00%	35.00%
State income taxes, net of federal tax benefit	2.40%	2.40%	4.00%
State tax credits, net of federal effect	(1.20%)	(1.00%)	(1.00%)
Excess tax benefits	(0.40%)	(2.30%)	(3.70%)
Nondeductible expenses		0.10%	0.40%
Other	1.00%	(1.80%)	(0.50%)
Effective Income Tax Rate Reconciliation, Percent, Total	22.80%	18.40%	20.20%

Income Taxes - Significant Components of Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets:
Share-based compensation	$ 2,535	$ 2,499
Employee compensation	832	614
Allowance for credit losses	1,200
Intangibles	20,633	23,693
State taxes	2,787	1,764
Other	964	432
Deferred tax assets	28,951	29,002
Deferred tax liability:
Property and equipment	(12,764)	(10,865)
Goodwill	(36,295)	(36,295)
Other	(180)	(162)
Deferred tax liability	(49,239)	(47,322)
Net deferred tax liability	$ (20,288)	$ (18,320)

Income Taxes - Significant Components of Deferred Income Tax Assets and Liabilities Classified (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Income Taxes
Deferred income taxes, current	$ 4,639	$ 2,215
Deferred income taxes, non-current	(24,927)	(20,535)
Net deferred tax liability	$ (20,288)	$ (18,320)

Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Unrecognized tax benefits
Unrecognized tax benefits, beginning of year	$ 6,773	$ 1,960
Tax positions taken during the current year - Increases	4,521	5,671
Tax positions taken during a prior year - Increases	962	96
Decreases for settlements during the period	(235)
Reductions for lapses of applicable statute of limitations	(703)	(954)
Unrecognized tax benefits, end of year	11,318	6,773
Amount of unrecognized tax benefit, if recognized, that would affect the effective tax rate	11,318	6,773
Interest accrued on unrecognized tax benefit	46	153
Penalties accrued on unrecognized tax benefit	$ 0	$ 0

Share-Based Compensation Plans - Additional Information (Details) shares in Thousands, $ in Thousands	1 Months Ended		12 Months Ended
	Aug. 31, 2019 director	Jun. 30, 2018 USD ($) employee shares	Dec. 31, 2020 USD ($) shares	Dec. 31, 2019 USD ($) shares	Dec. 31, 2018 USD ($) shares	Dec. 31, 2011
Share-based Compensation Plans
Shares available for grant			1,599
Minimum eligible age to participate in the plan			21 years
University made discretionary matching contributions \| $			$ 2,225	$ 2,529	$ 1,625
Maximum
Share-based Compensation Plans
Shares authorized			3,000
Restricted Stock
Share-based Compensation Plans
Shares granted			167	152	163
Unrecognized share-based compensation cost \| $			$ 25,332
Costs are expected to be recognized over a weighted average period			2 years 1 month 2 days
Forfeiture of shares by transferred employees at closing of transaction			15	16	95
Restricted Stock \| Grand Canyon University
Share-based Compensation Plans
Number of former employees hired \| employee		100
Shares issued under plan		82
Share-based compensation expense for restricted stock awards \| $		$ 7,880
Recognized deferred compensation plan expense for former GCE employees \| $		$ 9,568
Forfeiture of shares by transferred employees at closing of transaction		86
Restricted Stock \| Share-based Payment Arrangement, Employee
Share-based Compensation Plans
Shares granted			164	149	160
Vesting period			5 years
Shares withheld for taxes			62	68	151
Common stock in lieu of taxes \| $			$ 4,969	$ 8,127	$ 15,152
Restricted Stock \| Share-based Payment Arrangement, Nonemployee
Share-based Compensation Plans
Shares granted			3	3	3
Vesting period	1 year		1 year
Number of new non-employee directors \| director	2
Restricted Stock \| Share-based Compensation Award, Tranche One \| Share-based Payment Arrangement, Employee
Share-based Compensation Plans
Vesting right percentage			20.00%
Restricted Stock \| Share-based Compensation Award, Tranche Two \| Share-based Payment Arrangement, Employee
Share-based Compensation Plans
Vesting right percentage			20.00%
Restricted Stock \| Share-based Compensation Award, Tranche Three \| Share-based Payment Arrangement, Employee
Share-based Compensation Plans
Vesting right percentage			20.00%
Restricted Stock \| Share-based Compensation Award Tranche Four \| Share-based Payment Arrangement, Employee
Share-based Compensation Plans
Vesting right percentage			20.00%
Restricted Stock \| Share-based Compensation Award Tranche Five \| Share-based Payment Arrangement, Employee
Share-based Compensation Plans
Vesting right percentage			20.00%
Stock Options
Share-based Compensation Plans
Vesting period						5 years
Expiration period of options						10 years
Options granted			0	0	0

Share-Based Compensation Plans - Summary of Activity Related to Restricted Stock Granted under Company's Incentive Plan (Details) - Restricted Stock - $ / shares shares in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Total Shares
Total Shares, Outstanding, Beginning Balance	422	460	776
Total Shares, Granted	167	152	163
Total Shares, Vested	(155)	(174)	(384)
Total Shares, Forfeited, canceled or expired	(15)	(16)	(95)
Total Shares, Outstanding, Ending Balance	419	422	460
Weighted Average Grant Date
Weighted Average Grant Date Fair Value, Beginning Balance	$ 76.43	$ 63.28	$ 49.16
Weighted Average Grant Date Fair Value, Granted	84.31	93.62	92.34
Weighted Average Grant Date Fair Value, Vested	65.19	56.14	65.57
Weighted Average Grant Date Fair Value, Forfeited, canceled or expired	84.64	82.11	71.60
Weighted Average Grant Date Fair Value, Ending Balance	$ 83.43	$ 76.43	$ 63.28

