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Goodwill and Intangible Assets

12 Months Ended

Jul. 01, 2012

Note 6. Goodwill and Intangible Assets

The change in the net carrying amount of goodwill is as follows:

	Consumer Floral		BloomNet Wire Service		Gourmet Food and Gift Baskets(1)			Total

			(in thousands)
Balance at June 27, 2010	$	5,728	$	—	$	39,908		$	45,636
Acquisition of Fine Stationery		1,051							1,051
Acquisition of Mrs. Beasley's						308			308
Acquisition related adjustments						(1,023	)		(1,023	)

Balance at July 3, 2011	$	6,779	$	—	$	39,193		$	45,972
Acquisition of Flowerama		2,440							2,440
Acquisition related adjustments		490							490
Sale of Fannie May stores						(1,001	)		(1,001	)

Balance at July 1, 2012	$	9,709	$	—	$	38,192		$	47,901

(1): The total carrying amount of goodwill for all periods in the table above is reflected net of $71.1 million of accumulated impairment charges, which were recorded in the GFGB segment.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination, with the carrying value of the Company's goodwill allocated to its reporting units.

Goodwill and other indefinite lived intangibles are subject to an assessment for impairment, which must be performed annually, or more frequently if events or circumstances indicate that goodwill or other indefinite lived intangibles might be impaired. Goodwill impairment testing involves a two-step process. Step 1 compares the fair value of the Company's reporting units to their carrying values. If the fair value of the reporting unit exceeds its carrying value, no further analysis is necessary. If the carrying amount of the reporting unit exceeds its fair value, Step 2 must be completed to quantify the amount of impairment. Step 2 calculates the implied fair value of goodwill by deducting the fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit, from the fair value of the reporting unit as determined in Step 1. The implied fair value of goodwill determined in this step is compared to the carrying value of goodwill. If the implied fair value of goodwill is less than the carrying value of goodwill, an impairment loss, equal to the difference, is recognized.

The Company's other intangible assets consist of the following:

			July 1, 2012						July 3, 2011

	Amortization Period		Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
			(in thousands)
Intangible assets with determinable lives:
Investment in licenses		14 - 16 years	$	7,420	$	5,401	$	2,019	$	5,314	$	5,314	$	—
Customer lists		3 - 10 years		16,019		9,961		6,058		15,804		8,619		7,185
Other		5 - 8 years		2,538		2,173		365		2,538		1,770		768

				25,977		17,535		8,442		23,656		15,703		7,953
Trademarks with indefinite lives				33,396		—		33,396		33,795		—		33,795

Total intangible assets			$	59,373	$	17,535	$	41,838	$	57,451	$	15,703	$	41,748

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. There were no impairments of intangible assets during the years ended July 1, 2012, and July 3, 2011.

The amortization of intangible assets for the years ended July 1, 2012, July 3, 2011 and June 27, 2010 was $1.8 million, $2.3 million, and $3.0 million, respectively. Future estimated amortization expense is as follows: 2013—$1.8 million, 2014—$1.4 million, 2015—$1.3 million, and 2016—$1.2 million, and thereafter—$2.7 million.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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