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Amortizable Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2011

Amortizable Intangible Assets and Goodwill

Amortizable Intangible Assets and Goodwill

12. Amortizable Intangible Assets and Goodwill

Intangible Assets

The components of the Company’s intangible assets as of September 30, 2011 and December 31, 2010 were as follows:

		As of September 30, 2011
		Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
		(In thousands)
Patents (useful life of 3 to 10 years)		$	27,643		$	(12,042	)	$	15,601
Customer contracts and contractual relationships (useful life of 1 to 10 years)		33,550			(5,327		)	28,223
Existing technology (useful life of 3 to 7 years)		159,350			(14,078		)	145,272
Intellectual property (useful life of 4 years)		10,384			(10,384		)	—
Non-competition agreement (useful life of 3 years)		400			(133		)	267
Total intangible assets		$	231,327		$	(41,964	)	$	189,363

		As of December 31, 2010
		Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
		(In thousands)
Patents (useful life of 3 to 10 years)		$	24,433		$	(9,361	)	$	15,072
Customer contracts and contractual relationships (useful life of 1 to 10 years)		4,050			(3,127		)	923
Existing technology (useful life of 3 to 7 years)		29,950			(4,959		)	24,991
Intellectual property (useful life of 4 years)		10,384			(10,384		)	—
Non-competition agreement (useful life of 3 years)		100			(100		)	—
Total intangible assets		$	68,917		$	(27,931	)	$	40,986

Amortization expense for intangible assets for the three and nine months ended September 30, 2011 was $6.9 million and $12.9 million, respectively. Amortization expense for intangible assets for the three and nine months ended September 30, 2010 was $1.3 million and $3.6 million, respectively.

During the third quarter of 2011, the Company acquired semiconductor patents with a fair value of $3.2 million.

During the second quarter of 2011, the Company acquired CRI. As part of the acquisition, the Company acquired the following intangible assets with fair values determined as of the acquisition date:

		Total			Estimated Useful Life
		(in thousands)			(in years)
Existing technology		$	129,400		7
Customer relationships		17,300			7
Favorable contracts		12,200			2
Non-competition agreements		300			3
Total		$	159,200

The favorable contracts are acquired patent licensing agreements where the Company has no performance obligations. Cash received from these acquired favorable contracts will reduce the favorable contract intangible asset. During the third quarter of 2011, the Company received $1.1 million related to the favorable contracts. The estimated useful life is based on expected payment dates related to the favorable contracts. The group of purchased intangible assets has an estimated weighted average useful life of approximately 7 years from the date of acquisition. Refer to Note 16, “Acquisition” for additional details.

The estimated future amortization expense of intangible assets as of September 30, 2011 was as follows (amounts in thousands):

Years Ending December 31:		Amount
2011 (remaining 3 months)		$	8,384
2012		35,167
2013		32,101
2014		27,960
2015		27,309
Thereafter		58,442
		$	189,363

Goodwill

As a result of the CRI acquisition, the Company recorded approximately $97.0 million of goodwill. CRI is a new reporting unit within the NBG reportable segment which focuses on data security technology. Refer to Note 16, “Acquisition” for additional details.

Goodwill information for each reporting unit is as follows:

		December 31,			Addition to			September 30,
Reporting Units:		2010			Goodwill (1)			2011
		(In thousands)
SBG		$	4,454		$	—		$	4,454
CRI		—			96,994			96,994
Lighting and Display Technology group (“LDT”)		13,700			—			13,700
Total		$	18,154		$	96,994		$	115,148

(1) The addition to goodwill resulted from a business combination which was completed on June 3, 2011. See Note 16, “Acquisition” for further details.

The SBG reporting unit represents the SBG reportable segment. Additionally, both the CRI and LDT reporting units are part of the NBG reportable segment.

No goodwill was impaired as of September 30, 2011 and December 31, 2010.