Discontinued Operations

12 Months Ended

Dec. 31, 2015

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

5. DISCONTINUED OPERATIONS

As of December 31, 2015, 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. During 2015, we did not have any campuses that met the criteria to be considered as discontinued operations under the new guidance.

Additionally, during December 2015 the decision was made to teach-out the LCB campuses which were previously held for sale within discontinued operations. As a result of this decision, the results of operations for these campuses have been recast to be reflected as part of continuing operations for all periods presented.

Results of Discontinued Operations

Combined summary results of operations for our discontinued operations for the years ended December 31, 2015, 2014 and 2013 were as follows (dollars in thousands):

	For the Year Ended December 31,
	2015			2014			2013 (1)
Revenue	$	(20	)	$	4,708		$	177,791
Operating expenses:
Educational services and facilities	$	1,211		$	25,152		$	139,479
General and administrative		910			13,282			83,096
Depreciation and amortization		-			2,073			10,913
Asset impairment		-			68			1,044
Total operating expenses	$	2,121		$	40,575		$	234,532
Pretax (loss) income	$	(2,128	)	$	(35,601	)	$	73,493
Income tax (benefit) provision		(997	)		-			68,477
(Loss) income from discontinued operations, net of tax	$	(1,131	)	$	(35,601	)	$	5,016
Net (loss) income per diluted share	$	(0.02	)	$	(0.53	)	$	0.08
Capital expenditures	$	-		$	-		$	6,128

(1) The income tax expense associated with the gain on sale of our International Segment approximates $87.9 million.

Assets and Liabilities of Discontinued Operations

Assets and liabilities of discontinued operations on our consolidated balance sheets as of December 31, 2015 and 2014 include the following (dollars in thousands):

	As of December 31,
	2015		2014
Assets:
Current assets:
Receivables, net	$	254	$	473
Total current assets		254		473
Non-current assets:
Other assets, net		720		975
Deferred income tax assets, net		8,091		-
Total assets of discontinued operations	$	9,065	$	1,448
Liabilities:
Current liabilities:
Accounts payable and accrued expenses	$	528	$	579
Remaining lease obligations		12,539		14,927
Total current liabilities		13,067		15,506
Non-current liabilities:
Remaining lease obligations		9,212		22,689
Other		164		170
Total liabilities of discontinued operations	$	22,443	$	38,365

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 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 consolidated balance sheets, for the years ended December 31, 2015, 2014 and 2013 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, 2015	$	37,616	$	(342	)	$	(15,523	)	$	-	$	21,751
For the twelve months ended December 31, 2014	$	44,084	$	13,676		$	(24,854	)	$	4,710	$	37,616
For the twelve months ended December 31, 2013	$	46,298	$	11,181		$	(13,700	)	$	305	$	44,084

(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 9 “Leases” for the future minimum lease payments under operating leases for discontinued operations as of December 31, 2015.

(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.