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Sensata Technologies Holding N.V.'s SEC Filings

S-1/A
SENSATA TECHNOLOGIES HOLDING PLC filed this Form S-1/A on 03/09/2010
Entire Document
 


Table of Contents

8. Goodwill and Other Intangible Assets

 

The following table outlines the changes in goodwill, by segment:

 

    Sensors     Controls     Total  
    Gross
Goodwill
    Accumulated
Impairment
  Net
Goodwill
    Gross
Goodwill
    Accumulated
Impairment
    Net
Goodwill
    Gross
Goodwill
    Accumulated
Impairment
    Net
Goodwill
 

Balance as of December 31, 2006

  $ 1,153,784      $ —     $ 1,153,784      $ 288,942      $ —        $ 288,942      $ 1,442,726      $ —        $ 1,442,726   

2006 Acquisition—purchase accounting adjustments

    (5,190     —       (5,190     (1,226     —          (1,226     (6,416     —          (6,416

First Technology Automotive acquisition—purchase accounting adjustments

    468        —       468        540        —          540        1,008        —          1,008   

Airpax acquisition—purchase accounting adjustments

    17,505        —       17,505        101,179        —          101,179        118,684        —          118,684   
                                                                     

Balance as of December 31, 2007

    1,166,567        —       1,166,567        389,435        —          389,435        1,556,002        —          1,556,002   

Airpax acquisition—purchase accounting adjustments

    —          —       —          (6,056     —          (6,056     (6,056     —          (6,056

Impairment

    —          —       —          —          (13,173     (13,173     —          (13,173     (13,173
                                                                     

Balance as of December 31, 2008

    1,166,567        —       1,166,567        383,379        (13,173     370,206        1,549,946        (13,173     1,536,773   

First Technology Automotive acquisition—purchase accounting adjustments

    (209     —       (209     —          —          —          (209     —          (209

Airpax acquisition—purchase accounting adjustments

    —          —       —          (701     —          (701     (701     —          (701

Impairment

    —          —       —          —          (5,293     (5,293     —          (5,293     (5,293
                                                                     
  $ 1,166,358      $ —     $ 1,166,358      $ 382,678      $ (18,466   $ 364,212      $ 1,549,036      $ (18,466   $ 1,530,570   
                                                                     

 

Goodwill attributed to the acquisitions above reflect the Company’s allocation of purchase price to the estimated fair value of certain assets acquired and liabilities assumed. The purchase accounting adjustments above reflect changes in estimates associated with exit and severance restructuring reserves as well as revisions in fair value estimates of acquired intangible assets and property, plant and equipment.

 

As discussed in Note 2, during the three months ended December 31, 2008 and March 31, 2009, the Company determined that goodwill and definite-lived intangible assets associated with the Interconnection reporting unit were impaired and recorded charges totaling $13,173 (goodwill) and $19,867 (goodwill of $5,293 and definite-lived intangible assets of $14,574), respectively, in the consolidated statements of operations. The Company believes that the current global economic crisis, economic conditions within the semiconductor end-market and an increase in the competitive landscape surrounding suppliers to the semiconductor end-market were all factors that lead to the impairment of goodwill. The Company utilized a discounted cash flow analysis to estimate the fair value of the Interconnection reporting unit. Key assumptions that were used in the development of the fair value of the Interconnection reporting unit include management’s forecast of revenue and earnings, the long-term expected growth rate for the reporting unit, the discount rate, and management’s forecast of capital expenditures and required working capital investment. The Company’s revenue and earnings forecasts for this business depend on many factors, including the ability to project customer spending, particularly within the semiconductor industry. Changes in the level of spending in the industry and/or by the Company’s customers could result in a change to its forecasts, which, in turn, could result in a future impairment of goodwill and/or intangible assets.

 

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