DISCONTINUED OPERATIONS

3 Months Ended

Mar. 31, 2014

Discontinued Operations And Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

4. DISCONTINUED OPERATIONS

As of March 31, 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 first quarter of 2014, we completed the teach-out of nine 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.

Results of Discontinued Operations

The summary of unaudited results of operations for our discontinued operations for the quarters ended March 31, 2014 and 2013 were as follows (dollars in thousands):

	For the Quarter Ended March 31,
	2014			2013
Revenue	$	274		$	56,060
Pretax (loss) income	$	(10,698	)	$	5,340
Income tax provision (1)		—			749
(Loss) income from discontinued operations, net of tax	$	(10,698	)	$	4,591

(1) Due to the valuation allowance against our net deferred taxes, there is no income tax benefit reported for the quarter ended March 31, 2014.

Assets and Liabilities of Discontinued Operations

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

	March 31, 2014		December 31, 2013
Assets:
Current assets:
Cash and cash equivalents	$	199	$	182
Receivables, net		237		368
Other current assets		87		600
Total current assets		523		1,150
Non-current assets:
Property and equipment, net		12		396
Other assets, net		1,394		1,458
Total assets of discontinued operations	$	1,929	$	3,004
Liabilities:
Current liabilities:
Accounts payable and accrued expenses	$	216	$	790
Deferred tuition revenue		—		217
Remaining lease obligations		15,202		13,048
Total current liabilities		15,418		14,055
Non-current liabilities:
Remaining lease obligations		32,225		30,852
Other		—		3,262
Total liabilities of discontinued operations	$	47,643	$	48,169

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 ended March 31, 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 March 31, 2014	$	43,900	$	6,311		$	(5,817	)	$	3,033		$	47,427
For the quarter ended March 31, 2013	$	46,298	$	(227	)	$	(2,294	)	$	(38	)	$	43,739

(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.