Discontinued Operations and Divestitures

12 Months Ended

Dec. 31, 2012

Discontinued Operations and Divestitures [Abstract]

Discontinued Operations and Divestitures

20. Discontinued Operations and Divestitures

CBIZ will divest (through sale or closure) business operations that do not contribute to the Company’s long-term objectives for growth, or that are not complementary to its target service offerings and markets. Divestitures are classified as discontinued operations provided they meet the criteria as provided in FASB ASC 205 “Presentation of Financial Statements – Discontinued Operations – Other Presentation Matters”.

Discontinued Operations

Gains or losses from the sale of discontinued operations are recorded as “Gain (loss) on disposal of discontinued operations, net of tax”, in the accompanying consolidated statements of comprehensive income. Additionally, proceeds that are contingent upon a divested operation’s actual future performance are recorded as gain on sale of discontinued operations in the period they are earned. During the twelve months ended December 31, 2012, CBIZ did not sell any operations. Gains recorded for the twelve months ended December 31, 2012 related to contingent proceeds of $0.1 million for a National Practices operation that was sold during 2010.

During the twelve months ended December 31, 2011, CBIZ sold a business from the Financial Services practice group and will receive contingent proceeds from this sale transaction based on revenue over the three-year period ending December 31, 2014. As part of the sale of this business, CBIZ reduced its goodwill balance by approximately $0.3 million.

During the twelve months ended December 31, 2010, CBIZ sold two businesses and closed one business from the National Practices group. Proceeds from the sales of the two businesses consisted of $0.2 million in cash and resulted in a pre-tax loss of approximately $0.7 million, and the office closure resulted in a pre-tax loss of approximately $1.1 million.

Revenue and results from operations of discontinued operations for the years ended December 31, 2012, 2011 and 2010 are separately reported as “Loss from operations of discontinued operations, net of tax” in the consolidated statements of comprehensive income and were as follows (in thousands):

	2012			2011			2010
Revenue	$	—		$	943		$	5,586
Loss from operations of discontinued operations before income tax benefit	$	(32	)	$	(957	)	$	(4,408	)
Income tax benefit		13			366			1,740
Loss from operations of discontinued operations, net of tax	$	(19	)	$	(591	)	$	(2,668	)

Gains (losses) on disposals of discontinued operations for the years ended December 31 2012, 2011 and 2010 were as follows (in thousands):

	2012			2011			2010
Gain (loss) on disposal of discontinued operations, before income tax (expense) benefit	$	142		$	207		$	(1,785	)
Income tax (expense) benefit		(52	)		(193	)		812
Gain (loss) on disposal of discontinued operations, net of tax	$	90		$	14		$	(973	)

At December 31, 2012 and 2011, the assets and liabilities of businesses classified as discontinued operations are reported separately in the accompanying consolidated financial statements and consisted of the following (in thousands):

	2012		2011
Assets:
Accounts receivable, net	$	—	$	38
Other current assets		267		521
Assets of discontinued operations	$	267	$	559
Liabilities:
Other current liabilities	$	173	$	199
Liabilities of discontinued operations	$	173	$	199

Divestitures

Gains or losses from divested operations and assets that do not qualify for treatment as discontinued operations are recorded as “Gain on sale of operations, net” in the consolidated statements of comprehensive income and totaled gains of $2.8 million, $2.9 million and $0.5 million the years ended December 31, 2012, 2011 and 2010, respectively. These gains relate to sales made in the respective period, contingent consideration earned on sales made in previous periods, and deferred gains that are recognized as cash payments are received. CBIZ received cash proceeds for divestiture activity totaling $1.4 million, $0.9 million and $7.9 million for the years ended December 31, 2012, 2011 and 2010, respectively. As a result of the sale of CBIZ’s individual wealth management business on January 1, 2011, goodwill was reduced by $2.2 million.