Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2013

NOTE 7. Goodwill and Other Intangible Assets

Goodwill and other intangible assets, net, consisted of $120,870,000 of goodwill and $102,667,000 of intangible assets, net of accumulated amortization, as of June 30, 2013.

Additions to goodwill and other intangible assets in the first six months of 2013 relate to the acquisition of A.M. Holding S.A.S., which operates under the name Aixam Mega S.A.S. ("Aixam"), on April 10, 2013. Aixam manufactures and sells enclosed on-road quadricycles and light duty commercial vehicles. The acquisition strengthens Polaris' SV portfolio and enhances the profitability and growth potential of Polaris in Europe. Aixam's financial results are included in the Company’s consolidated results from the date of acquisition. Pro forma financial results are not presented as the acquisition is not material to the consolidated financial statements. The acquisition of Aixam for $141,189,000, which was funded with cash on hand, was allocated on a preliminary basis to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Net of cash acquired, the Aixam purchase price was $134,817,000. As of June 30, 2013, this allocation for Aixam remains preliminary as it relates to the valuation of certain working capital accounts, intangible assets and taxes.

The changes in the carrying amount of goodwill for the six months ended June 30, 2013 were as follows (in thousands):



	Six months ended June 30, 2013
Balance as of beginning of period	$	56,324
Goodwill acquired during the period	65,004
Currency translation effect on foreign goodwill balances	(458		)
Balance as of end of period	$	120,870

For other intangible assets, the changes in the net carrying amount for the six months ended June 30, 2013 were as follows (in thousands):



	Six months ended June 30, 2013
	Gross Amount		Accumulated Amortization
Other intangible assets, beginning	$	54,907	$	(4,015	)
Intangible assets acquired during the period	55,327		—
Amortization expense	—		(3,652		)
Foreign currency translation effect on balances	48		52
Other intangible assets, ending	$	110,282	$	(7,615	)

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



	Total estimated life (years)	June 30, 2013		December 31, 2012
Non-amortizable - indefinite lived:
Brand names		40,357		26,691
Amortized:
Non-compete agreements	5	540		540
Dealer/customer related	7	56,562		14,702
Developed technology	5-7	12,823		12,974
Total amortizable		69,925		28,216
Less: Accumulated amortization		(7,615	)	(4,015	)
Net amortized other intangible assets		62,310		24,201
Total other intangible assets, net		102,667		50,892

Amortization expense for intangible assets for the three months ended June 30, 2013 was $2,574,000. Estimated amortization expense for the remainder of 2013 through 2018 is as follows: 2013 (remainder), $5,090,000; 2014, $10,180,000; 2015, $10,180,000; 2016, $10,156,000; 2017, $9,847,000; 2018, $8,399,000; and after 2018, $8,458,000. 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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