Goodwill, Other Identifiable Intangible Assets and Debt Issuance Costs

In accordance with ASC 350, Intangibles - Goodwill and Other Intangible Assets, the Company performs its annual goodwill impairment test at the end of each fiscal year, or whenever indicators of impairment are present. This testing includes the determination of each reporting unit's fair value using a discounted cash flows model compared to each reporting unit's carrying value. The reporting units utilized for goodwill impairment tests are primarily based on geography, one level below the Worldwide Barcode & Security and Worldwide Communications & Services operating segments.

The Company completed its annual impairment test as of June 30 and determined that a goodwill impairment charge was necessary for its Brazilian POS & Barcode and European Communications reporting units. Prior to the test, no interim impairment indicators were identified. The Company's impairment testing included the determination of the reporting unit's fair value using market multiples and discounted cash flows modeling based on recent forecasts which were discounted using a weighted average cost of capital (a level 3 input). The impairment charges were a result of reduced earnings and cash flow forecast primarily due to the general macroeconomic environment and lower expectations of future results. During the fourth quarter of fiscal 2013, the Company recorded a non-cash charge for goodwill impairment of $5.4 million and $15.1 million in Europe Communications and Brazil POS & Barcode, respectively. In addition, the estimated fair value of our Europe POS & Barcode and Latin American goodwill reporting units exceeded their carrying values by smaller margins than the Company's other goodwill reporting units. The estimated fair value of these goodwill reporting units exceeded the carrying value by 7.2% and 9.7%, respectively, in the most recent annual impairment test. The increase in sensitivity to these goodwill reporting units is driven largely by the general macroeconomic environment and lower expectations for future results in the units. Key assumptions used in determining fair value include projected growth and operating margin, working capital requirements and discount rates. While we do not believe that these goodwill reporting units are impaired at this time, if we are not able to achieve projected operating margins within the expected working capital requirements and/or there are unfavorable changes to the discount rate, a future impairment of goodwill is at least reasonably possible.

Changes in the carrying amount of goodwill for the years ended June 30, 2013 and 2012, by reportable segment, are as follows:



	Barcode & Security Segment			Communications & Services Segment			Total
	(in thousands)
Balance as of June 30, 2011	$	37,975		$	21,115		$	59,090
CDC measurement period adjustments	914			—			914
Unrealized gain (loss) on foreign currency translation	(5,881		)	(238		)	(6,119		)
Balance as of June 30, 2012	$	33,008		$	20,877		$	53,885
Impairment charges	(15,143		)	(5,419		)	(20,562		)
Unrealized gain (loss) on foreign currency translation	(1,536		)	8			(1,528		)
Balance as of June 30, 2013	$	16,329		$	15,466		$	31,795

During the fiscal year ended June 30, 2012, the Company's goodwill balances increased due to the finalization of purchase accounting for CDC from measurement period adjustments. For further information regarding CDC purchase accounting adjustments, please see Note 4 - Acquisitions.

The following table shows the Company’s identifiable intangible assets and debt issuance costs as of June 30, 2013 and 2012, respectively. These balances are included on the Consolidated Balance Sheet within other assets:



	June 30, 2013						June 30, 2012
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
	(in thousands)
Amortized intangible assets:
Customer relationships	$	33,166	$	14,191	$	18,975	$	34,483	$	10,864	$	23,619
Trade names	1,941		1,941		—		2,127		1,285		842
Non-compete agreements	888		535		353		938		379		559
Distributor agreements	637		153		484		610		105		505
Total intangibles	36,632		16,820		19,812		38,158		12,633		25,525
Debt issuance costs	2,499		1,312		1,187		2,499		967		1,532
Total	$	39,131	$	18,132	$	20,999	$	40,657	$	13,600	$	27,057

In fiscal 2012, the Company wrote off the gross carrying amount and corresponding accumulated amortization for fully amortized non-compete agreements in the amount of $0.9 million.

The weighted average amortization period for all intangible assets was approximately 10 years for the years ended June 30, 2013, 2012 and 2011. Amortization expense for the years ended June 30, 2013, 2012 and 2011 was $4.9 million, $6.4 million and $3.0 million, respectively.

Estimated future amortization expense is as follows:



	Amortization Expense
	(in thousands)
Year Ended June 30,
2014	$	3,768
2015	3,768
2016	3,742
2017	3,176
2018	1,373
Thereafter	3,985
Total	$	19,812