GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Apr. 04, 2015

NOTE 7GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amounts of goodwill were as follows:

	Photonics			Lasers			Optics
(In thousands)	Group			Group			Group			Total
Balance at January 3, 2015:
Goodwill	98,808			129,761			41,314			269,883
Accumulated impairment losses	(47,458		)	(104,562		)	(20,339		)	(172,359		)
	51,350			25,199			20,975			97,524
Goodwill allocated to acquisition	—			7,841			—			7,841
Foreign currency impact	—			(722		)	—			(722		)
Balance at April 4, 2015:
Goodwill	98,808			136,880			41,314			277,002
Accumulated impairment losses	(47,458		)	(104,562		)	(20,339		)	(172,359		)
	$	51,350		$	32,318		$	20,975		$	104,643

Acquisition related intangible assets were as follows:

	April 4,		January 3,
(In thousands)	2015		2015
Intangible assets subject to amortization:
Developed technology, net of accumulated amortization of $10,170 and $16,782 as of April 4, 2015 and January 3, 2015, respectively	$	29,424	$	28,864
Customer relationships, net of accumulated amortization of $18,748 and $37,312 as of April 4, 2015 and January 3, 2015, respectively	9,898		10,515
In-process research and development, net of accumulated amortization of $1,110 and $1,496 as of April 4, 2015 and January 3, 2015, respectively	13,356		11,965
Other, net of accumulated amortization of $1,071 and $6,299 as of April 4, 2015 and January 3, 2015, respectively	1,110		1,162
	53,788		52,506
Intangible assets not subject to amortization:
Trademarks and trade names	18,305		18,305
Intangible assets, net	$	72,093	$	70,811

As of April 4, 2015, the amounts of accumulated amortization shown in the table above exclude amounts related to the Company’s acquisition of Spectra-Physics, Inc. (and certain related entities), as the purchased intangible assets related to that acquisition have been fully amortized.

Developed technology is amortized on a straight line basis over 10 to 20 years, depending on the life of the product technology. Intangible assets related to customer relationships are generally amortized over a period of up to 10 years on an accelerated basis. In-process research and development is amortized on a straight line basis over the product’s estimated useful life upon completion of the technology. Other intangible assets include acquired backlog, product trademarks and trade names, non-competition agreements and defensible assets. With the exception of product trademarks and trade names, such assets are amortized on a straight line basis over a period of three months to 10 years, depending on the asset. Trademarks and trade names associated with products are amortized on a straight line basis over the estimated remaining life of the product technology, which ranges from 10 to 20 years. Trademarks and trade names associated with a business have indefinite lives and are not amortized.

Amortization expense related to intangible assets totaled $2.1 million and $2.5 million for the three months ended April 4, 2015 and March 29, 2014, respectively.

Estimated aggregate amortization expense for future fiscal years is as follows:

(In thousands)	Estimated Aggregate Amortization Expense
2015 (remaining)	$	6,198
2016	7,813
2017	6,673
2018	4,509
2019	3,919
Thereafter	17,462
	$	46,574

The Company has excluded $7.2 million of estimated amortization expense related to certain in-process research and development from the table above, as it was uncertain as of April 4, 2015 when the technology will be completed and when the amortization will begin.

- 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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