Goodwill and Intangible Assets

12 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

6. Goodwill and Intangible Assets

Goodwill represents the excess of net book value over the estimated fair value of net tangible and identifiable intangible assets of a reporting unit. Goodwill is tested for impairment annually or more often if impairment indicators are present at the reporting unit level. The Company elected April 1st as its annual goodwill impairment assessment date. If the existence of events or circumstances indicates that it is more likely than not that fair values of the reporting units are below their carrying values, the Company performs additional impairment tests during interim periods to evaluate goodwill for impairment.

During the second quarter of fiscal year 2017, the Company adopted on a prospective basis the Accounting Standard Update 2017-04, Intangibles- Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment issued by the FASB. The adoption of the guidance is expected to reduce the cost and complexity of evaluating goodwill for impairment and did not have an impact on the Company’s financial position or results of operations during fiscal year 2017. In accordance with provisions of the guidance, the Company initially assesses qualitative factors to determine whether the existence of events or circumstances indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company determines, based on this assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying value, it performs a quantitative goodwill impairment test by comparing the reporting unit’s fair value with its carrying value. An impairment loss is recognized for the amount by which the reporting unit’s carrying value exceeds its fair value, up to the total amount of goodwill allocated to the reporting unit. No impairment loss is recognized if the fair value of the reporting exceeds its carrying value.

The Company completed its annual goodwill impairment test as of April 1, 2017 and determined that no adjustment to goodwill was necessary since the fair value of each reporting unit was significantly in excess of the carrying value of each reporting unit. The Company conducted a qualitative assessment for three reporting units within the Brooks Semiconductor Solutions Group segment and determined that it was not likely that their fair values were less than their carrying values. As a result of the analysis, the Company did not perform the quantitative assessment for these reporting units and did not recognize impairment losses. The Company also performed the quantitative goodwill impairment test for the fourth reporting unit within the Brooks Semiconductor Solutions Group segment and for the Brooks Life Science Systems reporting unit. The Company determined that no adjustment to goodwill was necessary for these two reporting units since their fair values significantly exceeded their respective carrying values. If events occur or circumstances change that would more likely than not reduce the fair value of any reporting unit below its carrying value, the Company will evaluate such reporting unit’s goodwill for impairment between annual tests.

The components of the Company’s goodwill by an operating segment at September 30, 2017 and 2016 are as follows (in thousands):


	Brooks
	Semiconductor		Brooks
	Solutions		Life Science
	Group		Systems		Other		Total
Gross goodwill, at September 30, 2015	$	654,727	$	55,625	$	26,014	$	736,366
Accumulated goodwill impairments		(588,944)		—		(26,014)		(614,958)
Goodwill, net of accumulated impairments, at September 30, 2015		65,783		55,625		—		121,408
Acquisitions and adjustments		1,054		79,676		—		80,730
Gross goodwill, at September 30, 2016	$	655,781	$	135,301	$	26,014	$	817,096
Accumulated goodwill impairments		(588,944)		—		(26,014)		(614,958)
Goodwill, net of accumulated impairments, at September 30, 2016		66,837		135,301		—		202,138
Acquisitions and adjustments		(19)		31,519		—		31,500
Gross goodwill, at September 30, 2017		655,762		166,820		26,014		848,596
Accumulated goodwill impairments		(588,944)		—		(26,014)		(614,958)
Goodwill, net of accumulated impairments, at September 30, 2017	$	66,818	$	166,820	$	—	$	233,638

During fiscal year 2017, the Company recorded a goodwill increase of $31.5 million related to the acquisitions of Cool Lab, PBMMI and certain assets and liabilities of RURO, Inc. which represented the excess of the consideration transferred over the fair value of the net assets acquired.

The components of the Company’s identifiable intangible assets as of September 30, 2017 and 2016 are as follows (in thousands):


	September 30, 2017						September 30, 2016
			Accumulated		Net Book				Accumulated		Net Book
	Cost		Amortization		Value		Cost		Amortization		Value
Patents	$	9,028	$	7,729	$	1,299	$	7,808	$	7,486	$	322
Completed technology		61,662		54,777		6,885		60,485		51,018		9,467
Trademarks and trade names		9,244		4,969		4,275		9,142		4,204		4,938
Customer relationships		130,655		59,594		71,061		114,263		47,147		67,116
	$	210,589	$	127,069	$	83,520	$	191,698	$	109,855	$	81,843

Amortization expense for intangible assets was $17.1 million, $15.0 million and $12.9 million, respectively, for the fiscal years ended September 30, 2017, 2016 and 2015.

Estimated future amortization expense for the intangible assets as of September 30, 2017 is as follows (in thousands):


Fiscal year ended September 30,
2018	$	18,026
2019		17,076
2020		15,244
2021		9,730
2022		7,418
Thereafter		16,026
	$	83,520

- 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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