Goodwill and Intangible Assets

12 Months Ended

Apr. 30, 2022

Goodwill and Intangible Assets [Abstract]

Note 11 – Goodwill and Intangible Assets

Goodwill

The following table summarizes the activity in goodwill by segment as of April 30:

	2021 ⁽¹⁾		Acquisitions⁽²⁾		Foreign Translation Adjustment			2022
Research Publishing & Platforms	$	619,203	$	24,806	$	(33,593	)	$	610,416
Academic & Professional Learning		512,512		—		(14,376	)		498,136
Education Services		172,625		22,226		(1,261	)		193,590
Total	$	1,304,340	$	47,032	$	(49,230	)	$	1,302,142

⁽¹⁾	The Education Services goodwill balance as of April 30, 2021 includes a cumulative pretax noncash goodwill impairment of $110.0 million.

⁽²⁾	Refer to Note 4, “Acquisitions,” for more information related to the acquisitions that occurred in the year ended April 30, 2022.

Annual Goodwill Impairment Test as of February 1, 2022 and 2021

As of February 1, 2022 and 2021, we completed step one of our annual goodwill impairment test for our reporting units. We concluded that the fair values of our reporting units were above their carrying values and, therefore, there was no indication of impairment.

We estimated the fair value of these reporting units using a weighting of fair values derived from an income and a market approach. Under the income approach, we determined the fair value of a reporting unit based on the present value of estimated future cash flows. Cash flow projections are based on our best estimates of forecasted economic and market conditions over the period including growth rates, expected changes in operating cash flows, and cash expenditures. The discount rate used is based on a weighted average cost of capital adjusted for the relevant risk associated with the characteristics of the business and the projected cash flows. The market approach estimates fair value based on market multiples of current and forward 12-month revenue or EBITDA, as applicable, derived from comparable publicly traded companies with similar operating and investment characteristics as the reporting unit.

As noted above, the fair value determined as part of the annual goodwill impairment test completed in the fourth quarter exceeded the carrying value for all of our reporting units. Therefore, there was no impairment of goodwill. However, if the fair value of these reporting units decreases in future periods, we could potentially have an impairment. The future occurrence of a potential indicator of impairment, such as a decrease in expected net earnings, changes in assumptions, adverse equity market conditions, a decline in current market multiples, a decline in our common stock price, a significant adverse change in legal factors or business climates, an adverse action or assessment by a regulator, unanticipated competition, strategic decisions made in response to economic or competitive conditions, or a more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of, could require an interim assessment for some or all of the reporting units before the next required annual assessment.

Annual Goodwill Impairment Test as of February 1, 2020

As of February 1, 2020, we completed our annual goodwill impairment test for our reporting units. We concluded that the fair values of our Research Publishing & Platforms and Academic & Professional Learning reporting units were above their carrying values and, therefore, there was no indication of impairment.

During our annual goodwill impairment test initiated on February 1, 2020, we identified indicators that the goodwill of the Education Services business was impaired due to underperformance as compared with our acquisition case projections for revenue growth and operating cash flow. Subsequently, during the fourth quarter of fiscal year 2020, we determined that our updated revenue and operating cash flow projections would be further impacted by anticipated near-term headwinds due to COVID-19, including adverse impacts on new student starts and student reenrollment. Therefore, we updated the impairment test as of March 31, 2020 to reflect this change in circumstances. As a result, we concluded that the carrying value was above the fair value which resulted in a pretax noncash goodwill impairment of $110.0 million. This charge is reflected in Impairment of goodwill and intangible assets in the Consolidated Statements of Income (Loss).

Prior to performing the goodwill impairment test for Education Services, we also evaluated the recoverability of long-lived assets of the reporting unit. The carrying value of the long-lived assets that were tested for impairment was $434.0 million. When indicators of impairment are present, we test definite lived and long-lived assets for recoverability by comparing the carrying value of an asset group to an estimate of the future undiscounted cash flows expected to result from the use and eventual disposition of the asset group. We considered the lower-than-expected revenue and forecasted operating cash flows over a sustained period of time, and downward revisions to our cash flow forecasts for this reporting unit to be indicators of impairment for their long-lived assets. Based on the results of the recoverability test, we determined that the undiscounted cash flows of the asset group of the Education Services reporting unit exceeded the carrying value. Therefore, there was no impairment.

