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economic outlook at some of the Company’s businesses, industry challenges and an estimate for the
possible impact of any applicable regulations. Expected cash flows also reflected the anticipated
savings from restructuring plans at certain of the education division’s reporting units, and other
initiatives.
• Cash flows beyond 2020 were projected to grow at a long-term growth rate, which the Company
estimated between 1.5% and 3% for each reporting unit.
• The Company used a discount rate of 10.5% to 20.0% to risk adjust the cash flow projections in
determining the estimated fair value.
The fair value of each of the reporting units exceeded its respective carrying value as of November 30, 2015. The
estimated fair value of the Company’s reporting units with significant goodwill balances exceeded their respective
carrying values by a margin in excess of 25%. It is possible that impairment charges could occur in the future, given
changes in market conditions and the inherent variability in projecting future operating performance.
Indefinite-Lived Intangible Assets
The Company initially assesses qualitative factors to determine if it is more likely than not that the fair value of its
indefinite-lived intangible assets is less than its carrying value. The Company compares the fair value of the
indefinite-lived intangible asset with its carrying value if the qualitative factors indicate it is more likely than not
that the fair value of the asset is less than its carrying value or if it decides to bypass the qualitative assessment. The
Company records an impairment loss if the carrying value of the indefinite-lived intangible assets exceeds the fair
value of the assets for the difference in the values. The Company uses a discounted cash flow model, and, in certain
cases, a market value approach is also utilized to supplement the discounted cash flow model to determine the
estimated fair value of the indefinite-lived intangible assets. The Company makes estimates and assumptions
regarding future cash flows, discount rates, long-term growth rates and other market values to determine the
estimated fair value of the indefinite-lived intangible assets. The Company’s policy requires the performance of a
quantitative impairment review of the indefinite-lived intangible assets at least once every three years.
The Company’s intangible assets with an indefinite life are principally from trade names, licensure and
accreditation. The fair value of each indefinite-lived intangible asset exceeded its respective carrying value as of
November 30, 2015. There is always a possibility that impairment charges could occur in the future, given the
inherent variability in projecting future operating performance.
Pension Costs. The Company sponsors a defined benefit pension plan for eligible employees in the U.S.
Excluding curtailment gain, settlement loss and special termination benefits, the Company’s net pension credit
including amounts for discontinued operations was $63.3 million and $69.4 million for 2015 and 2014,
respectively, and the net pension cost was $1.9 million for 2013. The Company’s pension benefit obligation and
related (credits) costs are actuarially determined and are impacted significantly by the Company’s assumptions
related to future events, including the discount rate, expected return on plan assets and rate of compensation
increases. The Company evaluates these critical assumptions at least annually and, periodically, evaluates other
assumptions involving demographic factors, such as retirement age, mortality and turnover, and updates them to
reflect its experience and expectations for the future. Actual results in any given year will often differ from
actuarial assumptions because of economic and other factors.
The Company assumed a 6.5% expected return on plan assets for year 2015, which is consistent with the
expected return assumption for years 2014 and 2013. The Company’s actual (loss) return on plan assets was
(6.2%) in 2015, 7.4% in 2014 and 36.2% in 2013. The 10-year and 20-year actual returns on plan assets on an
annual basis were 8.8% and 10.9%, respectively.
Accumulated and projected benefit obligations are measured as the present value of future cash payments. The
Company discounts those cash payments using the weighted average of market-observed yields for high-quality
fixed-income securities with maturities that correspond to the payment of benefits. Lower discount rates increase
2015 FORM 10-K 66