Quarterly report pursuant to Section 13 or 15(d)

GOODWILL AND PURCHASED INTANGIBLE ASSETS

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GOODWILL AND PURCHASED INTANGIBLE ASSETS
 3 Months Ended
Sep. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND PURCHASED INTANGIBLE ASSETS GOODWILL AND PURCHASED INTANGIBLE ASSETS
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in the current and prior quarters’ business combinations. We have four reportable segments and six operating segments. The operating segments are determined to be the same as reporting units. For additional details, refer to Note 18 “Segment Reporting and Geographic Information” to our Condensed Consolidated Financial Statements. The following table presents changes in goodwill carrying value during the three months ended September 30, 2021(1):
(In thousands) Wafer Inspection and Patterning
Global Service and Support (“GSS”)
Specialty Semiconductor Process PCB and Display Component Inspection Total
Balance as of June 30, 2021 $ 416,860  $ 25,908  $ 681,858  $ 872,971  $ 13,575  $ 2,011,172 
Acquired goodwill 30,164  —  —  —  —  30,164 
Foreign currency adjustments 2  —  —  —  —  2 
Balance as of September 30, 2021 $ 447,026  $ 25,908  $ 681,858  $ 872,971  $ 13,575  $ 2,041,338 
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(1)No goodwill was assigned to the Other reporting unit and, accordingly, it was excluded from the table above.
Goodwill is not subject to amortization but is tested for impairment annually during the third fiscal quarter, as well as whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
As of September 30, 2021, there have been no significant events or circumstances affecting the valuation of goodwill subsequent to the annual assessment performed in the third quarter of the fiscal year ended June 30, 2021. There was no goodwill impairment as a result of that assessment. For additional details, refer to Note 7 “Goodwill and Purchased Intangible Assets” to our Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2021.
Purchased Intangible Assets
The components of purchased intangible assets as of the dates indicated below were as follows:
(In thousands)   As of September 30, 2021 As of June 30, 2021
Category
Range of
Useful 
Lives
(in years)
 Gross
Carrying
Amount		 Accumulated
Amortization
and
Impairment		 Net
Amount		 Gross
Carrying
Amount		 Accumulated
Amortization
and
Impairment		 Net
Amount
Existing technology
4-8
 $ 1,400,191  $ 540,125  $ 860,066  $ 1,382,612  $ 499,219  $ 883,393 
Customer relationships
4-9
 313,317  139,919  173,398  305,817  131,386  174,431 
Trade name / Trademark
4-7
 117,983  57,100  60,883  117,383  53,493  63,890 
Backlog and other
<1-9
 51,836  50,242  1,594  50,403  49,962  441 
Intangible assets subject to amortization 1,883,327  787,386  1,095,941  1,856,215  734,060  1,122,155 
In-process research and development 67,656  6,062  61,594  63,256  100  63,156 
Total $ 1,950,983  $ 793,448  $ 1,157,535  $ 1,919,471  $ 734,160  $ 1,185,311 

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 fully recoverable. The impairment indicator primarily includes the declines in our operating cash flows from the use of these assets. If the impairment indicators are present, we are required to perform a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to these long-lived assets to their carrying value.
As of September 30, 2021, there were no impairment indicators for purchased intangible assets.
Amortization expense for purchased intangible assets for the periods indicated below was as follows:
Three Months Ended September 30,
(In thousands) 2021 2020
Amortization expense - Costs of revenues $ 41,124  $ 37,040 
Amortization expense - Selling, general and administrative 12,389  13,429 
Amortization expense - Research and development 31  31 
Total $ 53,544  $ 50,500 
Based on the purchased intangible assets gross carrying amount recorded as of September 30, 2021, the remaining estimated annual amortization expense is expected to be as follows:
Fiscal year ending June 30: Amortization (In thousands)
2022 (remaining nine months) $ 160,633 
2023 212,609 
2024 209,615 
2025 197,396 
2026 182,071 
2027 and thereafter 133,617 
Total $ 1,095,941