Goodwill and Other Intangible Assets

9 Months Ended

Jan. 01, 2012

Goodwill and Other Intangible Assets [Abstract]

Note 12

Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying amounts of goodwill by segment for nine months ended January 1, 2012 were as follows:

(in thousands)	Communications		Computing and Consumer			Totals
Balance as of April 3, 2011	$	74,673	$	29,347		$	104,020
Additions		640		---			640
Disposal related to divestiture (see Note 5)		---		(8,568	)		(8,568	)
Balance as of January 1, 2012	$	75,313	$	20,779		$	96,092

Purchase of Intangible Assets from Samplify Systems, Inc.(“Samplify”)

During the quarter ended January 1, 2012, the Company acquired from Samplify developed wireless technology including license and patent rights. In exchange for these technology rights, the Company paid Samplify $5.0 million in cash consideration, and returned a portion of IDT's previous equity investment in Samplify. The total fair value of the consideration paid for the purchased existing technology from Samplify was recorded at $6.5 million. This intangible asset will be amortized over its estimated useful life of 3 years.

Intangible Assets

Intangible asset balances as of January 1, 2012 are summarized as follows:

(in thousands)	Gross Assets		Accumulated Amortization			Net Assets
Purchased intangible assets:
Existing technology	$	223,455	$	(188,719	)	$	34,736
Trademarks		2,911		(1,039	)		1,872
Customer relationships		127,231		(121,642	)		5,589
Total amortizable purchased intangible assets		353,597		(311,400	)		42,197
IPR&D*		2,711		---			2,711
Total purchased intangible assets	$	356,308	$	(311,400	)	$	44,908

Intangible asset balances as of April 3, 2011 are summarized as follows:

(in thousands)	Gross Assets		Accumulated Amortization			Net Assets
Purchased intangible assets:
Existing technology	$	219,700	$	(181,722	)	$	37,978
Trademarks		3,421		(904	)		2,517
Customer relationships		127,379		(119,564	)		7,815
Total amortizable purchased intangible assets		350,500		(302,190	)		48,310
IPR&D*		2,711		---			2,711
Total purchased intangible assets	$	353,211	$	(302,190	)	$	51,021

* IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When the IPR&D project is complete, it is reclassified as an amortizable purchased intangible asset and is amortized over its estimated useful life. If an IPR&D project is abandoned, the Company will record a charge for the value of the related intangible asset to its Consolidated Statements of Operations in the period it is abandoned.

Amortization expense for purchased intangible assets is summarized below:

	Three Months Ended				Nine Months Ended
(in thousands)	Jan. 1, 2012		Jan. 2, 2011		Jan. 1, 2012		Jan. 2, 2011
Existing technology	$	3,038	$	3,548	$	9,142	$	10,555
Trademarks		104		122		349		366
Customer relationships		864		1,319		2,641		3,951
Other		---		---		---		44
Total	$	4,006	$	4,989	$	12,132	$	14,916

Based on the purchased intangible assets recorded at January 1, 2012, and assuming no subsequent additions to or impairment of the underlying assets, the remaining estimated amortization expense is expected to be as follows:

(in thousands)
Fiscal Year	Amount
Remainder of FY 2012	$	4,293
2013		12,949
2014		10,571
2015		6,926
2016		4,249
Thereafter		3,209
Total	$	42,197

- 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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