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Goodwill And Other Intangible Assets
12 Months Ended
Jul. 31, 2011
Goodwill And Other Intangible Assets  
Goodwill And Other Intangible Assets

NOTE B Goodwill and Other Intangible Assets

          The Company has allocated goodwill to its Industrial Products and Engine Products segments. As of August 1, 2010, as a result of an internal reorganization, the Company transferred Industrial Hydraulics, a component of its Industrial Filtration Solutions Products within the Industrial Products segment to Aftermarket Products within the Engine Products segment, along with the goodwill associated with this component. Disposition of goodwill during Fiscal 2011 relates to the sale of the Company's Ultracool chiller business, based in Terrassa, Spain, for $3.6 million, which resulted in a gain on sale of $0.4 million in the second quarter. The Ultracool chiller business manufactured industrial circulation chillers and was part of the Company's Industrial Products segment. There was no acquisition or disposition activity during Fiscal 2010. The Company completed its annual impairment assessments in the third quarters of Fiscal 2011 and 2010. The results of this assessment showed that the fair values of the reporting units to which goodwill is assigned continue to exceed the book values of the respective reporting units, resulting in no goodwill impairment.

          Following is a reconciliation of goodwill for the years ended July 31, 2011 and 2010:

 

 

 

 

 

 

 

 

 

 

 

 

 

Engine
Products

 

Industrial
Products

 

Total Goodwill

 

 

 

(thousands of dollars)

 

Balance as of July 31, 2009

 

$

61,582

 

$

107,445

 

$

169,027

 

Foreign exchange translation

 

 

(668

)

 

(3,044

)

 

(3,712

)

Balance as of July 31, 2010

 

$

60,914

 

$

104,401

 

$

165,315

 

Goodwill transferred

 

 

11,258

 

 

(11,258

)

 

 

Disposition activity

 

 

 

 

(325

)

 

(325

)

Foreign exchange translation

 

 

794

 

 

5,957

 

 

6,751

 

Balance as of July 31, 2011

 

$

72,966

 

$

98,775

 

$

171,741

 

          Intangible assets are comprised of patents, trademarks, and Customer relationships and lists. Following is a reconciliation of intangible assets for the years ended July 31, 2011 and 2010:

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross
Carrying
Amount

 

Accumulated
Amortization

 

Net
Intangible
Assets

 

 

 

(thousands of dollars)

 

Balance as of July 31, 2009

 

$

85,809

 

$

(20,423

)

$

65,386

 

Amortization expense

 

 

 

 

(6,007

)

 

(6,007

)

Foreign exchange translation

 

 

(2,322

)

 

1,235

 

 

(1,087

)

Balance as of July 31, 2010

 

$

83,487

 

$

(25,195

)

$

58,292

 

Amortization expense

 

 

 

 

(5,917

)

 

(5,917

)

Foreign exchange translation

 

 

1,952

 

 

(831

)

 

1,121

 

Balance as of July 31, 2011

 

$

85,439

 

$

(31,943

)

$

53,496

 

          Net intangible assets consist of patents, trademarks and trade names of $20.0 million and $20.5 million as of July 31, 2011 and 2010, respectively, and Customer related intangibles of $33.5 million and $37.8 million as of July 31, 2011 and 2010, respectively. Expected amortization expense relating to existing intangible assets is as follows (in thousands):

 

 

 

 

 

 

Fiscal Year

 

 

 

 

 

2012

 

 

$

5,863

 

2013

 

 

$

5,700

 

2014

 

 

$

5,327

 

2015

 

 

$

5,221

 

2016

 

 

$

5,206