Goodwill and Identified Intangible Assets

6 Months Ended

Jun. 29, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Identified Intangible Assets

GOODWILL AND IDENTIFIED INTANGIBLE ASSETS

Goodwill

Goodwill represents the difference between the purchase price and the estimated fair value of the identifiable assets acquired and liabilities assumed. Goodwill is allocated among and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. The Company has two reporting units, Video and Cable Access.

The Company tests for goodwill impairment at the reporting unit level on an annual basis in the fiscal fourth quarter, or more frequently, if events or changes in circumstances indicate that the asset is more likely than not impaired. The Company performed its annual goodwill impairment review at the reporting unit level as of October 31, 2017, with no goodwill impairment indicated. There were no events or circumstances which triggered additional impairment reviews for the periods presented.

The changes in the carrying amount of goodwill by reportable segments for the six months ended June 29, 2018 were as follows (in thousands):



	Video			Cable Access			Total
Balance as of December 31, 2017	$	182,012		$	60,815		$	242,827
Foreign currency translation adjustment	(1,633		)	(18		)	(1,651		)
Balance as of June 29, 2018	$	180,379		$	60,797		$	241,176

Intangible Assets

The following is a summary of intangible assets (in thousands):



		June 29, 2018							December 31, 2017
	Weighted Average Remaining Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Developed core technology	1.7	$	31,707	$	(22,985	)	$	8,722	$	31,707	$	(20,396	)	$	11,311
Customer relationships/contracts	2.7	44,690		(36,664		)	8,026		44,819		(35,205		)	9,614
Trademarks and trade names	1.7	630		(368		)	262		654		(300		)	354
Maintenance agreements and related relationships	n/a	5,500		(5,500		)	—		5,500		(5,500		)	—
Order Backlog	n/a	3,128		(3,128		)	—		3,177		(3,177		)	—
Total identifiable intangibles		$	85,655	$	(68,645	)	$	17,010	$	85,857	$	(64,578	)	$	21,279

Amortization expense for the identifiable purchased intangible assets for the three and six months ended June 29, 2018 and June 30, 2017 was allocated as follows (in thousands):



	Three months ended				Six months ended
	June 29, 2018		June 30, 2017		June 29, 2018		June 30, 2017
Included in cost of revenue	$	1,295	$	1,295	$	2,590	$	2,590
Included in operating expenses	800		780		1,604		1,554
Total amortization expense	$	2,095	$	2,075	$	4,194	$	4,144

The estimated future amortization expense of purchased intangible assets with definite lives is as follows (in thousands):



	Cost of Revenue		Operating Expenses		Total
Year ended December 31,
2018 (remaining six months)	$	2,590	$	1,584	$	4,174
2019	5,180		3,167		8,347
2020	951		3,036		3,987
2021	—		502		502
Total future amortization expense	$	8,721	$	8,289	$	17,010

- 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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