Enerpac Tool Group Corp. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

12 Months Ended

Aug. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. Goodwill is not subject to amortization and is tested for impairment annually or more frequently if events or changes in circumstances indicate that the assets might be impaired. Impairment tests are performed by the Company annually in the fourth quarter of each fiscal year. Total cumulative goodwill impairment charges for continuing operations were $22.2 million at August 31, 2013 and 2012. The changes in the carrying amount of goodwill for the years ended August 31, 2013 and 2012 are as follows (in thousands):



	Industrial			Energy			Electrical			Engineered Solutions			Total
Balance as of August 31, 2011	$	85,409		$	252,285		$	260,777		$	289,995		$	888,466
Businesses acquired	—			14,101			—			26,188			40,289
Purchase accounting adjustments	—			—			(3,995		)	715			(3,280		)
Impairment charge	—			—			(36,557		)	—			(36,557		)
Impact of changes in foreign currency rates	(4,005		)	(6,865		)	(6,355		)	(5,281		)	(22,506		)
Balance as of August 31, 2012	81,404			259,521			213,870			311,617			866,412
Business acquired	—			87,734			—			—			87,734
Purchase accounting adjustments	—			117			—			(100		)	17
Impairment charge	—			—			(137,804		)	—			(137,804		)
Reclassification to discontinued operations	—			—			(76,877		)	—			(76,877		)
Divestiture of Nielsen Sessions business	—			—			—			(2,556		)	(2,556		)
Impact of changes in foreign currency rates	1,207			(5,469		)	811			1,477			(1,974		)
Balance as of August 31, 2013	$	82,611		$	341,903		$	—		$	310,438		$	734,952

The gross carrying amount and accumulated amortization of the Company’s intangible assets are as follows (in thousands):



	Weighted Average Amortization Period (Years)	August 31, 2013						August 31, 2012
	Weighted Average Amortization Period (Years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Amortizable intangible assets:
Customer relationships	15	$	318,143	$	95,215	$	222,928	$	347,739	$	93,768	$	253,971
Patents	11	30,564		18,747		11,817		52,851		34,842		18,009
Trademarks and tradenames	19	24,088		7,356		16,732		43,820		8,670		35,150
Non-compete agreements and other	4	7,034		6,458		576		7,677		6,316		1,361
Indefinite lived intangible assets:
Tradenames	N/A	124,639		—		124,639		137,393		—		137,393
		$	504,468	$	127,776	$	376,692	$	589,480	$	143,596	$	445,884

Changes in the gross carrying value of intangible assets result from foreign currency exchange rate changes, impairment charges and the reclassification of Electrical segment intangible assets to discontinued operations (refer to Note 3, "Discontinued Operations"). Amortization expense recorded on intangible assets for the years ended August 31, 2013, 2012 and 2011 was $22.9 million, $22.0 million and $21.5 million, respectively. Amortization expense for future years is estimated to be: $24.6 million in each of fiscal years 2014 and 2015, $24.5 million in fiscal 2016, $23.4 million in fiscal 2017, $23.0 million in fiscal 2018 and $132.0 million in aggregate thereafter. The future amortization expense amounts represent estimates, which may change based on future acquisitions, changes in foreign currency exchange rates or other factors.

- 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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