Intangible Assets And Goodwill

6 Months Ended

Jun. 30, 2011

Note 8 — Intangible Assets and Goodwill

Intangible Assets

The following table represents the details of intangible assets (in thousands):


June 30, 2011	Gross			Accumulated Amortization			Net
Intangible assets with finite lives:
Purchased technology	$	98,870		$	(43,274	)	$	55,596
Customer relationships		18,800			(6,178	)		12,622
Contract backlog		7,500			(6,493	)		1,007
Non-compete agreements		4,380			(2,510	)		1,870
IPR&D, with finite lives		2,450			(349	)		2,101
Trademarks and trade names		1,240			(474	)		766
Effect of exchange rate changes		1,410			(1,097	)		313

Total intangible assets with finite lives		134,650			(60,375	)		74,275
IPR&D, with indefinite lives		461						461

Total intangible assets	$	135,111		$	(60,375	)	$	74,736


December 31, 2010	Gross			Accumulated Amortization			Net
Intangible assets with finite lives:
Purchased technology	$	98,870		$	(30,126	)	$	68,744
Customer relationships		18,800			(3,929	)		14,871
Contract backlog		7,500			(4,879	)		2,621
Non-compete agreements		4,380			(1,415	)		2,965
IPR&D, with finite lives		2,450			(148	)		2,302
Trademarks and trade names		1,240			(267	)		973
Effect of exchange rate changes		(766	)		74			(692	)

Total intangible assets with finite lives		132,474			(40,690	)		91,784
IPR&D, with indefinite lives		461						461

Total intangible assets	$	132,935		$	(40,690	)	$	92,245

During the first quarter of 2011 we evaluated the remaining useful lives of purchased technology intangible assets associated with our 2004 Steleus and 2005 iptelorg acquisitions. Based on current technological trends and our related expected business opportunities, we shortened the useful lives of these assets from a remaining weighted average life of 3.75 years at the time the evaluation was performed to an estimated life of approximately one year.

The estimated future amortization expense of purchased intangible assets with finite lives as of June 30, 2011 is as follows:


For the Years Ending December 31,	(Thousands)
2011 (remaining six months)	$	19,317
2012		20,027
2013		14,562
2014		14,409
2015		5,960

Total	$	74,275

Goodwill

As required by the authoritative guidance for intangibles and goodwill, we do not amortize our goodwill balances, but instead test our goodwill for impairment annually on October 1^st and more frequently upon the occurrence of certain events in accordance with the provisions of the authoritative guidance for intangibles and goodwill. In the first quarter of 2011, due to the fact that our net book value exceeded our market capitalization, we performed an interim goodwill impairment analysis in accordance with the provisions of the authoritative guidance for intangible assets and goodwill. Our analysis indicated that the fair value of the reporting unit exceeded its net book value by over 20%, and thus no impairment existed as of March 31, 2011. There were no additional indicators of impairment during the six months ended June 30, 2011. As of June 30, 2011, no impairment losses were recognized with respect to goodwill.

The changes in the carrying amount of goodwill for the six months ended June 30, 2011 are as follows (in thousands):


Balance at December 31, 2010	$	135,564
Effect of exchange rate changes		1,691

Balance at June 30, 2011	$	137,255

- Definition

Discloses 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 or 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. This element may be used as a single block of text to include the entire intangible asset disclosure including data and tables.

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