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Goodwill and Intangible Assets
 9 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets [Abstract]  
Goodwill and Intangible Assets
Note 14: Goodwill and Intangible Assets

Effective July 1, 2021, the Company aligned the data center businesses previously managed by and reported within the CIS segment under the BHVAC segment; see Note 20 for additional information.  As a result of this segment realignment, the Company reassigned a total of $32.5 million of goodwill from a reporting unit within the CIS segment to the reporting units within the BHVAC segment using the relative fair value approach.  To determine the amount of goodwill to be reassigned, the Company compared the estimated fair values of the businesses transferred to the BHVAC segment with the CIS reporting unit immediately prior to the segment change.  The Company estimated the fair values of the affected businesses based upon the present value of their estimated future cash flows.  The Company’s determination of fair value involved judgment and the use of significant estimates and assumptions, including assumptions regarding the revenue growth rates and operating profit margins used to calculate estimated future cash flows, risk-adjusted discount rates, business trends and market conditions.
The following table presents a rollforward of the carrying value of goodwill from March 31, 2021 to December 31, 2021.  The Company has revised the March 31, 2021 goodwill balances to be comparable with the current segment structure.

 
BHVAC
    
CIS
    
Total
  
Goodwill, March 31, 2021
  
$
47.0
    
$
123.7
    
$
170.7
  
Effect of exchange rate changes
    
(0.7
)
    
(0.5
)
    
(1.2
)
Goodwill, December 31, 2021
  
$
46.3
    
$
123.2
    
$
169.5
  

In conjunction with the goodwill reassignment evaluation described above, the Company tested its reporting units for potential impairment during the second quarter of fiscal 2022 and concluded that the estimated fair value of each reporting unit exceeded its respective carrying value. 

Although the Company concluded goodwill was not impaired, the Company identified that subsequent to the segment realignment, the estimated fair value of the Coils and Coolers reporting unit within the CIS segment exceeded its carrying value by approximately 8.0 percent.  As such, there is a heightened risk of a future impairment charge with respect to the $63.0 million of goodwill recorded in this reporting unit as of December 31, 2021.  In estimating the fair value of the Coils and Coolers reporting unit, the Company calculated the present value of its estimated future cash flows using a discounted cash flow model.  The most significant estimates and assumptions inherent in the discounted cash flow model are forecasted financial results, the terminal growth rate, and the discount rate.  These assumptions are classified as Level 3 inputs.  Refer to Note 4 for the definition of a Level 3 fair value measurement.  The Company utilized its multi-year projections for revenue and operating income margins and considered both historical revenue growth rates and earnings levels as well as its assessment of future market potential and expectations for the future financial performance of the reporting unit.  The Company used a discount rate corresponding to its estimated cost of capital, adjusting for country-specific risks based upon the location of the businesses within the reporting unit.

While the Company believes the assumptions it used in estimating the Coils and Coolers reporting unit’s fair value were appropriate and resulted in a reasonable estimate of its fair value, future events or circumstances could have a negative effect on its estimated fair value and could trigger an impairment charge.  These potential future events or circumstances could include lower than forecasted revenues or earnings, market trends that fall below the Company’s current expectations, actions of key customers or suppliers, or increases in the discount rate.  The Company cannot predict the occurrence of events or changes in circumstances that could adversely affect the reporting unit’s future revenue and operating income margins or increase the discount rate, thereby resulting in an impairment charge which could be material to the Company’s consolidated financial statements.

Intangible assets consisted of the following:

 
December 31, 2021
    
March 31, 2021
  
   
Gross
Carrying
Value
    
Accumulated
Amortization
    
Net
Intangible
Assets
    
Gross
Carrying
Value
    
Accumulated
Amortization
    
Net
Intangible
Assets
  
Customer relationships
  
$
61.9
    
$
(19.4
)
  
$
42.5
    
$
62.8
    
$
(16.9
)
  
$
45.9
  
Trade names
    
51.1
      
(13.2
)
    
37.9
      
51.5
      
(11.4
)
    
40.1
  
Acquired technology
    
23.5
      
(10.7
)
    
12.8
      
23.9
      
(9.3
)
    
14.6
  
Total intangible assets
  
$
136.5
    
$
(43.3
)
  
$
93.2
    
$
138.2
    
$
(37.6
)
  
$
100.6
  

The Company recorded amortization expense of $2.1 million and $2.2 million for the three months ended December 31, 2021 and 2020, respectively. The Company recorded amortization expense of $6.3 million and $6.4 million for the nine months ended December 31, 2021 and 2020, respectively. The Company estimates that it will record $2.1 million of amortization expense during the remainder of fiscal 2022 and approximately $8.0 million of annual amortization expense in fiscal 2023 through 2027.