Intangible Asset and Goodwill

6 Months Ended

Jun. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The following table presents goodwill balances and adjustments to those balances for each of the reportable segments for the six months ended June 30, 2013:



Reportable Segment:	December 31, 2012		Additions to Goodwill		Impairment Charge of Goodwill		June 30, 2013
	(In thousands)
MID	$	19,905	$	—	$	—	$	19,905
CTO	8,070		—		—		8,070
All Other	96,994		—		—		96,994
Total	$	124,969	$	—	$	—	$	124,969



	As of
	June 30, 2013
Reportable Segment:	Gross Carrying Amount		Accumulated Impairment Losses			Net Carrying Amount
	(In thousands)
MID	$	19,905	$	—		$	19,905
CTO	8,070		—			8,070
All Other	110,694		(13,700		)	96,994
Total	$	138,669	$	(13,700	)	$	124,969

Intangible Assets

The components of the Company’s intangible assets as of June 30, 2013 and December 31, 2012 were as follows:



		As of June 30, 2013
	Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
		(In thousands)
Existing technology	3 to 10 years	$	193,345	$	(69,728	)	$	123,617
Customer contracts and contractual relationships	1 to 10 years	32,650		(16,964		)	15,686
Non-compete agreements	3 years	300		(208		)	92
Total intangible assets		$	226,295	$	(86,900	)	$	139,395



		As of December 31, 2012
	Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
		(In thousands)
Existing technology	3 to 10 years	$	191,815	$	(57,240	)	$	134,575
Customer contracts and contractual relationships	1 to 10 years	32,650		(14,194		)	18,456
Non-compete agreements	3 years	300		(158		)	142
Total intangible assets		$	224,765	$	(71,592	)	$	153,173

During the three and six months ended June 30, 2013, the Company purchased intellectual property of $0.6 million and $2.5 million, respectively, which were recorded as intangible assets on the condensed consolidated balance sheets. During the three and six months ended June 30, 2013, the Company sold portfolios of its intellectual property covering lighting technologies for $0.3 million and $2.3 million, respectively, and the related gain was recorded as gain from sale of intellectual property in the condensed consolidated statements of operations.

During the six months ended June 30, 2012, the Company entered into various business combinations and technology asset acquisitions. These transactions had a total purchase price of $48.2 million. These transactions were completed to acquire patents and technology to expand the Company's existing technology for its MID and MTD groups.

The favorable contracts (included in customer contracts and contractual relationships) are acquired patent licensing agreements where the Company has no performance obligations. Cash received from these acquired favorable contracts reduce the favorable contract intangible asset. For the three months ended June 30, 2013 and 2012, the Company received an immaterial amount and $1.2 million related to the favorable contracts, respectively. For the six months ended June 30, 2013 and 2012, the Company received $1.4 million and $3.6 million related to the favorable contracts, respectively. As of June 30, 2013 and December 31, 2012, the net balance of the favorable contract intangible assets was $3.4 million and $4.8 million, respectively.

Amortization expense for intangible assets for the three and six months ended June 30, 2013 was $7.0 million and $14.0 million, respectively. Amortization expense for intangible assets for the three and six months ended June 30, 2012 was $7.9 million and $15.6 million, respectively.

The estimated future amortization expense of intangible assets as of June 30, 2013 was as follows (amounts in thousands):



Years Ending December 31:	Amount
2013 (remaining 6 months)	$	17,132
2014	27,599
2015	26,949
2016	26,081
2017	24,625
Thereafter	17,009
	$	139,395

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 MTD and LDT reporting units are not successful in commercializing new business arrangements, or if the Company is unsuccessful in signing new license agreements or renewing its existing license agreements for the MID and CRI reporting units, the revenue and income for these reporting units could adversely and materially deviate from their historical trends and could cause goodwill or long-lived assets to become impaired. If the Company determines that its goodwill or long-lived assets are impaired, the Company 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.

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