Discontinued Operations

12 Months Ended

Dec. 31, 2012

Discontinued Operations

Note 5. Discontinued Operations

The Company also generated advertising and content-related revenue through its former wholly-owned subsidiary, Toolbox.com. CEB sold substantially all of the assets of Toolbox.com on December 30, 2011 for $2.1 million. The carrying amounts of the major classes of assets and liabilities sold consisted of (in thousands):

	December 30, 2011
Accounts receivable	$	1,060
Other current assets		46
Property and equipment		100
Goodwill		3,449
Intangible assets		952
Total assets		5,607
Current liabilities		471
Net assets sold	$	5,136

The components of discontinued operations included in the consolidated statements of operations consisted of (in thousands):

	Year Ended December 31,
	2011			2010
Revenue	$	5,251		$	6,476
Costs and expenses:
Cost of services		3,202			2,486
Member relations and marketing		2,115			2,651
General and administrative		2,930			3,975
Depreciation and amortization		782			2,423
Impairment loss		—			12,645
Loss on disposal		3,503			—
Loss from discontinued operations before provision for income taxes		(7,281	)		(17,704	)
Provision for income taxes		(2,489	)		(5,968	)
Loss from discontinued operations, net of provision for income taxes	$	(4,792	)	$	(11,736	)

In the third quarter of 2011, the Company identified indicators of possible impairment for the Toolbox.com reporting unit relating to the continued weakness in the online advertising market. The Company tested the goodwill for impairment and determined that the asset was not impaired. The carrying value of the reporting unit was $5.1 million at September 30, 2011.

In the third quarter of 2010, the Company identified indicators of possible impairment for the Toolbox.com reporting unit based on a combination of factors (including the current economic environment and the near term outlook for advertising related revenue). The Company completed an impairment test at September 1, 2010 and concluded that goodwill and intangible asset amounts were impaired. The total pre-tax impairment loss recognized in 2010 was $12.6 million ($9.5 million related to goodwill and $3.1 million related to intangible assets).

The Company utilized the income approach (discounted cash flow method) and the market approach (guideline company method and the transaction method) in the determination of the fair value. Significant assumptions included: expected revenue growth rates, reporting unit profit margins, and working capital levels; a discount rate of 19%; and a terminal value based upon long-term growth assumptions. The expected future revenue growth rates and profit margins were determined after taking into consideration historical revenue growth rates and profit margins, the Company’s assessment of future market potential, and the Company’s expectations of future business performance.