Goodwill & Intangible Assets

12 Months Ended

Mar. 31, 2012

Goodwill & Intangible Assets [Abstract]

NOTE 8 – GOODWILL & INTANGIBLE ASSETS

Goodwill

The carrying amount of goodwill was $170.4 million and $128.2 million as of March 31, 2012 and 2011, respectively. The change in the carrying amount of goodwill for the fiscal years ended March 31, 2012 and 2011 is as follows (in thousands):


Balance as of March 31, 2010	$	128,177

Balance as of March 31, 2011	$	128,177
Goodwill related to the acquisition of Psytechnics		13,179
Goodwill related to the acquisition of Replay		15,313
Goodwill related to the acquisition of Simena		14,013
Purchase accounting adjustments		(7	)
Foreign currency translation impact		(291	)

Balance as of March 31, 2012	$	170,384

During the fiscal year ended March 31, 2012, the Company early adopted authoritative guidance that allows it to utilize a qualitative approach to test goodwill for impairment. This authoritative guidance permitted the Company to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of its reporting units is less than their carrying value. Because the Company, and its one reporting unit did not experience any significant adverse changes in their business or reporting structures, the Company performed the qualitative Step 0 assessment. In performing the qualitative Step 0 assessment, the Company considered certain events and circumstances specific to the entity as a whole, such as macroeconomic conditions, industry and market considerations, overall financial performance and cost factors when evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. No indicators of impairment were noted as of January 31, 2012. Additionally, the market capitalization of the Company as a whole significantly exceeded its carrying value.

Intangible Assets

The net carrying amounts of intangible assets were $54.7 million and $47.7 million as of March 31, 2012 and 2011, respectively. Intangible assets acquired in a business combination are recorded under the acquisition method of accounting at their estimated fair values at the date of acquisition. The Company amortizes intangible assets over their estimated useful lives, except for the acquired trade name which resulted from the Network General acquisition, which has an indefinite life and thus is not amortized. The carrying value of the indefinite lived trade name is evaluated for potential impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.

The Company completed its annual impairment test of the indefinite lived intangible as of January 31, 2012. As part of the impairment test, the fair value of the asset was compared to its book value, $18.6 million. The indefinite lived intangible asset fair value was estimated using the discounted cash flow method and included assumptions on revenue forecasts earned using the tradename, royalty rate and weighted average cost of capital rate. These estimates were based on historical performance and projections of future revenue and inputs used in current valuations performed for acquisitions made in fiscal year 2012. The resulting fair value of the indefinite lived intangible asset was greater than its carrying value.

Intangible assets consist of the following as of March 31, 2012 (in thousands):


	Cost		Accumulated Amortization			Net
Acquired software	$	24,919	$	(17,943	)	$	6,976
Customer relationships		32,754		(8,492	)		24,262
Indefinite lived trade name		18,600		0			18,600
Core technology		4,760		(306	)		4,454
Net beneficial leases		336		(334	)		2
Non-compete agreements		343		(57	)		286
Other		200		(95	)		105

	$	81,912	$	(27,227	)	$	54,685

Intangible assets consist of the following as of March 31, 2011 (in thousands):


	Cost		Accumulated Amortization			Net
Acquired software	$	19,900	$	(13,598	)	$	6,302
Customer relationships		29,200		(6,437	)		22,763
Indefinite lived trade name		18,600		0			18,600
Net beneficial leases		336		(315	)		21

	$	68,036	$	(20,350	)	$	47,686

Amortization of software and core technology included as cost of product revenue was $4.7 million, $4.0 million and $4.0 million for the fiscal years ended March 31, 2012, 2011 and 2010, respectively. Amortization of other intangible assets included as operating expense was $2.2 million, $1.9 million and $2.1 million for the fiscal years ended March 31, 2012, 2011 and 2010, respectively.

The following is the expected future amortization expense as of March 31, 2012 for the years ended March 31 (in thousands):


2013	$	6,446
2014		4,113
2015		3,875
2016		3,539
2017		3,263
Thereafter		14,849

Total	$	36,085

The weighted average amortization period of acquired software and core technology is 6.3 years. The weighted average amortization period for customer relationships is 15.2 years. The weighted average amortization period for amortizing all intangibles is 10.8 years.

- 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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