Discontinued Operations

9 Months Ended

Jan. 31, 2012

13. Discontinued Operations

As of January 31, 2012, the results of operations and the related losses on the sale of RSM and MCM businesses are presented as discontinued operations in the condensed consolidated financial statements. Our discontinued operations also include the results of operations of SCC, which exited its mortgage business in fiscal year 2008.

In connection with the sale of RSM and MCM, we indemnified the buyers against certain litigation matters. The indemnities are not subject to a stated term or limit. Accounting Standards Codification 460 – Guarantees (ASC 460) requires that we recognize a liability for the estimated fair value of guarantee and indemnification obligations at the inception of the arrangement. We have estimated an aggregate fair value of $6.0 million related to these indemnifications and recorded a liability in that amount as of the date of the sales. Subsequent changes in this liability will be determined in accordance with ASC 460 and ASC 450 – Loss Contingencies and recorded in discontinued operations.

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


				(in 000s)
	Three months ended January 31,		Nine months ended January 31,
	2012	2011	2012	2011
Revenues	$ 50,508	$ 171,071	$ 416,436	$ 549,180

Pretax income (loss) from operations:
RSM and related businesses	$ 1,117	$ 8,327	$ 18,831	$ 15,228
Mortgage	(27,385 )	(10,551 )	(54,019 )	(17,125 )

	(26,268 )	(2,224 )	(35,188 )	(1,897 )
Income taxes (benefit)	(6,462 )	(537 )	(10,268 )	268

Net income (loss) from operations	(19,806 )	(1,687 )	(24,920 )	(2,165 )

Pretax loss on sales of businesses	(236 )	—	(109,485 )	—
Income tax benefit	(20,260 )	—	(59,969 )	—

Net gain (loss) on sales of businesses	20,024	—	(49,519 )	—

Net income (loss) from discontinued operations	$ 218	$ (1,687 )	$ (74,436 )	$ (2,165 )

The sale of RSM resulted in a pretax financial statement loss, but produced a gain for tax purposes. The tax gain resulted primarily from larger amortization deductions taken for tax purposes than for financial statement purposes. A portion of the gain from the sale of intangible assets is capital in nature and can be offset by utilization of capital loss carry forwards. A net income tax benefit of $20.5 million was recorded in discontinued operations related to the sale.

- 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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