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Discontinued Operations
 9 Months Ended
Sep. 30, 2014
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations

4. DISCONTINUED OPERATIONS

As of September 30, 2014, the results of operations for campuses that have ceased operations or campuses 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 third quarter of 2014, we completed the teach-out of three campuses (see Note 2, “Basis of Presentation” of the notes to our unaudited condensed 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.

Results of Discontinued Operations

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

 

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

Revenue

    $ 29      $ 27,229      $ 3,836      $ 129,118   
  

 

 

    

 

 

    

 

 

    

 

 

  

Loss before income tax

    $ (2,065 )    $ (21,712 )    $ (32,784 )    $ (40,714 ) 

Income tax expense (1) (2)

      —          30,450        —          20,477   
  

 

 

    

 

 

    

 

 

    

 

 

  

Loss from discontinued operations, net of tax

    $ (2,065 )    $ (52,162 )    $ (32,784 )    $ (61,191 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net loss per diluted share

    $ (0.03 )    $ (0.78 )    $ (0.48 )    $ (0.91 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

 

(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 September 30, 2014.
(2) Third quarter of 2013 included $39.9 million of income tax expense recorded as a result of the decision to commit to a plan of sale for the International Schools segment.

Assets and Liabilities of Discontinued Operations

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

 

     September 30,
2014		      December 31,
2013		  

Assets:

      

Current assets:

      

Cash and cash equivalents

    $ 2       $ 475   

Receivables, net

      413         1,437   

Other current assets

      189         1,329   
  

 

 

     

 

 

  

Total current assets

      604         3,241   

Non-current assets:

      

Property and equipment, net

      —           2,561   

Other assets, net

      1,029         1,502   
  

 

 

     

 

 

  

Total assets of discontinued operations

    $ 1,633       $ 7,304   
  

 

 

     

 

 

  

Liabilities:

      

Current liabilities:

      

Accounts payable and accrued expenses

    $ 521       $ 1,344   

Deferred tuition revenue

      —           1,164   

Remaining lease obligations

      15,493         13,132   
  

 

 

     

 

 

  

Total current liabilities

      16,014         15,640   

Non-current liabilities:

      

Remaining lease obligations

      28,143         30,952   

Other

      286         6,444   
  

 

 

     

 

 

  

Total liabilities of discontinued operations

    $ 44,443       $ 53,036   
  

 

 

     

 

 

  

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 condensed consolidated balance sheets, for the quarters and years to date ended September 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 September 30, 2014

    $ 50,240       $ (173 )    $ (6,581 )    $ 150      $ 43,636   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

For the quarter ended September 30, 2013

    $ 41,219       $ 257      $ (3,224 )    $ —        $ 38,252   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

For the year to date ended September 30, 2014

    $ 44,084       $ 13,436      $ (18,637 )    $ 4,753      $ 43,636   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

For the year to date ended September 30, 2013

    $ 46,298       $ 1,211      $ (9,192 )    $ (65 )    $ 38,252   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

 

(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.