18. SEGMENT REPORTING

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

During 2015, we announced the teach-out of all remaining 15 Sanford-Brown campuses, two Briarcliffe College campuses, Harrington College of Design campus and 17 Culinary Arts (“LCB”) campuses. The Sanford-Brown, Briarcliffe and Harrington College campuses are now included in the Transitional Group segment and the LCB campuses are reported within the Culinary Arts segment, as part of our continuing operations. The LCB campuses were previously recorded as held for sale within discontinued operations and during December 2015 the decision made to teach-out the LCB campuses, which required these campuses to be reclassified to continuing operations in accordance with ASC Topic 360. During 2015, we also completed the teach-out of five Transitional Group campuses and the sale of two Transitional Group campuses (Brooks Institute and Missouri College). These campuses continue to be reported as part of the Transitional Group within continuing operations, as a result of a change in accounting guidance effective January 1, 2015 with respect to ASC Topic 360, which limits discontinued operations reporting.

All prior period results have been recast to reflect our reporting segments on a comparable basis. Our four reporting segments are described below.

University Group:

Colorado Technical University (CTU) places a strong focus on providing industry-relevant degree programs to meet the needs of our students for employment and of employers for a well-educated workforce and offers academic programs in the career-oriented disciplines of business studies, information systems and technologies, criminal justice, computer science and engineering, and health sciences. Students pursue their degrees through fully-online programs through CTU Online, local campuses and blended formats, which combine campus-based and online education. As of December 31, 2015, students enrolled at CTU represented approximately 49% of our total enrollments. Approximately 92% of CTU’s enrollments are fully online.

American InterContinental University (AIU) focuses on helping busy professionals get the degree they need to move forward in their career as efficiently as possible and offers academic programs in the career-oriented disciplines of business studies, information technologies, criminal justice and design technologies. Students pursue their degrees through fully-online programs through AIU Online, local campuses and blended formats, which combine campus-based and online education. As of December 31, 2015, students enrolled at AIU represented approximately 25% of our total enrollments. Approximately 92% of AIU’s enrollments are fully online.

Career Schools Group:

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

Culinary Arts includes our Le Cordon Bleu institutions in North America (“LCB”) which offer hands-on educational programs in the career-oriented disciplines of culinary arts and patisserie and baking in the commercial-grade kitchens of Le Cordon Bleu. LCB also provides online programs in culinary arts and hotel and restaurant management. These campuses are all expected to complete their teach-out activities during 2017. As of December 31, 2015, students enrolled at LCB represented approximately 18% of our total enrollments.

Our LCB campuses were previously recorded as an asset held for sale within discontinued operations as of December 31, 2014. As a result of the decision made during December 2015 to teach-out our LCB campuses, they will now be reported as part of continuing operations within the Culinary Arts segment.

Transitional Group includes our non-LCB campuses which are in teach-out or those which have been closed or sold subsequent to January 1, 2015. Our Transitional Group offers academic programs primarily in the career-oriented discipline of health education complemented by certain programs in business studies and information technology, as well as fashion design, film and video production, graphic design, interior design and visual communications. The campuses within the Transitional Group that have not yet ceased operations as of December 31, 2015 will complete their teach-outs on varying dates through 2018. As of December 31, 2015, students enrolled at the Transitional Group campuses represented approximately 8% of our total enrollments.

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

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

	Revenue		Operating (Loss) Income			Depreciation and Amortization		Capital Expenditures		Total Assets
For the Year Ended December 31, 2015 ⁽¹⁾
CTU	$	348,215	$	87,496		$	2,281	$	1,084	$	76,577
AIU		201,649		5,520			1,636		2,406		53,087
Total University Group		549,864		93,016			3,917		3,490		129,664
Corporate and Other		157		(27,267	)		11,173		4,873		372,405
Subtotal		550,021		65,749			15,090		8,363		502,069
Culinary Arts ⁽²⁾		170,190		(57,577	)		1		2,352		71,197
Transitional Group ⁽³⁾		127,062		(100,340	)		9,847		980		28,584
Discontinued Operations											9,065
Total	$	847,273	$	(92,168	)	$	24,938	$	11,695	$	610,915
For the Year Ended December 31, 2014 ⁽¹⁾
CTU	$	336,573	$	69,492		$	2,627	$	628	$	73,458
AIU		198,896		(9,412	)		2,329		916		51,755
Total University Group		535,469		60,080			4,956		1,544		125,213
Corporate and Other ⁽⁴⁾		230		(21,169	)		17,455		4,545		332,672
Subtotal		535,699		38,911			22,411		6,089		457,885
Culinary Arts ⁽⁵⁾		172,606		(66,556	)		17,363		2,292		76,846
Transitional Group ⁽⁶⁾		205,659		(111,627	)		13,608		4,775		37,355
Discontinued Operations									-		1,448
Total	$	913,964	$	(139,272	)	$	53,382	$	13,156	$	573,534
For the Year Ended December 31, 2013 ⁽¹⁾
CTU	$	346,086	$	65,078		$	2,828	$	158
AIU		231,606		(5,556	)		3,069		122
Total University Group		577,692		59,522			5,897		280
Corporate and Other		—		(33,600	)		22,574		6,272
Subtotal		577,692		25,922			28,471		6,552
Culinary Arts ⁽⁷⁾		177,549		(81,218	)		17,082		705
Transitional Group⁽⁸⁾		261,989		(106,763	)		16,684		6,251
Discontinued Operations									6,128
Total	$	1,017,230	$	(162,059	)	$	62,237	$	19,636

(1)

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

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

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

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

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

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

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

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

For the year ended December 31, 2013, segment results included:

(7)	Culinary Arts: $15.5 million related to a pending legal settlement and a $13.0 million trade name impairment charge.

(8)	Transitional Group: $7.7 million of trade name and asset impairment charges and $10.5 million related to the settlement of legal matters.