Goodwill and Other Intangible Assets

12 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

The Company performed its most recent annual goodwill impairment review as of April 25, 2014, and noted the fair value of each of the Company's reporting units with goodwill substantially exceeded its carrying value, and therefore, no further analysis was required. As of June 30, 2014, the Company had $31,679 of goodwill. The Company does not believe there were any events or changes in circumstances since its April 2014 annual assessment that would indicate the fair value of goodwill was more likely than not reduced to below its carrying value. In making this assessment, the Company relied on a number of factors including operating results, business plans, anticipated future cash flows, transactions and market data.

In performing the fiscal year 2014 and 2013 goodwill assessments, the Company utilized valuation methods, including the discounted cash flow method, the guideline company approach, and the guideline transaction approach as the best evidence of fair value. The weighting of the valuation methods used by the Company in both fiscal 2014 and 2013 was 50% discounted cash flows, 40% guideline company approach and 10% guideline transaction approach.

The key estimates and factors used in the income approach include, but are not limited to, revenue growth rates and profit margins based on internal forecasts, terminal value and the weighted-average cost of capital used to discount future cash flows. The key uncertainty in the revenue growth assumption used in the estimation of the fair value of the Energy operating segment reporting unit is the level of investment electric utilities will make to modernize, expand, and enhance the electric transmission grid over the next several years. The key uncertainty in the revenue growth assumption used in the estimation of the fair value of the Environmental operating segment reporting units is the projected increase in capital spending on oil and gas pipelines, energy exploration and distribution projects, new power and generation sources, and increased environmental management strategies to comply with recent regulatory rule-making.

Virtually all of the assumptions used in the Company's models are susceptible to change due to national and regional economic conditions as well as competitive factors in the industry in which the Company operates. The forecasted cash flows the Company uses are derived from the annual long-range planning process that it performs and presents to its Board of Directors. In this process, each reporting unit is required to develop reasonable sales, earnings and cash flow forecasts for the next three years based on current and forecasted economic conditions. For purposes of testing for impairment, the cash flow forecasts are adjusted as needed to reflect information that becomes available concerning changes in business levels and general economic trends. The discount rates used for determining discounted future cash flows are generally based on our weighted-average cost of capital and are then adjusted for "plan risk" (the risk that a business will fail to achieve its forecasted results). Finally, a growth factor beyond the three year period for which cash flows are planned is selected based on expectations of future economic conditions. While the Company believes the estimates and assumptions it uses are reasonable, various economic factors could cause the results of its goodwill testing to vary significantly.

The changes in the carrying amount of goodwill for fiscal year 2014 by operating segment are as follows:



	Gross									Gross
	Balance,		Accumulated			Balance,				Balance,		Accumulated			Balance,
	July 1,		Impairment			July 1,				June 30,		Impairment			June 30,
Operating Segment	2013		Losses			2013		Additions		2014		Losses			2014
Energy	$	24,954	$	(14,506	)	$	10,448	$	2,882	$	27,836	$	(14,506	)	$	13,330
Environmental	36,214		(17,865		)	18,349		—		36,214		(17,865		)	18,349
Infrastructure	7,224		(7,224		)	—		—		7,224		(7,224		)	—
	$	68,392	$	(39,595	)	$	28,797	$	2,882	$	71,274	$	(39,595	)	$	31,679

The changes in the carrying amount of goodwill for fiscal year 2013 by operating segment are as follows:



	Gross									Gross
	Balance,		Accumulated			Balance,				Balance,		Accumulated			Balance,
	July 1,		Impairment			July 1,				June 30,		Impairment			June 30,
Operating Segment	2012		Losses			2012		Additions		2013		Losses			2013
Energy	$	21,893	$	(14,506	)	$	7,387	$	3,061	$	24,954	$	(14,506	)	$	10,448
Environmental	35,366		(17,865		)	17,501		848		36,214		(17,865		)	18,349
Infrastructure	7,224		(7,224		)	—		—		7,224		(7,224		)	—
	$	64,483	$	(39,595	)	$	24,888	$	3,909	$	68,392	$	(39,595	)	$	28,797

Identifiable intangible assets as of June 30, 2014 and 2013 are included in other assets on the consolidated balance sheets and were comprised of:



	June 30, 2014							June 30, 2013
	Gross					Net		Gross					Net
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
Identifiable intangible assets	Amount		Amortization			Amount		Amount		Amortization			Amount
With determinable lives:
Customer relationships	$	12,125	$	(4,400	)	$	7,725	$	9,349	$	(1,711	)	$	7,638
Contract backlog	110		(83		)	27		259		(194		)	65
	12,235		(4,483		)	7,752		9,608		(1,905		)	7,703

With indefinite lives:
Engineering licenses	426		—			426		426		—			426
	$	12,661	$	(4,483	)	$	8,178	$	10,034	$	(1,905	)	$	8,129

Identifiable intangible assets with determinable lives are amortized over their estimated useful lives and are also reviewed for impairment if events or changes in circumstances indicate that their carrying amount may not be realizable.

Identifiable intangible assets with determinable lives are being amortized over a weighted-average period of approximately 6 years. The weighted-average periods of amortization by intangible asset class is approximately 7 years for customer relationship assets and 8 months for contract backlog. The amortization of intangible assets for fiscal years 2014, 2013 and 2012 were $2,868, $1,594 and $690, respectively.

Estimated amortization expense of intangible assets for future periods is as follows:



Fiscal Year		Amount
2015		$	2,483
2016		1,998
2017		1,564
2018		1,112
2019		476
2020 and thereafter		119
	Total	$	7,752

On an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired, the fair value of the indefinite-lived intangible assets is evaluated by the Company to determine if an impairment charge is required. The Company performed its most recent annual impairment review as of April 25, 2014. As of the assessment date there was no impairment of the indefinite-lived intangible assets. There were no events or changes in circumstances that would indicate the fair value of indefinite-lived intangible assets was reduced to below its carrying value since the assessment date.

- 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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