Goodwill and Intangible Assets, Net

6 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Note 8 – Goodwill and Intangible Assets, Net

Goodwill

Goodwill was $530.9 million at December 31, 2014 compared with $541.0 million at June 30, 2014. The decrease in goodwill in the six months ended December 31, 2014 versus June 30, 2014 was primarily related to foreign currency translation adjustments offset by goodwill associated with the following: an increase of $9.2 million in connection with the acquisition of I.P.S.G. International Product Solution Group Pty Ltd and VFX Systems Pty Ltd (collectively “IPSG/VFX” or the “IPSG/VFX Acquisition”), a reduction of $1.1 million in connection with the acquisition of AMX LLC and AMX Holding Corporation (collectively “AMX”) and an increase of $1.1 million in connection with the acquisition of Verto Medical Solutions, LLC d/b/a yurbuds and its wholly-owned subsidiary (“yurbuds”).

Goodwill was $251.4 million at December 31, 2013 compared with $234.3 million at June 30, 2013. The increase in goodwill in the six months ended December 31, 2013 versus June 30, 2013 was primarily related to $15.9 million of goodwill associated with the acquisition of Duran Audio BV (“Duran”).

The changes in the carrying amount of goodwill by business segment for the six months ended December 31, 2014 and 2013 were as follows:


	Infotainment			Lifestyle			Professional			Total
Balance, June 30, 2014	$	17,080		$	137,950		$	385,922		$	540,952
Acquisitions and adjustments⁽¹⁾		0			1,080			8,110			9,190
Other adjustments⁽²⁾		(1,699	)		(4,563	)		(12,991	)		(19,253	)

Balance, December 31, 2014	$	15,381		$	134,467		$	381,041		$	530,889

Balance, June 30, 2013	$	8,576		$	107,438		$	118,328		$	234,342
Acquisitions and adjustments⁽¹⁾		0			0			15,929			15,929
Other adjustments⁽²⁾		318			(1,086	)		1,867			1,099

Balance, December 31, 2013	$	8,894		$	106,352		$	136,124		$	251,370

⁽¹⁾	Refer to Note 23 – Acquisitions for more information.

⁽²⁾	The other adjustments to goodwill primarily consist of foreign currency translation adjustments.

We did not recognize any goodwill impairment charges in our Condensed Consolidated Statements of Income in the three and six months ended December 31, 2014 and 2013.

The contingent purchase price associated with the acquisition of innovative Systems (“IS”) is calculated pursuant to the terms of an agreement between the parties. Certain terms of the agreement are currently subject to a dispute between the parties and the matter was submitted to arbitration. On November 5, 2013, the arbitration panel reached a partial judgment on some of the disputed matters covering the period from February 2009 through January 2012 awarding €16.3 million to the IS sellers. We contested the enforcement of the partial award. During the fiscal year ended June 30, 2014, we recorded approximately $8.1 million of additional contingent purchase price in goodwill to accrue for this partial award. In July 2014, the partial award was upheld. Until such time as the other disputed matters are resolved, we cannot calculate the contingent purchase price related to these other disputed matters.

Intangible Assets, Net

Intangible assets, net were $168.5 million and $182.0 million at December 31, 2014 and June 30, 2014, respectively and were comprised of the following:


	Weighted Average Amortization		December 31, 2014							June 30, 2014
	Weighted Average Amortization		Gross Carrying Amount		Accumulated Amortization			Net Amount		Gross Carrying Amount		Accumulated Amortization			Net Amount
Customer relationships		6 Years	$	64,829	$	(20,736	)	$	44,093	$	67,277	$	(17,770	)	$	49,507
Technology		5 Years		41,897		(10,665	)		31,232		39,331		(8,196	)		31,135
Patents		11 Years		5,136		(1,520	)		3,616		11,418		(7,166	)		4,252
Tradenames⁽¹⁾		5 Years		88,266		(9,709	)		78,557		88,266		(7,489	)		80,777
Non-compete agreement		4 Years		1,468		(1,335	)		133		2,212		(2,016	)		196
Software		4 Years		11,813		(2,971	)		8,842		11,813		(431	)		11,382
Other		7 Years		7,590		(5,514	)		2,076		7,463		(2,682	)		4,781

Total			$	220,999	$	(52,450	)	$	168,549	$	227,780	$	(45,750	)	$	182,030

⁽¹⁾	Includes $55.7 million, $18.3 million and $3.3 million of indefinite-lived intangible assets related to the acquisition of AMX, Martin Professional A/S and substantially all of the assets of yurbuds, respectively.

Amortization expense related to intangible assets was $4.9 million and $3.4 million for the three months ended December 31, 2014 and 2013, respectively, and was $11.1 million and $6.3 million for the six months ended December 31, 2014 and 2013, respectively.

At December 31, 2014, amortization expense is expected to approximate the following:


2015	$	12,541
2016		21,376
2017		16,658
2018		13,909
2019		11,131
Thereafter		15,557

Total	$	91,172

- 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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