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Discontinued Operations and Divestitures | 6 Months Ended
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Jun. 30, 2013
Discontinued Operations And Disposal Groups [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.” On July 26, 2013, CBIZ, through its subsidiary CBIZ Operations, Inc., entered into an agreement with Zotec Partners, LLC to sell all of the issued and outstanding capital stock of each of CBIZ Medical Management Professionals, Inc. and CBIZ Medical Management, Inc. and substantially all of the stock of their subsidiary companies, collectively consisting of all of CBIZ’s Medical Management Professionals ongoing operations and business (“MMP”) for a purchase price of approximately $200 million, which amount is subject to adjustment. Subject to customary closing conditions and regulatory approvals, the transaction is expected to close on September 1, 2013. After transaction costs and taxes, CBIZ expects proceeds to be approximately $145 million. Discontinued Operations As a result of the agreement to sell MMP, the results of operations of MMP are included in “Income from discontinued operations, net of tax” on the consolidated statements of comprehensive income for the three and six months ended June 30, 2013 and 2012. Additionally, the assets and liabilities of MMP have been consolidated and are included in “Assets of discontinued operations” and “Liabilities of discontinued operations” on the consolidated balance sheets as of June 30, 2013 and December 31, 2012. Certain adjustments were determined to be necessary to correctly reflect the operating results and financial position of MMP. These adjustments include an allocation for interest expense and tax expense, as well as an allocation of deferred tax accounts that specifically relate to MMP. The interest charges were based on the assumption that $40.0 million of the credit facility debt was related to MMP, thus the interest related to the $40.0 million was charged to MMP at the respective annual rate of interest for the credit facility. Tax expense was allocated to MMP at its respective individual tax rate. During the six months ended June 30, 2012, CBIZ did not discontinue the operations of any of its businesses and did not sell any operations. Revenue and results from operations of discontinued operations for the three and six months ended June 30, 2013 and 2012 primarily relate to the discontinued operations of MMP and were as follows (in thousands):
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |
Revenue |  | $ | 35,500 |  |  | $ | 34,401 |  |  | $ | 67,847 |  |  | $ | 67,672 |
Income from discontinued operations, before income tax |  | $ | 2,906 |  |  | $ | 3,389 |  |  | $ | 5,140 |  |  | $ | 5,957 |
Income tax expense |  |  | 1,115 |  |  |  | 1,314 |  |  |  | 1,972 |  |  |  | 2,311 |
Income from discontinued operations, net of tax |  | $ | 1,791 |  |  | $ | 2,075 |  |  | $ | 3,168 |  |  | $ | 3,646 |
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 disposal of discontinued operations, net of tax” in the period they are earned. During the three months ended June 30, 2013, CBIZ recorded a deferred tax benefit of $1.9 million for the estimated outside basis differences between the book and tax basis related to the expected future sale of its MMP operations. Gain on the disposal of discontinued operations for the three and six months ended June 30, 2013 and 2012 were as follows (in thousands):
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |
Gain on disposal of discontinued operations, before income tax |  | $ | — |  |  | $ | 28 |  |  | $ | 36 |  |  | $ | 63 |
Income tax (benefit) expense |  |  | (1,905 | ) |  |  | 10 |  |  |  | (1,892 | ) |  |  | 23 |
Gain on disposal of discontinued operations, net of tax |  | $ | 1,905 |  |  | $ | 18 |  |  | $ | 1,928 |  |  | $ | 40 |
At June 30, 2013 and December 31, 2012, the assets and liabilities of businesses classified as discontinued operations are reported separately in the accompanying consolidated financial statements and consisted of the following (in thousands):
|  | June 30, |  |  | December 31, |
|  | 2013 |  |  | 2012 |
Assets: |  |  |  |  |  |  |  |
Accounts receivable, net |  | $ | 18,895 |  |  | $ | 17,915 |
Goodwill and other intangible assets, net |  |  | 78,498 |  |  |  | 80,222 |
Property and equipment, net |  |  | 2,275 |  |  |  | 2,609 |
Other assets |  |  | 2,419 |  |  |  | 2,545 |
Assets of discontinued operations |  | $ | 102,087 |  |  | $ | 103,291 |
Liabilities: |  |  |  |  |  |  |  |
Accounts payable |  | $ | 4,086 |  |  | $ | 4,088 |
Accrued personnel |  |  | 3,001 |  |  |  | 4,230 |
Accrued expenses—current |  |  | 663 |  |  |  | 2,296 |
Other liabilities |  |  | 3,803 |  |  |  | 3,530 |
Liabilities of discontinued operations |  | $ | 11,553 |  |  | $ | 14,144 |
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 six months ended June 30, 2012, CBIZ recognized a contingent gain of $2.5 million from the 2011 sale of its individual wealth management business. Cash proceeds from the sale totaled approximately $0.9 million.

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- Definition The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e957-107759 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1012-107759 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1510-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1020-107759 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=8077374&loc=d3e2443-110228 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1474-107760 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760 + Details
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