Share-Based Compensation Plans - Summary of Activity Related to Stock Options Granted under Company's Incentive Plan (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Weighted Average Remaining Term and Aggregate Intrinsic Value
Value of closing stock price	$ 93.11
Stock Options
Total Shares
Total Shares outstanding, Beginning balance	232	444	694
Total Shares, Granted	0	0	0
Total Shares, Exercised	(56)	(212)	(250)
Total Shares outstanding, Ending balance	176	232	444
Total Shares, Exercisable	176
Weighted Average Exercise Price Per Share
Weighted Average Exercise Price per Share Outstanding, Beginning balance	$ 15.42	$ 16.66	$ 17.31
Weighted Average Exercise Price per Share, Exercised	15.66	18.01	18.47
Weighted Average Exercise Price per Share Outstanding, Ending balance	15.34	$ 15.42	$ 16.66
Weighted Average Exercise Price per Share, Exercisable	$ 15.34
Weighted Average Remaining Term and Aggregate Intrinsic Value
Weighted Average Remaining Contractual Term (Years), Outstanding	2 months 8 days
Weighted Average Remaining Contractual Term (Years), Exercisable	2 months 8 days
Aggregate Intrinsic Value, Outstanding	$ 13,586
Aggregate Intrinsic Value, Exercisable	$ 13,586

Share-Based Compensation Plans - Share-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Expense
Share-based compensation expense	$ 10,663	$ 10,300	$ 19,508
Tax effect of share-based compensation	(2,666)	(2,575)	(4,877)
Share-based compensation expense, net of tax	7,997	7,725	14,631
Technology and Academic Services
Share-based Compensation Expense
Share-based compensation expense	2,049	1,721	1,585
Counseling Services and Support
Share-based Compensation Expense
Share-based compensation expense	5,364	5,297	4,926
Marketing and Communication
Share-based Compensation Expense
Share-based compensation expense	100	87	48
General and Administrative
Share-based Compensation Expense
Share-based compensation expense	$ 3,150	$ 3,195	3,355
University related expenses
Share-based Compensation Expense
Share-based compensation expense			$ 9,594

Related Party Transactions (Details) - GCE Community Fund $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Related party transactions
Contributions	$ 1,100
Due to GCECF	$ 0

Quarterly Results of Operations (Unaudited) - Summarizes the Unaudited Quarterly Results of Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended									6 Months Ended	12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net revenue					$ 213,247				$ 177,548	$ 512,499	$ 844,096	$ 778,643	$ 845,501
Costs and expenses:
Technology and academic services	$ 31,833	$ 30,751	$ 27,151	$ 26,277	25,128	$ 24,231	$ 22,528	$ 18,625			116,012	90,512	43,574
Counseling services and support	58,505	58,214	57,596	60,219	59,957	56,249	54,299	53,093			234,534	223,598	204,690
Marketing and communication	38,292	42,244	41,105	42,693	33,863	37,340	35,726	35,967			164,334	142,896	117,420
General and administrative	10,263	14,031	9,501	9,565	10,148	13,556	9,216	11,397			43,360	44,317	29,968
Amortization of intangible assets	2,104	2,105	2,105	2,105	2,179	2,179	2,179	1,686			8,419	8,223
Loss on transaction							(122)	4,088				3,966	18,370
Total costs and expenses	140,997	147,345	137,458	140,859	131,275	133,555	123,826	124,856			566,659	513,512	587,352
Operating income	97,292	51,039	48,310	80,796	81,972	59,734	50,994	72,431			277,437	265,131	258,149
Interest income on Secured Note	14,872	14,885	14,723	14,710	14,872	16,208	14,482	13,735			59,190	59,297	26,947
Interest expense	(865)	(918)	(1,073)	(1,546)	(2,943)	(2,875)	(2,907)	(2,586)			(4,402)	(11,311)	(1,536)
Investment interest and other	122	181	396	216	343	255	2,668	1,119			915	4,385	3,440
Income before income taxes	111,421	65,187	62,356	94,176	94,244	73,322	65,237	84,699			333,140	317,502	287,000
Income tax expense	24,666	13,141	15,346	22,791	17,575	15,171	14,125	11,456			75,944	58,327	57,989
Net income	$ 86,755	$ 52,046	$ 47,010	$ 71,385	$ 76,669	$ 58,151	$ 51,112	$ 73,243	$ 75,531		$ 257,196	$ 259,175	$ 229,011
Earnings per share:
Basic income per share	$ 1.87	$ 1.11	$ 1.00	$ 1.50	$ 1.61	$ 1.21	$ 1.07	$ 1.54			$ 5.49	$ 5.42	$ 4.81
Diluted income per share	$ 1.86	$ 1.11	$ 1.00	$ 1.49	$ 1.59	$ 1.20	$ 1.06	$ 1.52			$ 5.45	$ 5.37	$ 4.73
Basic weighted average shares outstanding	46,369	46,808	46,893	47,455	47,758	47,920	47,851	47,699			46,880	47,814	47,608
Diluted weighted average shares outstanding	46,655	47,095	47,151	47,764	48,112	48,337	48,313	48,274			47,165	48,266	48,414
Service
Net revenue	$ 238,289	$ 198,384	$ 185,768	$ 221,655	$ 213,247	$ 193,289	$ 174,820	$ 197,287			$ 844,096	$ 778,643	$ 333,002
University Related Revenue
Net revenue													$ 512,499