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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. GOODWILL
The table below contains details related to the Company's recorded goodwill for the years ended June 30, 2010 and 2009 is as follows:
103
Salons
Hair Restoration
Centers
North America International Consolidated
(Dollars in thousands)
Gross goodwill at June 30, 2008
$
668,799
$
48,461
$
153,733
$
870,993
Accumulated impairment losses
—
—
—
—
Net goodwill at June 30, 2008
668,799
48,461
153,733
870,993
Goodwill acquired(3)
31,531
(1,255
)
536
30,812
Translation rate adjustments
(7,149
)
(5,545
)
(43
)
(12,737
)
Resolution to pre-acquisition
income tax contingency
—
—
(
4,859
)
(4,859
)
Goodwill impairment(2)(4)
(78,126
)
(41,661
)
—
(
119,787
)
Gross goodwill at June 30, 2009
693,181
41,661
149,367
884,209
Accumulated impairment losses(2)
(4)
(78,126
)
(41,661
)
—
(
119,787
)
Net goodwill at June 30, 2009
615,055
—
149,367
764,422
Goodwill acquired
2,581
—
—
2,581
Translation rate adjustments
4,250
—
13
4,263
Resolution to pre-acquisition
income tax contingency
—
—
1,000
1,000
Goodwill impairment(1)
(35,277
)
—
—
(
35,277
)
Gross goodwill at June 30, 2010
700,012
41,661
150,380
892,053
Accumulated impairment losses(1)
(2)(4)
(113,403
)
(41,661
)
—
(
155,064
)
Net goodwill at June 30, 2010
$
586,609
$
—
$
150,380
$
736,989
(1) As a result of the Company's annual impairment testing of goodwill during the three months ended March 31, 2010, a
$35.3 million impairment charge was recorded within continuing operations for the excess of the carrying value of
goodwill over the implied fair value of goodwill for the Regis salon concept.
(2) During the three months ended December 31, 2008 the fair value of the Company's stock declined such that it began
trading below book value per share. As a result of the Company's interim impairment test of goodwill during the three
months ended December 31, 2008, a $41.7 million impairment charge for the full carrying amount of goodwill within the
salon concepts in the United Kingdom.
(3) Goodwill acquired includes adjustments to prior year acquisitions, primarily representing the finalization of purchase
price allocations. For the twelve months ended June 30, 2009 the $1.3 million reduction to international goodwill related
to the settlement of the escrow account on an acquisition that closed in September 2007.
(4) As the proceeds the Company received from the sale of Trade Secret were negligible, the Company recognized a
$78.1 million goodwill impairment charge within discontinued operations during fiscal year 2009.