GOODWILL AND LONG-LIVED ASSETS

9 Months Ended

Sep. 30, 2014

GOODWILL AND LONG-LIVED ASSETS [Abstract]

4.	GOODWILL AND LONG-LIVED ASSETS

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 as of September 30, 2014, there was sufficient evidence to conclude that there were impairments of certain long-lived assets at six of the Company’s campuses. Long-lived assets had been tested at these campuses as a result of certain financial indicators such as the Company’s history of losses, current respective period losses, as well as future projected losses at these campuses. The long-lived assets impairment resulted in a pre-tax charge of $1.9 million for leasehold improvements and $0.5 million for intangible assets as of September 30, 2014.

The Company concluded as of June 30, 2013, there was sufficient evidence to conclude that there were impairments of certain long-lived assets at two of the Company’s campuses. Long-lived assets had been tested at these campuses as a result of certain financial indicators such as the Company’s history of losses, current respective period losses, as well as future projected losses at these campuses. The long-lived assets impairment resulted in a pre-tax charge of $1.4 million (of which $0.7 million is included in discontinued operations) and $1.7 million (of which $1.6 million is included in discontinued operations) for leasehold improvements as of June 30, 2013 and March 31, 2013, respectively.

The Company reviews goodwill and 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 as of September 30, 2014 there was an indicator of potential impairment as a result of a decrease in market capitalization and, accordingly, the Company tested goodwill for impairment. The test indicated that 10 of the Company’s reporting units were impaired, which resulted in a pre-tax non-cash charge of $39.0 million for the three months ended September 30, 2014.

As of June 30, 2013, the Company concluded that current period losses at two reporting units, which resulted in a deterioration of current and projected cash flows, was an indicator of potential impairment and, accordingly, tested goodwill for impairment. The test indicated that these two reporting units were impaired, which resulted in a pre-tax non-cash charge of $3.1 million for the three months ended June 30, 2013.

The carrying amount of goodwill at September 30, 2014 is as follows:

	Gross Goodwill Balance		Accumulated Impairment Losses			Net Goodwill Balance
Balance as of January 1, 2014	$	117,176	$	(54,711	)	$	62,465
Impairment		-		(38,954	)		(38,954	)
Balance as of September 30, 2014	$	117,176	$	(93,665	)	$	23,511

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

	Indefinite Trade Name			Trade Name			Accreditation			Curriculum			Non-compete			Total
Gross carrying amount at December 31, 2013	$	180		$	335		$	1,166		$	1,124		$	200		$	3,005
Impairment		(180	)		(25	)		(102	)		(574	)		(200	)		(1,081	)
Gross carrying amount at September 30, 2014		-			310			1,064			550			-			1,924

Accumulated amortization at December 31, 2013		-			228			-			828			68			1,124
Amortization		-			37			-			78			27			142
Impairment					(12	)					(448	)		(95	)		(555	)
Accumulated amortization at September 30, 2014		-			253			-			458			-			711

Net carrying amount at September 30, 2014	$	-		$	57		$	1,064		$	92		$	-		$	1,213

Weighted average amortization period (years)		-			7		Indefinite				10			-

Amortization of intangible assets was less than $0.1 million and $0.1 million for the three months ended September 30, 2014 and 2013, and approximately $0.1 million and $0.2 million for the nine months ended September 30, 2014 and 2013.

The following table summarizes the estimated future amortization expense:

Year Ending December 31,
Remainder of 2014	$	21
2015		65
2016		22
2017		20
2018		20
Thereafter		1

	$	149

- 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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