Annual report pursuant to Section 13 and 15(d)

Goodwill and Purchased Intangible Assets

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Goodwill and Purchased Intangible Assets
12 Months Ended
Jun. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Purchased Intangible Assets
GOODWILL AND PURCHASED INTANGIBLE ASSETS
Goodwill
The following table presents goodwill balances and the movements during the fiscal years ended June 30, 2015 and 2014: 
(In thousands)
 
As of June 30, 2013
$
326,635

Acquisition
8,730

Adjustments
(10
)
As of June 30, 2014
335,355

Adjustments
(92
)
As of June 30, 2015
$
335,263

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in prior business combinations. The Company has four reporting units: Defect Inspection, Metrology, Service and Other. As of June 30, 2015, substantially all of the goodwill balance resided within the Defect Inspection reporting unit.
The changes in the gross goodwill balance during the fiscal year ended June 30, 2015 resulted from foreign currency translation adjustments. The changes in the gross goodwill balance during the fiscal year ended June 30, 2014 resulted from the acquisition of certain assets and liabilities of a privately-held company and foreign currency translation adjustments.
The Company performed a qualitative assessment of the goodwill by reporting unit as of November 30, 2014 and concluded that it was more likely than not that the fair value of each of the reporting units exceeded its carrying amount. In assessing the qualitative factors, the Company considered the impact of key factors including change in industry and competitive environment, market capitalization, stock price, earnings multiples, budgeted-to-actual revenue performance from prior year, gross margin and cash flow from operating activities. As such, it was not necessary to perform the two-step quantitative goodwill impairment test at that time. In addition, there have been no significant events or circumstances affecting the valuation of goodwill subsequent to the qualitative assessment performed in the second quarter of the fiscal year ended June 30, 2015. The next annual assessment of the goodwill by reporting unit will be performed in the second quarter of the fiscal year ending June 30, 2016.
Purchased Intangible Assets
The components of purchased intangible assets as of the dates indicated below were as follows:
(In thousands)
 
 
As of June 30, 2015
 
As of June 30, 2014
Category
Range of
Useful Lives
 
Gross
Carrying
Amount
 
Accumulated
Amortization and Impairment
 
Net
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization and Impairment
 
Net
Amount
Existing technology
4-7 years
 
$
141,659

 
$
134,664

 
$
6,995

 
$
141,659

 
$
126,567

 
$
15,092

Patents
6-13 years
 
57,648

 
56,998

 
650

 
57,648

 
54,398

 
3,250

Trade name/Trademark
4-10 years
 
19,893

 
18,899

 
994

 
19,893

 
17,427

 
2,466

Customer relationships
6-7 years
 
54,980

 
51,724

 
3,256

 
54,980

 
48,915

 
6,065

Other
0-1 year
 
17,299

 
17,299

 

 
17,299

 
16,475

 
824

Total
 
 
$
291,479

 
$
279,584

 
$
11,895

 
$
291,479

 
$
263,782

 
$
27,697


Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.
For the fiscal years ended June 30, 2015, 2014 and 2013, amortization expense for other intangible assets was $15.8 million, $16.2 million and $20.8 million, respectively. Based on the intangible assets recorded as of June 30, 2015, and assuming no subsequent additions to, or impairment of, the underlying assets, the remaining estimated annual amortization expense is expected to be as follows:
Fiscal year ending June 30:
Amortization
(In thousands)
2016
$
7,564

2017
2,806

2018
1,525

Total
$
11,895