Goodwill and Intangible Assets

9 Months Ended

Sep. 29, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Note 4: Goodwill and Intangible Assets

Goodwill

The following table summarizes goodwill by reportable segment as of September 29, 2017 and December 31, 2016 (in millions):



	Balance as of September 29, 2017							Balance as of December 31, 2016
	Goodwill		Accumulated Impairment Losses			Carrying Value		Goodwill		Accumulated Impairment Losses			Carrying Value
Reportable Segment:
Power Solutions Group	$	432.2	$	(28.6	)	$	403.6	$	438.7	$	(28.6	)	$	410.1
Analog Solutions Group	836.7		(418.9		)	417.8		836.7		(418.9		)	417.8
Image Sensor Group	95.5		—			95.5		96.8		—			96.8
	$	1,364.4	$	(447.5	)	$	916.9	$	1,372.2	$	(447.5	)	$	924.7

The amount of goodwill disposed as part of the Xsens Transaction amounted to $6.5 million. See Note 3: "Acquisitions and Divestitures" for further information. During the quarter ended September 29, 2017, goodwill was also reduced due to a measurement period adjustment of $1.3 million related to an immaterial acquisition that occurred on December 29, 2016. There has been no other change in the balance of goodwill from December 31, 2016 to September 29, 2017.

Goodwill is tested for impairment annually on the first day of the fourth quarter or more frequently if events or changes in circumstances (each, a "triggering event") would more likely than not reduce the carrying value of goodwill. Management did not identify any triggering events through September 29, 2017 that would require an interim impairment analysis.

Intangible Assets

Intangible assets, net, were as follows as of September 29, 2017 and December 31, 2016 (in millions):



	September 29, 2017
	Original Cost		Accumulated Amortization			Accumulated Impairment Losses			Carrying Value
Intellectual property	$	13.9	$	(11.7	)	$	(0.4	)	$	1.8
Customer relationships	555.9		(318.4		)	(20.1		)	217.4
Patents	43.7		(26.4		)	(13.7		)	3.6
Developed technology	640.1		(260.1		)	(2.6		)	377.4
Trademarks	17.2		(12.2		)	(1.1		)	3.9
Backlog	3.3		(3.3		)	—			—
Favorable Leases	1.7		(1.6		)	—			0.1
IPRD	72.0		—			(13.7		)	58.3
Total intangibles	$	1,347.8	$	(633.7	)	$	(51.6	)	$	662.5



	December 31, 2016
	Original Cost		Accumulated Amortization			Accumulated Impairment Losses			Carrying Value
Intellectual property	$	13.9	$	(11.2	)	$	(0.4	)	$	2.3
Customer relationships	549.0		(283.3		)	(19.5		)	246.2
Patents	43.7		(25.4		)	(13.7		)	4.6
Developed technology	566.9		(201.6		)	(2.6		)	362.7
Trademarks	17.2		(11.6		)	(1.1		)	4.5
Backlog	3.3		(2.4		)	—			0.9
Favorable Leases	1.5		(0.4		)	—			1.1
IPRD	145.8		—			(6.0		)	139.8
Total intangibles	$	1,341.3	$	(535.9	)	$	(43.3	)	$	762.1

During the quarter and nine months ended September 29, 2017, the Company completed certain of its IPRD projects, resulting in the reclassification of $49.0 million and $81.9 million from IPRD to developed technology, respectively. During the quarter and nine months ended September 29, 2017, the Company abandoned certain of its previously capitalized IPRD projects and recorded impairment charges of $1.5 million and $7.7 million, respectively. During the quarter and nine months ended September 29, 2017, the Company sold intangible assets of $8.7 million as part of a divestiture and expensed $8.1 million as part of a licensing transaction. See Note 3: "Acquisitions and Divestitures" for further information.

Amortization expense for acquisition-related intangible assets amounted to $37.3 million and $95.0 million for the quarter and nine months ended September 29, 2017, respectively, and $24.7 million and $71.9 million for the quarter and nine months ended September 30, 2016, respectively. Amortization expense for intangible assets, with the exception of the $58.3 million of IPRD assets that will be amortized once the corresponding projects have been completed, is expected to be as follows for remainder of 2017, each of the next four years, and thereafter (in millions):



Period	Estimated Amortization Expense
Remainder of 2017	$	28.9
2018	105.1
2019	95.7
2020	79.0
2021	67.7
Thereafter	227.8
Total estimated amortization expense	$	604.2

- 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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