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BUSINESS COMBINATIONS
6 Months Ended
Jul. 03, 2015
Business Combinations [Abstract]  
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS
During the first two quarters of fiscal 2015, the Company acquired seven businesses, all with cash consideration, in its Engineering and Construction, Field Solutions and Mobile Solutions segments. The Condensed Consolidated Statements of Income include the operating results of the businesses from the dates of acquisition. The acquisitions were not significant individually or in the aggregate. The purchase prices ranged from less than $2.0 million to $22.0 million. The largest acquisition was of a company that provides food traceability and quality inspection solutions. In the aggregate, the businesses acquired during the first two quarters of fiscal 2015 collectively contributed less than one percent to the Company's total revenue during the first two quarters of fiscal 2015.
The Company determined the total consideration paid for each of its acquisitions as well as the fair value of the assets acquired and liabilities assumed as of the date of acquisition. For certain acquisitions completed in the last two quarters of fiscal 2014 and the first two quarters of fiscal 2015, the fair value of the assets acquired and liabilities assumed are preliminary and may be adjusted as the Company obtains additional information, primarily related to adjustments for the true up of acquired net working capital in accordance with certain purchase agreements, and estimated values of certain net tangible assets and liabilities including tax balances, pending the completion of final studies and analyses. If there are adjustments made for these items, the fair value of intangible assets and goodwill could be impacted. Thus the provisional measurements of fair value are subject to change. Such changes could be significant. The Company expects to finalize the valuation of the net tangible and intangible assets as soon as practicable, but not later than one-year from the acquisition date.
The fair value of identifiable assets acquired and liabilities assumed were determined under the acquisition method of accounting for business combinations. The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. The fair value of intangible assets acquired is generally determined based on a discounted cash flow analysis. Acquisition costs directly related to the acquisitions, including the changes in the fair value of the contingent consideration liabilities, of $2.8 million and $5.6 million for the second quarter and the first two quarters of fiscal 2015, respectively, and $2.0 million and $3.4 million for the corresponding periods of fiscal 2014, respectively, were expensed as incurred and were included in General and administrative expense in the Condensed Consolidated Statements of Income.
The following table summarizes the Company’s business combinations completed during the first two quarters of fiscal 2015.
 
First Two Quarters of
 
 
2015
 
(Dollars in millions)
 
 
Fair value of total purchase consideration
$
64.1

 
Fair value of net assets acquired
1.1

 
Identifiable intangible assets
31.2

 
Deferred income taxes
(3.2
)
 
Goodwill
$
35.0

 

Intangible Assets
Intangible Assets consisted of the following: 
As of
Second Quarter of Fiscal 2015
 
Fiscal Year End 2014
 
Gross
 
 
 
 
 
Gross
 
 
 
 
 
Carrying
 
Accumulated
 
Net Carrying
 
Carrying
 
Accumulated
 
Net Carrying
(Dollars in millions)
Amount
 
Amortization
 
Amount
 
Amount
 
Amortization
 
Amount
Developed product technology
$
775.6

 
$
(489.0
)
 
$
286.6

 
$
770.4

 
$
(445.4
)
 
$
325.0

Trade names and trademarks
51.2

 
(36.8
)
 
14.4

 
51.2

 
(33.9
)
 
17.3

Customer relationships
441.0

 
(237.9
)
 
203.1

 
455.0

 
(226.8
)
 
228.2

Distribution rights and other intellectual properties
78.9

 
(57.5
)
 
21.4

 
78.5

 
(54.5
)
 
24.0

 
$
1,346.7

 
$
(821.2
)
 
$
525.5

 
$
1,355.1

 
$
(760.6
)
 
$
594.5


The estimated future amortization expense of purchased intangible assets as of the end of the second quarter of fiscal 2015 was as follows:
 
(Dollars in millions)
 
2015 (Remaining)
$
80.1

2016
144.7

2017
121.7

2018
92.8

2019
50.9

Thereafter
35.3

Total
$
525.5


Goodwill
The changes in the carrying amount of goodwill by segment for the first two quarters of fiscal 2015 were as follows:
 
 
Engineering
and
Construction
 
Field
Solutions
 
Mobile
Solutions
 
Advanced
Devices
 
Total
(Dollars in millions)
 
 
 
 
 
 
 
 
 
Balance as of fiscal year end 2014
$
1,186.0

 
$
96.0

 
$
796.0

 
$
23.2

 
$
2,101.2

Additions due to acquisitions
12.0

 
11.1

 
11.9

 

 
35.0

Purchase price adjustments
(0.1
)
 
1.6

 
(0.7
)
 

 
0.8

Foreign currency translation adjustments
(29.9
)
 
(2.5
)
 
(2.5
)
 
(1.0
)
 
(35.9
)
Divestiture
(13.7
)
 

 

 

 
(13.7
)
Balance as of the end of the second quarter of fiscal 2015
$
1,154.3

 
$
106.2

 
$
804.7

 
$
22.2

 
$
2,087.4