Goodwill and Intangible Assets

9 Months Ended

Sep. 27, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill. Goodwill balances as of September 27, 2015 and December 28, 2014 were as follows:



	Carrying Amount
	(In thousands)
Balance, beginning of year and end of period	$	831,328

Intangible Assets. Intangible asset balances were as follows:



	September 27, 2015
	Gross Carrying Amount		Accumulated Amortization			Impairment			Net Carrying Amount
	(In thousands)
Developed product technology	$	451,560	$	(174,693	)	$	—		$	276,867
Customer relationships	64,600		(51,934		)	—			12,666
Trademarks and trade names	62,500		(17,088		)	—			45,412
Acquisition-related intangible assets	578,660		(243,715		)	—			334,945
Technology licenses and patents	102,000		(93,667		)	—			8,333
Total intangible assets subject to amortization	680,660		(337,382		)	—			343,278
Acquired in-process research and development	61,000		—			(61,000		)	—
Total intangible assets	$	741,660	$	(337,382	)	$	(61,000	)	$	343,278



	December 28, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In thousands)
Developed product technology	$	568,744	$	(209,478	)	$	359,266
Customer relationships	64,600		(21,009		)	43,591
Trademarks and trade names	62,500		(7,395		)	55,105
Acquisition-related intangible assets	695,844		(237,882		)	457,962
Technology licenses and patents	102,000		(78,611		)	23,389
Total intangible assets subject to amortization	797,844		(316,493		)	481,351
Acquired in-process research and development	61,000		—			61,000
Total intangible assets	$	858,844	$	(316,493	)	$	542,351

During the first quarter of 2015, $61.0 million of in-process research and development (“IPR&D”) was impaired. The Company performs tests for impairment of long-lived assets whenever events or circumstances suggest that long-lived assets may be impaired. In the first quarter of 2015, due to a decline in revenue from previous forecasts and changes to the product development schedule related to an IPR&D project from the Fusion‑io, Inc. (“Fusion‑io”) acquisition, the Company performed impairment tests on the acquisition-related amortizable intangible and IPR&D assets for this acquisition. In the first quarter of 2015, the Company reviewed the forecasts for the Fusion‑io IPR&D project and determined to cancel this project in order to reduce the number of platforms under development, resulting in no future attributable cash flows and a full impairment of the IPR&D asset of $61.0 million was recorded. The project was cancelled and resources were redirected towards the next-generation PCIe and converged enterprise platform. In testing the recoverability of the Fusion‑io acquisition-related amortizable intangible assets, the Company determined that there was no impairment. The impairment test is based upon the lowest level for which identifiable cash flows are available related to the intangible assets. In connection with the impairment analysis in the first quarter of 2015, the Company reduced the expected life of the acquisition-related amortizable developed technology intangible assets from the Fusion‑io acquisition from five years to four years, and will amortize the remaining net carrying amount of this developed technology intangible asset over the next 34 months. As of September 27, 2015, the net book value of the Fusion‑io acquisition-related amortizable intangible assets was $253.7 million, some or all of which could be subject to impairment.

The annual expected amortization expense of intangible assets subject to amortization as of September 27, 2015 was as follows:



	Acquisition-related Intangible Assets		Technology Licenses and Patents
	(In thousands)
Year:
2015 (remaining 3 months)	$	41,553	$	5,000
2016	126,231		3,333
2017	107,176		—
2018	53,160		—
2019	6,825		—
Total intangible assets subject to amortization	$	334,945	$	8,333

- 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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