Goodwill And Intangible Assets

9 Months Ended

Sep. 30, 2011

Goodwill And Intangible Assets [Abstract]

Goodwill and Intangible Assets

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in the Company’s recent and historical acquisitions.

Goodwill is evaluated for potential impairment on an annual basis or whenever events or circumstances indicate that impairment may have occurred. See Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates – Goodwill” of this Form 10-Q for information concerning this process. The Company will perform its annual impairment analysis as of the first day of the fiscal fourth quarter of each year unless a triggering event would require an expedited analysis. Adverse changes in operating results and/or unfavorable changes in economic factors used to estimate fair values could result in a non-cash impairment charge in the future. As of September 30, 2011, there were no triggering events which would require the Company to perform an impairment analysis.

The Company has determined that its product families, which are components of its operating segments, constitute reporting units for purposes of allocating and testing goodwill. Because the product families are one level below the operating segments, they constitute individual businesses and the Company’s segment management regularly reviews the operating results of each product family. As of each acquisition date, all goodwill was assigned to the product families that were expected to benefit from the synergies of the respective acquisition. The amount of goodwill assigned to each reporting unit was the difference between the fair value of the reporting unit and the fair value of identifiable assets and liabilities allocated to the reporting unit as of the acquisition date. The Company determined the fair value of a reporting unit using the income approach, which is based on the present value of estimated future cash flows using management’s assumptions and forecasts as of the acquisition date.

A reconciliation of the original goodwill from each of the Company's acquisitions to the carrying value as of September 30, 2011 and December 31, 2010 for each reporting unit that contains goodwill, is as follows (in millions):



			Balance as of December 31, 2010										For the Nine Months Ended September 30, 2011						Balance as of September 30, 2011
Acquisition	Operating Segment	Reporting Unit	Goodwill		Accumulated Amortization			Accumulated Impairment Losses			Carrying Value		Goodwill Acquired		Purchase Price Adjustments		Impairment Losses		Goodwill		Accumulated Amortization			Accumulated Impairment Losses			Carrying Value
Cherry acquisition:
	Automotive & Power Group:
		Analog Automotive	$	21.8	$	(4.2	)	$	—		$	17.6	$	—	$	—	$	—	$	21.8	$	(4.2	)	$	—		$	17.6
	Computing & Consumer Products:
		Signal & Interface	29.1		(5.6		)	—			23.5		—		—		—		29.1		(5.6		)	—			23.5
Leshan additional interest:
	Standard Products:
		Small Signal	3.8		—			—			3.8		—		—		—		3.8		—			—			3.8
AMIS acquisition:
	Digital & Mixed-Signal Product Group:
		Industrial	238.7		—			(214.7		)	24.0		—		—		—		238.7		—			(214.7		)	24.0
		Foundry	146.2		—			(131.4		)	14.8		—		—		—		146.2		—			(131.4		)	14.8
		Medical	79.7		—			(59.9		)	19.8		—		—		—		79.7		—			(59.9		)	19.8
		Military/Aerospace	44.8		—			—			44.8		—		—		—		44.8		—			—			44.8
Catalyst acquisition:
	Standard Products:
		Memory Products	14.1		—			—			14.1		—		—		—		14.1		—			—			14.1
PulseCore acquisition:
	Digital & Mixed-Signal Product Group:
		Protection Products	8.9		—			(8.9		)	—		—		—		—		8.9		—			(8.9		)	—
CMD acquisition:
	Standard Products:
		Filter Products	20.1		—			—			20.1		—		—		—		20.1		—			—			20.1
SDT acquisition:
	Digital & Mixed-Signal Product Group:
		Medical Products	8.7		—			—			8.7		—		—		—		8.7		—			—			8.7
ISBU acquisition:
	Digital & Mixed-Signal Product Group:
		Sensor Products	—		—			—			—		8.0		—		—		8.0		—			—			8.0
			$	615.9	$	(9.8	)	$	(414.9	)	$	191.2	$	8.0	$	—	$	—	$	623.9	$	(9.8	)	$	(414.9	)	$	199.2

Intangible Assets

The Company’s acquisitions resulted in intangible assets consisting of values assigned to intellectual property, assembled workforce, customer relationships, non-compete agreements, patents, developed technology, trademarks, acquired software and IPRD. These are stated at cost less accumulated amortization, are amortized over their economic useful lives ranging from less than 1 year to 18 years using the straight-line method and are reviewed for impairment when facts or circumstances suggest that the carrying value of these assets may not be recoverable.

Intangible assets, net were as follows as of September 30, 2011 and December 31, 2010 (in millions):



	September 30, 2011
	Original Cost		Accumulated Amortization			Foreign Currency Translation Adjustment			Impairment			Carrying Value		Useful Life (in Years)
Intellectual property	$	13.9	$	(7.9	)	$	—		$	—		$	6.0	5-12
Assembled workforce	6.7		(6.7		)	—			—			—		5
Customer relationships	280.3		(66.3		)	(26.6		)	(3.2		)	184.2		5-18
Non-compete agreements	0.5		(0.5		)	—			—			—		1-3
Patents	43.7		(8.9		)	—			—			34.8		12
Developed technology	136.2		(31.9		)	—			(2.0		)	102.3		5-12
Trademarks	14.0		(3.0		)	—						11.0		15
In-process research and development	12.5		—			—			(2.5		)	10.0		8
Acquired software	1.0		(1.0		)	—			—			—		2
Backlog	0.8		(0.8		)	—			—			—		0.3
Total intangibles	$	509.6	$	(127.0	)	$	(26.6	)	$	(7.7	)	$	348.3



	December 31, 2010
	Original Cost		Accumulated Amortization			Foreign Currency Translation Adjustment			Impairment			Carrying Value		Useful Life (in Years)
Intellectual property	$	13.9	$	(7.0	)	$	—		$	—		$	6.9	5-12
Assembled workforce	6.7		(6.1		)	—			—			0.6		5
Customer relationships	250.5		(51.2		)	(27.2		)	(3.2		)	168.9		5-18
Non-compete agreements	0.5		(0.5		)	—			—			—		1-3
Patents	16.7		(4.2		)	—			—			12.5		12
Developed technology	113.0		(22.5		)	—			(2.0		)	88.5		5-12
Trademarks	11.0		(1.7		)	—			—			9.3		15
In-process research and development	18.3		—			—			(2.0		)	16.3		8
Acquired software	1.0		(1.0		)	—			—			—		2
Total intangibles	$	431.6	$	(94.2	)	$	(27.2	)	$	(7.2	)	$	303.0

Amortization expense for intangible assets amounted to $10.6 million and $32.8 million for the quarter and nine months ended September 30, 2011, of which zero and $1.1 million was included in cost of revenues; and $8.5 million and $25.6 million for the quarter and nine months ended October 1, 2010, of which $0.6 million and $1.8 million was included in cost of revenues. The Company is currently amortizing ten projects totaling $22.2 million through developed technology relating to projects that were originally classified as IPRD at the time of acquisition, but which are now completed, over a weighted average useful life of 10.3 years. Amortization expense for intangible assets, with the exception of the remaining $10.0 million of in-process research and development assets that will be amortized once the corresponding projects have been completed, is expected to be as follows over the next five years, and thereafter (in millions):



	Total
Remainder of 2011	$	24.2
2012	40.6
2013	35.9
2014	35.7
2015	34.6
Thereafter	167.3
Total estimated amortization expense	$	338.3

- 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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