Goodwill and Intangible Assets

12 Months Ended

Jun. 28, 2015

Note 12: Goodwill and Intangible Assets

Goodwill

The balance of Goodwill decreased to $1.4 billion as of June 28, 2015, as compared to, $1.5 billion as of June 29, 2014. The primarily cause of the decrease was recognition of a $79.4 million impairment on the Company’s single-wafer clean reporting unit during the quarter ended June 28, 2015. Uncertainty surrounding future revenue growth in certain products resulted in the estimated discounted cash flows falling below the carrying value of the goodwill balance. Following fiscal year 2015’s impairment, there is no remaining balance of the Company’s goodwill attributable to the single-wafer clean systems reporting unit.

Of the $1.4 billion goodwill balance, $61.1 million is tax deductible and the remaining balance is not tax deductible due to purchase accounting and applicable foreign law.

Intangible Assets

The following table provides the Company’s intangible assets, other than goodwill, as of June 28, 2015:


	Gross		Accumulated Amortization			Net
			(in thousands)
Customer relationships	$	615,490	$	(234,968	)	$	380,522
Existing technology		643,919		(313,071	)		330,848
Patents		33,553		(26,431	)		7,122
Other intangible assets		35,914		(35,366	)		548

Intangible assets subject to amortization		1,328,876		(609,836	)		719,040
Development rights		9,100					9,100

Intangible assets not subject to amortization		9,100					9,100

Total intangible assets	$	1,337,976	$	(609,836	)	$	728,140

The following table provides details of the Company’s intangible assets, other than goodwill, as of June 29, 2014:


	Gross		Accumulated Amortization			Net
			(in thousands)
Customer relationships	$	615,618	$	(169,162	)	$	446,456
Existing technology		643,922		(224,246	)		419,676
Patents		32,253		(24,407	)		7,846
Other intangible assets		35,270		(35,270	)		—

Intangible assets subject to amortization		1,327,063		(453,085	)		873,978
In process research and development		11,000					11,000
Development rights		9,100					9,100

Intangible assets not subject to amortization		20,100					20,100

Total intangible assets	$	1,347,163	$	(453,085	)	$	894,078

The Company recognized $157.7 million, $163.2 million, and $177.6 million in intangible asset amortization expense during fiscal years 2015, 2014, and 2013, respectively. The Company recognized a $9.8 million impairment of existing technology during the fiscal year 2015, resulting from current market demand for the technology. The Company recognized a $4.0 million impairment of in process research and development during fiscal year 2014, due to the cancellation of a project.

The estimated future amortization expense of intangible assets, excluding those with indefinite lives, as of June 28, 2015 was as follows:


Fiscal Year	Amount
	(in thousands)
2016	$	156,074
2017		154,122
2018		152,918
2019		114,846
2020		49,700
Thereafter		91,380

	$	719,040

- 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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