XML 95 R11.htm IDEA: XBRL DOCUMENT v2.4.0.6
DISCONTINUED OPERATIONS
 12 Months Ended
Dec. 31, 2012
DISCONTINUED OPERATIONS

5. DISCONTINUED OPERATIONS

As of December 31, 2012, the results of operations for schools that have ceased operations or were sold are presented within discontinued operations. During the fourth quarter of 2012, our LCB Pittsburgh campus ceased operations. All current and prior period financial statements include the results of operations and financial position of LCB Pittsburgh as a component of discontinued operations.

Results of Discontinued Operations

Combined summary results of operations for our discontinued operations for the years ended December 31, 2012, 2011 and 2010, were as follows:

 

     For the Year Ended December 31,  
     2012     2011 (1)      2010  
     (Dollars in thousands)  

Revenue

    $ 1,295      $ 42,868       $ 55,127   
  

 

 

    

 

 

     

 

 

  

(Loss) income before income tax

    $ (12,200 )    $ 19,162       $ (9,292 ) 

Income tax benefit

      (4,310 )      (2,672)         (3,395 ) 
  

 

 

    

 

 

     

 

 

  

(Loss) income from discontinued operations, net of tax

    $ (7,890 )    $ 21,834       $ (5,897 ) 
  

 

 

    

 

 

     

 

 

  

 

(1) During the year ended December 31, 2011, we completed the sale of our Istituto Marangoni schools in Milan, Paris and London. As a result of that transaction we recorded a pretax gain of approximately $27.1 million. The income tax benefit for fiscal 2011 included $0.3 million of income tax expense related to this sale. The tax gain related to this transaction was significantly less than the gain reflected within the income before income tax for fiscal 2011 due to the $20.2 million of goodwill which was allocated to the remainder of the International reporting unit for book purposes, but which was included in the net assets sold for purposes of calculating the taxable gain.

 

Assets and Liabilities of Discontinued Operations

Assets and liabilities of discontinued operations on our consolidated balance sheets as of December 31, 2012 and 2011 include the following:

 

     As of December 31,  
     2012      2011  
     (Dollars in thousands)  

Assets:

      

Current assets:

      

Cash and cash equivalents

    $ 62       $ —     

Receivables, net

      421         736   

Other current assets

      —           142   

Deferred income tax assets

      3,450         3,327   
  

 

 

     

 

 

  

Total current assets

      3,933         4,205   

Non-current assets:

      

Property and equipment, net

      7         69   

Intangible assets, net

      —           900   

Deferred income tax assets

      17,083         22,270   

Other assets, net

      1,540         1,666   
  

 

 

     

 

 

  

Total assets of discontinued operations

    $ 22,563       $ 29,110   
  

 

 

     

 

 

  

Liabilities:

      

Current liabilities:

      

Accounts payable

    $ 8       $ 49   

Accrued expenses

      644         613   

Deferred tuition revenue

      —           251   

Remaining lease obligations

      9,174         7,981   
  

 

 

     

 

 

  

Total current liabilities

      9,826         8,894   

Non-current liabilities:

      

Remaining lease obligations

      33,103         37,980   
  

 

 

     

 

 

  

Total liabilities of discontinued operations

    $ 42,929       $ 46,874   
  

 

 

     

 

 

  

Remaining Lease Obligations

A number of the schools that ceased operations have remaining lease obligations that expire over time with the latest expiration in 2019. A liability is recorded representing the fair value of the remaining lease obligation at the time the space is no longer being utilized. Changes in our future remaining lease obligations, which are reflected within current and non-current liabilities of discontinued operations on our consolidated balance sheets, for our discontinued operations for the years ended December 31, 2012, 2011 and 2010, were as follows:

 

     Balance,
Beginning
of Period		      Charges
Incurred  (1)		      Net Cash
Payments (2)		     Other (3)     Balance,
End of
Period		  
     (Dollars in thousands)  

For the twelve months ended December 31, 2012

    $ 45,961       $ 7,371       $ (11,055 )    $ —         $ 42,277   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

For the twelve months ended December 31, 2011

    $ 50,827       $ 7,636       $ (11,035 )    $ (1,467 )    $ 45,961   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

For the twelve months ended December 31, 2010

    $ 71,714       $ 6,527       $ (27,952 )    $ 538      $ 50,827   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

 

(1) Includes charges for newly vacated spaces and subsequent adjustments for accretion, revised estimates, and variances between estimated and actual charges, net of any reversals for terminated lease obligations.
(2) See Note 9 “Leases” of the notes to our consolidated financial statements for the future minimum lease payments under operating leases for discontinued operations as of December 31, 2012.
(3) Includes existing prepaid rent and deferred rent liability balances for newly vacated spaces that are netted with the losses incurred in the period recorded.