Goodwill And Other Intangible Assets

9 Months Ended

Apr. 30, 2012

Goodwill And Other Intangible Assets [Abstract]

9.	Goodwill and Other Intangible Assets

The components of amortizable intangible assets are as follows:


	Weighted Average		April 30, 2012				July 31, 2011
	Remaining Life				Accumulated				Accumulated
	in Years		Cost		Amortization		Cost		Amortization
Dealer networks		11	$	72,230	$	11,561	$	72,230	$	6,154
Non-compete agreements		4		6,321		3,465		6,851		3,300
Trademarks		23		36,775		2,142		36,669		1,008
Design technology and other intangibles		13		21,300		2,476		22,260		2,293

Total amortizable intangible assets			$	136,626	$	19,644	$	138,010	$	12,755

Dealer networks are primarily being amortized on an accelerated cash flow basis. Non-compete agreements, trademarks and design technology and other intangibles are amortized on a straight-line basis.

Prior to the Heartland acquisition, the Company had deemed its various trademarks to have indefinite lives and therefore not subject to amortization. However, in assessing the trademarks obtained in the Heartland acquisition, the Company determined that, with the cyclicality in the RV industry and the extent of competition in the industry, it was more appropriate to consider those trademarks as definite-lived assets with 25 year useful lives. The Company also re-assessed its other trademarks and, effective on May 1, 2011, re-characterized all of its trademarks as definite-lived assets with useful lives of 20-25 years based on its assessment of the factors listed above in regards to the specific trademarks. Accordingly, all trademarks are now subject to amortization.

Estimated annual amortization expense is as follows:


For the fiscal year ending July 2012	$	11,133
For the fiscal year ending July 2013	$	10,944
For the fiscal year ending July 2014	$	10,676
For the fiscal year ending July 2015	$	10,318
For the fiscal year ending July 2016	$	9,262
For the fiscal year ending July 2017 and thereafter	$	73,028

The change in carrying value in goodwill from July 31, 2011 to April 30, 2012 is as follows:


	Goodwill
Balance at July 31, 2011	$	244,452
Adjustments to Heartland acquisition goodwill in towables reportable segment		757

Balance at April 30, 2012	$	245,209

All but $7,106 (buses segment) of the goodwill resides in the towable recreation vehicles segment.

Goodwill is not subject to amortization, but instead is reviewed for impairment by applying a fair-value based test to the Company's reporting units on an annual basis as of April 30, or more frequently if events or circumstances indicate a potential impairment. Thor's reporting units are the same as its operating segments, which are identified in Note 6.

Fair values are determined by a discounted cash flow model and a market approach, when appropriate. These estimates are subject to significant management judgment including the determination of many factors such as sales growth rates, gross margin patterns, cost growth rates, comparable companies, terminal value assumptions and discount rates and therefore largely represent Level 3 inputs as defined by ASC 820. Changes in these estimates can have a significant impact on the determination of cash flows and fair value and could potentially result in future material impairments. Management engages an independent valuation firm in many cases to assist in its impairment assessments. The Company completed its impairment review as of April 30, 2012 and no impairment of goodwill was identified.

The Company completed an annual review as of April 30, 2011 that resulted in a non-cash trademark impairment of $1,430 associated with an operating subsidiary in the Company's bus segment. This impairment resulted from lower anticipated sales than previously expected. The fair value of the trademark was determined using Level 3 inputs as defined by ASC 820.

During the first quarter of fiscal year 2011, the Company decided to combine its Damon and Four Winds motorized operations to form Thor Motor Coach to optimize operations and garner cost efficiencies. As a result, trademarks associated with one of the former operating companies ceased to be used. Intangible assets were reviewed at that time for a potential impairment and the related trademark values of $2,036 were written off. The fair value of the trademarks was determined using Level 3 inputs as defined by ASC 820.

- 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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