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Goodwill And Other Intangible Assets

12 Months Ended

Jul. 03, 2011

Goodwill And Other Intangible Assets

(5) Goodwill and Other Intangible Assets:

Goodwill reflects the cost of acquisitions in excess of the fair values assigned to identifiable net assets acquired. Goodwill is assigned to reporting units based upon the expected benefit of the synergies of the acquisition. The reporting units are Engines and Power Products. The Engines reporting unit had goodwill of $138.0 million and $136.9 million at July 3, 2011 and June 27, 2010, respectively. The Power Products reporting unit had goodwill of $64.9 million and $116.1 million at July 3, 2011 and June 27, 2010, respectively.

The changes in the carrying amount of goodwill for the fiscal years ended July 3, 2011 and June 27, 2010 are as follows (in thousands):


	2011			2010
Beginning Goodwill Balance	$	252,975		$	253,854
Impairment Loss		(49,450	)		-
Tax Benefit on Amortization		(1,779	)		(1,779	)
Reversal of Tax Valuation Allowance		(700	)		-
Reclassification		-			263
Effect of Translation		1,894			637

Ending Goodwill Balance	$	202,940		$	252,975

The Company evaluates goodwill for impairment at least annually as of the fiscal year-end or more frequently if events or circumstances indicate that the assets may be impaired. Based on a combination of factors, including the influence of prolonged macro-economic conditions on the lawn and garden market in the U.S. and the operating results of the Power Products segment during the past two years which lacked the benefit of certain weather related events that would have been favorable to the business, the Company's forecasted cash flow estimates used in the goodwill assessment were adversely impacted. As a result, the Company concluded that the carrying value amounts of the Power Products reporting unit exceeded its fair value as of July 3, 2011. The Company recorded a non-cash goodwill impairment charge in the fourth quarter of fiscal 2011 of $49.5 million, which was determined by comparing the carrying value of the reporting unit's goodwill with the implied fair value of goodwill for the reporting unit. This impairment charge is a non-cash expense that did not adversely affect the Company's debt position, cash flow, liquidity or compliance with financial covenants under its revolving credit facility. No impairment charges were recorded within the Engines segment. The Company previously evaluated its goodwill at June 27, 2010, and determined that there were no impairments of goodwill.

The Company's other intangible assets as of July 3, 2011 and June 27, 2010 are as follows (in thousands):


	2011							2010
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Amortized Intangible Assets:
Patents	$	13,601	$	(8,247	)	$	5,354	$	13,601	$	(7,049	)	$	6,552
Customer Relationships		17,910		(5,015	)		12,895		17,910		(4,298	)		13,612
Effect of Translation		52		(16	)		36		22		-			22

Total Amortized Intangible Assets		31,563		(13,278	)		18,285		31,533		(11,347	)		20,186
Unamortized Intangible Assets:
Trademarks/Brand Names		69,841		-			69,841		69,841		-			69,841
Effect of Translation		1,149		-			1,149		318		-			318

Total Unamortized Intangible Assets		70,990		-			70,990		70,159		-			70,159

Total Intangible Assets	$	102,553	$	(13,278	)	$	89,275	$	101,692	$	(11,347	)	$	90,345

The Company also performs an impairment test of its intangible assets as of the fiscal year-end. As of July 3, 2011 and June 27, 2010, the Company concluded that no evidence of impairment of intangible assets existed.

Amortization expense of other intangible assets amounted to approximately $1.9 million in each of 2011, 2010, and 2009.

The estimated amortization expense of other intangible assets for the next five years is (in thousands):


2012		1,911
2013		1,911
2014		1,911
2015		1,860
2016		1,860

	$	9,453

- 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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