Goodwill and Other Intangible Assets

9 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

December Quarter of Fiscal 2020 Impairment Charge

In the December quarter of fiscal 2020, the Company experienced deteriorating market conditions, primarily in general engineering and transportation applications in India and China, in addition to overall global weakness in the manufacturing sector. In view of these declining conditions and the significant detrimental effect on cash flows and actual and projected revenue and earnings compared with the prior annual impairment test, we determined that an impairment triggering event had occurred and performed an interim quantitative impairment test of our goodwill, indefinite-lived trademark intangible asset and other long-lived assets of our former Widia reporting unit. We evaluated the recoverability of goodwill for the reporting unit by comparing its carrying value with the fair values determined using a combination of a discounted cash flow analysis and market multiples based upon historical and projected financial information. As a result of this test, we recorded a non-cash pre-tax impairment charge during the three months ended December 31, 2019 of $14.6 million in the former Widia segment, which is now part of the Metal Cutting segment as of July 1, 2020, of which $13.1 million was for goodwill and $1.5 million was 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.

March Quarter of Fiscal 2020 March Impairment Charge

In the March quarter of fiscal 2020, the decline in actual and projected financial results for the Widia reporting unit, primarily as a result of the COVID-19 pandemic, represented an interim impairment triggering event because there was essentially zero cushion between the reporting unit's carrying value and fair value as of March 31, 2020. As a result, we performed an interim quantitative impairment test of goodwill and the indefinite-lived trademark intangible asset for the Widia reporting unit. We evaluated the recoverability of goodwill for the reporting unit by comparing the fair value with its carrying value, with the fair values determined using a combination of a discounted cash flow analysis and market multiples based upon historical and projected financial information. As a result of this interim test, we recorded a non-cash pre-tax impairment charge during the three months ended March 31, 2020 of $15.6 million in the Widia segment, of which $13.7 million was for goodwill and $1.9 million was for an indefinite-lived trademark intangible asset. These impairment charges were recorded in restructuring and asset impairment charges in our condensed consolidated statements of income. No impairment was recorded for the other Widia long-lived assets. Subsequent to the impairment charges recorded in the March quarter of fiscal 2020, there is no remaining goodwill for the Widia reporting unit and the carrying value of the indefinite-lived trademark at March 31, 2021 is $11.7 million.

Divestiture Impact on Other Intangible Assets

During the three months ended December 31, 2019, we completed the sale of certain assets of the non-core specialty alloys and metals business within the Infrastructure segment, see Note 3. As a result of this transaction, other intangibles decreased by $12.5 million in our Infrastructure segment. This decrease was recorded in the loss on divestiture account in our condensed consolidated statements of income.

A summary of the carrying amount of goodwill attributable to each segment, as well as the changes in such carrying amounts, is as follows:


(in thousands)	Metal Cutting		Infrastructure		Total
Gross goodwill	$	448,241	$	633,211	$	1,081,452
Accumulated impairment losses	(177,661)		(633,211)		(810,872)
Balance as of June 30, 2020	$	270,580	$	—	$	270,580

Activity for the nine months ended March 31, 2021:
Change in gross goodwill due to translation	5,468		—		5,468



Gross goodwill	453,709		633,211		1,086,920
Accumulated impairment losses	(177,661)		(633,211)		(810,872)
Balance as of March 31, 2021	$	276,048	$	—	$	276,048

The components of our other intangible assets were as follows:


	Estimated Useful Life (in years)	March 31, 2021				June 30, 2020
(in thousands)		Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization

Technology-based and other	4 to 20	$	33,373	$	(23,977)		$	32,713	$	(22,612)
Customer-related	10 to 21	182,840		(95,662)			181,408		(88,112)
Unpatented technology	10 to 30	31,896		(19,918)			31,586		(17,890)
Trademarks	5 to 20	13,229		(9,763)			13,087		(8,772)
Trademarks	Indefinite	11,669		—			11,160		—
Total		$	273,007	$	(149,320)		$	269,954	$	(137,386)