XML 24 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
Goodwill and Intangible Assets
 9 Months Ended
Sep. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets

Note 5. Goodwill and Intangible Assets

 

Goodwill

 

As of September 30, 2018, the Company has preliminarily recorded goodwill of $310.8 million related to the Ruckus Networks acquisition. The Company is in the process of assigning the assets and liabilities acquired to each of its identified reporting units and as such, the determination of this goodwill by reporting unit is incomplete as of September 30, 2018.  The Company intends to finalize the assignment of the goodwill from the Ruckus Networks acquisition during fiscal year 2018. 

 

The changes in the carrying amount of goodwill for the year to date period ended September 30, 2018 are as follows (in thousands):

 

    CPE     N & C     Enterprise     Total  
Goodwill   $ 1,386,680     $ 1,003,654     $ 318,034     $ 2,708,368  
Accumulated impairment losses     —       (429,856 )     —       (429,856 )
Balance as of December 31, 2017   $ 1,386,680     $ 573,798     $ 318,034     $ 2,278,512  
Changes in year 2018:                                
Goodwill acquired, net     —       —       (7,222 )     (7,222 )
Impairment     —       (3,400 )     —       (3,400 )
Other     (7,341 )     453       —       (6,888 )
Balance as of September 30, 2018   $ 1,379,339     $ 570,851     $ 310,812     $ 2,261,002  
                                 
Goodwill     1,379,339       1,004,107       310,812       2,694,258  
Accumulated impairment losses     —       (433,256 )     —       (433,256 )
Balance as of September 30, 2018   $ 1,379,339     $ 570,851     $ 310,812     $ 2,261,002  

 

In addition, during the nine months ended September 30, 2018, the Company recorded partial impairment of goodwill of $3.4 million related to our Cloud TV reporting unit, respectively, of which $1.2 million is attributable to the noncontrolling interest. This impairment was a result of the indirect effect of a change in accounting principle related to the adoption of new accounting standard Revenue from Contracts with Customers, resulting in changes in the composition and carrying amount of the net assets of our Cloud TV reporting unit. The partial impairment was included in impairment of goodwill on the Consolidated Statements of Operations.

 

Intangible Assets

 

The gross carrying amount and accumulated amortization of the Company’s acquired intangible assets as of September 30, 2018 and December 31, 2017 are as follows (in thousands):

 

    September 30, 2018     December 31, 2017  
    Gross
Amount		     Accumulated
Amortization		     Net Book
Value		     Gross
Amount		     Accumulated
Amortization		     Net Book
Value		  
Definite-lived intangible assets:                                                
Customer relationships   $ 1,759,668     $ 908,648     $ 851,020     $ 1,672,470     $ 780,655     $ 891,815  
Developed technology, patents & licenses     1,479,200       914,538       564,662       1,521,893       771,200       750,693  
Trademarks, trade and domain names     75,672       58,631       17,041       87,472       41,885       45,587  
Backlog     15,300       14,843       457       35,000       5,833       29,167  
Sub-total     3,329,840       1,896,660       1,433,180       3,316,835       1,599,573       1,717,262  
                                                 
Indefinite-lived intangible assets:                                                
Tradenames     55,400       —       55,400       —       —       —  
In-process research and development     —       —       —       54,100       —       54,100  
Sub-total     55,400       —       55,400       54,100       —       54,100  
Total   $ 3,385,240     $ 1,896,660     $ 1,488,580     $ 3,370,935     $ 1,599,573     $ 1,771,362  

 

As of September 30, 2018, the Company preliminarily recorded intangible assets (other than goodwill) of $494.7 million related to the Ruckus Networks acquisition. In-process research and development of $4.1 million was reclassified to become a definite-lived asset upon completion of the associated research and development efforts during the quarter ended June 30, 2018.

 

Amortization expense is reported in the consolidated statements of operations within cost of sales and operating expenses. The following table presents the amortization of acquired intangible assets (in thousands):

 

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2018     2017     2018     2017  
                         
Cost of sales   $ 890     $ 871     $ 2,668     $ 2,293  
Selling, general and administrative expenses     986       950       2,969       2,849  
Amortization of acquired intangible assets (1)     88,305       90,162       293,499       274,819  
Total   $ 90,181     $ 91,983     $ 299,136     $ 279,961  

 

(1) Reflects amortization expense for the intangible assets acquired through business combinations.

 

The estimated total amortization expense for finite-lived intangibles for each of the next five fiscal years is as follows (in thousands):

 

 

2018 (for the remaining three months)   $ 89,861  
2019     332,979  
2020     321,134  
2021     186,348  
2022     149,089  
Thereafter     353,769