Goodwill and Purchased Intangible Assets

6 Months Ended

Jun. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Purchased Intangible Assets

Intangible assets consist of the following as of June 30, 2012 and December 31, 2011



	June 30, 2012					December 31, 2011
	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	8	$	57,969	$	27,069	8	$	53,509	$	22,160
Purchased customer relationships	7	25,863		10,811		7	25,906		8,158
Purchased backlog	3	7,740		5,366		3	7,740		4,390
Purchased contract base	5	50		50		5	50		50
Purchased intellectual property	5	1,998		1,654		5	1,998		1,448
Purchased trademark/tradename	5	6,705		2,505		5	6,712		1,848
		$	100,325	$	47,455		$	95,915	$	38,054
Intangible assets not subject to amortization:
Purchased trademark/tradename		$	2,500				$	2,500

As discussed in Note 2, intangible assets related to the acquisition of HEOS are included based on our preliminary purchase price determination 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 two to fifteen years, with no residual value. Intangible asset amortization expense was $4.7 million and $9.4 million for the three and six months ended June 30, 2012, respectively. Intangible asset amortization expense was $5.1 million and $10.3 million for the three and six months ended June 30, 2011, respectively.

Future estimated amortization expense for intangible assets as of June 30, 2012 is as follows and is subject to change as a result of measurement period adjustments (in thousands):



2012	$	9,599
2013	15,021
2014	10,559
2015	6,415
2016	3,793
Thereafter	7,483
Total	$	52,870

The changes to the carrying amount of goodwill for the six months ended June 30, 2012, are as follows (in thousands):



Balance at December 31, 2011	$	100,429
Goodwill measurement period adjustments	408			(1)
Effect of foreign exchange	(154		)
Balance at June 30, 2012	$	100,683

(1) As discussed in Note 2, we made total measurement period adjustments related to the VelQuest Acquisition of 0.4 million consisting of $0.1 million to accrued liabilities and 0.3 million to deferred revenue offset by a measurement period adjustment of $29,000 to accrued income tax balances related to the Contur Acquisition.

- 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