Discontinued Operations

6 Months Ended

Oct. 31, 2011

12. Discontinued Operations

As of October 31, 2011, the assets and liabilities of RSM and EquiCo are being presented as held-for-sale and the results of operations of these businesses are presented as discontinued operations in the condensed consolidated financial statements.

The major classes of assets and liabilities reported as held-for-sale are as follows:


		(in 000s)
As of		October 31, 2011		April 30, 2011
Receivables, net	$	215,817	$	262,118
Prepaid expenses and other current assets		61,357		67,854
Property and equipment, net		49,833		52,022
Intangible assets, net		87,324		92,579
Goodwill		299,896		412,094
Other assets		14,926		13,661
Assets held for sale	$	729,153	$	900,328
Accounts payable, accrued expenses and deposits	$	67,947	$	67,088
Accrued salaries, wages and payroll taxes		39,009		48,290
Long-term debt		10,841		13,107
Deferred tax liability		50,209		81,492
Other liabilities		31,024		31,585
Liabilities held for sale	$	199,030	$	241,562

The results of operations of our discontinued operations are as follows:


					(in 000s)
		Three months ended October 31,				Six months ended October 31,
		2011			2010		2011				2010
Revenues	$	199,042		$	203,088	$	365,928		$	378,109
Income (loss) from operations before impairment and
income tax benefit	$	(22,949	)	$	5,708	$	(18,472	)		$	327
Impairment of goodwill		—			—		(99,697	)			—
Pretax income (loss)		(22,949	)		5,708		(118,169	)			327
Income tax expense (benefit)		(4,238	)		3,313		(43,515	)			805
Net income (loss) from discontinued operations	$	(18,711	)	$	2,395	$	(74,654	)		$	(478	)

During fiscal year 2008, we exited our mortgage business. Our discontinued operations also include pretax losses related to our mortgage business of $24.1 million and $26.6 million for the three and six months ended October 31, 2011, respectively, and $2.1 million and $6.6 million for the three and six months ended October 31, 2010, respectively.

For income tax purposes, the sale of RSM may result in a taxable gain, a portion of which could be capital in character. To the extent all or a portion of the tax gain is determined to be capital, it would be offset up to our existing capital loss carry forwards. In order to determine the amount of such gain, the purchase price will be allocated among the assets sold and liabilities assumed. Capital gains resulting from the sale would allow us to release additional portions of the valuation allowance on capital loss deferred tax assets. The amount of valuation allowance release has not yet been determined, but would result in a tax benefit recorded to discontinued operations and could have a material impact on our results of operations in the third quarter. In the second quarter, no benefit or expense was recorded relating to the RSM transaction because the sale of RSM had not yet closed.

- Definition

Tabular disclosure of disposal groups, which may include the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the classification and carrying value of the assets and liabilities comprising the disposal group, and the segment in which the disposal group was reported. Also may include the amount of adjustments to amounts previously reported in discontinued operations such as resolution of contingencies arising from the disposal transaction or the operations of the component prior to disposal.

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