Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2013

NOTE 7. Goodwill and Other Intangible Assets

Goodwill and other intangible assets, net, consisted of $125,428,000 of goodwill and $102,461,000 of intangible assets, net of accumulated amortization, as of September 30, 2013.

Additions to goodwill and other intangible assets in the first nine months of 2013 relate to the acquisition of A.M. Holding S.A.S., which operates under the name Aixam Mega S.A.S. ("Aixam"), on April 10, 2013. During the 2013 third quarter, certain adjustments were made to the opening balance sheet allocation. These adjustments did not result in a change to any previously reported consolidated income statements.

Aixam manufactures and sells enclosed on-road quadricycles and light duty commercial vehicles. The acquisition strengthens Polaris' SV portfolio and enhances the profitability and growth potential of Polaris in Europe. Aixam's financial results are included in the Company’s consolidated results from the date of acquisition. Pro forma financial results are not presented as the acquisition is not material to the consolidated financial statements. The acquisition of Aixam for $141,189,000, which was funded with cash on hand, was allocated on a preliminary basis to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Net of cash acquired, the Aixam purchase price was $134,817,000. As of September 30, 2013, the purchase price allocation for Aixam remains preliminary as it relates to taxes.

The changes in the carrying amount of goodwill for the nine months ended September 30, 2013 were as follows (in thousands):



	Nine months ended September 30, 2013
Balance as of beginning of period	$	56,324
Goodwill acquired during the period	66,085
Currency translation effect on foreign goodwill balances	3,019
Balance as of end of period	$	125,428

For other intangible assets, the changes in the net carrying amount for the nine months ended September 30, 2013 were as follows (in thousands):



	Nine months ended September 30, 2013
	Gross Amount		Accumulated Amortization
Other intangible assets, beginning	$	54,907	$	(4,015	)
Intangible assets acquired during the period	55,327		—
Amortization expense	—		(6,379		)
Foreign currency translation effect on balances	2,647		(26		)
Other intangible assets, ending	$	112,881	$	(10,420	)

The components of other intangible assets were as follows (in thousands):



	Total estimated life (years)	September 30, 2013			December 31, 2012
Non-amortizable - indefinite lived:
Brand names		$	40,921		$	26,691
Amortized:
Non-compete agreements	5	540			540
Dealer/customer related	7	58,381			14,702
Developed technology	5-7	13,039			12,974
Total amortizable		71,960			28,216
Less: Accumulated amortization		(10,420		)	(4,015		)
Net amortized other intangible assets		61,540			24,201
Total other intangible assets, net		$	102,461		$	50,892

Amortization expense for intangible assets for the three months ended September 30, 2013 was $2,727,000. Estimated amortization expense for the remainder of 2013 through 2018 is as follows: 2013 (remainder), $2,618,000; 2014, $10,471,000; 2015, $10,471,000; 2016, $10,447,000; 2017, $10,131,000; 2018, $8,651,000; and after 2018, $8,751,000. The preceding expected amortization expense is an estimate and actual amounts could differ due to additional intangible asset acquisitions, changes in foreign currency rates or impairment of intangible assets.

- 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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