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Discontinued Operations | 12 Months Ended
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Dec. 31, 2014
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | 4. DISCONTINUED OPERATIONS As of December 31, 2014, the results of operations for campuses that have ceased operations, assets that are held for sale or institutions 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 2014, we completed the teach-out of twenty-one campuses, as well as completed the sale of two campuses, and accordingly, all current and prior period financial statements include the results of operations and financial position of these campuses as components of discontinued operations. Assets Held for Sale During the fourth quarter of 2014, we made the decision to commit to a plan of sale for our Le Cordon Bleu Culinary Arts institutions. Accordingly, the assets and liabilities for these institutions are included in the assets and liabilities of discontinued operations on our consolidated balance sheets and the results of operations are reported within discontinued operations in the consolidated statements of loss and comprehensive loss. As we anticipate the sale of these assets to be completed within one year, we have recorded the assets and liabilities related to these institutions within current assets and liabilities of discontinued operations as of December 31, 2014. During the fourth quarter of 2014, and prior to the announcement of the plan of sale for our LCB institutions, we concluded that certain indicators, including the recent release of the gainful employment regulation, existed to suggest the long-lived assets were at risk of their carrying values exceeding their respective fair values. As a result of our analysis of fair value, we recorded $10.0 million of asset impairment charges related to the fixed assets at four of our LCB institutions. The fixed assets related to these institutions are expected to generate negative cash flows through their respective lease end dates and as such the carrying values were not deemed recoverable. The fair value for these assets was determined based upon management’s assumptions regarding an estimated percentage of replacement value for similar assets and estimated salvage values. Because the determination of the estimated fair value of these assets requires significant estimation and assumptions, these fair value measurements are categorized as Level 3 per ASC Topic 820. Disposition of International Segment On December 3, 2013, we completed the sale and transfer of control of our International Segment, which consisted of our INSEEC schools and the International University of Monaco located in France and Monaco, respectively. This sale reflected our strategy to redeploy our assets to rebuild our domestic educational institutions and improve our options for accelerating growth. The total consideration for the International Segment pursuant to the Purchase Agreement was $305.0 million, less certain distributions and adjustments prior to closing, which resulted in a cash payment of $276.5 million received at closing. We realized a gain on the sale of $130.1 million, net of approximately $8.9 million of transaction costs, during 2013 within loss from discontinued operations on our consolidated statements of loss and comprehensive loss. This gain represented the difference between the proceeds received and the book value of the net assets sold. The income tax expense associated with the gain was approximately $87.9 million. Results of Discontinued Operations Combined summary results of operations for our discontinued operations for the years ended December 31, 2014, 2013 and 2012, were as follows (dollars in thousands):
|  | For the Year Ended December 31, |
|  | 2014 |  |  | 2013 (1) |  |  | 2012 (2) |
Revenue |  | $ | 177,314 |  |  | $ | 355,340 |  |  | $ | 470,661 |
Pretax loss |  | $ | (101,923 | ) |  | $ | (7,749 | ) |  | $ | (125,123 | )
Income tax provision (benefit) |  |  | — |  |  |  | 38,789 |  |  |  | (47,168 | )
Loss from discontinued operations, net of tax |  | $ | (101,923 | ) |  | $ | (46,538 | ) |  | $ | (77,955 | )
Net loss per diluted share |  | $ | (1.52 | ) |  | $ | (0.70 | ) |  | $ | (1.17 | )
(1) | The income tax expense associated with the gain on sale of our International Segment approximates $87.9 million.
(2) | 2012 pretax loss includes income for non-profit entities within our International segment, which are not subject to income tax.
