XML 85 R15.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Intangible Assets and Goodwill | 12 Months Ended
--- | ---
Dec. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract] |
Intangible Assets and Goodwill | Intangible Assets and Goodwill 2013 Impairment of Long-Lived Assets During the fourth quarter of 2013, as a result of the change in business strategy for the LDT reporting unit to reduce its focus on the lower margin bulb products, the Company revised its projected cash flows for LDT, triggering an impairment analysis for long-lived assets. As a result of the impairment analysis, the Company concluded that its LDT asset group was not able to recover the carrying amount of its assets. Determining the fair value of an asset group unit is judgmental in nature and requires the use of significant estimates and assumptions, considered to be Level 3 fair value inputs, including current replacement costs, revenue growth rates and operating margins, and discount rates, among others. Accordingly, the Company was required to make various estimates in determining the fair values of the LDT asset group. Due to the highly customized nature of the LDT manufacturing equipment, the Company primarily utilized the cost approach to estimate the fair value of its property, plant and equipment. To determine the estimated fair value of its property, plant and equipment, adjustment factors, including cost trend factors, were applied to each individual asset's original cost in order to estimate current replacement cost. The current replacement cost was then adjusted for estimated deductions to recognize the effects of deterioration and obsolescence from all causes, as well as indirect costs such as installation. Where appropriate, the Company utilized a market approach to estimate the fair value of its property, plant and equipment. This approach included the identification of market prices in actual transactions for similar assets based on asking prices for assets currently available for sale, as well as obtaining and reviewing certain direct market values based quoted prices with manufacturers and secondary market participants for similar equipment. Upon completion of this analysis, the Company recorded an impairment charge of $3.5 million, $0.5 million and $0.2 million for building and related improvements, machinery and equipment, and software in its LDT asset group, respectively. The estimated fair value of the LDT acquired existing technology intangible assets was determined based on the income approach, using Level 3 fair value inputs, as it was deemed to be the most indicative of the fair value in an orderly transaction between market participants. Under the income approach the Company determined fair value based on the estimated future cash flows resulting from the licensing of the technology underlying the intangible assets. The estimated cash flows in the income approach were discounted by an estimated weighted-average cost of capital which reflects the overall level of inherent risk of the reporting unit and the rate of return an outside investor would expect to earn. Upon completion of this analysis, the Company recorded an impairment charge of $4.0 million in the fourth quarter of 2013 related to the acquired intangible assets. Also, during the fourth quarter of 2013, as a result of changes in one customer's business, the Company recorded a $1.5 million impairment charge related to its CRI favorable contracts (refer to "Intangible Assets" table below for further discussion on favorable contracts) due to a decline in the projected cash flows from the customer. The long-lived asset impairment charges for LDT and CRI aggregating to $9.7 million were included in "Impairment of goodwill and long-lived assets" in the Consolidated Statements of Operations. As of December 31, 2013, the Company had $12.9 million and $99.4 million of long-lived assets remaining in its LDT and CRI asset groups, respectively. 2013 Impairment of Goodwill During the third quarter of 2013, the Company curtailed its immersive media platform spending. The Company conducted an impairment review as a result of the change of its strategy related to the immersive media platform. As a result of this impairment review, the Company recorded a charge of $8.1 million to fully impair the goodwill related to the MTD reporting unit which was part of the CTO reportable segment. The goodwill impairment charge was reflected in "Impairment of goodwill and long-lived assets" in the Consolidated Statements of Operations. The Company estimated the fair value of the MTD reporting unit using the income approach which was determined using Level 3 fair value inputs. The utilization of the income approach to determine fair value requires estimates of future operating results and cash flows discounted using an estimated discount rate. Cash flow projections are based on management's estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used of 36% is based on a weighted average cost of capital adjusted for the relevant risk associated with the characteristics of the business and the projected cash flows. In the fourth quarter of 2013, the Company performed its annual goodwill impairment analysis for the MID and CRI reporting units, which are the only reporting units with goodwill. As of December 31, 2013, the fair value of the MID reporting unit, with $19.9 million of goodwill, exceeded the carrying value of its net assets by approximately 480%; the fair value of the CRI reporting unit, with $97.0 million of goodwill, exceeded the carrying value of its net assets by approximately 44%. To arrive at the cash flow projections utilized in the income approach, the Company used the reporting unit’s forecast of estimated operating results based on assumptions such as long-term revenue growth rates, costs and estimates of future anticipated changes in operating margins based on economic and market information. Key assumptions used to determine the fair value of the MID and CRI reporting units at December 31, 2013, were the revenue growth rates for the forecast period and terminal year, terminal growth rates and discount rates. Certain estimates used in the income approach involve information for new product lines with limited financial history and developing revenue models which increase the risk of differences between the projected and actual performance. The discount rate of 14% for MID and 21% for CRI is based on the reporting units’ overall risk profile relative to other guideline companies, the reporting units’ respective industry as well as the visibility of future expected cash flows. The terminal growth rate applied to determine fair value for both reporting units was 3%, which was based on historical experience as well as anticipated economic conditions, industry data and long term outlook for the business. These assumptions are inherently uncertain. 