DISCONTINUED OPERATIONS |
4. DISCONTINUED
OPERATIONS
As of
June 30, 2012, the results of operations for schools that have
ceased operations or were sold are presented within discontinued
operations.
The combined
summary of unaudited results of operations for our discontinued
operations for the quarters and years to date ended June 30,
2012 and 2011 were as follows:
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For the Quarters Ended
June 30, |
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For the Years to Date Ended
June 30, |
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2012 |
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2011 |
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2012 |
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2011 |
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(Dollars in
thousands) |
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Revenue
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$ |
— |
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$ |
12,313 |
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$ |
5 |
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$ |
23,977 |
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(Loss) income before income
tax
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$ |
(782 |
) |
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$ |
2,842 |
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$ |
(1,393 |
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$ |
6,565 |
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Income tax provision
(benefit) (1)
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5,585 |
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908 |
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(669 |
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2,191 |
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(Loss) income from
discontinued operations, net of tax
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$ |
(6,367 |
) |
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$ |
1,934 |
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$ |
(724 |
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$ |
4,374 |
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(1) |
Amount represents the
difference between the total consolidated income tax (benefit)
provision, calculated by applying the estimated full-year
consolidated effective tax rate to earnings/(losses) reported for
the period, and the income tax (benefit) provision for continuing
operations, calculated by applying the estimated full-year
effective tax rate for continuing operations to pretax (loss)
income from continuing operations for the period. |
Assets and
liabilities of discontinued operations on our consolidated balance
sheets as of June 30, 2012 and December 31, 2011 include
the following:
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June 30,
2012 |
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December 31,
2011 |
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(Dollars in
thousands) |
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Assets:
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Current assets:
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Receivables, net
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$ |
58 |
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$ |
104 |
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Deferred income tax
assets
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3,224 |
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3,224 |
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Total current
assets
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3,282 |
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3,328 |
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Non-current
assets:
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Deferred income tax
assets
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15,421 |
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15,421 |
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Other assets,
net
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1,560 |
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1,680 |
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Total assets of
discontinued operations
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$ |
20,263 |
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$ |
20,429 |
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Liabilities:
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Current
liabilities:
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Accounts payable
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$ |
— |
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$ |
3 |
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Accrued expenses
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— |
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498 |
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Remaining lease
obligations
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11,072 |
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7,902 |
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Total current
liabilities
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11,072 |
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8,403 |
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Non-current
liabilities:
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Remaining lease
obligations
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30,143 |
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37,935 |
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Total liabilities of
discontinued operations
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$ |
41,215 |
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$ |
46,338 |
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A number of the
campuses 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 in which 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 quarters and years to date ended
June 30, 2012 and 2011 were as follows:
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Balance,
Beginning
of Period |
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Charges
Incurred (1) |
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Net Cash
Payments |
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Other (2) |
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Balance,
End of
Period |
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(Dollars in
thousands) |
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For the quarter ended
June 30, 2012
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$ |
43,598 |
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$ |
416 |
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$ |
(2,799 |
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$ |
— |
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$ |
41,215 |
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For the quarter ended
June 30, 2011
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$ |
46,682 |
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$ |
1,992 |
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$ |
(3,311 |
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$ |
(1,468 |
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$ |
43,895 |
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For the year to date ended
June 30, 2012
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$ |
45,837 |
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$ |
713 |
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$ |
(5,335 |
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$ |
— |
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$ |
41,215 |
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For the year to date ended
June 30, 2011
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$ |
50,378 |
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$ |
819 |
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$ |
(5,834 |
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$ |
(1,468 |
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$ |
43,895 |
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(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 balances for newly vacated spaces that are netted with the
losses incurred in the period recorded. |
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