DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2011

DISCONTINUED OPERATIONS

3. DISCONTINUED OPERATIONS

In the first half of 2009, the Company exited Italy and Japan. In accordance with the provision of ASC 205-20-45 “Reporting Discontinued Operations” the assets, liabilities, and results of operations of the Italy and Japan operations were reclassified as discontinued operations.

In the first quarter of 2008, the Company sold substantially all of the assets of Hudson Americas’ energy, engineering and technical staffing division (“ETS”) to System One Holdings LLC (“System One”).

In the fourth quarter of 2006, the Company sold its Highland Partners executive search business (“Highland”) to Heidrick & Struggles International, Inc. As a result of Highland achieving certain revenue metrics in 2008, the Company received an additional and final earn-out payment of $11,625 on April 9, 2009, which was reflected within discontinued operations as a gain from sale of discontinued operations for the year ended December 31, 2009.

Italy was part of the Hudson Europe reportable segment, Japan and T&I were part of the Hudson Asia Pacific reportable segment and ETS was part of the Hudson Americas reportable segment. Highland was a separate reportable segment of the Company at the time of its sale. The gain or loss on sale and results of operations of the disposed businesses were reported in discontinued operations in the relevant periods.

There were no reported results for the discontinued operations for the year ended December 31, 2011 and the reported results for the discontinued operations were insignificant for the year ended December 31, 2010. The reported results for the discontinued operations for the year ended December 31, 2009 were as follows:

	For The Year Ended December 31, 2009
	Italy			Japan			ETS		T&I		Highland			Total
Revenue	$	432		$	1,022		$	—	$	—	$	—		$	1,454
Gross margin	$	338		$	986		$	383	$	—	$	—		$	1,707
Operating (loss) income	$	(2,179	)	$	(2,624	)	$	237	$	—	$	(104	)	$	(4,670	)
Other (expense) income		699			(247	)		—		201		(1,111	)		(458	)
Gain from sale of discontinued operations		—			—			—		—		11,625			11,625
Provision for income taxes(a)		126			—			—		60		3,967			4,153
(Loss) income from discontinued operations	$	(1,606	)	$	(2,871	)	$	237	$	141	$	6,443		$	2,344

(a) Income tax expense (benefit) is provided at the effective tax rate by taxing jurisdiction and differs from the U.S. statutory tax rate of 35% for differences in the foreign statutory tax rates, as well as the ability to offset net operating loss carry forwards (“NOLs”) against taxable profits.

Amounts related to assets and liabilities of discontinued operations were insignificant as of December 31, 2011 and 2010.