Intangible Assets and Goodwill (Notes)

Intangible Assets and Goodwill

Intangible assets consist of the following (amounts in thousands):



	September 30, 2017
	Gross Amount		Accumulated Amortization			Net Amount
Core and developed technology	$	1,939,833	$	(532,821	)	$	1,407,012
Customer-related	716,945		(249,773		)	467,172
Trademarks and trade names	11,700		(10,668		)	1,032
In-process research and development	29,379		—			29,379
Distribution rights	5,578		(5,368		)	210
Other	1,449		(524		)	925
Total	$	2,704,884	$	(799,154	)	$	1,905,730



	March 31, 2017
	Gross Amount		Accumulated Amortization			Net Amount
Core and developed technology	$	1,932,329	$	(419,468	)	$	1,512,861
Customer-related	716,945		(123,616		)	593,329
Trademarks and trade names	11,700		(9,636		)	2,064
In-process research and development	38,511		—			38,511
Distribution rights	5,578		(5,346		)	232
Other	1,449		(354		)	1,095
Total	$	2,706,512	$	(558,420	)	$	2,148,092

The Company amortizes intangible assets over their expected useful lives, which range between 1 and 15 years. During the six months ended September 30, 2017, $8.9 million of in-process research and development reached technological feasibility and was reclassified as core and developed technology and began being amortized over its estimated useful life. The following is an expected amortization schedule for the intangible assets for the remainder of fiscal 2018 through fiscal 2022, absent any future acquisitions or impairment charges (amounts in thousands):



Fiscal Year Ending March 31,	Projected Amortization Expense
2018	$244,942
2019	361,769
2020	313,684
2021	257,444
2022	190,439

Amortization expense attributed to intangible assets was $122.7 million and $245.5 million for the three and six months ended September 30, 2017, respectively. Amortization expense attributed to intangible assets was $82.8 million and $165.3 million for the three and six months ended September 30, 2016, respectively. In the three and six months ended September 30, 2017, approximately $1.9 million and $3.9 million of amortization expense, respectively, was charged to cost of sales, and approximately $120.8 million and $241.6 million, respectively, was charged to operating expenses. In the three and six months ended September 30, 2016, approximately $1.0 million and $1.9 million of amortization expense, respectively, was charged to cost of sales, and approximately $81.8 million and $163.4 million, respectively, was charged to operating expenses. The Company recognized an immaterial amount of intangible asset impairment charges in the three and six months ended September 30, 2017. In connection with its acquisition of Atmel, the Company recognized intangible asset impairment charges of $2.0 million for the six months ended September 30, 2016. The impairment losses were recognized as a result of changes in the combined product roadmaps after the acquisition of Atmel that affected the use and life of these assets.

The following shows the goodwill balance as of September 30, 2017 and March 31, 2017 by segment (amounts in thousands):



	Semiconductor Products Reporting Unit		Technology Licensing Reporting Unit
Goodwill	$	2,279,809	$	19,200

At March 31, 2017, 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 September 30, 2017, 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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