HR Block 2006 Annual Report Download - page 121

Download and view the complete annual report

Please find page 121 of the 2006 HR Block annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 155

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155

NOTE 2: BUSINESS COMBINATIONS AND DISPOSALS
Acquisitions during fiscal years 2006, 2005 and 2004 are as follows. Results for each acquisition are included since the date of acquisition.
(in 000s)
Asset Acquired Weighted Average Life Asset Value at Acquisition
Fiscal Year 2006 –
American Express Tax and Business Services, Inc. Property and equipment $ 17,759
Goodwill 72,123
Customer relationships 11 years 18,800
Noncompete agreements 6 years 3,900
Trade name 2 years 2,600
Other assets 128,998
Liabilities (53,442)
Weighted average life 9 years $ 190,738
Other Goodwill $ 13,616
Customer relationships 9 years 8,397
Noncompete agreements 9 years 2,024
Other assets (liabilities) (4,353)
Weighted average life 9 years $ 19,684
Fiscal Year 2005 –
Non-accounting firm Business Services acquisitions Property and equipment $ 2,497
Goodwill 9,666
Customer relationships 10 years 7,730
Noncompete agreements 15 years 100
Weighted average life 10 years $ 19,993
Fiscal Year 2004 –
Former major franchise territories Property and equipment $ 2,697
Goodwill 205,313
Customer relationships 10 years 18,167
Noncompete agreements 3 years 17,069
Weighted average life 7 years $ 243,246
Accounting firms Goodwill $ 3,923
Customer relationships 10 years 1,794
Noncompete agreements 15 years 747
Weighted average life 11 years $ 6,464
During fiscal year 2006, we acquired all outstanding common stock of 쐍Determination of final liabilities relating to planned exit
American Express Tax and Business Services, Inc. for an aggregate activities; and
purchase price of $190.7 million. The customer relationships will be 쐍Determination of the tax basis of acquired assets and liabilities, and
amortized based on estimated customer retention and have a weighted deferred tax balances of the acquired business.
average life of 11 years. The noncompete agreements will be amortized During fiscal year 2005, our Business Services segment acquired six
on a straight-line basis and have a weighted average life of six years. businesses. Cash payments related to these acquisitions totaled
Goodwill recognized in this transaction is included in the Business $19.5 million, with additional cash payments of $0.1 million over the
Services segment and is not deductible for tax purposes. The next five years. Goodwill recognized in these transactions is included in
preliminary purchase price allocations are subject to change and will be the Business Services segment and all but $3.8 million is deductible for
adjusted based upon resolution of several matters including, but not tax purposes.
limited to, the following: During fiscal year 2004, we made payments of $243.2 million related
쐍Determination of the post-closing adjustment and final to the acquisition of primarily assets in the franchise territories of ten
purchase price; former major franchisees. The customer relationships will be amortized
based on estimated customer retention over ten years. The noncompete
H&R BLOCK 2006 Form 10K
51