KLA Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Purchased Intangible Assets

Goodwill and Purchased Intangible Assets

6 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND PURCHASED INTANGIBLE ASSETS

NOTE 7 – GOODWILL AND PURCHASED INTANGIBLE ASSETS

Goodwill

We have four reporting units: Wafer Inspection, Patterning, Global Service and Support (“GSS”), and Others. The following table presents goodwill carrying value and the movements by reporting unit during the six months ended December 31, 2018 :



(In thousands)	Wafer Inspection			Patterning		GSS		Others		Total
Balance as of June 30, 2018	$	281,005		$	53,255	$	8,039	$	12,399	$	354,698
Acquired goodwill	—			—		4,631		1,176		5,807
Foreign currency and other adjustments	(25		)	—		—		—		(25		)
Balance as of December 31, 2018	$	280,980		$	53,255	$	12,670	$	13,575	$	360,480

The change in goodwill during the six months ended December 31, 2018 resulted primarily from the acquisition of certain assets and liabilities of privately-held companies. For additional details, refer to Note 6 “Business Combinations”.

As of December 31, 2018 , there have been no significant events or circumstances affecting the carrying value of goodwill subsequent to the qualitative assessment performed in the third quarter of the fiscal year ended June 30, 2018 . For additional details, refer to Note 6 “Goodwill and Purchased Intangible Assets,” of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 . The next annual assessment of goodwill by reporting unit is scheduled to be performed in the third quarter of the fiscal year ending June 30, 2019 .

Purchased Intangible Assets

The components of purchased intangible assets as of the dates indicated below were as follows:



(In thousands)		As of December 31, 2018						As of June 30, 2018
Category	Range of 有用的生活	Gross Carrying Amount		Accumulated Amortization and Impairment		Net Amount		Gross Carrying Amount		Accumulated Amortization and Impairment		Net Amount
Existing technology	4-7 years	$	166,029	$	146,001	$	20028年	$	160,859	$	144,202	$	16,657
Trade name/Trademark	5-7 years	21,073		20,143		930		20,993		20,060		933
Customer relationships	4-7 years	58,050		55,388		2,662		56,680		55,136		1,544
Other	<1-5 years	1,270		1,072		198		660		461		199
Total		$	246,422	$	222,604	$	23,818	$	239,192	$	219,859	$	19,333

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.

For the three months ended December 31, 2018 and 2017, amortization expense for purchased intangible assets was $1.3 million and $1.2 million , respectively. For the six months ended December 31, 2018 and 2017, amortization expense for purchased intangible assets was $2.7 million and $2.4 million , respectively. The change in purchased intangible assets gross carrying amount resulted primarily from the acquisition of certain assets and liabilities of privately-held companies. For additional details, refer to Note 6 “Business Combinations.”

Based on the purchased intangible assets gross carrying amount recorded as of December 31, 2018 , and assuming no subsequent additions to, or impairment of, the underlying assets, the remaining estimated annual amortization expense is expected to be as follows:



Fiscal year ending June 30:	Amortization (In thousands)
2019 (remaining 6 months)	$	2,218
2020	4,438
2021	4,438
2022	4,438
2023	4,242
Thereafter	4,044
Total	$	23,818