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 reporting units are not successful in commercializing new business arrangements, if the businesses are unsuccessful in signing new license agreements or renewing its existing license agreements, or if the Company is unsuccessful in managing its costs, 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, 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. 2012 Impairment of Long-Lived Assets In August 2012, as a result of the change in business strategy for the LDT reporting unit, the Company revised its projected cash flows for LDT, triggering an interim impairment analysis of goodwill and long-lived assets. The decline in the projected cash flows for LDT resulted from a change in business strategy with less focus on the higher margin display technology licensing and an increased focus on its general lighting technologies. As noted above, the Company tested for impairment its long-lived assets in LDT as of August 31, 2012. The Company determined its long-lived asset group to be its LDT reporting unit comprised primarily of finite-lived intangible assets and property, plant and equipment. As a result of the interim impairment analysis, the Company concluded that its LDT asset group was not able to recover the carrying amount of its LDT assets. Determining the fair value of an asset group unit is judgmental in nature and requires the use of significant estimates and assumptions, considered to be Level 3 fair value inputs, including current replacement costs, revenue growth rates and operating margins, and discount rates, among others. Accordingly, the Company was required to make various estimates in determining the fair values of the LDT asset group. Due to the highly customized nature of the LDT manufacturing equipment, the Company primarily utilized the cost approach to estimate the fair value of its property, plant and equipment. To determine the estimated fair value of its property, plant and equipment, adjustment factors, including cost trend factors, were applied to each individual asset's original cost in order to estimate current replacement cost. The current replacement cost was then adjusted for estimated deductions to recognize the effects of deterioration and obsolescence from all causes, as well as indirect costs such as installation. Where appropriate, the Company utilized a market approach to estimate the fair value of its property, plant and equipment. This approach included the identification of market prices in actual transactions for similar assets based on asking prices for assets currently available for sale, as well as obtaining and reviewing certain direct market values based quoted prices with manufacturers and secondary market participants for similar equipment. Upon completion of this analysis, the Company recorded an impairment charge of $5.8 million and $0.6 million for building and related improvements and software in its LDT asset group, respectively. The estimated fair value of the LDT intangible assets was determined based on the income approach, using Level 3 fair value inputs, as it was deemed to be the most indicative of the Company's fair value in an orderly transaction between market participants. Under the income approach the Company determined fair value based on the estimated future cash flows resulting from the licensing of the technology underlying the intangible assets. The estimated cash flows in the income approach were discounted by an estimated weighted-average cost of capital which reflects the overall level of inherent risk of the reporting unit and the rate of return an outside investor would expect to earn. Upon completion of this analysis, the Company recorded an impairment charge of $15.4 million in the third quarter of 2012 related to the LDT intangible assets. Accordingly a long-lived asset impairment charge aggregating to $21.8 million was included in "Impairment of goodwill and long-lived assets" in the accompanying Consolidated Statements of Operations. 2012 Impairment of Goodwill In addition to the annual goodwill impairment analysis, the Company performed an event-driven interim impairment analysis of goodwill as of August 31, 2012 as noted above. The fair value of each of the reporting units was determined using the income approach as discussed above. One of the key assumptions used in applying the income approach includes discount rates which ranged from 20% to 35% depending on the reporting units' overall risk profile relative to other guideline companies, the reporting units' respective industry as well as the visibility of future expected cash flows. Upon the completion of the goodwill impairment analysis as of August 31, 2012, the Company recorded a non-cash goodwill impairment charge of $13.7 million relating to the LDT reporting unit. The goodwill impairment charge is included in “Impairment of goodwill and long-lived assets” in the accompanying Consolidated Statements of Operations. Goodwill The following tables present goodwill information for each of the reportable segments for the years ended December 31, 2013 and December 31, 2012:
Reportable Segment: | December 31, 2012 |  | Addition to Goodwill |  | Impairment Charge of Goodwill (1) |  | December 31, 2013
| (In thousands)
MID | $ | 19,905 |  |  | $ | — |  |  | $ | — |  |  | $ | 19,905 |
CTO | 8,070 |  |  | — |  |  | (8,070 | ) |  | — |
CRI | 96,994 |  |  | — |  |  | — |  |  | 96,994 |
Total | $ | 124,969 |  |  | $ | — |  |  | $ | (8,070 | ) |  | $ | 116,899 |
______________________________________ (1) The Company recorded a non-cash goodwill impairment charge of $8.1 million related to the MTD reporting unit as discussed above.