The summary results of operations held for sale presented within results from discontinued operations above were (dollars in thousands):
|  | For the Year Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Asset Held For Sale: |  |  |  |  |  |  |  |  |  |  |  |
Revenue |  | $ | 172,606 |  |  | $ | 177,549 |  |  | $ | 224,842 |
Loss from discontinued operations |  | $ | (66,322 | ) |  | $ | (81,242 | ) |  | $ | (33,865 | )
Assets and Liabilities of Discontinued Operations Assets and liabilities of discontinued operations on our consolidated balance sheets as of December 31, 2014 and 2013 include the following (dollars in thousands):
|  | As of December 31, |
|  | 2014 |  |  | 2013 |
Assets: |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | — |  |  | $ | 475 |
Receivables, net |  |  | 473 |  |  |  | 1,521 |
Other current assets |  |  | — |  |  |  | 1,344 |
Assets held for sale |  |  | 76,846 |  |  |  | 10,879 |
Total current assets |  |  | 77,319 |  |  |  | 14,219 |
Non-current assets: |
Property and equipment, net |  |  | — |  |  |  | 2,731 |
Other assets, net |  |  | 975 |  |  |  | 1,507 |
Assets held for sale |  |  | — |  |  |  | 97,470 |
Total assets of discontinued operations |  | $ | 78,294 |  |  | $ | 115,927 |
Liabilities: |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | 579 |  |  | $ | 1,370 |
Deferred tuition revenue |  |  | — |  |  |  | 1,522 |
Remaining lease obligations |  |  | 14,927 |  |  |  | 13,132 |
Liabilities held for sale |  |  | 50,357 |  |  |  | 19,671 |
Total current liabilities |  |  | 65,863 |  |  |  | 35,695 |
Non-current liabilities: |  |  |  |  |  |  |  |
Remaining lease obligations |  |  | 22,689 |  |  |  | 30,952 |
Other |  |  | 170 |  |  |  | 6,512 |
Liabilities held for sale |  |  | — |  |  |  | 25,732 |
Total liabilities of discontinued operations |  | $ | 88,722 |  |  | $ | 98,891 |
The major components of assets and liabilities held for sale presented above within discontinued operations were (dollars in thousands):
|  | As of December 31, |
|  | 2014 |  |  | 2013 |
Assets: |  |  |  |  |  |  |  |
Receivables, net (1) |  | $ | 8,303 |  |  | $ | 7,487 |
Property and equipment, net (1) |  |  | 42,521 |  |  |  | 67,570 |
Other intangible assets (1) |  |  | 18,400 |  |  |  | 27,300 |
Other assets (1) |  |  | 7,622 |  |  |  | 5,992 |
Total assets held for sale |  | $ | 76,846 |  |  | $ | 108,349 |
Liabilities: |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  |  | 12,410 |  |  |  | 4,831 |
Deferred revenue |  |  | 17,001 |  |  |  | 14,840 |
Remaining lease obligations (2) |  |  | 2,253 |  |  |  | 2,671 |
Other liabilities (2) |  |  | 18,693 |  |  |  | 23,061 |
Total liabilities held for sale |  | $ | 50,357 |  |  | $ | 45,403 |
(1) | Property and equipment, net, other intangible assets and a portion of receivables, net and other assets are classified within non-current assets held for sale as of December 31, 2013.
(2) | Other liabilities and a portion of remaining lease obligations are classified within non-current liabilities held for sale as of December 31, 2013.
Remaining Lease Obligations A number of the campuses that ceased operations or are held for sale have remaining lease obligations that expire over time with the latest expiration in 2022. 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 the years ended December 31, 2014, 2013 and 2012, were as follows (dollars in thousands):
|  | Balance, Beginning of Period |  |  | Charges Incurred (1) |  |  | Net Cash Payments (2) |  |  | Other (3) |  |  | Balance, End of Period |
For the twelve months ended December 31, 2014 |  | $ | 46,755 |  |  | $ | 14,129 |  |  | $ | (26,546 | ) |  | $ | 5,531 |  |  | $ | 39,869 |
For the twelve months ended December 31, 2013 |  | $ | 49,392 |  |  | $ | 11,855 |  |  | $ | (14,780 | ) |  | $ | 288 |  |  | $ | 46,755 |
For the twelve months ended December 31, 2012 |  | $ | 53,877 |  |  | $ | 8,689 |  |  | $ | (13,174 | ) |  | $ | — |  |  | $ | 49,392 |
(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 8 “Leases” for the future minimum lease payments under operating leases for discontinued operations as of December 31, 2014.
(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.

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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 205 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760 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 360 -SubTopic 10 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=8077374&loc=d3e2443-110228 + Details
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