Goodwill and Other Intangible Assets

20 Months Ended

Dec. 31, 2011

Note 4. Goodwill and Other Intangible Assets

Goodwill and other intangible assets: ASC Topic 350 prohibits the amortization of goodwill and intangible assets with indefinite useful lives. Topic 350 requires that these assets be reviewed for impairment at least annually. An impairment charge for goodwill is recognized only when the estimated fair value of a reporting unit, including goodwill, is less than its carrying amount. The Company performed analyses as of December 31, 2011 and 2010. The results of the analyses indicated that no goodwill or intangible impairment existed. In accordance with Topic 350, the Company will continue to complete an impairment analysis on an annual basis. Goodwill and other intangible assets, net, consist of $44,668,000 and $28,354,000 of goodwill and $33,050,000 and $2,959,000 of intangible assets, net of accumulated amortization, for the periods ended December 31, 2011 and December 31, 2010, respectively.

Additions to goodwill and other intangible assets in 2011 relate to the acquisition of Indian Motorcycle Company, GEM and Goupil during 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 aggregate Goupil purchase price was allocated on a preliminary basis to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. As of December 31, 2011, this allocation for Goupil remains preliminary related to income taxes and capitalized leases.

The changes in the carrying amount of goodwill for the years ended December 31, 2011 and 2010 are as follows (in thousands):


	2011			2010
Balance as of beginning of year	$	28,354		$	25,869
Goodwill acquired during the year		16,482			1,985
Currency translation effect on foreign goodwill balances		(168	)		500

Balance as of end of year	$	44,668		$	28,354

For other intangible assets the changes in the net carrying amount for the years December 31, 2011 and 2010 were as follows (in thousands):


	For the Year Ended December 31, 2011					For the Year Ended December 31, 2010
	Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization
Other intangible assets, beginning	$	3,147	$	(188	)		—		—
Intangible assets acquired during the period		31,106		—		$	3,001		—
Amortization expense		—		(1,018	)		—	$	(188	)
Foreign currency translation effect on balances		3		—			146		—

Other intangible assets, ending	$	34,256	$	(1,206	)	$	3,147	$	(188	)

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


December 31, 2011	Estimated Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net
Non-compete agreements	5	$	240	$	(24	)	$	216
Dealer/customer related	7		8,013		(366	)		7,647
Developed technology	7		8,625		(816	)		7,809

Total amortizable			16,878		(1,206	)		15,672

Non-amortizable—brand/trade names			17,378		—			17,378

Total other intangible assets, net		$	34,256	$	(1,206	)	$	33,050


December 31, 2010	Estimated Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net
Developed technology	7	$	3,147	$	(188	)	$	2,959

Total other intangible assets, net		$	3,147	$	(188	)	$	2,959

Amortization expense for intangible assets during 2011 and 2010 was $1,018,000 and $188,000, respectively. Estimated amortization expense for 2012 to 2016 is as follows: 2012, $2,393,000; 2013, $2,393,000; 2014, $2,393,000; 2015, $2,393,000; 2016, $2,369,000; and after 2016, $3,731,000. The preceding expected amortization expense is an estimate and actual amounts could differ due to additional intangible asset acquisitions, changes in foreign currency rates or impairment of intangible assets.

- 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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