BUSINESS COMBINATIONS

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

During the first three quarters of fiscal 2016, the Company acquired three businesses, with total cash consideration of $13.6 million, all in its Engineering and Construction segment. 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 largest acquisition was a cloud-based software developer for the design of sustainable and high-performance buildings, based in London and New York. In the aggregate, the businesses acquired during the first three quarters of fiscal 2016 contributed less than one percent to the Company's total revenue during the first three quarters of fiscal 2016.

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 quarter of fiscal 2015 and the first three quarters of fiscal 2016, 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, along with the changes in the fair value of the contingent consideration liabilities, of $0.9 million and $3.4 million for the third quarter and the first three quarters of fiscal 2016, respectively, and $2.7 million and $9.8 million for the corresponding periods of fiscal 2015, 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 three quarters of fiscal 2016.

	First Three Quarters of
	2016
(Dollars in millions)
Fair value of total purchase consideration	$	13.6
Less fair value of net assets acquired:
Net tangible liabilities assumed	(1.9		)
Identifiable intangible assets	6.5
Goodwill	$	9.0

Intangible Assets

The following table presents details of the Company’s total intangible assets:

As of	Third Quarter of Fiscal 2016							Fiscal Year End 2015
	Gross							Gross
	Carrying		Accumulated			Net Carrying		Carrying		Accumulated			Net Carrying
(Dollars in millions)	Amount		Amortization			Amount		Amount		Amortization			Amount
Developed product technology	$	810.6	$	(615.2	)	$	195.4	$	802.1	$	(536.0	)	$	266.1
Trade names and trademarks	51.6		(42.4		)	9.2		52.8		(39.8		)	13.0
Customer relationships	447.0		(289.0		)	158.0		448.1		(258.0		)	190.1
Distribution rights and other intellectual properties	65.6		(57.1		)	8.5		78.6		(60.7		)	17.9
	$	1,374.8	$	(1,003.7	)	$	371.1	$	1,381.6	$	(894.5	)	$	487.1

The estimated future amortization expense of purchased intangible assets as of the end of the third quarter of fiscal 2016 was as follows:

(Dollars in millions)
2016 (Remaining)	$	35.1
2017	128.4
2018	100.3
2019	59.8
2020	31.4
Thereafter	16.1
Total	$	371.1

Goodwill

The changes in the carrying amount of goodwill by segment for the first three quarters of fiscal 2016 were as follows:

	Engineering and Construction			Field Solutions		Mobile Solutions			Advanced Devices		Total
(Dollars in millions)
Balance as of fiscal year end 2015	$	1,140.1		$	125.7	$	820.7		$	19.9	$	2,106.4
Additions due to acquisitions and current year acquisitions' purchase price adjustments	9.0			—		—			—		9.0
Purchase price adjustments- prior years' acquisitions and others	(1.2		)	0.1		0.1			—		(1.0		)
Foreign currency translation adjustments	1.4			0.8		0.6			0.5		3.3
Divestitures	—			—		(6.6		)	—		(6.6		)
Balance as of the end of the third quarter of fiscal 2016	$	1,149.3		$	126.6	$	814.8		$	20.4	$	2,111.1

In the first three quarters of 2016, the Company sold the Omega Group assets and Advanced Public Safety (APS) business. Both businesses provided software solutions for public safety agencies and were part of the Company’s Mobile Solutions segment. The sales resulted in a $4.9 million gain in the first three quarters of fiscal 2016, and that was included in Other income, net on the Company's Condensed Consolidated Statements of Income.