
4.	PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at June 30 (in thousands):



Asset Class	2014			2013
Leasehold improvements	$	577,537		$	570,286
Technology	329,361			324,403
Furniture and equipment	162,872			163,595
Software	120,242			98,537
Library books	44,604			44,248
Construction in progress	16,683			19,601
Buildings and improvements	5,798			25,566
Land	3,605			5,495
Total	1,260,702			1,251,731
Less accumulated depreciation	(831,245		)	(726,106		)
Property and equipment, net	$	429,457		$	525,625

Depreciation and amortization expense related to property and equipment was $146.2 million, $157.9 million and $151.0 million, respectively, for the fiscal years ended June 30, 2014, 2013 and 2012. Included in these amounts is amortization expense on software of $18.3 million, $20.2 million and $14.7 million, respectively. Amortization expense on software assets for the year ended June 30, 2013 included $4.6 million in accelerated amortization resulting from the write off of a software asset that no longer had a useful life.

Sale-Leaseback Transactions

The Company completed six sale-leaseback transactions with unrelated third parties for net proceeds of $9.6 million and $65.1 million in fiscal 2014 and 2013, respectively, which are classified as an investing activity in the consolidated statement of cash flows. The transactions resulted in net losses of $3.5 million and $3.9 million recorded in educational services expense upon closing the transactions. In connection with the prior year sale-leaseback transactions, gains of $17.8 million were deferred, of which $14.3 million remains at June 30, 2014. The deferred gains are classified within deferred rent on the consolidated balance sheet and are being recognized over the initial terms of the new leases as a reduction to educational services expense. At the time of closing for all transactions, the Company entered into agreements to lease all of these properties back from the purchasers over initial lease terms ranging from three to 15 years. The Company classified these leases as operating and considers them normal leasebacks with no other continuing involvement. Refer to Note 18, "Subsequent Events," for a description of an additional sale-leaseback transaction that occurred in August 2014.

Lease Abandonment and Restructuring

During fiscal 2014, management determined it would not begin admitting students for one of its start-up Art

Institute locations as was previously anticipated. As a result, the Company recorded a $6.3 million lease abandonment charge in educational services expense during the fiscal year ended June 30, 2014 which was comprised of existing construction-in-progress assets (which resulted in a reduction to property and equipment) and accelerated rent expense based on the remaining minimum obligations under the existing lease, net of expected sublease income. In addition, in connection with restructuring plans across the organization intended to improve operational efficiencies and align costs with student enrollment levels as further described in Note 7, "Accrued Liabilities," the Company recorded lease restructuring charges during fiscal 2014, 2013 and 2012 of $5.8 million, $2.0 million and $2.5 million, respectively, which primarily comprised of existing leasehold improvement assets (which resulted in a reduction to property and equipment) and accelerated rent expense.

Impairments

During fiscal 2014 and 2013, the Company recorded charges of $6.1 million and $1.2 million in long-lived asset impairments in the consolidated statements of operations as estimated future cash flows at three of the Company's Brown Mackie College locations and one of the Company's Argosy University locations, respectively, were insufficient to support the carrying values of their property and equipment, which primarily consisted of leasehold improvement assets. These charges were calculated using an income valuation approach.