Discontinued Operations

12 Months Ended

Apr. 30, 2012

NOTE 20: DISCONTINUED OPERATIONS

In November 2011, we sold RSM to M&P for net cash proceeds of $523.1 million. We also received at the time of sale a long-term note in the amount of $54.0 million. M&P assumed substantially all liabilities of RSM, including contingent payments and lease obligations. The net after tax loss on the sale of RSM totaled $36.9 million, which includes an $85.4 million impairment of goodwill recorded in our first quarter and tax benefits of $17.9 million associated with capital loss carry-forwards utilized.

In January 2012, we sold RSM EquiCo, Inc.'s subsidiary, MCM, for cash proceeds of $1.0 million. The net after tax loss on the sale of MCM totaled $11.2 million and included a $14.3 million impairment of goodwill recorded in our first quarter.

In connection with the sales 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.

As of April 30, 2012, the results of operations of these businesses are presented as discontinued operations in the consolidated financial statements. All periods presented in the consolidated balance sheets and statements of income have been reclassified to reflect our discontinued operations. Our discontinued operations also include the results of operations of SCC, which exited its mortgage business in fiscal year 2008.

The results of our discontinued operations are as follows:


	(in 000s)
Year ended April 30,	2012			2011			2010
Revenues	$	417,168		$	828,725		$	859,869

Pretax income (loss) from operations:
RSM and related businesses	$	14,441		$	48,021		$	59,492
Mortgage		(59,702	)		(20,644	)		(16,449	)

		(45,261	)		27,377			43,043
Income taxes (benefit)		(13,329	)		13,814			18,924

Net income (loss) from operations		(31,932	)		13,563			24,119

Pretax loss on sales of businesses		(109,719	)		—			—
Income tax benefit		(61,615	)		—			—

Net loss on sales of businesses		(48,104	)		—			—

Net income (loss) from discontinued operations	$	(80,036	)	$	13,563		$	24,119

The sale of RSM resulted in a pretax financial statement loss, but 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.

- 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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