Discontinued Operations

12 Months Ended

Dec. 31, 2014

Discontinued Operation, Additional Disclosures [Abstract]

Discontinued Operations

DISCONTINUED OPERATIONS

In the third quarter of 2014, Kaplan completed the sale of three of its schools in China that were previously included as part of Kaplan International. An additional school in China was sold by Kaplan in January 2015. These sales resulted in a pre-tax loss of $3.1 million.

On June 30, 2014, the Company and Berkshire Hathaway Inc. completed a transaction, as described in Note 7, in which Berkshire acquired a wholly-owned subsidiary of the Company that included, among other things, WPLG, a Miami-based television station; a $375.0 million gain from the WPLG sale was recorded in the second quarter of 2014.

On October 1, 2013, the Company completed the sale of its newspaper publishing businesses for $250.0 million. The publishing businesses sold include The Washington Post, Express, The Gazette Newspapers, Southern Maryland Newspapers, Greater Washington Publishing, Fairfax County Times, El Tiempo Latino and related websites (Publishing Subsidiaries). A pre-tax gain of $157.5 million was recorded on the sale (after-tax gain of $100.0 million) in the fourth quarter of 2013.

In March 2013, the Company sold The Herald. Kaplan sold Kidum in August 2012, EduNeering in April 2012 and Kaplan Learning Technologies (KLT) in February 2012. In addition, the Company divested its interest in Avenue100 Media Solutions in July 2012.

The sale of The Herald resulted in a pre-tax loss of $0.1 million that was recorded in the first quarter of 2013.

The sale of KLT resulted in a pre-tax loss of $3.1 million, which was recorded in the first quarter of 2012. The sale of EduNeering resulted in a pre-tax gain of $29.5 million, which was recorded in the second quarter of 2012. The sale of Kidum resulted in a pre-tax gain of $3.6 million, which was recorded in the third quarter of 2012. 

In connection with each of the sales of the Company’s stock in EduNeering and KLT, in the first quarter of 2012, the Company recorded $23.2 million of income tax benefits related to the excess of the outside stock tax basis over the net book value of the net assets disposed.

In connection with the disposal of Avenue100 Media Solutions, Inc., the Company recorded a pre-tax loss of $5.7 million in the third quarter of 2012. An income tax benefit of $44.5 million was also recorded in the third quarter of 2012 as the Company determined that Avenue100 Media Solutions, Inc. had no value. The income tax benefit was due to the Company’s tax basis in the stock of Avenue100 exceeding its net book value as a result of goodwill and other intangible asset impairment charges recorded in prior years, for which no tax benefit was previously recorded.

The results of operations of the schools in China, WPLG, the Publishing Subsidiaries, The Herald, Kidum, Avenue100, Kaplan EduNeering and KLT for 2014, 2013 and 2012, where applicable, are included in the Company’s Consolidated Statements of Operations as Income (Loss) from Discontinued Operations, Net of Tax. All corresponding prior period operating results presented in the Company’s Consolidated Financial Statements and the accompanying notes have been reclassified to reflect the discontinued operations presented. The Company did not reclassify its Consolidated Statements of Cash Flows or prior year Consolidated Balance Sheet to reflect the discontinued operations.

In the first quarter of 2014, an after-tax adjustment of $3.0 million was made to reduce the $100.0 million after-tax gain on the sale of the Publishing Subsidiaries previously reported in the fourth quarter of 2013, as a result of changes in estimates related to liabilities retained as part of the sale.

The summarized income (loss) from discontinued operations, net of tax, is presented below:

	Year Ended December 31
(in thousands)	2014			2013			2012
Operating revenues	$	46,980		$	462,658		$	679,640
Operating costs and expenses	(37,257		)	(519,162		)	(690,963		)
Gain (loss) from discontinued operations	9,723			(56,504		)	(11,323		)
Provision (benefit) for income taxes	4,408			(20,559		)	(3,868		)
Net Gain (Loss) from Discontinued Operations	5,315			(35,945		)	(7,455		)
Gain on sales and disposition of discontinued operations	351,133			157,449			23,759
(Benefit) provision for income taxes on sales and disposition of discontinued operations	(15,801		)	57,489			(64,591		)
Income from Discontinued Operations, Net of Tax	$	372,249		$	64,015		$	80,895