Note 7 - Goodwill

12 Months Ended

May 31, 2014

Disclosure Text Block Supplement [Abstract]

Goodwill Disclosure [Text Block]

7. GOODWILL

Changes in the carrying amount of goodwill for the years ended May 31, 2014 and 2013 were as follows (in thousands):

	For the Years Ended May 31
	2014			2013
Balance at beginning of period	$	1,003,463			966,338
Additions:
Acquisition of businesses		6,912			36,889
Foreign currency translation adjustment		1,188			236
Impairment loss		(160,000	)		-
Balance at end of period	$	851,563			1,003,463

An impairment loss on goodwill is recognized to the extent that a reporting unit’s carrying amount of goodwill exceeds the implied fair value of goodwill of such reporting unit, determined in accordance with ASC Topic 350, Intangibles-Goodwill and Other (“ASC 350”). Goodwill is evaluated for impairment annually as of March 1^st, and between annual tests if a triggering event or a change in circumstances indicates that the goodwill might be impaired.

ASC 350 requires that if the fair value of a reporting unit is less than its carrying amount, including goodwill, further analysis is required to measure the amount of the impairment loss, if any. The amount by which the reporting unit’s carrying amount of goodwill exceeds the implied fair value of the reporting unit’s goodwill, determined in accordance with ASC 350, is to be recognized as an impairment loss.

The Company has six reporting units with goodwill from prior acquisitions reported on the balance sheet at May 31, 2014. The annual evaluation for impairment utilizes the financial projections of the next fiscal year and the five year strategic plans that are prepared in the fourth quarter and reflects Management’s continuing knowledge of the operations and the markets in which the reporting units operate. During the fourth quarter of fiscal 2014, while completing the annual evaluation based on these plans and projections, the estimated fair value of five of the Company’s six reporting units with goodwill exceeded the carrying amount. For each of the five reporting units that passed step one as of March 1, 2014, the percentage by which the estimated fair value exceeded the carrying amount of the reporting units ranged from 45% to 123%.

For one of the Company’s reporting units, the estimated fair value that reflects Management’s continuing knowledge of the operations and the markets in which the reporting unit operates did not exceed the carrying amount. Therefore, the Company completed step two of the impairment testing process to measure the amount of the impairment loss. The impairment loss on goodwill was determined to be $160.0 million and was recorded in the fourth quarter of fiscal year 2014. This impairment loss represented 18% of the carrying amount of goodwill for this reporting unit. There were no accumulated impairment losses for the Company’s goodwill as of May 31, 2013. After the impairment loss recorded on one of the reporting unit’s goodwill in fiscal year 2014, the Company had $160.0 million of accumulated impairment losses on goodwill as of May 31, 2014.

The Company estimated the fair value of each of its reporting units in a manner similar to the method used in a business combination. The Company utilized the income approach in the determination of fair value. Under the income approach, estimated fair value is based on the discounted cash flow method. The key assumptions that drive the estimated fair value of the reporting units under the income approach are level 3 inputs and include future cash flows from operations and the discount rate applied to those future cash flows, determined from a weighted-average cost of capital calculation. The future cash flows include additional key assumptions relating to revenue growth rates, margins and costs.