Goodwill and Identified Intangible Assets

12 Months Ended

Dec. 31, 2012

Goodwill and Identified Intangible Assets

NOTE 4: GOODWILL AND IDENTIFIED INTANGIBLE ASSETS

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


	December 31, 2012							December 31, 2011
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Identifiable intangibles:
Developed core technology	$	136,145	$	(102,449	)	$	33,696	$	136,145	$	(81,951	)	$	54,194
Customer relationships/contracts		67,098		(48,150	)		18,948		67,098		(42,142	)		24,956
Trademarks and tradenames		11,361		(9,145	)		2,216		11,361		(7,700	)		3,661
Maintenance agreements and related relationships		7,100		(3,513	)		3,587		7,100		(2,260	)		4,840

Total identifiable intangibles	$	221,704	$	(163,257	)	$	58,447	$	221,704	$	(134,053	)	$	87,651

The changes in the carrying amount of goodwill for the years ended December 31, 2012 and 2011 are as follows (in thousands):


	December 31,
	2012		2011
Balance at beginning of period	$	212,417	$	211,878
Adjustment to deferred tax liability associated with the acquisition of Omneon		—		(527	)
Adjustment to fixed assets associated with the acquisition of Omneon		—		298
Adjustment to income tax payable associated with the acquisition of Omneon		—		771
Foreign currency translation adjustment		101		(3	)

Total changes in goodwill	$	212,518	$	212,417

Based on the annual impairment test performed as of December 31, 2012, management determined that the Company’s estimated fair value exceeded the carrying value of its net assets by approximately 21% and that goodwill was not impaired as of December 31, 2012. In addition, the Company has not recorded any impairment charges related to goodwill for any prior periods.

For the years ended December 31, 2012, 2011 and 2010, the Company recorded a total of $29.2 million, $30.4 million and $17.4 million, respectively, of amortization expense for identified intangibles of which $20.5 million, $21.5 million and $12.5 million, respectively, was included in cost of revenue. 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,
2013	$	19,232	$	8,096	$	27,328
2014		13,745		6,775		20,520
2105		719		5,783		6,502
2016		—		4,097		4,097
2017		—		—		—

Total future amortization expense	$	33,696	$	24,751	$	58,447

- 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.

+ References+ Details