Goodwill and Intangible Assets

9 Months Ended

Sep. 27, 2015

Goodwill and Intangible Assets Disclosure [Abstract]


(a)	Goodwill

The carrying amounts of goodwill as of December 28, 2014 and September 27, 2015 by reportable segment are as follows (in millions):



	Public Safety & Security		Kratos Government Solutions		Unmanned Systems		Total
Gross value	$	53.9	$	565.8	$	111.1	$	730.8
Less accumulated impairment	18.3		215.3		13.8		247.4
Net	$	35.6	$	350.5	$	97.3	$	483.4

In the second quarter of 2015, as a result of the pending disposition of the Herley Entities, the Company performed a valuation analysis to apportion the carrying value of the goodwill of its Electronic Products reportable unit to the retained microwave electronic products business and the Herley Entities held for sale. Accordingly, the allocation of the carrying value of goodwill to the Herley Entities has been included in non-current assets of discontinued operations in the accompanying condensed consolidated balance sheet as of December 28, 2014. The balance allocated to the microwave electronic products business is included in the assets of the KGS segment.

(b) Purchased Intangible Assets

The following table sets forth information for finite-lived and indefinite-lived intangible assets (in millions):



	As of December 28, 2014							As of September 27, 2015
	Gross Value		Accumulated Amortization			Net Value		Gross Value		Accumulated Amortization			Net Value
Acquired finite-lived intangible assets:
Customer relationships	$	84.1	$	(58.2	)	$	25.9	$	84.1	$	(65.6	)	$	18.5
Contracts and backlog	72.1		(69.4		)	2.7		72.1		(70.0		)	2.1
Developed technology and technical know-how	23.1		(10.9		)	12.2		23.1		(12.7		)	10.4
Trade names	5.3		(4.6		)	0.7		5.3		(4.8		)	0.5
Favorable operating lease	1.8		(0.7		)	1.1		1.8		(0.8		)	1.0
Total finite-lived intangible assets	186.4		(143.8		)	42.6		186.4		(153.9		)	32.5
Acquired indefinite-lived intangible assets:
Trade names	6.9		—			6.9		6.9		—			6.9
Total intangible assets	$	193.3	$	(143.8	)	$	49.5	$	193.3	$	(153.9	)	$	39.4

Consolidated amortization expense related to intangible assets subject to amortization was $14.4 million and $10.1 million for the nine months ended September 28, 2014 and September 27, 2015, respectively.

- 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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