Note 8 – Goodwill and Intangible Assets, Net

Goodwill

Goodwill was $710.6 million at March 31, 2015 compared with $541.0 million at June 30, 2014. The increase in goodwill in the nine months ended March 31, 2015 versus June 30, 2014 was primarily associated with the following: an increase of $168.3 million in connection with the acquisition of Red Bend Ltd. (“Redbend”), an increase of $18.9 million in connection with the acquisition of S1nn GmbH & Co. KG (“S1nn”), an increase of $9.5 million in connection with the acquisition of I.P.S.G. International Product Solution Group Pty Ltd and VFX Systems Pty Ltd (collectively “IPSG/VFX” or the “IPSG/VFX Acquisition”), an increase of $4.6 million in connection with the acquisition of certain assets of Verto Medical Solutions, LLC d/b/a yurbuds and its wholly-owned subsidiary (“yurbuds”) and a reduction of $1.1 million in connection with the acquisition of AMX LLC and AMX Holding Corporation (collectively “AMX”).

The changes in the carrying amount of goodwill by business segment for the nine months ended March 31, 2015 and 2014 were as follows:

 

		Infotainment				Lifestyle				Professional				Other				Total
Balance, June 30, 2014		$	17,080			$	137,950			$	385,922			$	0			$	540,952
Acquisitions and adjustments(1)			9,245				14,280				8,422				168,306				200,253
Other adjustments(2)			(3,601	)			(8,737	)			(18,268	)			0				(30,606	)
Balance, March 31, 2015		$	22,724			$	143,493			$	376,076			$	168,306			$	710,599

 

 

(1)	Refer to Note 23 – Acquisitions for more information.

(2)	The other adjustments to goodwill primarily consist of foreign currency translation adjustments.

We did not recognize any goodwill impairment charges in our Condensed Consolidated Statements of Income in the three and nine months ended March 31, 2015 and 2014.

The contingent purchase price associated with the acquisition of innovative Systems GmbH (“IS”) is calculated pursuant to the terms of an agreement between the parties. Certain terms of the agreement are currently subject to a dispute between the parties and the matter was submitted to arbitration. On November 5, 2013, the arbitration panel reached a partial judgment on some of the disputed matters covering the period from February 2009 through January 2012 awarding €16.3 million to the IS sellers. We contested the enforcement of the partial award. During the fiscal year ended June 30, 2014, we recorded approximately $8.1 million of additional contingent purchase price in goodwill to accrue for this partial award. In July 2014, the partial award was upheld. Until such time as the other disputed matters are resolved, we cannot calculate the contingent purchase price related to these other disputed matters.

Intangible Assets, Net

Intangible assets, net were $260.0 million and $182.0 million at March 31, 2015 and June 30, 2014, respectively, and were comprised of the following:

 

		Weighted Average Amortization				March 31, 2015												June 30, 2014
						Gross Carrying Amount				Accumulated Amortization				Net Amount				Gross Carrying Amount				Accumulated Amortization				Net Amount
Customer relationships			8 Years			$	75,228			$	(23,816	)		$	51,412			$	67,277			$	(17,770	)		$	49,507
Technology			6 Years				135,173				(14,756	)			120,417				39,331				(8,196	)			31,135
Patents			14 Years				5,136				(1,982	)			3,154				11,418				(7,166	)			4,252
Trade names(1)			5 Years				88,266				(12,403	)			75,863				88,266				(7,489	)			80,777
Non-compete agreement			4 Years				2,117				(1,400	)			717				2,212				(2,016	)			196
Software			4 Years				11,813				(4,582	)			7,231				11,813				(431	)			11,382
Other			5 Years				7,588				(6,429	)			1,159				7,463				(2,682	)			4,781
Total						$	325,321			$	(65,368	)		$	259,953			$	227,780			$	(45,750	)		$	182,030

 

(1)	Includes $55.7 million and $18.7 million of indefinite-lived intangible assets related to the acquisition of AMX and Martin Professional A/S, respectively.

Amortization expense related to intangible assets was $7.1 million and $3.1 million for the three months ended March 31, 2015 and 2014, respectively, and was $18.2 million and $9.4 million for the nine months ended March 31, 2015 and 2014, respectively.

At March 31, 2015, amortization expense is expected to approximate the following:

 

2015		$	9,030
2016			33,665
2017			31,598
2018			28,732
2019			25,707
Thereafter			56,601
Total		$	185,333