Goodwill and long-lived assets

9 Months Ended

Apr. 01, 2017

4. Goodwill and long-lived assets

Goodwill

The following table presents the change in goodwill since the end of fiscal 2016. All of the accumulated impairment was recognized in fiscal 2009.


	Avnet
	(Thousands)
Gross goodwill	$	1,666,962
Accumulated impairment		(1,045,110)
Carrying value at July 2, 2016		621,852
Acquisitions		509,631
Adjustments		—
Foreign currency translation		9,495
Carrying value at April 1, 2017	$	1,140,978
Gross goodwill	$	2,186,088
Accumulated impairment		(1,045,110)
Carrying value at April 1, 2017	$	1,140,978

Intangible Assets

The following table presents the Company’s acquired intangible assets at April 1, 2017, and July 2, 2016, respectively.


	April 1, 2017						July 2, 2016
	Acquired		Accumulated		Net Book		Acquired		Accumulated		Net Book
	Amount		Amortization		Value		Amount		Amortization		Value
	(Thousands)
Customer related	$	267,326	$	(61,858)	$	205,468	$	47,980	$	(34,515)	$	13,465
Trade name		45,005		(4,516)		40,489		3,746		(2,718)		1,028
Technology and other		48,058		(8,625)		39,433		12,356		(4,278)		8,078
	$	360,389	$	(74,999)	$	285,390	$	64,082	$	(41,511)	$	22,571

Intangible asset amortization expense from continuing operations was $22.4 million and $1.9 million for the third quarters of fiscal 2017 and 2016, respectively, and $34.2 million and $5.9 million for the first nine months of fiscal 2017 and 2016, respectively. Intangible assets have a weighted average remaining useful life of approximately 4 years. The following table presents the estimated future amortization expense for the remainder of fiscal 2017, the next five fiscal years and thereafter (in thousands):


Fiscal Year
Remainder of fiscal 2017		20,089
2018		74,215
2019		72,865
2020		71,145
2021		33,685
2022		10,197
Thereafter		3,194
Total	$	285,390

During the fourth quarter of fiscal 2017, the Company decided to implement a new global Enterprise Resource Planning (“ERP”). As a result of this decision, the estimated useful life of its ERP system in the Americas, which had a carrying value of approximately $170 million as of April 1, 2017, has been reduced to its estimated remaining useful life of 24 months.

- 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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