GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Sep. 30, 2014

5. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The changes in the carrying amount of goodwill for the three months ended September 30, 2014 are as follows:

	(in 000s)
Balance at June 30, 2014	$	1,003,377
Acquisition of Dragonplay	33,062
Foreign currency translation adjustment	(19,764		)
Balance at September 30, 2014	$	1,016,675

Intangible Assets

		September 30, 2014							June 30, 2014
	Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(dollars in 000s)
Computer software	2 - 5	$	54,848	$	(40,315	)	$	14,533	$	51,392	$	(39,229	)	$	12,163
License rights	3 - 13	16,006		(11,526		)	4,480		16,108		(10,921		)	5,187
Trademarks	5 - 10	12,006		(3,584		)	8,422		9,430		(3,104		)	6,326
Core technology and content	4 – 18(1)	504,297		(63,362		)	440,935		487,473		(51,790		)	435,683
Customer relationships	7	43,410		(5,429		)	37,981		43,572		(3,737		)	39,835
Contracts	2 - 10	10,943		(10,686		)	257		10,943		(10,651		)	292
Other intangibles	3 - 5	2,268		(434		)	1,834		2,187		(928		)	1,259
Total finite lived intangible assets		$	643,778	$	(135,336	)	$	508,442	$	621,105	$	(120,360	)	$	500,745
Trademark	indefinite	7,500		—			7,500		7,500		—			7,500
Total		$	651,278	$	(135,336	)	$	515,942	$	628,605	$	(120,360	)	$	508,245

(1) Includes $46 million of in-process research and development assets that are not yet subject to amortization until they reach commercial feasibility.

Finite-lived intangible assets are amortized on a straight-line method. Total amortization expense related to finite lived intangible assets was $17.4 million and $2.1 million for the three months ended September 30, 2014 and 2013, respectively, which included computer software amortization expense of $1.5 million and $0.5 million for the three months ended September 30, 2014 and 2013, respectively.

The weighted average life of the Company’s total finite-lived intangible assets is approximately 9 years, which includes average lives of approximately 10 years for core technology and content and approximately 6 years for customer relationships. The Company’s indefinite-lived intangible asset of approximately $7.5 million was for one-time consideration given for a perpetual, worldwide license for the use of the Bally trademark in connection with the Company’s business.

Future amortization of finite lived intangible assets is scheduled as follows:

Year Ended June 30,	(in 000s)
2015 (remaining nine months of fiscal year)	$	54,305
2016	70,788
2017	68,643
2018	67,143
2019	50,273
Thereafter	197,290
Total	$	508,442

- 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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