| As of December 31, 2013
Reportable Segment: | Gross Carrying Amount |  | Accumulated Impairment Losses |  | Net Carrying Amount
| (In thousands)
MID | $ | 19,905 |  |  | $ | — |  |  | $ | 19,905 |
CTO | 8,070 |  |  | (8,070 | ) |  | — |
CRI | 96,994 |  |  | — |  |  | 96,994 |
All Other | 13,700 |  |  | (13,700 | ) |  | — |
Total | $ | 138,669 |  |  | $ | (21,770 | ) |  | $ | 116,899 |
Reportable Segment: | December 31, 2011 |  | Addition to Goodwill (1) |  | Impairment Charge of Goodwill (2) |  | December 31, 2012
MID | $ | 4,454 |  |  | $ | 15,451 |  |  | $ | — |  |  | $ | 19,905 |
CTO | — |  |  | 8,070 |  |  | — |  |  | 8,070 |
CRI | 96,994 |  |  | — |  |  | — |  |  | 96,994 |
All Other | 13,700 |  |  | — |  |  | (13,700 | ) |  | — |
Total | $ | 115,148 |  |  | $ | 23,521 |  |  | $ | (13,700 | ) |  | $ | 124,969 |
______________________________________ (1) The addition to goodwill resulted from two business combinations in the first quarter of 2012. See Note 5, “Acquisitions” for further details. (2) The Company recorded a non-cash goodwill impairment charge of $13.7 million related to the LDT reporting unit as discussed above.
| As of December 31, 2012
Reportable Segment: | Gross Carrying Amount |  | Accumulated Impairment Losses |  | Net Carrying Amount
MID | $ | 19,905 |  |  | $ | — |  |  | $ | 19,905 |
CTO | 8,070 |  |  | — |  |  | 8,070 |
CRI | 96,994 |  |  | — |  |  | 96,994 |
All Other | 13,700 |  |  | (13,700 | ) |  | — |
Total | $ | 138,669 |  |  | $ | (13,700 | ) |  | $ | 124,969 |
Intangible Assets The components of the Company’s intangible assets as of December 31, 2013 and December 31, 2012 were as follows:
|  |  | As of December 31, 2013
| Useful Life |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
|  |  | (In thousands)
Existing technology (1) | 3 to 10 years |  | $ | 186,202 |  |  | $ | (80,961 | ) |  | $ | 105,241 |
Customer contracts and contractual relationships (2) | 1 to 10 years |  | 31,093 |  |  | (19,204 | ) |  | 11,889 |
Non-compete agreements | 3 years |  | 300 |  |  | (258 | ) |  | 42 |
Total intangible assets |  |  | $ | 217,595 |  |  | $ | (100,423 | ) |  | $ | 117,172 |
______________________________________ (1) The Company recorded a non-cash intangible impairment charge of $4.0 million related to the LDT group which has been netted from the gross carrying amount and accumulated amortization for existing technology. (2) The Company recorded a non-cash intangible impairment charge of $1.5 million related to a favorable contract which has been netted from the gross carrying amount and accumulated amortization for customer contracts and contractual relationships.
|  |  | As of December 31, 2012
| Useful Life |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
|  |  | (In thousands)
Existing technology (1) | 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 |
______________________________________ (1) The Company recorded a non-cash intangible impairment charge of $15.4 million related to the LDT group as discussed above which has been netted from the gross carrying amount and accumulated amortization for existing technology. 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. During 2013 and 2012, the Company received $2.3 million and $5.1 million related to the favorable contracts, respectively. As of December 31, 2013 and 2012, the net balance of the favorable contract intangible assets was $1.0 million and $4.8 million, respectively. The estimated useful life is based on expected payment dates related to the favorable contracts. The group of acquired intangible assets had an original estimated weighted average useful life of approximately 7 years from the date of acquisition. Refer to Note 5, “Acquisitions” for additional details. As of December 31, 2013, as part of the Company's business strategy of monetizing its patent portfolio to include the sale of selected intellectual property, the Company had $2.3 million of intangible assets classified as held for sale primarily in the MID reportable segment which the Company expects to sell by the middle of 2014. In addition to the business acquisitions discussed in Note 5, "Acquisitions", the Company acquired other patents in 2013, 2012 and 2011 aggregating $2.5 million, $1.7 million, $4.2 million (only $1.2 million was paid in cash), respectively. Amortization expense for intangible assets for the years ended December 31, 2013, 2012, and 2011 was $28.9 million, $30.3 million and $20.2 million, respectively. The estimated future amortization expense of intangible assets as of December 31, 2013 was as follows (amounts in thousands):
Years Ending December 31: | Amount
2014 | $ | 27,487 |
2015 | 25,348 |
2016 | 24,356 |
2017 | 23,734 |
2018 | 10,827 |
Thereafter | 5,420 |
| $ | 117,172 |

X
- Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16323-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13854-109267 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13816-109267 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16373-109275 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16265-109275 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 142 -Paragraph 42, 43, 44, 45, 46, 47 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration