GOODWILL AND LONG-LIVED ASSETS

9 Months Ended

Sep. 30, 2012

GOODWILL AND LONG-LIVED ASSETS [Abstract]

4.	GOODWILL AND LONG-LIVED ASSETS

The Company reviews intangible assets for impairment when indicators of impairment exist. Annually, or more frequently if necessary, the Company evaluates goodwill and intangible assets with indefinite lives for impairment, with any resulting impairment reflected as an operating expense. The Company concluded that the decrease in the Company's market capitalization as of June 30, 2012 was an indicator of potential impairment and, accordingly, the Company tested goodwill for impairment. The tests indicated that five of the Company's reporting units were impaired as a result of lower than expected student population, which resulted in a pre-tax non-cash charge of $15.4 million in the second quarter of 2012. The fair values of these reporting units were estimated using the expected present value of future cash flows. There was no impairment during the third quarter ended September 30, 2012.

The Company reviews long-lived assets for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The Company concluded that as of June 30, 2012 there was an indicator of potential impairment and, accordingly, the Company tested long-lived assets for impairment and determined that 10 campuses were impaired. This resulted in a pre-tax non-cash charge of $8.3 million which included leasehold improvements of $8.1 million and definite-lived intangible assets of $0.2 million.

The carrying amount of goodwill at September 30, 2012 is as follows:

Balance as of January 1, 2012
Goodwill	$	115,303
Accumulated impairment losses		(17,932	)
		97,371
Goodwill acquired pursuant to business acquisition-FMTI		1,837
Goodwill impairment		(15,352	)

Balance as of September 30, 2012
Goodwill		117,140
Accumulated impairment losses		(33,284	)
	$	83,856

Intangible assets, which are included in other assets in the accompanying condensed consolidated balance sheets, consist of the following:

	Student Contracts		Indefinite Trade Name		Trade Name			Accreditation		Curriculum			Non-compete		Total
Gross carrying amount at December 31, 2011	$	-	$	180	$	509		$	1,268	$	1,150		$	1,980	$	5,087
Acquisition of FMTI		25		-		25			-		224			200		474
Impairment		-		-		(168	)		-		(250	)		-		(418	)
Gross carrying amount at September 30, 2012		25		180		366			1,268		1,124			2,180		5,143
Accumulated amortization at December 31, 2011		-		-		262			-		620			1,952		2,834
Amortization		23		-		61			-		100			46		230
Impairment		-		-		(127	)		-		(85	)		-		(212	)
Accumulated amortization at September 30, 2012		23		-		196			-		635			1,998		2,852
Net carrying amount at September 30, 2012	$	2	$	180	$	170		$	1,268	$	489		$	182	$	2,291
Weighted average amortization period (years)		1	Indefinite			7		Indefinite			9			3

Amortization of intangible assets was approximately $0.1 million and $0.7 million for the three months ended September 30, 2012 and 2011, respectively, and approximately $0.2 million and $1.2 million for the nine months ended September 30, 2012 and 2011, respectively.

The following table summarizes the estimated future amortization expense:

Year Ending December 31,
Remainder of 2012	$	60
2013		225
2014		224
2015		156
2016		112
Thereafter		66

	$	843

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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