Note 8. Goodwill

Goodwill

The following table presents the changes in goodwill allocated to the reportable segments (in millions):

	Network and Service Enablement		Communications and Commercial Optical Products(1)		Optical Security and Performance Products(2)		Total

Balance as of June 30, 2012(3)	$	60.4	$	—	$	8.3	$	68.7
Goodwill from GenComm Acquisition(6)		5.7		—		—		5.7
Goodwill from Arieso Acquisition(6)		40.7		—		—		40.7


Balance as of June 29, 2013(4)	$	106.8	$	—	$	8.3	$	115.1
Goodwill from Trendium Acquisition(6)		14.4		—		—		14.4
Goodwill from Network Instruments Acquisition(6)		125.7		—		—		125.7
Goodwill from Time-Bandwidth Acquisition(6)		—		5.8		—		5.8
Currency translation and other adjustments		5.9		0.1		—		6.0


Balance as of June 28, 2014(5)	$	252.8	$	5.9	$	8.3	$	267.0

(1): The goodwill balance as of June 28, 2014 for the CCOP segment relates to the acquisition of Time-Bandwidth and has been allocated to the Lasers reporting unit. Refer to "Note 5. Mergers and Acquisitions" more information.
(2): During the first quarter of fiscal 2013, the reporting structure of the Advanced Optical Technologies reportable segment ("AOT") was reorganized and its previous reporting units, which consisted of the Custom Optics Product Group ("COPG"), Flex Products Group ("Flex") and Authentication Solutions Group ("ASG") (excluding the Hologram Business), were merged into the new Optical Security and Performance Products reportable segment, having one single reporting unit, replacing AOT. As the entire $8.3 million balance of AOT's goodwill at June 30, 2012 was attributable to the Flex reporting unit, the Company reclassified AOT's goodwill to Optical Security and Performance Products ("OSP"). The Company closed the sale of the Hologram Business, a component of the ASG reporting unit, during the second quarter of fiscal 2013. As there was zero goodwill attributable to the ASG reporting unit as of June 30, 2012, the sale did not impact goodwill. Refer to "Note 19. Discontinued Operations" for more information.
(3): Gross goodwill balances for CCOP, NSE, and OSP were $5,111.3 million, $543.5 million, and $92.8 million, respectively as of June 30, 2012. Accumulated impairment for CCOP, NSE, and OSP were $5,111.3 million, $483.1 million, and $84.5 million, respectively as of June 30, 2012.
(4): Gross goodwill balances for CCOP, NSE, and OSP were $5,111.3 million, $589.9 million, and $92.8 million, respectively as of June 29, 2013. Accumulated impairment for CCOP, NSE, and OSP were $5,111.3 million, $483.1 million, and $84.5 million, respectively as of June 29, 2013.
(5): Gross goodwill balances for CCOP, NSE, and OSP were $5,117.2 million, $735.9 million, and $92.8 million, respectively as of June 28, 2014. Accumulated impairment for CCOP, NSE, and OSP were $5,111.3 million, $483.1 million, and $84.5 million, respectively as of June 28, 2014.
(6): Refer to "Note 5. Mergers and Acquisitions" of the Notes to Consolidated Financial Statements for more information.

The following table presents gross goodwill and accumulated impairment balances for the fiscal years ended June 28, 2014, and June 29, 2013 (in millions):

	Years Ended

	June 28, 2014			June 29, 2013
Gross goodwill balance	$	5,945.9		$	5,794.0
Accumulated impairment losses		(5,678.9	)		(5,678.9	)


Net goodwill balance	$	267.0		$	115.1

Impairment of Goodwill

The Company reviews goodwill for impairment annually during the fourth quarter of the fiscal year or more frequently if events or circumstances indicate that an impairment loss may have occurred. No triggering events were noted during the interim periods of fiscal 2014, 2013 or 2012 and thus, the Company reviewed goodwill for impairment during the fourth quarter of each fiscal year. The Company determined that, based on its cash flow structure, organizational structure and the financial information that is provided to and reviewed by Management for the year ended fiscal 2014, its reporting units are: NSE, Optical Communications, Lasers, and OSP. For the year ended fiscal 2013, the Company's reporting units were: NSE, Optical Communications, Lasers and OSP. For the year ended fiscal 2012, the Company's reporting units were: NSE, CCOP, COPG, ASG, and Flex.

Fiscal 2014

The Company reviewed goodwill under the two-step quantitative goodwill impairment test in accordance with the authoritative guidance. Under the first step of the authoritative guidance for impairment testing, the fair value of the reporting units was determined based on a combination of the income approach, which estimates the fair value based on the future discounted cash flows, and the market approach, which estimates the fair value based on comparable market prices. Based on the first step of the analysis, the Company determined that the fair value of each reporting unit is significantly above its carrying amount. As such, the Company was not required to perform step two of the analysis on any reporting unit to determine the amount of the impairment loss. The Company recorded no impairment charge in accordance with its annual impairment test.

Fiscal 2013 and 2012

Under the qualitative assessment of the authoritative guidance for impairment testing, the Company concluded that it was more likely than not that the fair value of the reporting units that currently have goodwill recorded exceeded its carrying amount. In assessing the qualitative factors, the Company considered the impact of these key factors: change in industry and competitive environment, market capitalization, earnings multiples, budgeted-to-actual operating performance from prior year, and consolidated company stock price and performance etc. As such, it was not necessary to perform the two-step goodwill impairment test at this time and hence the Company recorded no impairment charge in accordance with its annual impairment test.