Goodwill and Intangible Assets

9 Months Ended

Sep. 28, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill. Goodwill balances and activity during the nine months ended September 28, 2014 were as follows (in thousands):



	Carrying Amount
Balance as of December 29, 2013	$	318,111
Acquisition	542,690
Adjustment	(181		)
Balance as of September 28, 2014	$	860,620

During the nine months ended September 28, 2014, goodwill increased by $542.5 million, primarily due to the Company’s acquisition of Fusion‑io, Inc. (“Fusion‑io”) during the third quarter of fiscal year 2014. For additional information regarding the Fusion-io acquisition, see Note 14, “Business Acquisition.”

Intangible Assets. Intangible asset balances were as follows (in thousands):



	September 28, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Developed product technology	$	568,744	$	(176,438	)	$	392,306
Customer relationships	64,600		(10,559		)	54,041
Trademarks and trade names	62,500		(4,164		)	58,336
Acquisition-related intangible assets	695,844		(191,161		)	504,683
Technology licenses and patents	102,000		(73,444		)	28,556
Total intangible assets subject to amortization	797,844		(264,605		)	533,239
Acquired in-process research and development (“IPR&D”)	61,000		—			61,000
Total intangible assets	$	858,844	$	(264,605	)	$	594,239



	December 29, 2013
	Gross Carrying Amount		Accumulated Amortization			Impairment			Net Carrying Amount
Developed product technology	$	348,385	$	(121,304	)	$	(44,216	)	$	182,865
Customer relationships	20,650		(14,426		)	—			6,224
Trademarks	14,200		(3,634		)	(2,812		)	7,754
Covenants not to compete	3,100		(2,959		)	—			141
Acquisition-related intangible assets	386,335		(142,323		)	(47,028		)	196,984
Technology licenses and patents	133,909		(89,289		)	—			44,620
Total intangible assets subject to amortization	520,244		(231,612		)	(47,028		)	241,604
Acquired IPR&D	42,500		—			(36,200		)	6,300
Total intangible assets	$	562,744	$	(231,612	)	$	(83,228	)	$	247,904

During the nine months ended September 28, 2014, total intangible assets increased primarily due to the acquisition of Fusion-io. Additionally, the Company reclassified $6.3 million of IPR&D to developed product technology and commenced amortization during the second quarter of fiscal year 2014.

The annual expected amortization expense of intangible assets subject to amortization as of September 28, 2014 was as follows (in thousands):



	Acquisition-related Intangible Assets		Technology Licenses and Patents
Fiscal year:
2014 (remaining 3 months)	$	46,721	$	5,167
2015	152,375		20,056
2016	109,971		3,333
2017	90,916		—
2018 and thereafter	104,700		—
Total intangible assets subject to amortization	$	504,683	$	28,556

- 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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