Goodwill and Intangible Assets, Net

12 Months Ended

Jun. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Note 8—Goodwill and Intangible Assets, Net

Goodwill

In September 2011, we adopted ASU 2011-08, “Intangibles – Goodwill and Other (Topic 350),” under which an entity may first assess qualitative factors in determining whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. In fiscal years 2015 and 2014, we did not elect to first assess the qualitative factors in evaluating our goodwill for impairment; therefore, we proceeded with our quantitative goodwill impairment test.

We test for impairment at the reporting unit level on an annual basis as of April 30^th of every year and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. Refer to Note 1—Summary of Significant Accounting Policies for more information on how we test goodwill for impairment. The annual goodwill impairment tests conducted as of April 30, 2015 and 2014 indicated that the fair value of each reporting unit was substantially in excess of its carrying value and, as such, no impairments were deemed to exist. Our accumulated amount of goodwill impairment recorded in prior fiscal years is $330.0 million.

Goodwill was $1.3 billion at June 30, 2015 compared with $541.0 million at June 30, 2014. The increase in goodwill in the fiscal year ended June 30, 2015 versus the prior fiscal year was primarily associated with the following: an increase of $13.2 million in connection with the acquisition of SVSI, an increase of $13.2 million in connection with the acquisition of certain automotive assets of B&O, an increase of $529.4 million in connection with the acquisition of STC, an increase of $187.0 million in connection with the acquisition of Redbend, an increase of $20.3 million in connection with the acquisition of S1nn, an increase of $8.0 million in connection with the acquisition of IPSG/VFX, an increase of $5.4 million in connection with the acquisition of yurbuds and a reduction of $1.9 million in connection with the acquisition of AMX.

Goodwill was $541.0 million at June 30, 2014 compared with $234.3 million at June 30, 2013. The increase in goodwill in the fiscal year ended June 30, 2014 versus the prior fiscal year was primarily related to goodwill associated with the following: $244.3 million in connection with the acquisition of AMX, $30.1 million in connection with the acquisition of yurbuds, $15.1 million in connection with the acquisition of Duran, $8.1 million in connection with the acquisition of innovative Systems GmbH (“IS”), $4.9 million in connection with the acquisition of Martin and $0.1 million in connection with the acquisition of iOnRoad.

The contingent purchase price associated with the acquisition of 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 has been 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 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. During the fiscal year ended June 30, 2015, we paid the €16.3 million partial award.

The changes in the carrying amount of goodwill by business segment for the fiscal years ended June 30, 2015 and 2014 were as follows:


	Infotainment			Lifestyle			Professional			Services		Other			Total
Balance, June 30, 2013	$	8,576		$	107,438		$	118,328		$	0	$	0		$	234,342
Acquisitions and adjustments⁽¹⁾		143			30,118			264,308			0		0			294,569
Contingent purchase price consideration associated with the acquisition of IS		8,052			0			0			0		0			8,052
Other adjustments⁽²⁾		309			394			3,286			0		0			3,989

Balance, June 30, 2014	$	17,080		$	137,950		$	385,922		$	0	$	0		$	540,952
Acquisitions and adjustments⁽¹⁾		10,209			28,809			19,225			529,367		187,031			774,641
Other adjustments⁽²⁾		(2,867	)		(7,671	)		(17,286	)		0		(589	)		(28,413	)

Balance, June 30, 2015	$	24,422		$	159,088		$	387,861		$	529,367	$	186,442		$	1,287,180

⁽¹⁾	Refer to Note 2—Acquisitions for more information.

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

Intangible Assets, Net

Net intangible assets were $669.7 million and $182.0 million at June 30, 2015 and 2014, respectively and were comprised of the following:


	Weighted Average Amortization		June 30, 2015							June 30, 2014
	Weighted Average Amortization		Gross Carrying Amount		Accumulated Amortization			Net Amount		Gross Carrying Amount		Accumulated Amortization			Net Amount
Customer relationships		12 Years	$	503,928	$	(30,924	)	$	473,004	$	67,277	$	(17,770	)	$	49,507
Technology		6 Years		87,090		(17,653	)		69,437		39,331		(8,196	)		31,135
Patents		14 Years		5,136		(1,265	)		3,871		11,418		(7,166	)		4,252
Trade names⁽¹⁾		3 Years		100,827		(15,282	)		85,545		88,266		(7,489	)		80,777
Non-compete agreement		4 Years		3,168		(1,543	)		1,625		2,212		(2,016	)		196
Software		5 Years		42,013		(6,863	)		35,150		11,813		(431	)		11,382
Other		5 Years		7,242		(6,207	)		1,035		7,463		(2,682	)		4,781

Total			$	749,404	$	(79,737	)	$	669,667	$	227,780	$	(45,750	)	$	182,030

⁽¹⁾	Includes $55.7 million and $18.5 million of indefinite-lived intangible assets related to the acquisition of AMX and Martin, respectively.

Amortization expense related to intangible assets was $37.3 million, $13.2 million and $12.6 million for the fiscal years ended June 30, 2015, 2014 and 2013, respectively.

Amortization expense is expected to approximate the following:


2016	$	84,728
2017		70,891
2018		65,904
2019		61,460
2020		56,215
Thereafter		256,098

Total	$	595,296

- 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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