Intangible Asset and Goodwill

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Goodwill

The following tables present goodwill information for each of the reportable segments for the nine months ended September 30, 2017:



Reportable Segment:	As of December 31, 2016		Additions to Goodwill (1)		Impairment of Goodwill		Effect of Exchange Rates (2)		As of September 30, 2017
	(In thousands)
MID	$	66,643	$	—	$	—	$	—	$	66,643
RSD	138,151		803		—		3,721		142,675
Total	$	204,794	$	803	$	—	$	3,721	$	209,318

(1) During the first quarter of 2017, the Company corrected an immaterial error related to an overstatement in prepaids and other current assets that originated in 2016.

(2) Effect of exchange rates relates to foreign currency translation adjustments for the period.



	As of
	September 30, 2017
Reportable Segment:	Gross Carrying Amount		Accumulated Impairment Losses			Net Carrying Amount
	(In thousands)
MID	$	66,643	$	—		$	66,643
RSD	142,675		—			142,675
Other	21,770		(21,770		)	—
Total	$	231,088	$	(21,770	)	$	209,318

Intangible Assets

The components of the Company’s intangible assets as of September 30, 2017 and December 31, 2016 were as follows:



		As of September 30, 2017
	Useful Life	Gross Carrying Amount (1)		Accumulated Amortization			Net Carrying Amount
		(In thousands)
Existing technology	3 to 10 years	$	258,792	$	(183,590	)	$	75,202
Customer contracts and contractual relationships	1 to 10 years	68,376		(46,133		)	22,243
Non-compete agreements and trademarks	3 years	300		(300		)	—
In-process research and development	Not applicable	5,100		—			5,100
Total intangible assets		$	332,568	$	(230,023	)	$	102,545

(1) The change in gross carrying amount reflects the effects of exchange rates during the period.



		As of December 31, 2016
	Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
		(In thousands)
Existing technology	3 to 10 years	$	256,656	$	(156,577	)	$	100,079
Customer contracts and contractual relationships	1 to 10 years	65,109		(37,900		)	27,209
Non-compete agreements and trademarks	3 years	300		(300		)	—
In-process research and development	Not applicable	5,100		—			5,100
Total intangible assets		$	327,165	$	(194,777	)	$	132,388

During the three and nine months ended September 30, 2017, the Company acquired patents related to its memory technology for an immaterial amount. During the three and nine months ended September 30, 2016, the Company did not sell any intangible assets.

Included in customer contracts and contractual relationships are favorable contracts which are acquired software and service agreements where the Company has no performance obligations. Cash received from these acquired favorable contracts reduces the favorable contract intangible asset. For the three months ended September 30, 2017 and 2016, the Company received $0.5 million and $0.6 million, respectively, related to the favorable contracts. For the nine months ended September 30, 2017 and 2016, the Company received $2.8 million and $4.7 million, respectively, related to the favorable contracts. As of September 30, 2017 and December 31, 2016, the net balance of the favorable contract intangible assets was $2.2 million and $3.6 million, respectively.

Amortization expense for intangible assets for the three and nine months ended September 30, 2017 was $10.5 million and $31.4 million, respectively. Amortization expense for intangible assets for the three and nine months ended September 30, 2016, was $10.2 million and $26.0 million, respectively. The estimated future amortization of intangible assets as of September 30, 2017 was as follows (amounts in thousands):



Years Ending December 31:	Amount
2017 (remaining 3 months)	$	11,775
2018	29,624
2019	19,877
2020	19,133
2021	12,653
Thereafter	9,483
	$	102,545

It is reasonably possible that the businesses could perform significantly below the Company's expectations or a deterioration of market and economic conditions could occur. This would adversely impact the Company's ability to meet its projected results, which could cause the goodwill in any of its reporting units or long-lived assets in any of its asset groups to become impaired. Significant differences between these estimates and actual cash flows could materially affect the Company's future financial results. If the Company determines that its goodwill or long-lived assets are impaired, it would be required to record a non-cash charge that could have a material adverse effect on its results of operations and financial position.

- 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