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H&R Block 2013 Form 10-K 65
NOTE 7: GOODWILL AND INTANGIBLE ASSETS
Changes in the carrying amount of goodwill of our Tax Services segment for the years ended April 30, 2013 and 2012
are as follows:
(in 000s)
Goodwill
Accumulated
Impairment
Losses Net
Balance at April 30, 2011 $ 459,039 $ (24,888) $ 434,151
Acquisitions 5,377 — 5,377
Disposals and foreign currency changes, net (4,553) — (4,553)
Impairments —(7,409) (7,409)
Balance at April 30, 2012 459,863 (32,297) 427,566
Acquisitions 7,625 — 7,625
Disposals and foreign currency changes, net (409)— (409)
Impairments — — —
Balance at April 30, 2013 $ 467,079 $ (32,297) $ 434,782
We tested goodwill for impairment in the fourth quarter of fiscal year 2013, and did not identify any impairment.
In fiscal year 2012, we discontinued service under our ExpressTax brand and closed approximately 200
underperforming company-owned offices. As a result, we recorded an impairment of goodwill, in the amount of $7.4
million. There is no remaining goodwill related to our ExpressTax brand. We recorded a $22.7 million impairment in
our former RedGear reporting unit in fiscal year 2011.
Components of the intangible assets of our Tax Services segment are as follows:
(in 000s)
As of April 30, 2013 2012
Gross
Carrying
Amount
Accumulated
Amortization Net
Gross
Carrying
Amount
Accumulated
Amortization Net
Reacquired franchise rights $ 214,330 $ (18,204) $ 196,126 $ 214,330 $ (14,083) $ 200,247
Customer relationships 100,719 (48,733) 51,986 90,433 (46,504) 43,929
Internally-developed software 91,745 (72,764) 18,981 104,685 (92,472) 12,213
Noncompete agreements 23,058 (21,728) 1,330 22,337 (21,425) 912
Franchise agreements 19,201 (5,654) 13,547 19,201 (4,373) 14,828
Purchased technology 14,800 (12,331) 2,469 14,700 (10,665) 4,035
Trade name 300 (300) — 1,300 (800)500
$ 464,153 $ (179,714) $ 284,439 $ 466,986 $ (190,322) $ 276,664
Amortization of intangible assets of continuing operations for the years ended April 30, 2013, 2012 and 2011 was
$24.2 million, $27.8 million and $29.5 million, respectively. We recorded impairments of various intangible assets
totaling $3.6 million during fiscal year 2013, including those related to our former RedGear reporting unit. We recorded
an impairment of customer relationships of $4.0 million during fiscal year 2012, related to the discontinuation of our
ExpressTax brand, as discussed above. Estimated amortization of intangible assets for fiscal years 2014, 2015, 2016,
2017 and 2018 is $22.1 million, $18.2 million, $14.8 million, $12.3 million and $11.3 million, respectively.