Goodwill and Purchased Intangible Assets

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Purchased Intangible Assets

7. Goodwill and Purchased Intangible Assets

Intangible assets consist of the following as of December 31, 2013 and 2012



	December 31, 2013					December 31, 2012
	Weighted Average Life (yrs)	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life (yrs)	Gross Carrying Amount		Accumulated Amortization
		(In thousands)					(In thousands)
Intangible assets subject to amortization:
Purchased technology	7	$	77,704	$	43,606	8	$	61,309	$	32,569
Purchased customer relationships	7	49,446		21,477		7	30,729		13,991
Purchased backlog	3	9,506		8,022		3	7,800		6,370
Purchased contract base	5	50		50		5	50		50
Purchased intellectual property	5	1,998		1,998		5	1,998		1,860
Purchased trademark/tradename	6	7,184		4,564		5	6,850		3,173
		$	145,888	$	79,717		$	108,736	$	58,013
Intangible assets not subject to amortization:
Purchased trademark/tradename		$	2,500				$	2,500

As discussed in Note 2, intangible assets related to the Qumas Acquisition and the ChemSW Acquisition are included in our preliminary purchase price allocation and are subject to change during the measurement period. Intangible assets are amortized over their estimated useful lives either on a straight-line or accelerated basis that reflects the pattern in which the economic benefits of the intangible assets are expected to be realized, which range from one to fifteen years, with no residual value.

Intangible asset amortization expense was $21.6 million, $19.9 million and $21.0 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Future estimated amortization expense for intangible assets as of December 31, 2013 is as follows and is subject to change as a result of measurement period adjustments (in thousands):



2014	$	21,188
2015	14,195
2016	10,097
2017	7,673
2018	5,606
Thereafter	7,412
Total	$	66,171

Goodwill represents the excess of cost over fair value of net assets acquired. The change in the carrying value of goodwill during the year ended December 31, 2013 was due to goodwill recorded in connection with the Qumas Acquisition, the ChemSW Acquisition and the Vialis Acquisition. We believe the factors that contributed to goodwill include expected synergies of the combined operations of the newly acquired entities as well as intangibles that do not qualify for separate recognition such as the acquired workforce.

The changes to the carrying amount of goodwill for the year ended December 31, 2013, are as follows (in thousands):



Balance at December 31, 2012	$	123,670
Goodwill acquired in the Vialis Acquisition	810
Goodwill acquired in the ChemSW Acquisition	5,905
Goodwill acquired in the Qumas Acquisition	24,388
Goodwill measurement period adjustments related to the Aegis Acquisition	3,556
Effect of foreign exchange	178
Balance at December 31, 2013	$	158,507

- 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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