v2.4.0.6
Discontinued Operations and Divestitures
 3 Months Ended
Mar. 31, 2012
Discontinued Operations and Divestitures [Abstract]  
Discontinued Operations and Divestitures
13. Discontinued Operations and Divestitures

CBIZ will divest (through sale or closure) business operations that do not contribute to the Company’s long-term objectives for growth, or that are not complementary to its target service offerings and markets. Divestitures are classified as discontinued operations provided they meet the criteria as provided in FASB ASC 205 “Presentation of Financial Statements – Discontinued Operations – Other Presentation Matters”.

Discontinued Operations

Gains from the sale of discontinued operations are recorded as “Gain on disposal of discontinued operations, net of tax”, in the accompanying consolidated statements of comprehensive income. In addition, proceeds that are contingent upon a divested operation’s actual future performance are recorded as “gain on sale of discontinued operations, net of tax” in the period they are earned. During the first quarter of 2012, CBIZ did not discontinue the operations of any of its businesses and did not sell any operations. Gains recorded in the first quarter of 2012 related to contingent proceeds on sales of discontinued operations that occurred in prior periods.

During the first quarter of 2011, CBIZ decided to discontinue operations of a business that was previously reported in the Financial Services practice group. The business was subsequently sold in 2011 for future contingent proceeds to be received over the following three years. As part of the sale of this business, CBIZ reduced its goodwill balance by approximately $0.3 million. For those businesses that qualified for treatment as discontinued operations, the assets, liabilities and results of operations are reported separately in the accompanying consolidated financial statements.

Revenue and results from operations of discontinued operations for the three months ended March 31, 2012 and 2011 are separately reported as “Loss from operations of discontinued operations, net of tax” in the consolidated statements of comprehensive income and were as follows (in thousands):

 

                 
    Three Months Ended
March 31,		  
    2012     2011  

Revenue

   $ —       $ 598  
   

 

 

    

 

 

  

Loss from operations of discontinued operations, before income tax benefit

   $ (6 )    $ (405 ) 

Income tax benefit

     2       166  
   

 

 

    

 

 

  

Loss from operations of discontinued operations, net of tax

   $ (4 )    $ (239 ) 
   

 

 

    

 

 

  

For the three months ended March 31, 2012 and 2011, gain on the disposal of discontinued operations was as follows (in thousands):

 

                 
    Three Months Ended
March 31,		  
    2012     2011  

Gain on disposal of discontinued operations, before income tax expense

   $ 35     $ 67  

Income tax expense

     13       27  
   

 

 

    

 

 

  

Gain on disposal of discontinued operations, net of tax

   $ 22     $ 40  
   

 

 

    

 

 

  

 

At March 31, 2012 and December 31, 2011, the assets and liabilities of businesses classified as discontinued operations consisted of the following (in thousands):

 

                 
    March 31,
2012		     December 31,
2011		  

Assets:

                

Accounts receivable, net

   $ 20     $ 38  

Other current assets

     505       521  
   

 

 

    

 

 

  

Assets of discontinued operations

   $ 525     $ 559  
   

 

 

    

 

 

  

Liabilities:

                

Accounts payable

   $ 4     $ —    

Other current liabilities

     183       199  
   

 

 

    

 

 

  

Liabilities of discontinued operations

   $ 187     $ 199  
   

 

 

    

 

 

  

Divestitures

Gains and losses from divested operations and assets that do not qualify for treatment as discontinued operations are recorded as “Gain on sale of operations, net” in the consolidated statements of comprehensive income. During the first quarter of 2012, CBIZ recognized a contingent gain of $2.5 million from the 2011 sale of its individual wealth management business and gains of $0.1 million from the sales of client lists. Cash proceeds from the sales totaled approximately $1.0 million.

During the first quarter of 2011, CBIZ recognized a gain of $2.3 million from the sale of its individual wealth management business and gains of $0.4 million from the sales of client lists. Cash proceeds from the sale of the business and client lists totaled approximately $7.2 million, of which approximately $6.7 million was received on December 31, 2010. As part of the sale of the individual wealth management business in the first quarter of 2011, CBIZ’s goodwill was reduced by approximately $2.2 million.