Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets (Notes)

12 Months Ended

Jul. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill by reportable segment for the years ended July 31, 2015 and 2014, were as follows:



	IDS			WPS			Total
Balance as of July 31, 2013	$	517,029		$	100,207		$	617,236
Impairment charge	(100,412		)	—			(100,412		)
Purchase accounting adjustments	(2,168		)	—			(2,168		)
Translation adjustments	(2,160		)	2,508			348
Balance as of July 31, 2014	$	412,289		$	102,715		$	515,004
Impairment charge	—			(37,112		)	(37,112		)
Translation adjustments	(29,503		)	(15,190		)	(44,693		)
Balance as of July 31, 2015	$	382,786		$	50,413		$	433,199

Goodwill decreased by $81,805 during fiscal 2015. The decline in the balance consisted of an impairment charge of $37,112 recognized on the Company's WPS Americas and WPS APAC reporting units and foreign currency translation of $44,693.

Goodwill at July 31, 2015 included $118,637 and $209,392 of accumulated impairment losses within the IDS and WPS segments, respectively, for a total of $328,029. Goodwill at July 31, 2014 included $118,637 and $172,280 of accumulated impairment losses within the IDS and WPS segments, respectively, for a total of $290,917.

The annual impairment testing performed on May 1, 2015, in accordance with ASC 350, “Intangibles - Goodwill and Other” (“Step One”) indicated that each of the following reporting units had a fair value substantially in excess of its carrying value: IDS Americas & Europe, PeopleID, and WPS Europe. The results of the Step One analysis completed over the Company's WPS Americas and WPS APAC reporting units indicated that they were potentially impaired.

WPS APAC Goodwill Impairment

The WPS APAC reporting unit consists entirely of the Company's business located in Australia. Organic sales declined in the mid-single digits in fiscal 2015 primarily due to a decline in the mining production and manufacturing industries. As a result of the decline in sales and challenging economic conditions, the WPS APAC reporting unit's segment profit declined by nearly 30% in fiscal 2015.

Management believes that the digital investments and current strategy will result in sales growth and improved profitability over the long-term, however, improved financial performance in this reporting unit may take several years. As a result, management incorporated the decline in fiscal 2015 sales and profitability as well as current economic forecasts for the business' end user markets in Australia when performing the annual goodwill impairment analysis. Management used the discounted cash flow model and market multiples model in order to complete Step One of the analysis in accordance with ASC 350 - Intangibles - Goodwill and Other, and concluded that the WPS APAC reporting unit failed, as the resulting fair value was less than the carrying value of the reporting unit.

Management proceeded to measure the amount of the potential impairment ("Step Two") by determining the implied fair value of the goodwill compared to the carrying value. Management allocated the fair value of the WPS APAC reporting unit to its assets and liabilities as if the reporting unit had been acquired in a business combination. There was no excess fair value of the reporting unit over the fair value of its identifiable assets and liabilities, which resulted in the entire goodwill balance of $26,246 being impaired in fiscal 2015.

WPS Americas Goodwill Impairment

Organic sales within the WPS Americas reporting unit declined in fiscal 2015 as compared to fiscal 2014. The business has improved many of its digital capabilities over the past two years; however, sales through the traditional catalog model have decreased at a greater rate than expected, and digital sales have not been sufficient to offset the decline in sales through catalogs. As a result of the decline in sales and the increased investment in digital capabilities, WPS Americas' segment profit declined by nearly 17% in fiscal 2015.

Management believes that the digital investments and current strategy will result in sales growth and improved profitability over the long-term; however, improved financial performance is expected to take time. As a result, management incorporated the decline in fiscal 2015 sales and profitability and the risk in achieving modest sales growth in future years when performing the annual goodwill impairment analysis. Management used the discounted cash flow model and market multiples model in order to complete Step One of the analysis in accordance with ASC 350 - Intangibles - Goodwill and Other, and concluded that the WPS Americas reporting unit failed, as the resulting fair value was less than the carrying value of the reporting unit.

Management proceeded to measure the amount of the potential impairment ("Step Two") by determining the implied fair value of the goodwill compared to the carrying value. Management allocated the fair value of the WPS Americas reporting unit to its assets and liabilities as if the reporting unit had been acquired in a business combination. There was no excess fair value of the reporting unit over the fair value of its identifiable assets and liabilities, which resulted in the remainder of the goodwill of $10,866 being impaired in fiscal 2015.

Other Intangible Assets

Other intangible assets include patents, tradenames, customer relationships, non-compete agreements and other intangible assets with finite lives being amortized in accordance with the accounting guidance for other intangible assets. The net book value of these assets was as follows:



	July 31, 2015								July 31, 2014
	Weighted Average Amortization Period (Years)	Gross Carrying Amount		Accumulated Amortization			Net Book Value		Weighted Average Amortization Period (Years)	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Amortized other intangible assets:
Patents	5	$	12,073	$	(10,641	)	$	1,432	5	$	11,656	$	(10,160	)	$	1,496
Tradenames and other	5	14,375		(12,471		)	1,904		5	15,366		(10,706		)	4,660
Customer relationships	7	136,693		(94,537		)	42,156		7	168,525		(114,363		)	54,162
Non-compete agreements and other	4	9,076		(9,032		)	44		4	10,089		(9,622		)	467
Unamortized other intangible assets:
Tradenames	N/A	23,352		—			23,352		N/A	30,229		—			30,229
Total		$	195,569	$	(126,681	)	$	68,888		$	235,865	$	(144,851	)	$	91,014

The value of goodwill and other intangible assets in the Consolidated Balance Sheets at July 31, 2015 and 2014, differs from the value assigned to them in the original allocation of purchase due to the effect of fluctuations in foreign exchange rates. Other intangible assets consisting of tradenames and customer relationships primarily associated with the WPS APAC and WPS Americas reporting units were written down to fair value. As a result, the Company recognized impairment charges of $6,651 during fiscal 2015.

Amortization expense on intangible assets during fiscal 2015, 2014, and 2013 was $12,103, $17,871 and $17,148, respectively. The amortization over each of the next five fiscal years is projected to be $8,843, $7,155, $6,464, $6,190 and $5,461 for the fiscal years ending July 31, 2016, 2017, 2018, 2019 and 2020, 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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