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Discontinued Operations
 12 Months Ended
Dec. 31, 2016
Discontinued Operations And Disposal Groups [Abstract]  
Discontinued Operations

17. DISCONTINUED OPERATIONS

As of December 31, 2016, the results of operations for campuses that have ceased operations prior to 2015 are presented within discontinued operations. Prior to January 1, 2015, our Transitional Group campuses met the criteria for discontinued operations upon completion of their teach-out as defined under FASB ASC Topic 205 – Presentation of Financial Statements. Commencing January 1, 2015, in accordance with the new guidance under ASC Topic 360, only campuses that meet the criteria of a strategic shift upon disposal will be classified within discontinued operations, among other criteria. Since the January 2015 effective date of the updated guidance within ASC Topic 360, we did not have any campuses that met the criteria to be considered a discontinued operation.

Results of Discontinued Operations

Combined summary results of operations for our discontinued operations for the years ended December 31, 2016, 2015, and 2014 were as follows (dollars in thousands):

 

 

 

For the Year Ended December 31,

 

 

 

2016

 

 

2015

 

 

2014

 

Revenue

 

$

-

 

 

$

(20

)

 

$

4,708

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

$

5,558

 

 

$

1,211

 

 

$

25,152

 

General and administrative

 

 

1,028

 

 

 

910

 

 

 

13,282

 

Depreciation and amortization

 

 

-

 

 

 

-

 

 

 

2,073

 

Asset impairment

 

 

-

 

 

 

-

 

 

 

68

 

Total operating expenses

 

$

6,586

 

 

$

2,121

 

 

$

40,575

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax loss

 

$

(6,586

)

 

$

(2,128

)

 

$

(35,601

)

Income tax benefit

 

 

(2,690

)

 

 

(997

)

 

 

-

 

Loss from discontinued operations, net of tax

 

$

(3,896

)

 

$

(1,131

)

 

$

(35,601

)

Net loss per diluted share

 

$

(0.05

)

 

$

(0.02

)

 

$

(0.53

)

 

Assets and Liabilities of Discontinued Operations

Assets and liabilities of discontinued operations on our consolidated balance sheets as of December 31, 2016 and 2015 include the following (dollars in thousands):

 

 

 

As of December 31,

 

 

 

2016

 

 

2015

 

Assets:

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Receivables, net

 

$

148

 

 

$

254

 

Total current assets

 

 

148

 

 

 

254

 

Non-current assets:

 

 

 

 

 

 

 

 

Other assets, net

 

 

483

 

 

 

720

 

Deferred income tax assets, net

 

 

5,622

 

 

 

8,091

 

Total assets of discontinued operations

 

$

6,253

 

 

$

9,065

 

Liabilities:

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

76

 

 

$

528

 

Remaining lease obligations

 

 

8,143

 

 

 

12,539

 

Total current liabilities

 

 

8,219

 

 

 

13,067

 

Non-current liabilities:

 

 

 

 

 

 

 

 

Remaining lease obligations

 

 

6,331

 

 

 

9,212

 

Other

 

 

91

 

 

 

164

 

Total liabilities of discontinued operations

 

$

14,641

 

 

$

22,443

 

Remaining Lease Obligations of Discontinued Operations

A number of the campuses that ceased operations prior to January 1, 2015 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 the years ended December 31, 2016, 2015 and 2014 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 year ended December 31, 2016

 

$

21,751

 

 

$

4,090

 

 

$

(11,367

)

 

$

-

 

 

$

14,474

 

For the year ended December 31, 2015

 

$

37,616

 

 

$

(342

)

 

$

(15,523

)

 

$

-

 

 

$

21,751

 

For the year ended December 31, 2014

 

$

44,084

 

 

$

13,676

 

 

$

(24,854

)

 

$

4,710

 

 

$

37,616

 

 

 

(1)

Includes subsequent adjustments for accretion, revised estimates, and variances between estimated and actual charges, net of any reversals for terminated lease obligations.

(2)

See Note 7 “Leases” for the future minimum lease payments under operating leases for discontinued operations as of December 31, 2016.

(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.