Discontinued Operations and Assets Held for Sale

9 Months Ended

Sep. 30, 2011

Discontinued Operations and Assets Held for Sale

Discontinued Operations and Assets Held for Sale

Note 8 Discontinued Operations and Assets Held for Sale

In January 2011, we sold our French facility for $8.3, and recognized a gain on the sale of $1.1.  This asset was classified in assets held for sale in our December 31, 2010 consolidated balance sheet.

For the three and nine months ended September 30, 2011, there were no discontinued operations.  As of September 30, 2011, there were no assets or liabilities held for sale in our consolidated balance sheet.

In January 2010, we sold CompassLearning, Inc. (“CompassLearning”), our educational software division, for a purchase price of $30.8.  We recognized a gain on the sale, net of taxes, of $30.8 for the period January 1 to February 19, 2010.  This business qualified as discontinued operations under ASC 360.  We reported the results of operations and consolidated financial position of this business in discontinued operations within the consolidated statements of operations and consolidated statements of cash flows for the periods February 20 to September 30, 2010 and January 1 to February 19, 2010.

Income from discontinued operations, net of taxes for the three months ended September 30, 2010 was $0.7.

Income from discontinued operations, net of taxes for the periods February 20 to September 30, 2010 and January 1 to February 19, 2010 is as follows:

	Successor Company		Predecessor Company
	February 20 to September 30, 2010		January 1 to February 19, 2010
Revenue	$	—	$	2.6
Income from discontinued operations before income taxes	1.1		1.0
Income tax benefit on discontinued operations	—		(1.6		)
Income from discontinued operations, net of taxes, before gain on sales	1.1		2.6
Gain on sale of divested business, net of taxes	—		30.8
Income from discontinued operations, net of taxes	$	1.1	$	33.4

The gain on the sale of the CompassLearning divested business, net of taxes was as follows:

	Predecessor Company
	January 1 to February 19, 2010
Sales price	$	30.8
Net tangible assets	(3.0		)
Associated intangible assets	0.6
Transaction costs	2.4
Gain on sale of divested business, net of taxes	$	30.8

The tax expense resulting from the sale was fully offset by the reversal of the valuation allowance recorded on CompassLearning’s net operating loss carryforwards.