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Goodwill and Other Intangible Assets
 9 Months Ended
Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS
GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill represents the excess of cost over the fair value of the net assets of acquired companies. Goodwill and other intangible assets with indefinite lives are tested at least annually for impairment. We perform our annual impairment tests during the June quarter in connection with our annual planning process, unless there are impairment indicators based on the results of an ongoing cumulative qualitative assessment that warrant a test prior to that. We evaluate the recoverability of goodwill for each of our reporting units by comparing the fair value of each reporting unit with its carrying value. The fair values of our reporting units are determined using a combination of a discounted cash flow analysis and market multiples based upon historical and projected financial information. We apply our best judgment when assessing the reasonableness of the financial projections used to determine the fair value of each reporting unit. We evaluate the recoverability of indefinite-lived intangible assets using a discounted cash flow analysis based on projected financial information. This evaluation is sensitive to changes in market interest rates and other external factors.

2016 December Quarter Impairment Charge
Late in the December quarter of fiscal 2016, the Company experienced a further unexpected deterioration in customer demand in many of its end markets and certain geographies. Industrial production indices in the U.S. and China declined, as well as further reductions in mining and oil and gas activity. In view of these declines and the significant impact on our near term financial forecasts as well as a significant and sustained decline in the Company’s stock price, we determined an interim impairment test of our goodwill and other long-lived assets of our Industrial and Infrastructure reporting units was required. As a result of this interim test, we recorded a preliminary non-cash pre-tax impairment charge during the three months ended December 31, 2015 of $106.1 million in the Infrastructure segment, of which $105.7 million was for goodwill and $0.4 million was for an indefinite-lived trademark intangible asset. We also recorded a preliminary non-cash pre-tax impairment charge during the three months ended December 31, 2015 of $2.3 million in the Industrial segment for an indefinite-lived trademark intangible asset. These impairment charges are recorded in restructuring and asset impairment charges in our condensed consolidated statements of income. There is $302.1 million of goodwill at the Industrial reporting unit. The fair value substantially exceeds the carrying value. The Infrastructure segment has no remaining goodwill recorded.

Identifiable assets with finite lives are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable. During the December quarter end, we performed an interim review of our identifiable assets with finite lives and preliminarily determined that the assets were not impaired. During the March quarter of fiscal 2016, we completed the finalization of fair values related to intangibles and property, plant and equipment related to the aforementioned 2016 charges. We also completed a review of our identifiable assets with finite lives and determined that the assets were not impaired.

Divestiture Impact on Goodwill and Other Intangible Assets
During the nine months ended March 31, 2016, we completed the sale of non-core businesses, see Note 5. As a result of this transaction, goodwill decreased by $1.1 million and $6.5 million in our Industrial and Infrastructure segments, respectively. These decreases are recorded in the loss on divestiture account in our condensed consolidated statements of income.

2015 March Quarter Impairment Charge
As previously disclosed, we recorded a non-cash pre-tax impairment charge during the three months ended March 31, 2015 of $152.9 million in the Infrastructure segment, of which $152.5 million was for goodwill and $0.4 million was for an indefinite-lived trademark intangible asset.

In addition, we recorded an additional $6.8 million charge during the three months ended March 31, 2015 for an indefinite-lived trademark intangible asset based upon completion of the December valuation.

2015 December Quarter Impairment Charge
As previously disclosed, we recorded a non-cash pre-tax impairment charge during the three months ended December 31, 2014 of $376.5 million in the Infrastructure segment, of which $375.0 million was for goodwill and $1.5 million was for an indefinite-lived trademark intangible asset.

The further acceleration or extended persistence of the current downturn in the global end markets could have a further negative impact on our business and financial performance. We cannot provide assurance that we will achieve all of the anticipated benefits from restructuring actions we have taken and expect to continue to take. If we are unable to effectively restructure our operations in the light of evolving market conditions, it could have a material adverse effect on our business, financial condition, results of operations and cash flows. We are currently exploring strategic alternatives for a remaining non-core Infrastructure business. The estimated net book value of the business is approximately $40 million as of March 31, 2016. As the strategic direction has not yet been determined for this business, the business is classified as held and used, and the Company cannot determine if additional impairment charges will be incurred.
A summary of the carrying amount of goodwill attributable to each segment, as well as the changes in such, is as follows:
(in thousands)
Industrial

 
Infrastructure

 
Total

Gross goodwill
$
455,371

 
$
640,360

 
$
1,095,731

Accumulated impairment losses
(150,842
)
 
(527,500
)
 
(678,342
)
Balance as of June 30, 2015
$
304,529

 
$
112,860

 
$
417,389

 
 
 
 
 
 
Activity for the nine months ended March 31, 2016:
 
 
 
 
 
Divestiture
(1,075
)
 
(6,461
)
 
(7,536
)
Translation
(1,345
)
 
(688
)
 
(2,033
)
Change in gross goodwill
(2,420
)
 
(7,149
)
 
(9,569
)
Impairment charges
—

 
(105,711
)
 
(105,711
)
 
 
 
 
 
 
Gross goodwill
452,951

 
633,211

 
1,086,162

Accumulated impairment losses
(150,842
)
 
(633,211
)
 
(784,053
)
Balance as of March 31, 2016
$
302,109

 
$
—

 
$
302,109



The components of our other intangible assets were as follows:
 
Estimated
Useful Life
(in years)
 
March 31, 2016
June 30, 2015
(in thousands)
 
Gross Carrying
Amount

 
Accumulated
Amortization

 
 
Gross Carrying
Amount

 
Accumulated
Amortization

Contract-based
3 to 15
 
$
7,183

 
$
(6,736
)
 
 
$
8,523

 
$
(6,990
)
Technology-based and other
4 to 20
 
47,813

 
(26,863
)
 
 
52,820

 
(29,723
)
Customer-related
10 to 21
 
206,464

 
(64,204
)
 
 
275,796

 
(90,141
)
Unpatented technology
10 to 30
 
31,958

 
(4,390
)
 
 
59,449

 
(14,426
)
Trademarks
5 to 20
 
12,750

 
(8,471
)
 
 
18,575

 
(12,090
)
Trademarks
Indefinite
 
17,205

 
—

 
 
24,876

 
—

Total
 
 
$
323,373

 
$
(110,664
)
 
 
$
440,039

 
$
(153,370
)


As previously mentioned, during the nine months ended March 31, 2016, we recorded $2.3 million and $0.4 million of impairment charges in the Industrial and Infrastructure segments, respectively, for indefinite-lived trademark intangible assets as a result of our 2016 interim impairment analysis.

The divestiture of non-core businesses completed during the nine months ended March 31, 2016 resulted in a reduction of $30.0 million in customer-related, $15.4 million in unpatented technology, $5.0 million in indefinite-lived trademarks, $1.1 million in definite-lived trademarks, $0.8 million in technology-based and other and $0.5 million in contract-based.

During the nine months ended March 31, 2015, an impairment of $10.5 million was recorded for a contract-based technology intangible asset that was part of the Infrastructure segment, resulting in a non-cash impairment charge of $5.5 million and a reduction in a liability of $5.0 million. As previously mentioned, we recorded a $8.7 million impairment for an indefinite-lived trademark intangible asset as a result of our impairment test of our Infrastructure segment.

During the nine months ended March 31, 2016 and 2015, we recorded amortization expense of $16.3 million and $20.4 million, respectively, related to our other intangible assets.