5. DISCONTINUED OPERATIONS
In February 2009, the Company completed the sale of its utility services business. In November 2009, the Company terminated the operation of its credit program for web and catalog retailer VENUE. These dispositions have been treated as a discontinued operation under ASC 205-20, “Presentation of Financial Statements — Discontinued Operations — Other Presentation Matters” and, accordingly, have been reported as discontinued operations in this Annual Report on Form 10-K.
Utility Services
In February 2009, the Company completed the sale of the remainder of its utilities services business and recorded a $19.9 million pre-tax loss for the year ended December 31, 2009.
VENUE
The Company recorded a $1.9 million and $17.5 million after-tax loss for the years ended December 31, 2010 and 2009, respectively, related to the termination of its program for web and catalog retailer VENUE, which is reflected in the Private Label Services and Credit segment. There were no costs incurred for VENUE in 2011. VENUE offered high ticket luxury goods sold exclusively through the web and catalogs, with financing (provided by the Company starting in late 2008) that allowed for an interest-free period and installment payments thereafter. The Company believes that negative account selection combined with the recessionary environment were the primary causes of the venture’s insolvency. VENUE was the Company’s only client in this niche retail vertical, and the Company has no plans to participate in any future ventures in this vertical.
Summarized Financial Information
The underlying assets of the discontinued operations for the periods presented in the consolidated financial statements are as follows:
|
|
December 31, 2011 |
|
December 31, 2010 |
|
|
|
(In thousands) |
|
Assets: |
|
|
|
|
|
Credit card receivables, net |
|
$ |
2,439 |
|
$ |
11,920 |
|
Assets of discontinued operations |
|
$ |
2,439 |
|
$ |
11,920 |
|
The following table summarizes the operating results of the discontinued operations.
|
|
Years Ended December 31, |
|
|
|
2011 |
|
2010 |
|
2009 |
|
|
|
(In thousands) |
|
Revenue |
|
$ |
— |
|
$ |
— |
|
$ |
(10,212 |
) |
Costs and expenses |
|
— |
|
(3,000 |
) |
(41,919 |
) |
Loss before provision for income taxes |
|
— |
|
(3,000 |
) |
(52,131 |
) |
Benefit from income taxes |
|
— |
|
1,099 |
|
19,146 |
|
Loss from discontinued operations |
|
$ |
— |
|
$ |
(1,901 |
) |
$ |
(32,985 |
) | |