Intangible Assets

Intangible assets, net as of April 30 were as follows:

	2022							2021
	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Intangible assets with definite lives, net⁽¹⁾:
Content and publishing rights	$	1,099,778	$	(599,841	)	$	499,937	$	1,062,072	$	(497,843	)	$	564,229
Customer relationships		409,097		(167,039	)		242,058		384,462		(117,985	)		266,477
Developed technology⁽²⁾		72,398		(17,677	)		54,721		42,785		(7,824	)		34,961
Brands and trademarks		47,533		(31,512	)		16,021		45,630		(26,094	)		19,536
Covenants not to compete		1,655		(1,262	)		393		1,250		(1,192	)		58
Total intangible assets with definite lives, net		1,630,461		(817,331	)		813,130		1,536,199		(650,938	)		885,261
Intangible assets with indefinite lives:
Brands and trademarks⁽²⁾		37,000		—			37,000		37,000		—			37,000
Publishing rights		81,299		—			81,299		93,041		—			93,041
Total intangible assets with indefinite lives		118,299		—			118,299		130,041		—			130,041
Total intangible assets, net	$	1,748,760	$	(817,331	)	$	931,429	$	1,666,240	$	(650,938	)	$	1,015,302

⁽¹⁾	Refer to Note 4, “Acquisitions,” for more information related to the acquisitions that occurred in years ended April 30, 2022 and 2021.

⁽²⁾	The developed technology balance as of April 30, 2022 and 2021 is presented net of accumulated impairments and write-offs of $2.8 million. The indefinite-lived brands and trademarks balance as of April 30, 2022 and 2021 is net of accumulated impairments of $93.1 million.

Based on the current amount of intangible assets subject to amortization and assuming current foreign exchange rates, the estimated amortization expense for the following years are as follows:

Fiscal Year	Amount
2023	$	81,375
2024		76,193
2025		69,556
2026		67,044
2027		62,422
Thereafter		456,540
Total	$	813,130

Annual Indefinite-lived Intangible Impairment Test as of February 1, 2022 and 2021

We also review our indefinite-lived intangible assets for impairment annually, which consists of brands and trademarks and certain acquired publishing rights. As of February 1, 2022 and 2021, we completed our annual impairment test related to the indefinite-lived intangible assets. We concluded that the fair values of these indefinite-lived intangible assets were above their carrying values and, therefore, there was no indication of impairment.

Fiscal Year 2020 Impairment

Annual Indefinite-Lived Intangibles Impairment Test as of February 1, 2020

During the fourth quarter of 2020, we completed our annual impairment test related to the indefinite-lived intangible assets. We concluded that the fair values of these indefinite-lived intangible assets were above their carrying values and, therefore, there was no indication of impairment, except for the Blackwell indefinite-lived trademark.

For the year ended April 30, 2020, we recorded a pretax noncash impairment charge of $89.5 million for our Blackwell trademark, which was acquired in 2007 and carried as an indefinite-lived intangible asset primarily related to our Research Publishing & Platforms segment. The impairment reflected our decision to simplify Wiley’s brand portfolio and unify our research journal content under one Wiley brand, which sharply limited the use of the Blackwell trade name. This impairment resulted in writing off substantially all of the carrying value of the intangible trademark asset. This charge is reflected in Impairment of goodwill and intangible assets in the Consolidated Statements of Income (Loss). The resulting noncash impairment charge was entirely unrelated to COVID-19 or the expected future financial performance of the Research Publishing & Platforms segment.

Intangible Assets with Definite Lives

As a result of our decision to discontinue the use of certain technology offerings within the Research Publishing & Platforms segment, we recorded a pretax noncash impairment charge of $2.8 million related to a certain developed technology intangible. This charge was included in Impairment of goodwill and intangible assets on the Consolidated Statements of Income (Loss).