Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

The components of our amortizable intangible assets were as follows:



(In millions)	Trade Names			Software			Customer Relationships			Other			Total
June 30, 2012
Gross carrying amount	$	345.6		$	58.3		$	60.8		$	14.6		$	479.3
Accumulated amortization	(64.1		)	(52.4		)	(49.9		)	(5.7		)	(172.1		)
Intangible assets, net	$	281.5		$	5.9		$	10.9		$	8.9		$	307.2
December 31, 2011
Gross carrying amount	$	347.1		$	57.9		$	61.5		$	13.9		$	480.4
Accumulated amortization	(57.5		)	(51.1		)	(45.5		)	(4.6		)	(158.7		)
Intangible assets, net	$	289.6		$	6.8		$	16.0		$	9.3		$	321.7

Amortization expense for intangible assets consisted of the following:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2012		2011		2012		2011
Amortization expense	$	7.3	$	6.2	$	14.5	$	12.2

During the three months ended June 30, 2012, we accelerated the amortization of several intangible assets due to certain business decisions to abandon the intangible assets during the quarter. These intangible assets had a carrying value of $1.3 million. The $1.3 million of accelerated amortization was recorded in restructuring and other in the Condensed Consolidated Statements of Operations.

On December 20, 2011 we acquired intellectual property and other assets, from Nine Technology, LLC (Nine Technology). The purchase price included future contingent consideration of $1.0 million based on certain 2012 milestones of which $0.5 million was paid in 2011. During the six months ended June 30, 2012, we paid the remaining $0.5 million contingent consideration payment.

Goodwill

During 2011, we acquired the assets of MXI Security and the assets of Ironkey's secure data storage hardware business. These businesses, along with our Imation Defender brand, make up our Mobile Security reporting unit. The carrying value of our Mobile Security reporting unit includes $31.3 million of goodwill.

We test the carrying amount of a reporting unit's goodwill for impairment on an annual basis during the fourth quarter of each year. In addition, we also test goodwill for impairment if an event occurs or circumstances change that would warrant impairment testing during an interim period. During the three months ended June 30, 2012, we adjusted our internal financial forecast for the Mobile Security reporting unit resulting in a change in timing of the expected cash flows, which we considered to be an event that warranted an interim test as to whether the goodwill was impaired. In evaluating whether goodwill was impaired, we compared the estimated fair value of the Mobile Security reporting unit to its carrying value (Step 1 of the impairment test). See Note 12 - Fair Value Measurements for further discussion of our valuation technique.

This analysis indicates that this goodwill is not impaired. The projections utilized in the analysis reflect management's best assumptions regarding Mobile Security. To the extent that our projections or other assumptions about future economic conditions, the industry in which Mobile Security operates, or the potential for our growth and profitability in this business vary from actual results, it is possible that our conclusion regarding the recoverability of the remaining goodwill could change, which could have a material effect on our financial position and results of operations.

During the six months ended June 30, 2011, we acquired substantially all of the assets of Encryptx which resulted in goodwill of $1.6 million. The goodwill was allocated to our existing Americas-Commercial reporting unit. Based on an interim goodwill impairment test performed at March 31, 2011, we determined that the goodwill in the Americas-Commercial reporting unit, including the assets of Encryptx, exceeded the implied fair value and, therefore, the goodwill was fully impaired. As a result, a $1.6 million charge was recorded during the six months ended June 30, 2011 in restructuring and other in the Condensed Consolidated Statements of Operations.

- 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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