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DISCONTINUED OPERATIONS
 6 Months Ended
Jun. 30, 2014
Discontinued Operations And Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS

4. DISCONTINUED OPERATIONS

As of June 30, 2014, the results of operations for campuses that have ceased operations or schools that were sold, and are considered distinct operations as defined under FASB ASC Topic 205 — Presentation of Financial Statements, are presented within discontinued operations. During the second quarter of 2014, we completed the teach-out of eight campuses and the sale of two campuses (see Note 2, “Basis of Presentation” of the notes to our unaudited consolidated financial statements). All current and prior period financial statements include the results of operations and financial position for these campuses as components of discontinued operations.

During the second quarter of 2014, we completed the sales of both Everblue Training Institute and SBI Pittsburgh for immaterial amounts. The sales of these campuses were a result of two separate offers to continue the operations of each campus. We recorded a combined net loss on sale of these campuses of $0.3 million. Each of the buyers for these campuses assumed the remaining lease obligations for the facilities which approximated $3.7 million as of June 30, 2014.

Results of Discontinued Operations

The summary of unaudited results of operations for our discontinued operations for the quarters and years to date ended June 30, 2014 and 2013 were as follows (dollars in thousands):

 

     For the Quarter Ended
June 30,		     For the Year to Date Ended
June 30,		  
         2014             2013             2014                 2013          

Revenue

    $ 1,075      $ 35,397      $ 3,087      $ 98,596   
  

 

 

    

 

 

    

 

 

    

 

 

  

Loss before income tax

    $ (10,964 )    $ (16,287 )    $ (27,537 )    $ (16,253 ) 

Income tax benefit (1)

      —          (7,669 )      —          (9,494 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Loss from discontinued operations, net of tax

    $ (10,964 )    $ (8,618 )    $ (27,537 )    $ (6,759 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

 

(1) Due to the valuation allowance against our net deferred taxes, there is no income tax benefit reported for the quarter and year to date ended June 30, 2014.

 

Assets and Liabilities of Discontinued Operations

Assets and liabilities of discontinued operations on our unaudited consolidated balance sheets as of June 30, 2014 and December 31, 2013 include the following (dollars in thousands):

 

     June 30,
2014		      December 31,
2013		  

Assets:

      

Current assets:

      

Cash and cash equivalents

    $ —         $ 472   

Receivables, net

      385         1,320   

Other current assets

      188         1,178   
  

 

 

     

 

 

  

Total current assets

      573         2,970   

Non-current assets:

      

Property and equipment, net

      5         2,011   

Other assets, net

      1,174         1,500   
  

 

 

     

 

 

  

Total assets of discontinued operations

    $ 1,752       $ 6,481   
  

 

 

     

 

 

  

Liabilities:

      

Current liabilities:

      

Accounts payable and accrued expenses

    $ 241       $ 1,267   

Deferred tuition revenue

      —           1,061   

Remaining lease obligations

      16,754         13,048   
  

 

 

     

 

 

  

Total current liabilities

      16,995         15,376   

Non-current liabilities:

      

Remaining lease obligations

      32,912         30,852   

Other

      165         6,159   
  

 

 

     

 

 

  

Total liabilities of discontinued operations

    $ 50,072       $ 52,387   
  

 

 

     

 

 

  

Remaining Lease Obligations

A number of the campuses that ceased operations have remaining lease obligations that expire over time with the latest expiration in 2020. 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 unaudited consolidated balance sheets, for the quarters and years to date ended June 30, 2014 and 2013, were as follows (dollars in thousands):

 

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

For the quarter ended June 30, 2014

    $ 48,091       $ 5,893       $ (5,469 )    $ 1,151      $ 49,666   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

For the quarter ended June 30, 2013

    $ 43,739       $ 1,181       $ (3,674 )    $ (27 )    $ 41,219   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

For the year to date ended June 30, 2014

    $ 43,900       $ 13,196       $ (12,017 )    $ 4,587      $ 49,666   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

For the year to date ended June 30, 2013

    $ 46,298       $ 954       $ (5,968 )    $ (65 )    $ 41,219   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

 

(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) Includes existing prepaid rent and deferred rent liability balances for newly vacated spaces that are netted with the losses incurred in the period recorded.