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Redeemable Noncontrolling Interest
12 Months Ended
Jun. 30, 2014
Redeemable Noncontrolling Interest  
Redeemable Noncontrolling Interest

10. Redeemable Noncontrolling Interest

        In May 2010, the Company entered into an agreement to establish a joint venture with Middlebury College ("Middlebury") to form Middlebury Interactive Languages LLC ("MIL"). The venture creates and distributes innovative, high-quality online language courses under the trademark Middlebury and other marks. At any time after the fifth (5th) anniversary of forming the joint venture, Middlebury may give written notice of its irrevocable election to sell all (but not less than all) of its membership interest to the Company (put right). The purchase price for Middlebury's membership interest shall be its fair market value and the Company may, in its sole discretion, pay the purchase price in cash or shares of the Company's common stock. At June 30, 2014, MIL had not met certain milestones associated with its Language Academy summer camp programs. As such, Middlebury may exercise its option to either repurchase the camp programs at fair market value along with other contractual rights. Middlebury has neither exercised nor expressed an intent to exercise the option.

        Given the provision of the put right, the noncontrolling interest is redeemable outside of the Company's control and it is recorded outside of permanent equity at its redemption value fair value in accordance with ASC 480, Distinguishing Liabilities From Equity (EITF Topic D-98, Classification and Measurement of Redeemable Securities). The Company will adjust the redeemable noncontrolling interest to redemption value on each balance sheet date with changes in redemption value recognized as an adjustment to retained earnings, or in the absence of retained earnings, by adjustment to additional paid-in-capital.

        The following is a summary of the activity of the redeemable noncontrolling interest at June 30, 2014 and 2013:

(In thousands)
  Value  

Balance of redeemable noncontrolling interest at June 30, 2012

  $ 17,200  

Net loss

    (1,019 )

Adjustment to redemption value

    (981 )
       

Balance of redeemable noncontrolling interest at June 30, 2013

    15,200  

Net loss

    (1,319 )

Net proceeds from noncontrolling interest contribution

    1,275  

Adjustment to redemption value

    1,645  
       

Balance of redeemable noncontrolling interest at June 30, 2014

  $ 16,801