Goodwill and Intangible Assets

6 Months Ended

Jun. 29, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill. Goodwill balances and activity during the six months ended June 29, 2014 were as follows (in thousands):



	Carrying Amount
Balance as of December 29, 2013	$	318,111
Adjustment	(181		)
Balance as of June 29, 2014	$	317,930

Goodwill decreased by $0.2 million during the six months ended June 29, 2014 due primarily to the resolution of a working capital matter during the measurement period, which occurred in the first quarter of fiscal year 2014, for an acquisition from fiscal year 2013.

Intangible Assets. Intangible asset balances were as follows (in thousands):



	June 29, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Developed product technology	$	299,069	$	(149,241	)	$	149,828
Customer relationships	7,600		(3,276		)	4,324
Trademarks	8,900		(2,231		)	6,669
Covenants not to compete	2,400		(2,400		)	—
Acquisition-related intangible assets	317,969		(157,148		)	160,821
Technology licenses and patents	109,600		(75,878		)	33,722
Total intangible assets	$	427,569	$	(233,026	)	$	194,543



	December 29, 2013
	Gross Carrying Amount		Accumulated Amortization			Impairment			Net Carrying Amount
Developed product technology	$	348,385	$	(121,304	)	$	(44,216	)	$	182,865
Customer relationships	20,650		(14,426		)	—			6,224
Trademarks	14,200		(3,634		)	(2,812		)	7,754
Covenants not to compete	3,100		(2,959		)	—			141
Acquisition-related intangible assets	386,335		(142,323		)	(47,028		)	196,984
Technology licenses and patents	133,909		(89,289		)	—			44,620
Total intangible assets subject to amortization	520,244		(231,612		)	(47,028		)	241,604
Acquired IPR&D	42,500		—			(36,200		)	6,300
Total intangible assets	$	562,744	$	(231,612	)	$	(83,228	)	$	247,904

During the three months ended June 29, 2014, the Company reclassified $6.3 million of acquired in-process research and development (“IPR&D”) to developed product technology and commenced amortization.

The annual expected amortization expense of intangible assets subject to amortization as of June 29, 2014, were as follows (in thousands):



	Acquisition-related Intangible Assets		Technology Licenses and Patents
Fiscal year:
2014 (remaining 6 months)	$	41,942	$	10,333
2015	49,374		20,056
2016	41,804		3,333
2017	25,916		—
2018	1,260		—
2019	525		—
Total intangible assets subject to amortization	$	160,821	$	33,722

Acquisition. On July 23, 2014, the Company completed the acquisition of Fusion-io, Inc. (“Fusion-io”), a developer of flash-based PCIe hardware and software storage solutions that enhance application performance in enterprise and hyperscale data centers, pursuant to an Agreement and Plan of Merger dated June 16, 2014, by and among the Company, Fusion-io and Flight Merger Sub, Inc. (“Merger Sub”), a wholly-owned subsidiary of the Company. The acquisition was effected through a tender offer for all of the outstanding shares of common stock of Fusion-io, par value $0.0002 per share, followed by a merger of Merger Sub with and into Fusion-io, with Fusion-io surviving as a wholly-owned subsidiary of the Company. The Company completed the tender offer and the merger for $11.25 per share for all of the outstanding shares of Fusion-io common stock, and assumed certain unvested, in-the-money options and unvested RSUs for a total aggregate value of approximately $1.3 billion.

- 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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