Discontinued Operation

12 Months Ended

Dec. 31, 2012

Discontinued Operation

Discontinued Operation

Note 4—Discontinued Operation

        During 2009, the Company decided to discontinue the operations of its MicroEdge subsidiary, which provided products and services to the not-for-profit business community, to concentrate on its core investment management business. In connection with this decision, the Company completed the sale of MicroEdge on October 1, 2009 to an affiliate of Vista Equity Partners III, LLC ("Purchaser"). The Company sold net assets in MicroEdge totaling $3.0 million. The total consideration received by the Company in connection with the divestiture was approximately $30.0 million in cash, of which $27.0 million in cash was paid on the closing date. The remaining $3.0 million of the Purchase Price was held in escrow and was released to the Company in March 2011, resulting in the Company recording a net gain of $1.7 million in "net income from discontinued operation, net of applicable taxes" in the Company's consolidated statement of operations, for fiscal 2011.

        In connection with the sale of MicroEdge, the Company vacated its MicroEdge facilities in New York and entered into a sub-lease agreement with the Purchaser, whereby the Purchaser contracted to sub-lease the premises for two years with the option to extend the sub-lease term through the end of the lease term in 2018. The sub-lease agreement was amended during the first quarter of 2011. Under the amended sub-lease agreement, the Purchaser will sub-lease the premises through the end of the lease term, with an option to terminate in September 2013, subject to penalties.

        As part of the disposition, certain assets and obligations of the Company's discontinued operation were excluded from the sale and are reflected in the Company's balance sheets as noncurrent assets and noncurrent liabilities of discontinued operation as of December 31, 2012 and 2011. Assets excluded from the sale include cash and deferred tax assets. Liabilities excluded from the sale include sales tax and other tax-related obligations, future payments related to a two year service and maintenance agreement, and continuing lease obligations included as part of the restructuring noted below.

        The calculation of the gain on disposal of the Company's discontinued operation required management to make significant estimates in the resulting facility exit costs. Given the significance of, and the timing of the execution of such activities, this process is complex and involves periodic reassessments of estimates made at the time the original decisions were made, including evaluating the probability that the purchaser will decide to terminate the sub-lease agreement in 2013, evaluating real estate market conditions for expected vacancy periods and sub-lease rents. The Company continually evaluates the adequacy of the remaining liabilities related to this disposition. Although the Company believes that these estimates accurately reflect costs for its facility exit costs, actual results may differ, thereby requiring the Company to record additional provisions or reverse a portion of such provisions.

        The following table sets forth an analysis of the components of the restructuring charges related to the Company's discontinued operation and the payments and non-cash charges made against the accrual during fiscal 2012 and 2011 (in thousands):

	Facility Exit Costs
Balance of restructuring accrual at December 31, 2010	$	5,249
Restructuring charges		(206	)
Cash payments		(174	)
Adjustment of prior restructuring costs		165
Balance of restructuring accrual at December 31, 2011	$	5,034
Restructuring charges		(439	)
Cash payments		(721	)
Adjustment of prior restructuring costs		156
Balance of restructuring accrual at December 31, 2012	$	4,030

        Of the remaining restructuring accrual of $4.0 million at December 31, 2012, $0.2 million is included in "Current liabilities of discontinued operation" in the accompanying consolidated balance sheet. The facility exit costs will be paid over the remaining lease term through 2018.

        Net revenues and income from the Company's discontinued operation are as follows for the following periods (in thousands):

	Fiscal Years
	2012		2011		2010
Net revenues	$	—	$	—	$	—
Income (loss) from operation of discontinued operation (net of applicable taxes of $126, $(82) and $(46), respectively)	$	184	$	114	$	(166	)
Gain on disposal of discontinued operation (net of applicable taxes of $0, $1,279 and $0, respectively)		—		1,725		—
Net (loss) income from discontinued operation	$	184	$	1,839	$	(166	)

        The following table sets forth the assets and liabilities of the MicroEdge discontinued operation included in the consolidated balance sheets of the Company (in thousands):

	December 31
	2012		2011
Assets:
Total current assets of discontinued operation	$	88	$	—
Deferred taxes, long-term	$	1,609	$	2,006
Total noncurrent assets of discontinued operation	$	1,609	$	2,006
Liabilities:
Total current liabilities of discontinued operation	$	262	$	488
Accrued restructuring, long-term portion		3,804		4,633
Total noncurrent liabilities of discontinued operation	$	3,804	$	4,633