Goodwill and Intangible Assets

6 Months Ended

Jul. 03, 2011

Goodwill and Intangible Assets [Abstract]

5. Goodwill and Intangible Assets

Goodwill. Goodwill balances as of July 3, 2011 and January 2, 2011 are presented below:


	Carrying Amount
	(In thousands)
Balance as of January 2, 2011	$	—
Acquisition of Pliant Technology, Inc.		154,899

Balance as of July 3, 2011	$	154,899

Goodwill increased by approximately $154.9 million due to the Company’s acquisition of Pliant Technology, Inc. (“Pliant”) during the second quarter of fiscal year 2011. See Note 14, “Business Acquisitions” regarding this acquisition.

Goodwill is not amortized, but is reviewed and tested for impairment at least annually, on the first day of the Company’s fourth quarter and whenever events or circumstances occur which indicate that goodwill might be impaired. Impairment of goodwill is tested at the Company’s reporting unit level by comparing the carrying amount, including goodwill, to the fair value.

Intangible Assets. Intangible asset balances as of July 3, 2011 and January 2, 2011 are presented below:


	July 3, 2011
	Gross		Accumulated			Net
	Carrying Amount		Amortization			Carrying Amount
	(In thousands)
Core technology	$	79,800	$	(66,448	)	$	13,352
Developed product technology		172,800		(12,543	)		160,257
Trademarks		5,300		(103	)		5,197
Customer relationships		12,200		(593	)		11,607
Covenants not to compete		700		(34	)		666

Acquisition-related intangible assets		270,800		(79,721	)		191,079
Technology licenses and patents		131,340		(28,492	)		102,848

Total intangible assets subject to amortization		402,140		(108,213	)		293,927
Acquired in-process research and development		36,200		—			36,200

Total intangible assets	$	438,340	$	(108,213	)	$	330,127


	January 2, 2011
	Gross		Accumulated			Net
	Carrying Amount		Amortization			Carrying Amount
	(In thousands)
Core technology	$	79,800	$	(57,546	)	$	22,254
Developed product technology		11,400		(8,075	)		3,325

Acquisition-related intangible assets		91,200		(65,621	)		25,579
Technology licenses and patents		31,340		(19,515	)		11,825

Total intangible assets	$	122,540	$	(85,136	)	$	37,404

Acquisition-related intangible assets increased in the six months ended July 3, 2011 due to the acquisition of Pliant. Acquired in-process research and development relates to the acquisition of Pliant and is accounted for as an indefinite-lived intangible asset. Upon completion of development, the acquired in-process research and development will be considered an amortizable finite-lived intangible asset. Technology licenses and patents increased in the six months ended July 3, 2011 due to a technology license purchased from a third party.

The annual expected amortization expense of intangible assets as of July 3, 2011, excluding acquired in-process research and development, is presented below:


	Estimated Amortization Expense
			Technology
	Acquisition-Related		Licenses and
	Intangible Assets		Patents
	(In thousands)
Fiscal Year:
2011(remaining six months)	$	30,126	$	12,309
2012		44,906		23,971
2013		35,938		22,671
2014		33,340		20,564
2015		33,340		20,000
2016		13,429		3,333

Total intangible assets subject to amortization	$	191,079	$	102,848

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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