Goodwill And Identified Intangible Assets

6 Months Ended

Jun. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill And Identified Intangible Assets

GOODWILL AND IDENTIFIED INTANGIBLE ASSETS

The changes to the carrying value of goodwill as of and during the six months ended June 30, 2013, is reflected below (in thousands):



	DigitalOptics
Balance at December 31, 2012	$	6,664
Impairment of goodwill	(6,664		)
Balance at June 30, 2013	$	—

In March 2013, the Company revised its business strategy for the DigitalOptics business to concentrate its manufacturing efforts on the lens barrel, rather than the whole camera module. This revised strategy made the Zhuhai Facility unnecessary. The Company announced its plans to close the Zhuhai Facility in March 2013. This decision triggered an impairment review of the related goodwill and purchased intangible assets recorded in connection with the Zhuhai Transaction (see Note 6 – "Discontinued Operations," for additional detail regarding the Zhuhai Transaction). As a result of the Company's impairment assessment, completed in the first quarter of 2013, the Company recorded an impairment charge to goodwill of $6.7 million, all of which was included in the DigitalOptics segment.

Identified intangible assets consisted of the following (in thousands):



		June 30, 2013							December 31, 2012
	Average Life (Years)	Gross Assets		Accumulated Amortization			Net		Gross Assets		Accumulated Amortization			Net
Acquired patents / core technology (1), (3)	3-15	$	131,121	$	(42,091	)	$	89,030	$	137,728	$	(38,874	)	$	98,854
Existing technology (2), (3)	5-10	21,734		(16,686		)	5,048		54,196		(38,562		)	15,634
Customer contracts (3)	3-9	10,000		(6,536		)	3,464		12,800		(8,033		)	4,767
Trade name (3)	4-10	520		(465		)	55		3,620		(2,443		)	1,177
Non-competition agreements	2	—		—			—		1,400		(1,400		)	—
Assembled workforce	4	—		—			—		300		(300		)	—
		$	163,375	$	(65,778	)	$	97,597	$	210,044	$	(89,612	)	$	120,432

(1) The Company recorded a $400,000 charge in the six months ended June 30, 2013 due to abandonment of acquired patents which caused a revision of the useful life estimate of these patent assets thus fully impairing them.

(2) The Company incurred an $8.3 million charge in the six months ended June 30, 2013 due to the abandonment of existing technology which caused a revision of the useful life estimate of these technology assets thus fully impairing them.

(3) The Company reclassified $2.1 million of patents, trade names, customer contracts and existing technology to discontinued operations as of June 30, 2013 and December 31, 2012, respectively. See Note 6 - "Discontinued Operations" of the Notes to Condensed Financial Statements for additional details.

Amortization expense for the three months ended June 30, 2013 and 2012 amounted to $5.4 million and $6.3 million, respectively. Amortization expense for the six months ended June 30, 2013 and 2012 amounted to $11.8 million and $12.7 million , respectively. As of June 30, 2013, the estimated future amortization expense of intangible assets is as follows (in thousands):




2013 (remaining 6 months)	$	10,368
2014	19,089
2015	18,265
2016	17,412
2017	14,607
Thereafter	17,856
	$	97,597

- 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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