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Discontinued Operations and Divestitures
 12 Months Ended
Dec. 31, 2015
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations and Divestitures

19.    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

2015

During the year ended December 31, 2015, CBIZ sold the assets of two small businesses under the Financial Services segment for a total purchase price of $2.7 million. A gain of $1.4 million was recorded in “Gain on disposal of discontinued operations, net of tax” on the accompanying Consolidated Statements of Comprehensive Income during the year ended December 31, 2015. These two businesses were classified as held for sale during the comparable period in 2014 and were previously reported in the Financial Services practice group.

 

2014

During the year ended December 31, 2014, CBIZ made the decision to divest the operations of two small businesses under the Financial Services segment. These businesses were being held for sale at December 31, 2014, with the results of operations for these businesses being included in “(Loss) income from operations of discontinued operations, net of tax” on the accompanying Consolidated Statements of Comprehensive Income.

2013

During the year ended December 31, 2013, CBIZ sold all of the issued and outstanding capital stock 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 MMP’s ongoing operations and business for a purchase price of $201.6 million, subject to final working capital adjustments which were and recorded in “Gain on disposal of discontinued operations, net of tax” on the accompanying Consolidated Statements of Comprehensive Income for the year ended December 31, 2014, pursuant to a Stock Purchase Agreement among CBIZ Operations, Inc. and Zotec Partners, LLC dated July 26, 2013.

 

  •  

Certain adjustments were determined to be necessary to reflect the operating results and financial position of MMP as discontinued operations. 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.

 

  •  

The results of operations for MMP for the year ended December 31, 2013 are included in “(Loss) income from operations of discontinued operations, net of tax,” and the gain on the sale of MMP is recorded in “Gain on sale of discontinued operations, net of tax” on the accompanying Consolidated Statements of Comprehensive Income.

Revenue and results from operations of discontinued operations for the years ended December 31, 2015, 2014 and 2013 are separately reported as “(Loss) income from operations of discontinued operations, net of tax” in the accompanying Consolidated Statements of Comprehensive Income and were as follows (in thousands):

 

     2015      2014      2013  

Revenue

    $ 6,248       $ 14,589       $ 106,869   
  

 

 

     

 

 

     

 

 

  

(Loss) Income from operations of discontinued operations before income tax expense

    $ (3,518 )     $ (925 )     $ 4,602   

Income tax (benefit) expense

      (1,195 )       (171 )       2,454   
  

 

 

     

 

 

     

 

 

  

(Loss) income from operations of discontinued operations, net of tax

    $ (2,323 )     $ (754 )     $ 2,148   
  

 

 

     

 

 

     

 

 

  

Gains or losses 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. Additionally, proceeds that are contingent upon a divested operation’s actual future performance are recorded as gain on sale of discontinued operations in the period they are earned.

 

Gains on disposals of discontinued operations for the years ended December 31, 2015, 2014 and 2013 were as follows (in thousands):

 

     2015      2014      2013  

Gain on disposal of discontinued operations, before income tax expense

    $ 1,510       $ 133       $ 107,533   

Income tax expense

      83         34         49,197   
  

 

 

     

 

 

     

 

 

  

Gain on disposal of discontinued operations, net of tax

    $ 1,427       $ 99       $ 58,336   
  

 

 

     

 

 

     

 

 

  

At December 31, 2014, 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):

 

     2014  

Assets:

   

Accounts receivable, net

    $ 4,699   

Goodwill and other intangible assets, net

      301   

Property and equipment, net

      171   

Other assets

      58   
  

 

 

  

Assets of discontinued operations

    $ 5,229   
  

 

 

  

Liabilities:

   

Accounts payable

    $ 388   

Accrued personnel

      591   

Accrued expenses

      324   
  

 

 

  

Liabilities of discontinued operations

    $ 1,303   
  

 

 

  

Divestitures

Gains or 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 accompanying Consolidated Statements of Comprehensive Income.

 

  •  

During the year ended December 31, 2015, CBIZ sold a business from the Financial Services practice group for $0.5 million. A loss that was not material to our results of operations was recorded as a result of the sale.

 

  •  

During the year ended December 31, 2014, CBIZ sold a business from the Financial Services practice group for $2.9 million. A gain of $1.2 million was recorded as a result of the sale.

 

  •  

Gains totaling $0.1 million, $0.1 million and $0.1 million the years ended December 31, 2015, 2014 and 2013, respectively, were recorded and relate to contingent consideration earned on sales made in previous periods.