Redeemable Noncontrolling Interests

9 Months Ended

Oct. 03, 2015

Noncontrolling Interest [Abstract]

Redeemable Noncontrolling Interest

Redeemable Noncontrolling Interest:

With the acquisition of Silicon Image on March 10, 2015, we also assumed a redeemable noncontrolling interest which comprises a 7% investment in Qterics amounting to $7.0 million initially entered into on December 4, 2014. The investment is redeemable at fair market value at the third-party holder's option on the third, fourth, or fifth year anniversaries. If the fair market value at the redemption date, as negotiated and agreed to by the parties, does not exceed $21 million, the redemption price will be 130% of the fair market value.

As of the acquisition date, the fair value of the noncontrolling interest was determined to be $7.2 million (Note 7). The Company has elected to accrete the carrying value to the estimated redemption value over the three-year redemption period and reports the accretion charge as a reduction to additional-paid-in-capital. For the three and nine months ended October 3, 2015, we have recorded accretion charges of $0.2 million and $0.3 million, respectively, bringing the value of the redeemable noncontrolling interest to $7.5 million at October 3, 2015.