INTANGIBLE ASSETS AND GOODWILL
Intangible assets consist of the following (amounts in thousands):
|
| | | | | | | | | | | | |
| | March 31, 2013 |
| | Gross Amount | | Accumulated Amortization | | Net Amount |
Developed technology | | $ | 375,006 |
| | $ | (69,107 | ) | | $ | 305,899 |
|
Customer-related | | 194,500 |
| | (68,522 | ) | | 125,978 |
|
Trademarks and trade names | | 15,730 |
| | (3,941 | ) | | 11,789 |
|
Backlog | | 24,610 |
| | (17,310 | ) | | 7,300 |
|
In-process technology | | 78,968 |
| | — |
| | 78,968 |
|
Distribution rights | | 5,236 |
| | (5,101 | ) | | 135 |
|
Covenants not to compete | | 400 |
| | (333 | ) | | 67 |
|
| | $ | 694,450 |
| | $ | (164,314 | ) | | $ | 530,136 |
|
|
| | | | | | | | | | | | |
| | March 31, 2012 |
| | Gross Amount | | Accumulated Amortization | | Net Amount |
Developed technology | | $ | 94,681 |
| | $ | (35,920 | ) | | $ | 58,761 |
|
Customer-related | | 20,400 |
| | (4,633 | ) | | 15,767 |
|
Trademarks and trade names | | 1,730 |
| | (684 | ) | | 1,046 |
|
Backlog | | 2,410 |
| | (2,410 | ) | | — |
|
In-process technology | | 14,086 |
| | — |
| | 14,086 |
|
Distribution rights | | 5,236 |
| | (4,660 | ) | | 576 |
|
Covenants not to compete | | 400 |
| | (200 | ) | | 200 |
|
| | $ | 138,943 |
| | $ | (48,507 | ) | | $ | 90,436 |
|
The Company amortizes intangible assets over their expected useful lives, which range between 1 and 15 years. In fiscal 2013, the Company acquired $263.8 million of developed technology which has a weighted average amortization period of 8 years, $174.1 million of customer-related intangible assets which has a weighted average amortization period of 5 years, $14 million of trademark and trade names with an amortization period of 5 years, $22.2 million of intangible assets related to
backlog with an amortization period of 1 year and $81.6 million of in-process technology which will begin amortization once the technology reaches technological feasibility. The following is an expected amortization schedule for the intangible assets for fiscal 2014 through fiscal 2018, absent any future acquisitions or impairment charges (amounts in thousands):
|
| |
Year ending March 31, | Projected Amortization Expense |
2014 | $100,673 |
2015 | 133,005 |
2016 | 88,223 |
2017 | 59,183 |
2018 | 44,902 |
Amortization expense attributed to intangible assets was $115.8 million, $13.0 million and $13.9 million for fiscal years 2013, 2012 and 2011, respectively. In fiscal 2013, approximately $3.9 million was charged to cost of sales and approximately $111.9 million was charged to operating expenses. In fiscal 2012, approximately $1.4 million was charged to cost of sales and approximately $11.6 million was charged to operating expenses. In fiscal 2011, $0.9 million was charged to cost of sales and $13.0 million was charged to operating expenses. The Company found no indication of impairment of its intangible assets in fiscal 2013, 2012 or 2011.
Goodwill activity for fiscal years 2013 and 2012 was as follows (amounts in thousands):
|
| | | | | | | |
| Semiconductor Products Reporting Unit | | Technology Licensing Reporting Unit |
Balance at March 31, 2011 | $ | 56,818 |
| | $ | 19,200 |
|
Additions due to contingent consideration payments | 120 |
| | — |
|
Additions due to the acquisition of Ident Technology AG | 17,375 |
| | — |
|
Balance at March 31, 2012 | 74,313 |
| | 19,200 |
|
Additions due to the acquisition of SMSC | 169,065 |
| | — |
|
Additions due to the acquisition of Roving Networks | 8,652 |
| | — |
|
Additions due to contingent consideration payments | 118 |
| | — |
|
Balance at March 31, 2013 | $ | 252,148 |
| | $ | 19,200 |
|
In the year ended March 31, 2012, the Company acquired Ident Technology AG. This acquisition resulted in approximately $17.4 million of goodwill which was allocated to the semiconductor products reporting unit.
In the year ended March 31, 2013, the Company acquired SMSC and Roving Networks. The SMSC acquisition resulted in approximately $169.1 million of goodwill which was allocated to the semiconductor products reporting unit. The Roving Networks acquisition resulted in approximately $8.7 million of goodwill which was allocated to the semiconductor products reporting unit.
At March 31, 2013, $252.1 million of goodwill was recorded in the Company's semiconductor products reporting unit and $19.2 million was recorded in the Company's technology licensing reporting unit. At March 31, 2013, the Company applied a qualitative goodwill impairment screen to its two reporting units, concluding it was not more likely than not that goodwill was impaired. Through March 31, 2013, the Company has never recorded an impairment charge against its goodwill balance.
