Discontinued Operations

12 Months Ended

Dec. 31, 2011

Discontinued Operations

Discontinued Operations

(2) Discontinued Operations

        On January 21, 2012, we entered into an agreement to sell substantially all of the assets of our Federal division to CRGT, Inc. for an aggregate purchase price of $40 million in cash, subject to adjustment based on the final calculation of the working capital of the Federal division at the time of closing. The transaction closed on March 9, 2012. Net cash proceeds from this sale, including transaction-related costs, are estimated to be in the range of $33-34 million. At December 31, 2011, the carrying value of the net assets of the Federal division was approximately $31 million. Based on our estimates of related working capital and transaction-related fees and expenses and other exit costs, we expect to record a net gain of approximately $1-2 million in 2012. The Federal division met the conditions to be reported as a discontinued operation within the financial statements in December 2011, and accordingly, the financial position, results of operations and cash flows have been reclassified for all periods to conform to the current period's presentation.

        We performed a goodwill impairment test at December 31, 2011, and adjusted the carrying value of Federal division goodwill to its implied fair value. As a result, we recorded a goodwill impairment charge of $27.4 million during the quarter ended December 31, 2011, which is included within the loss from discontinued operations of the Federal division. Refer to Note 8 for further discussion on the Federal impairment charge. To report the results of discontinued operations, we are required to adjust the reported results of our Federal division from those previously reported as segment operating income. These adjustments eliminate corporate overhead allocations and adjust for costs of the division that will not be recognized on a going-forward basis. In addition, we have allocated interest expense to discontinued operations by applying the effective interest rate towards the amount of debt that is required to be repaid as a result of the transaction, and we have allocated related tax expense or benefit. These adjustments have been made for all periods presented.

        The following table summarizes the operating results of the discontinued operations included in the Consolidated Statements of Operations:

	Year Ended December 31,
	2011			2010			2009
	(In thousands)
Total revenues	$	107,705		$	117,545		$	117,613
Operating expenses		101,899			117,648			113,376
Goodwill impairment		27,400			30,000			—
Operating income (loss) from discontinued operations		(21,594	)		(30,103	)		4,237
Interest and other expense		528			484			401
Income (loss) from discontinued operations before income taxes		(22,122	)		(30,587	)		3,836
Income tax expense (benefit)		(6,995	)		(8,433	)		1,385
Income (loss) from discontinued operations, net of income tax	$	(15,127	)	$	(22,154	)	$	2,451

        The following table summarizes the carrying values of the assets and liabilities of discontinued operations which are included in the Consolidated Balance Sheets:

	December 31,
	2011		2010
	(In thousands)
Accounts receivable	$	19,410	$	22,928
Goodwill		16,864		44,264
Other assets		1,970		3,666
Assets of discontinued operations	$	38,244	$	70,858
Accounts payable and accrued compensation liabilities	$	6,216	$	7,905
Other accrued expenses and liabilities		1,094		1,612
Liabilities of discontinued operations	$	7,310	$	9,517