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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. INVESTMENTS IN AND LOANS TO AFFILIATES (Continued)
The tables below contain details related to the Company's investment in Provalliance for the twelve months ended June 30, 2011, 2010, and
2009:
Impact on Consolidated Balance Sheet
Impact on Consolidated Statement of Operations
Impact on Consolidated Statement of Cash Flows
Investment in Empire Education Group, Inc.
On August 1, 2007, the Company contributed its 51 wholly-owned accredited cosmetology schools to Empire Education Group, Inc. (EEG)
in exchange for a 49.0 percent equity interest in EEG. In January 2008, the Company's effective ownership interest increased to 55.1 percent
related to the
108
Carrying Value at
June 30,
Classification
2011
2010
(Dollars in thousands)
Investment in Provalliance
Investment in and loans to affiliates
$
149,245
$
75,481
Equity Put Option
Other noncurrent liabilities
22,700
22,009
For the Twelve Months
Ended June 30,
Classification
2011
2010
2009
(Dollars in thousands)
Other than temporary impairment
(1)
Equity in income (loss) of
affiliated companies, net of income
taxes
$
—
$
—
$
(
25,732
)
Equity in income, net of income
taxes
Equity in income (loss) of
affiliated companies, net of income
taxes
7,752
4,134
1,979
For the Twelve Months
Ended June 30,
Classification
2011
2010
2009
(Dollars in thousands)
Equity in income, net of income
taxes
Equity in income of affiliated
companies
$
(7,752
)
$
(4,134
)
$
(1,979
)
Cash dividends received
Dividends received from affiliated
companies
4,814
1,141
—
(1) Due to increased debt and reduced earnings expectations, the Company could no longer justify the carrying amount of its
investment in Provalliance and recorded a $25.7 million other than temporary impairment charge in its fourth quarter
ended June 30, 2009. The exposure to loss related to the Company's involvement with Provalliance is the carrying value of
the investment and future changes in fair value of the Equity Put.