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Veloce
3 Months Ended
Jun. 30, 2014
Variable Interest Entity, Measure of Activity [Abstract]  
VELOCE
VELOCE
On June 20, 2012, the Company completed its acquisition of Veloce. Veloce has been developing specific technology for the Company.
The total estimated consideration to be paid is approximately $178.5 million based on the benchmarks achieved during simulations. Veloce completed all three performance milestones relating to the project as of March 31, 2014. The consideration relating to the three performance milestones, excluding the value allocated to Veloce stock equivalents that have not yet been allocated to individuals ("Unallocated Veloce Units"), in the amount of $176.4 million, has been recognized as research and development expense through June 30, 2014 compared to $135.8 million as of June 30, 2013. During the three months ended June 30, 2014 and 2013, as part of the above arrangement, the Company paid approximately $6.4 million and $25.0 million, respectively, in cash and issued approximately 38,000 shares and 1.4 million shares, respectively, valued at approximately $0.3 million and $10.0 million, respectively. The Company is contractually required to distribute all Unallocated Veloce Units within a certain time period. During the three months ended June 30, 2014, the Company distributed an additional 0.5 million Unallocated Veloce Units which had a related expense of $7.1 million. Veloce Equity Holders subject to vesting requirements will receive their distribution upon satisfaction of such vesting requirements.
For accounting purposes, the costs incurred in connection with the development milestones relating to Veloce are considered compensatory and are recognized as R&D expense. These costs are recognized in the Consolidated Statement of Operations under R&D expense in the periods when certain development and performance milestones became probable of achievement and were deemed earned. However, the value allocated to the Unallocated Veloce Units will not be recognized as R&D expense until distribution of the underlying units occurs. As of June 30, 2014, 0.1 million Unallocated Veloce Units had not been allocated, and the maximum potential additional expense to be recognized associated with these Unallocated Veloce Units is approximately $2.1 million.
Total R&D expenses recognized related to Veloce were approximately $7.1 million and $9.3 million during the three months ended June 30, 2014 and 2013, respectively. Veloce consideration that has been accrued as of June 30, 2014 is classified as long-term if payments of the consideration are expected to occur beyond a 12 month period. For additional information regarding Veloce, see Note 4, Veloce, to the Consolidated Financial Statements included in the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2014.