Discontinued Operations

9 Months Ended

May 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

During the first quarter of fiscal year 2016, we completed the sale of Carnegie Learning for a nominal amount resulting in a $2.8 million loss on sale. We do not have significant continuing involvement with Carnegie Learning after the sale.

During fiscal year 2015, we began presenting Carnegie Learning’s assets and liabilities as held for sale on our Condensed Consolidated Balance Sheets and its operating results as discontinued operations on our Condensed Consolidated Statements of Operations for all periods presented. Carnegie Learning’s operating results were previously included in Other in our segment reporting, and certain additional Carnegie Learning expenses associated with University of Phoenix’s use of Carnegie Learning technology were included in our University of Phoenix reportable segment.

The major components of Carnegie Learning’s assets and liabilities presented separately as held for sale on our Condensed Consolidated Balance Sheets as of August 31, 2015 are as follows:

($ in thousands)	As of August 31, 2015
Cash	$	10,220
Accounts receivable, net	10,327
Property and equipment, net	15,912
Intangible assets, net	14,100
Other	3,972
Allowance for reduction of assets of business held for sale	(13,634		)
Total assets	$	40,897
Deferred revenue	$	35,602
Other	5,295
Total liabilities	$	40,897

The following summarizes Carnegie Learning’s operating results for the respective periods, which are presented in Loss from discontinued operations, net of tax on our Condensed Consolidated Statements of Operations:

	Three Months Ended May 31,					Nine Months Ended May 31,
($ in thousands)	2016		2015			2016			2015
Net revenue	$	—	$	5,123		$	2,993		$	13,119
Costs and expenses:
Intangibles impairment(1)	—		—			—			12,999
Loss on sale	—		—			2,773			—
Other	—		7,756			4,519			23,469
Loss from discontinued operations before income taxes	—		(2,633		)	(4,299		)	(23,349		)
Benefit from income taxes	—		447			1,040			8,443
Loss from discontinued operations, net of tax	$	—	$	(2,186	)	$	(3,259	)	$	(14,906	)

⁽¹⁾ Represents an impairment charge to write-off certain Carnegie Learning technology intangibles that were no longer being used. The associated technology had been incorporated into University of Phoenix’s academic platform and as a result of the University ceasing use of the technology, no future cash flows associated with the technology were expected over its remaining useful life. Accordingly, we recorded a $13.0 million impairment charge representing the remaining carrying value.

The operating results of our discontinued operations only includes revenues and costs directly attributable to the discontinued operations. Accordingly, no interest expense or general corporate overhead has been allocated to Carnegie Learning. Additionally, we ceased depreciation on Carnegie Learning’s property and equipment when we determined it was held for sale.

We determined cash flows from our discontinued operations are not material and are included with cash flows from continuing operations on our Condensed Consolidated Statements of Cash Flows.