Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and other intangible assets, net, consisted of $129,580,000 of goodwill and $105,450,000 of intangible assets, net of accumulated amortization, as of June 30, 2015.

Additions to goodwill and other intangible assets relate primarily to the acquisitions of Timbersled Products, Inc. (“Timbersled”) and HH Investment Limited (“Hammerhead”) in April 2015. Timbersled is based in Idaho and is an innovator and market leader in the burgeoning snow bike industry. Hammerhead is based in Shanghai, China and manufactures gasoline powered go-karts, light utility vehicles, and electric utility vehicles. Hammerhead markets its products globally under the Hammerhead Offroad® brand, along with maintaining key private label relationships with other original equipment manufacturers.

For both acquisitions, the respective aggregate purchase prices were allocated on a preliminary basis to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Timbersled and Hammerhead financial results are included in the Company's consolidated results from the respective dates of acquisition. Pro forma financial results are not presented as the acquisitions are not material to the consolidated financial statements. As of June 30, 2015, the purchase price allocations for both acquisitions remains preliminary.

In November 2014, the Company acquired certain assets of LSI Products Inc. and Armor Holdings, LLC. (collectively, “Pro Armor”). Pro Armor is an industry-leading brand in performance side-by-side accessories. In January 2015, Polaris completed a non-cash acquisition of the electric motorcycle business from Brammo, Inc. (“Brammo”). Brammo will continue to be a designer and developer of electric vehicle powertrains. As of June 30, 2015, the purchase price allocations for Pro Armor and Brammo remain preliminary.

The changes in the carrying amount of goodwill for the six months ended June 30, 2015 were as follows (in thousands):



	Six months ended June 30, 2015
Goodwill, beginning of period	$	123,031
Goodwill from businesses acquired	13,614
Currency translation effect on foreign goodwill balances	(7,065		)
Goodwill, end of period	$	129,580

For other intangible assets, the changes in the net carrying amount for the six months ended June 30, 2015 were as follows (in thousands):



	Six months ended June 30, 2015
	Gross Amount			Accumulated Amortization
Other intangible assets, beginning of period	$	124,093		$	(23,158	)
Intangible assets acquired during the period	13,695			—
Amortization expense	—			(5,667		)
Foreign currency translation effect on balances	(4,667		)	1,154
Other intangible assets, end of period	$	133,121		$	(27,671	)

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



	Total estimated life (years)	June 30, 2015			December 31, 2014
Non-amortizable—indefinite lived:
Brand names		$	47,937		$	46,224
Amortizable:
Non-compete agreements	5	540			540
Dealer/customer related	7	65,176			62,758
Developed technology	5-7	19,468			14,571
Total amortizable		85,184			77,869
Less: Accumulated amortization		(27,671		)	(23,158		)
Net amortized other intangible assets		57,513			54,711
Total other intangible assets, net		$	105,450		$	100,935

Amortization expense for intangible assets for the three months ended June 30, 2015 and 2014 was $2,913,000 and $2,963,000, respectively. Estimated amortization expense for the remainder of 2015 through 2020 is as follows: 2015 (remainder), $6,200,000; 2016, $12,400,000; 2017, $12,000,000; 2018, $10,500,000; 2019, $9,300,000; 2020, $4,400,000; and after 2020, $2,700,000. 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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