Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2011

NOTE 7. Goodwill and Other Intangible Assets

Goodwill and other intangible assets, net, consist of $35,043,000 and $28,354,000 of goodwill and $24,615,000 and $2,959,000 of intangible assets, net of accumulated depreciation, for the periods ended September 30, 2011 and December 31, 2010, respectively.

Additions to goodwill and other intangible assets in the first nine months of 2011 relate to the acquisition of Indian Motorcycle Company during April 2011 and the acquisition of certain assets of Global Electric Motorcars LLC (GEM), a division of Chrysler, during June 2011. Goodwill associated with these acquisitions is tax deductible. Financial results for each of the above acquisitions are included in the Company’s consolidated results from the date of acquisition. Pro forma financial results are not presented as the acquisitions are not material, individually or in the aggregate.

The changes in the net carrying amount of goodwill for the three and nine months ended September 30, 2011 and 2010 were as follows (in thousands):

		00000000			00000000		00000000			00000000
	Three Months Ended September 30,					Nine Months Ended September 30,
	2011			2010		2011			2010
Goodwill, beginning	$	35,696		$	26,554	$	28,354		$	25,869
Goodwill acquired during the period		—			—		6,865			690
Translation and other adjustments		(653	)		230		(176	)		225

Goodwill, ending	$	35,043		$	26,784	$	35,043		$	26,784

For other intangible assets the changes in the net carrying amount for the three and nine months ended September 30, 2011 and 2010 were as follows (in thousands):

		00000000			00000000			00000000		00000000
	Three Months Ended September 30, 2011						Nine Months Ended September 30, 2011
	Gross Amount			Accumulated Amortization			Gross Amount		Accumulated Amortization
Other Intangible assets, beginning	$	25,665		$	(483	)	$	3,147	$	(188	)
Other Intangible assets acquired during the period		—			—			22,110		—
Amortization expense		—			(327	)		—		(599	)
Foreign currency translation effect on balances		(255	)		15			153		(8	)

Other Intangible assets, ending	$	25,410		$	(795	)	$	25,410	$	(795	)

		00000000		00000000			00000000		00000000
	Three Months Ended September 30, 2010					Nine Months Ended September 30, 2010
	Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization
Other Intangible assets, beginning	$	1,090	$	(65	)		—		—
Other Intangible assets acquired during the period		—		—		$	1,111		—
Amortization expense		—		(50	)		—	$	(115	)
Foreign currency translation effect on balances		121		—			100		—

Other Intangible assets, ending	$	1,211	$	(115	)	$	1,211	$	(115	)

The components of other intangible assets were as follows (in thousands):

		000000000000		000000000000		000000000000			000000000000
September 30, 2011	Estimated Life (Years)		Gross Carrying Amount		Accumulated Amortization			Net
Non-compete agreements		5	$	240	$	(12	)	$	228
Dealer/customer related		7		3,740		(151	)		3,589
Developed technology		7		4,700		(632	)		4,068

Total amortizable				8,680		(795	)		7,885

Non-amortizable — brand names				16,730		—			16,730

Total other intangible assets, net			$	25,410	$	(795	)	$	24,615

		000000000000		000000000000		000000000000			000000000000
September 30, 2010	Estimated Life (Years)		Gross Carrying Amount		Accumulated Amortization			Net
Developed technology		7	$	1,211	$	(115	)	$	1,096

Total other intangible assets, net			$	1,211	$	(115	)	$	1,096

Amortization expense for intangible assets during the first nine months of 2011 was $599,000. Estimated amortization expense for the remainder of 2011 and succeeding fiscal years is as follows: 2011 (remainder), $313,000; 2012, $1,254,000; 2013, $1,254,000; 2014, $1,254,000; 2015, $1,254,000; 2016, $1,229,000; and after 2016, $1,326,000.

- 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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