Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2012

Goodwill and Other Intangible Assets [Abstract]

The Company has recorded goodwill and other intangible assets as a result of business acquisitions that occurred between 2000 and 2012. The Company also acquired license rights from the Massachusetts Institute of Technology in 1999. In February 2012, the Company recorded goodwill of $15.1 million and acquired other intangible assets of $5.1 million as a result of the acquisition of Blaze. In March 2012, the Company recorded goodwill of $241.4 million and acquired other intangible assets of $43.8 million as a result of the acquisition of Cotendo. In September 2012, the Company recorded goodwill of $12.2 million and acquired other intangible assets of $3.7 million as a result of the acquisition of FastSoft. (See Note 3). In accordance with current accounting standards, goodwill will not be amortized as it does not qualify as an amortizable intangible asset. The Company will test goodwill for impairment at least annually as required by the accounting guidance for goodwill and other intangible assets.

The changes in the carrying amount of goodwill for the three and nine months ended September 30, 2012 were as follows (in thousands):




Balance as of December 31, 2011	$	452,914
Purchase price allocation associated with Blaze acquisition	15,068
Purchase price allocation associated with Cotendo acquisition	241,646
Balance as of March 31, 2012	709,628
Purchase price adjustment associated with Cotendo acquisition	40
Balance as of June 30, 2012	709,668
Purchase price allocation associated with FastSoft acquisition	12,233
Purchase price adjustment associated with Cotendo acquisition	(300		)
Balance as of September 30, 2012	$	721,601

Other intangible assets that are subject to amortization consist of the following (in thousands except for years):



	September 30, 2012
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Amortization period in years
Completed technology	$	66,931	$	(30,229	)	$	36,702	6
Customer relationships	102,100		(66,657		)	35,443		9
Non-compete agreements	14,440		(6,999		)	7,441		5
Trademarks and trade names	3,700		(911		)	2,789		9
Acquired license rights	490		(490		)	—		10
Total	$	187,661	$	(105,286	)	$	82,375



	December 31, 2011
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Amortization period in years
Completed technology	$	36,731	$	(22,913	)	$	13,818	6
Customer relationships	88,700		(60,202		)	28,498		9
Non-compete agreements	8,340		(5,270		)	3,070		4
Trademarks and trade names	800		(800		)	—		4
Acquired license rights	490		(490		)	—		10
Total	$	135,061	$	(89,675	)	$	45,386

Aggregate expense related to amortization of other intangible assets for the three months ended September 30, 2012 and 2011 was $5.4 million and $4.2 million, respectively. For the nine months ended September 30, 2012 and 2011, aggregate expense related to the amortization of other intangible assets was $15.6 million and $12.8 million, respectively. Based on the Company’s other intangible assets as of September 30, 2012, aggregate expense related to amortization of other intangible assets is expected to be $5.4 million for the remainder of 2012, and $23.6 million, $18.2 million, $14.5 million and $10.1 million for 2013, 2014, 2015 and 2016, respectively.

- 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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