Goodwill and Purchased Intangible Assets
|9 Months Ended
Mar. 31, 2019
|Goodwill and Intangible Assets Disclosure [Abstract]
|GOODWILL AND PURCHASED INTANGIBLE ASSETS
NOTE 7 – GOODWILL AND PURCHASED INTANGIBLE ASSETS
We currently have four reporting units: Wafer Inspection, Patterning, Global Service and Support (“GSS”), and Others. The assignment of goodwill associated with Orbotech Acquisition to the reporting units has not yet been completed and therefore shown as a separate component. Refer to Note 17 “Segment Reporting and Geographic Information” for additional details. The following table presents goodwill carrying value and the movements during the nine months ended March 31, 2019:
The change in goodwill during the nine months ended March 31, 2019 resulted primarily from $1.77 billion related to the Orbotech Acquisition and $43.4 million related to the acquisition of the privately-held companies during the period. For additional details, refer to Note 6 “Business Combinations”.
We performed a qualitative assessment of the goodwill for our wafer inspection, patterning, GSS, and others reporting units during the three months ended March 31, 2019. Based on this assessment we concluded that it was more likely than not that the fair value of each of the reporting units exceeded its carrying amount. As a result of our determination based on our qualitative assessment, it was not necessary to perform the quantitative goodwill impairment test at this time. In assessing the qualitative factors, we considered the impact of key factors, including changes in the industry and competitive environment, market capitalization, stock price, earnings multiples, budgeted-to-actual revenue performance from prior year, gross margin and cash flows from operating activities. In addition, for goodwill associated with the Orbotech acquisition, no impairment indicators were identified as part of our goodwill impairment process.
Based on our assessment, goodwill in the reporting units was not impaired as of March 31, 2019 or June 30, 2018.
Purchased Intangible Assets
The components of purchased intangible assets as of the dates indicated below were as follows:
Purchased intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. The change in purchased intangible assets gross carrying amount resulted primarily from the Orbotech Acquisition and the acquisition of the privately-held companies. For additional details, refer to Note 6 “Business Combinations.”
Amortization expense for purchased intangible assets for the periods indicated below was as follows:
Based on the purchased intangible assets gross carrying amount recorded as of March 31, 2019, the underlying assets, the remaining estimated annual amortization expense is expected to be as follows: