Intangible Assets and Goodwill (Notes)

3 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets consist of the following (in millions):



	June 30, 2018
	Gross Amount		Accumulated Amortization			Net Amount
Core and developed technology	$	5,754.9	$	(737.6	)	$	5,017.3
Customer-related	1,165.1		(416.0		)	749.1
Backlog	36.9		(0.4		)	36.5
In-process research and development	445.1		—			445.1
Distribution rights	0.3		(0.1		)	0.2
Other	1.5		(0.8		)	0.7
Total	$	7,403.8	$	(1,154.9	)	$	6,248.9



	March 31, 2018
	Gross Amount		Accumulated Amortization			Net Amount
Core and developed technology	$	1,952.3	$	(644.4	)	$	1,307.9
Customer-related	716.9		(375.9		)	341.0
In-process research and development	12.1		—			12.1
Distribution rights	0.3		(0.1		)	0.2
Other	1.5		(0.7		)	0.8
Total	$	2,683.1	$	(1,021.1	)	$	1,662.0

The Company amortizes intangible assets over their expected useful lives, which range between 1 and 15 years. During the three months ended June 30, 2018, due to the acquisition of Microsemi, the Company acquired $3.80 billion of core and developed technology which has a weighted average amortization period of 10 years, $448.1 million of customer-related intangible assets which have a weighted average amortization period of 10 years, $36.9 million of intangible assets related to backlog with an amortization period of 1 year, and $434.0 million of in-process technology which will begin amortization once the technology reaches technological feasibility. In the three months ended June 30, 2018, $1.0 million of in-process research and development intangible assets reached technological feasibility and was reclassified as core and developed technology and began being amortized over the respective estimated useful lives. The following is an expected amortization schedule for the intangible assets for the remainder of fiscal 2019 through fiscal 2023, absent any future acquisitions or impairment charges (in millions):



Fiscal Year Ending March 31,	Projected Amortization Expense
2019	$855.5
2020	$1,045.1
2021	$983.7
2022	$704.3
2023	$612.1

Amortization expense attributed to intangible assets was $134.8 million and $122.8 million for the three months ended June 30, 2018 and 2017, respectively. In the three months ended June 30, 2018, approximately $1.0 million of amortization expense was charged to cost of sales, and approximately $133.8 million was charged to operating expenses. In the three months ended June 30, 2017, approximately $2.0 million of amortization expense was charged to cost of sales, and approximately $120.8 million was charged to operating expenses. The Company recognized $2.0 million of intangible asset impairment charges in the three months ended June 30, 2018. The impairment charges were recognized as a result of writing off intangibles assets purchased from Microsemi prior to the close of the acquisition. The Company recognized an immaterial amount of intangible asset impairment charges in the three months ended June 30, 2017. The impairment charges were related to the Microsemi acquisition and were attributable to the intangible assets being owned by the Company prior to the acquisition date.

Goodwill activity for the three months ended June 30, 2018 was as follows (in millions):



	Semiconductor Products Reporting Unit		Technology Licensing Reporting Unit
Balance at March 31, 2018	$	2,279.8	$	19.2
Additions due to the acquisition of Microsemi	4,974.2		—
Balance at June 30, 2018	$	7,254.0	$	19.2

At March 31, 2018, the Company applied a qualitative goodwill impairment test to its two reporting units, concluding it was not more likely than not that goodwill was impaired. Through June 30, 2018, the Company has never recorded an impairment charge against its goodwill balance.

- 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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