Intangible Assets, Goodwill and Long-Lived Assets

12 Months Ended

Jul. 31, 2013

Intangible Assets, Goodwill and Long-Lived Assets

6. INTANGIBLE ASSETS, GOODWILL AND LONG-LIVED ASSETS

The components of amortizable intangible assets are as follows:


		July 31, 2013				July 31, 2012
	Weighted Average Years Remaining Life	Cost		Accumulated Amortization		Cost		Accumulated Amortization
Dealer networks	9		$ 67,000		$ 19,121		$ 72,230		$ 13,343
Non-compete agreements	2		4,130		2,375		6,321		3,678
Trademarks	22		35,042		3,843		36,775		2,522
Design technology and other intangibles	11		21,300		4,380		21,300		2,856
Total amortizable intangible assets			$ 127,472		$ 29,719		$ 136,626		$ 22,399

Aggregate amortization expense for amortizable intangibles for all operations for the fiscal years ended July 31, 2013, 2012 and 2011 were $11,037, $11,135 and $10,262, respectively, including $10,460, $10,651 and $9,595, respectively, for continuing operations. The dealer networks are primarily being amortized on an accelerated cash flow basis. Non-compete agreements, trademarks and other intangibles are amortized on a straight-line basis.

Estimated Amortization Expense:


For the fiscal year ending July 31, 2014	$	10,192
For the fiscal year ending July 31, 2015		9,844
For the fiscal year ending July 31, 2016		8,802
For the fiscal year ending July 31, 2017		8,595
For the fiscal year ending July 31, 2018		8,157
For the fiscal year ending July 31, 2019 and thereafter		52,163

	$	97,753

During the first quarter of fiscal year 2011, management decided to combine its Damon and Four Winds motorized operations to form Thor Motor Coach to optimize operations and garner cost efficiencies. As a result, related intangible assets were reviewed at that time for a potential impairment, trademarks associated with one of the former operating companies were discontinued and the related trademark values of $2,036 were written off.

See Note 3 to the Consolidated Financial Statements for discussion of goodwill and other intangibles asset impairment charges recognized related to discontinued operations.

For the annual impairment test at April 30, 2013, 2012 and 2011, management engaged an independent valuation firm to assist in its impairment assessment reviews. The fair value of the Company’s reporting units for purposes of goodwill testing, based on Level 3 inputs as defined by ASC 820, was determined by employing a discounted cash flow methodology and a market approach, when appropriate. As a result of the April 30, 2013, 2012 and 2011 annual impairment assessments, no impairment of goodwill was identified.

During the fourth quarter of fiscal 2013, the Company determined it was more likely than not that certain RV facilities will be sold before the end of their previously estimated useful life and therefore, performed impairment assessments over these facilities to determine whether an impairment exists. As a result, a non-cash impairment charge of $2,000 was recognized in the quarter ended July 31, 2013.

Changes in the carrying amount of goodwill by reportable segment as of July 31, 2013 and 2012 are summarized as follows:


	2013
	Towables		Motorized		Buses		Total
Balance as of beginning of fiscal year:
Goodwill	$	238,103	$	17,252	$	7,106	$	262,461
Accumulated impairment charges		–		(17,252)		–		(17,252)

Net balance at beginning of fiscal year		238,103		–		7,106		245,209

Fiscal year activity:
Goodwill acquired – Bus		–		–		5,263		5,263
Impairment charges – discontinued operations		–		–		(6,810)		(6,810)
Discontinued operations reclassification		–		–		(5,559)		(5,559)

Net balance as of July 31, 2013	$	238,103	$	–	$	–	$	238,103


Components of balance at end of fiscal year:
Goodwill	$	238,103	$	17,252	$	12,369	$	267,724
Accumulated impairment charges		–		(17,252)		(6,810)		(24,062)
Discontinued operations reclassification		–		–		(5,559)		(5,559)

Net balance as of July 31, 2013	$	238,103	$	–	$	–	$	238,103


	2012
	Towables		Motorized		Buses		Total
Balance as of beginning of fiscal year:
Goodwill	$	237,346	$	17,252	$	7,106	$	261,704
Accumulated impairment charges		–		(17,252)		–		(17,252)

Net balance at beginning of fiscal year		237,346		–		7,106		244,452

Fiscal year activity:
Goodwill acquired – Heartland		757		–		–		757

Net balance as of July 31, 2012	$	238,103	$	–	$	7,106	$	245,209


Components of balance at end of fiscal year:
Goodwill	$	238,103	$	17,252	$	7,106	$	262,461
Accumulated impairment charges		–		(17,252)		–		(17,252)

Net balance as of July 31, 2012	$	238,103	$	–	$	7,106	$	245,209

- 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.

+ References+ Details