XML 28 R14.htm IDEA: XBRL DOCUMENT
v3.19.1

Goodwill and Purchased Intangible Assets | 9 Months Ended
--- | ---
Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND PURCHASED INTANGIBLE ASSETS | NOTE 7 – GOODWILL AND PURCHASED INTANGIBLE ASSETS Goodwill We currently have four reporting units: Wafer Inspection, Patterning, Global Service and Support (“GSS”), and Others. The assignment of goodwill associated with Orbotech Acquisition to the reporting units has not yet been completed and therefore shown as a separate component. Refer to Note 17 “Segment Reporting and Geographic Information” for additional details. The following table presents goodwill carrying value and the movements during the nine months ended March 31, 2019:
(In thousands) |  | Wafer Inspection |  | Patterning |  | GSS |  | Others |  | Orbotech |  | Total
Balance as of June 30, 2018 |  | $ | 281,005 |  |  | $ | 53,255 |  |  | $ | 8,039 |  |  | $ | 12,399 |  |  | $ | — |  |  | $ | 354,698 |
Acquired goodwill |  | — |  |  | 24,863 |  |  | 17,318 |  |  | 1,176 |  |  | 1,773,544 |  |  | 1,816,901 |
Foreign currency and other adjustments |  | (14 | ) |  | — |  |  | — |  |  | — |  |  | 1,317 |  |  | 1,303 |
Balance as of March 31, 2019 |  | $ | 280,991 |  |  | $ | 78,118 |  |  | $ | 25,357 |  |  | $ | 13,575 |  |  | $ | 1,774,861 |  |  | $ | 2,172,902 |
The change in goodwill during the nine months ended March 31, 2019 resulted primarily from $1.77 billion related to the Orbotech Acquisition and $43.4 million related to the acquisition of the privately-held companies during the period. For additional details, refer to Note 6 “Business Combinations”. We performed a qualitative assessment of the goodwill for our wafer inspection, patterning, GSS, and others reporting units during the three months ended March 31, 2019. Based on this assessment we concluded that it was more likely than not that the fair value of each of the reporting units exceeded its carrying amount. As a result of our determination based on our qualitative assessment, it was not necessary to perform the quantitative goodwill impairment test at this time. In assessing the qualitative factors, we considered the impact of key factors, including changes in the industry and competitive environment, market capitalization, stock price, earnings multiples, budgeted-to-actual revenue performance from prior year, gross margin and cash flows from operating activities. In addition, for goodwill associated with the Orbotech acquisition, no impairment indicators were identified as part of our goodwill impairment process. Based on our assessment, goodwill in the reporting units was not impaired as of March 31, 2019 or June 30, 2018. Purchased Intangible Assets The components of purchased intangible assets as of the dates indicated below were as follows:
(In thousands) |  |  | As of March 31, 2019 |  | As of June 30, 2018
Category | Range of Useful Lives |  | Gross Carrying Amount |  | Accumulated Amortization, Impairment, and Other |  | Net Amount |  | Gross Carrying Amount |  | Accumulated Amortization and Impairment |  | Net Amount
Existing technology | 4-8 years |  | $ | 1,238,037 |  |  | $ | 161,827 |  |  | $ | 1,076,210 |  |  | $ | 160,859 |  |  | $ | 144,202 |  |  | $ | 16,657 |
Trade name/Trademark | 5-7 years |  | 115,573 |  |  | 21,638 |  |  | 93,935 |  |  | 20,993 |  |  | 20,060 |  |  | 933 |
Customer relationships | 4-9 years |  | 370,665 |  |  | 59,740 |  |  | 310,925 |  |  | 56,680 |  |  | 55,136 |  |  | 1,544 |
Backlog and other | <1-8.5 years |  | 35,437 |  |  | 5,267 |  |  | 30,170 |  |  | 660 |  |  | 461 |  |  | 199 |
Intangible assets subject to amortization |  |  | 1,759,712 |  |  | 248,472 |  |  | 1,511,240 |  |  | 239,192 |  |  | 219,859 |  |  | 19,333 |
In-process research and development |  |  | 183,500 |  |  | 427 |  |  | 183,073 |  |  | — |  |  | — |  |  | — |
Total |  |  | $ | 1,943,212 |  |  | $ | 248,899 |  |  | $ | 1,694,313 |  |  | $ | 239,192 |  |  | $ | 219,859 |  |  | $ | 19,333 |
Purchased 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. The change in purchased intangible assets gross carrying amount resulted primarily from the Orbotech Acquisition and the acquisition of the privately-held companies. For additional details, refer to Note 6 “Business Combinations.” Amortization expense for purchased intangible assets for the periods indicated below was as follows:
| Three months ended |  | Nine months ended
| March 31, |  | March 31,
(In thousands) | 2019 |  | 2018 |  | 2019 |  | 2018
Amortization expense- Cost of revenues | $ | 15,770 |  |  | $ | 1,122 |  |  | $ | 17,628 |  |  | $ | 3,366 |
Amortization expense- Selling, general and administrative | 10,086 |  |  | 65 |  |  | 10,973 |  |  | 220 |
Amortization expense- Research and development | 12 |  |  | — |  |  | 12 |  |  | — |
Total | $ | 25,868 |  |  | $ | 1,187 |  |  | $ | 28,613 |  |  | $ | 3,586 |
Based on the purchased intangible assets gross carrying amount recorded as of March 31, 2019, the underlying assets, the remaining estimated annual amortization expense is expected to be as follows:
Fiscal year ending June 30: | Amortization (In thousands)
2019 (remaining 3 months) | $ | 59,114 |
2020 | 216,956 |
2021 | 196,915 |
2022 | 196,915 |
2023 | 195,691 |
Thereafter | 645,649 |
Total | $ | 1,511,240 |

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration