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60 2014 Form 10-K | H&R Block, Inc.
Depreciation and amortization expense of property and equipment for continuing operations for fiscal years 2014,
2013 and 2012 was $84.7 million, $68.2 million and $61.4 million, respectively.
NOTE 8: GOODWILL AND INTANGIBLE ASSETS
Changes in the carrying amount of goodwill of our Tax Services segment for the years ended April 30, 2014 and 2013
are as follows:
(in 000s)
Goodwill Accumulated
Impairment Losses Net
Balance as of May 1, 2012 $ 459,863 $ (32,297) $ 427,566
Acquisitions 7,625 — 7,625
Disposals and foreign currency changes, net (409) — (409)
Impairments — — —
Balance as of April 30, 2013 467,079 (32,297) 434,782
Acquisitions 3,086 — 3,086
Disposals and foreign currency changes, net (1,751) — (1,751)
Impairments — — —
Balance as of April 30, 2014 $ 468,414 $ (32,297) $ 436,117
We tested goodwill for impairment in the fourth quarter of fiscal year 2014, 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.
Components of the intangible assets of our Tax Services segment are as follows:
(in 000s)
As of April 30, 2014 2013
Gross
Carrying
Amount Accumulated
Amortization Net
Gross
Carrying
Amount Accumulated
Amortization Net
Reacquired franchise rights $ 233,749 $ (26,136) $ 207,613 $ 214,330 $ (18,204) $ 196,126
Customer relationships 123,110 (59,521) 63,589 100,719 (48,733) 51,986
Internally-developed software 101,162 (72,598) 28,564 91,745 (72,764) 18,981
Noncompete agreements 24,694 (22,223) 2,471 23,058 (21,728) 1,330
Franchise agreements 19,201 (6,934) 12,267 19,201 (5,654) 13,547
Purchased technology 54,900 (13,782) 41,118 14,800 (12,331) 2,469
Trade name 300 (300) — 300 (300) —
$ 557,116 $ (201,494) $ 355,622 $ 464,153 $ (179,714) $ 284,439
In fiscal year 2014, we acquired the assets of a business for $30.3 million. Assets acquired consisted primarily of
purchased technology.
Amortization of intangible assets of continuing operations for the years ended April 30, 2014, 2013 and 2012 was
$30.9 million, $24.2 million and $27.8 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 2015, 2016, 2017,
2018 and 2019 is $39.2 million, $32.4 million, $27.0 million, $23.7 million and $20.7 million, respectively.