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Goodwill and Intangibles

12 Months Ended

Sep. 30, 2012

5. Goodwill and Intangibles

The following table summarizes the changes in the carrying value of goodwill:

	ECS			TSS		EAS			RCM			Total

	(in thousands)

Balance at October 3, 2010	$	244,616		$	68,661	$	17,210		$	63,935		$	394,422
Goodwill additions		149,193			11,469		–			–			160,662
Currency translation adjustments		(3,486	)		–		–			–			(3,486	)
Goodwill adjustments		15,355			1,961		500			–			17,816

Balance at October 2, 2011		405,678			82,091		17,710			63,935			569,414
Inter-segment transfers		(29,338	)		45,435		–			(16,097	)		–
Goodwill additions		5,245			31,201		–			1,945			38,391
Currency translation adjustments		18,910			–		–			–			18,910
Goodwill adjustments		10,122			35		–			–			10,157
Goodwill impairment		–			–		(914	)		–			(914	)

Balance at September 30, 2012	$	410,617		$	158,762	$	16,796		$	49,783		$	635,958

Goodwill additions are attributable to acquisitions described in Note 4, "Mergers and Acquisitions," for the respective fiscal years. Substantially all of the goodwill additions are not deductible for income tax purposes. Currency translation adjustments related to our foreign subsidiaries with functional currencies that are different than our reporting currency. Goodwill adjustments resulted primarily from earn-out payments and accruals associated with acquisitions consummated prior to fiscal 2010, which are accounted for as goodwill adjustments under previous accounting rules. Inter-segment transfers related to the realignment of certain operating activities in our reportable segments in the first quarter of fiscal 2012. For more information regarding the fiscal 2012 realignment, see Note 17, "Reportable Segments." A goodwill impairment charge of $0.9 million was recognized in the fourth quarter of fiscal 2012 for a reporting unit in the EAS segment. This reporting unit reported lower than planned operating income during the fourth quarter of fiscal 2012, and projected future operating losses and negative cash flows. The impairment represented all of the goodwill for this reporting unit.

Gross amount of goodwill for the EAS segment was $122.7 million for both fiscal 2012 and 2011 year-ends. We recorded impairment charges of $105.0 million in fiscal 2005 and $0.9 million in fiscal 2012. Accordingly, accumulated impairment losses for this segment were $105.9 million and $105.0 million for September 30, 2012 and October 2, 2011, respectively. There were no impairment charges in the other reportable segments.

The gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in "Intangible assets – net" on the consolidated balance sheets, were as follows:

	Fiscal Year Ended

	September 30, 2012							October 2, 2011
	Weighted- Average Remaining Life (in years)		Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization
	($ in thousands)

Non-compete agreements		1.3	$	5,467	$	(4,685	)	$	5,175	$	(3,430	)
Client relations		5.6		99,096		(31,477	)		81,619		(17,951	)
Backlog		1.1		59,931		(55,908	)		52,938		(39,452	)
Technology and trade names		3.8		3,034		(1,227	)		2,684		(530	)

Total			$	167,528	$	(93,297	)	$	142,416	$	(61,363	)

In fiscal 2012, the increases in gross amounts are attributable to the fiscal 2012 acquisitions described in Note 4, "Mergers and Acquisitions" and, to a lesser extent, foreign currency translation adjustments. Amortization expense for these intangible assets for fiscal 2012, 2011 and 2010 was $29.6 million, $28.0 million and $12.7 million, respectively. Estimated amortization expense for the succeeding five years and beyond is as follows:

	Amount

	(in thousands)

2013	$	17,834
2014		14,272
2015		13,229
2016		11,617
2017		9,563
Beyond		7,716

Total	$	74,231

- 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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