Korn Ferry Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets

12 Months Ended

Apr. 30, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

13. Goodwill and Intangible Assets

Changes in the carrying value of goodwill by reportable segment were as follows:

	Executive Search
	North America			EMEA			Asia Pacific		Subtotal			Advisory			RPO & Professional Search			Consolidated
	(in thousands)
Balance as of May 1, 2017	$	46,201		$	44,976		$	972	$	92,149		$	457,241		$	27,475		$	576,865
Exchange rate fluctuations		1,556			2,525			—		4,081			928			2,348			7,357
Balance as of April 30, 2018		47,757			47,501			972		96,230			458,169			29,823			584,222
Exchange rate fluctuations		(1,186	)		(2,021	)		—		(3,207	)		(808	)		(1,909	)		(5,924	)
Balance as of April 30, 2019	$	46,571		$	45,480		$	972	$	93,023		$	457,361		$	27,914		$	578,298

Tax deductible goodwill from the PIVOT Leadership acquisition was $7.1 million and $7.0 million as of April 30, 2019 and 2018, respectively.

Intangible assets include the following:

	April 30, 2019								April 30, 2018
	(in thousands)
Amortized intangible assets:	Gross		Accumulated Amortization			Net			Gross		Accumulated Amortization			Net
Customer lists	$	125,099	$	(53,352	)	$	71,747		$	125,099	$	(42,248	)	$	82,851
Intellectual property		33,100		(22,045	)		11,055			33,100		(20,112	)		12,988
Proprietary databases		4,256		(4,053	)		203			4,256		(3,628	)		628
Non-compete agreements		910		(893	)		17			910		(873	)		37
Trademarks		3,986		(3,986	)		—			3,986		(3,986	)		—
Total	$	167,351	$	(84,329	)		83,022		$	167,351	$	(70,847	)		96,504
Unamortized intangible assets:
Trademarks							—								106,000
Exchange rate fluctuations							(74	)							712
Total Intangible assets						$	82,948							$	203,216

During fiscal 2019, the Company decided to further integrate our go-to-market activities under one master brand —Korn Ferry, and discontinued the use of all sub-brands. Two of the Company’s sub-brands, Hay Group and Lominger, came to Korn Ferry through acquisitions. As a result of the decision to discontinue their use, the Company took a non-cash intangible asset impairment charge of $106.6 million during the year ended April 30, 2019, recorded in general and administrative expenses.

Amortization expense for amortized intangible assets was $13.5 million, $14.7 million and $15.4 million during fiscal 2019, 2018 and 2017, respectively. Estimated annual amortization expense related to amortizing intangible assets is as follows:

Year Ending April 30,	Estimated Annual Amortization Expense
	(in thousands)
2020	$	13,204
2021		13,071
2022		13,060
2023		11,208
2024		8,731
Thereafter		23,748
	$	83,022

All amortizable intangible assets will be fully amortized by the end of fiscal 2032.