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Goodwill and Intangible Assets | 12 Months Ended
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Dec. 31, 2014
Goodwill and Intangible Assets |
Goodwill and Intangible Assets | Note 6 — Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the sum of the amounts assigned to tangible and identifiable intangible assets acquired less liabilities assumed in each business combination. The following table presents the changes in goodwill balances during the fiscal years indicated:
|  | Gross |  |  |  |  |
|  | Carrying |  | Accumulated |  | Net |
|  | Amount |  | Impairment |  | Amount |
|  | (in thousands) |
As of December 31, 2012 |  | $ | 151,069 |  | $ | 95,241 |  | $ | 55,828 |
Acquisition |  | 35,520 |  | — |  | 35,520 |
As of December 31, 2013 |  | 186,589 |  | 95,241 |  | 91,348 |
Acquisition |  | 51,396 |  | — |  | 51,396 |
Purchase price adjustments |  | 173 |  | — |  | 173 |
Impairments |  | — |  | 27,958 |  | (27,958 | )
As of December 31, 2014 |  | $ | 238,158 |  | $ | 123,199 |  | $ | 114,959 |
Additions to the gross goodwill balance during the years ended December 31, 2014 and 2013 resulted from the acquisition of privately-held businesses as described further in Note 5, “Business Combinations.” The Company performed its annual goodwill impairment test in the fourth quarter. The reporting units’ fair value exceeded their respective carrying amount and therefore goodwill within these reporting units was not impaired. The fair value of each reporting unit was determined using an income approach to determine the present value of expected future cash flows. During 2014, the Company successfully demonstrated its FAST-ALD technology for flexible OLED encapsulation. But subsequent to the Company’s annual goodwill impairment test, the Company determined that the incumbent deposition technology had progressed to satisfy current market requirements. The carrying amount of the ALD reporting unit was determined to exceed its fair value, and therefore the fair value of the reporting unit’s goodwill was estimated. An impairment loss was recognized equal to the excess of the carrying amount of the reporting unit’s goodwill over its implied fair value. As part of its valuation to determine the total impairment charge, the Company also estimated the fair value of significant tangible and intangible long-lived assets within the ALD reporting unit. These tangible and intangible long-lived assets were valued using appropriate valuation techniques for assets of their nature, including income and market approaches. As a result of the impairment analysis, the Company recorded non-cash impairment charges of $28.0 million related to goodwill and $25.9 million related to other long-lived assets, including $17.4 million related to customer relationships, $4.8 million related to in-process research and development, and $3.6 million related to certain tangible assets. The components of purchased intangible assets as of the dates indicated below were as follows:
|  |  |  | December 31, 2014 |  | December 31, 2013 |
|  | Weighted |  |  |  | Accumulated |  |  |  |  |  | Accumulated |  |  |
|  | Average Remaining |  | Gross |  | Amortization |  |  |  | Gross |  | Amortization |  |  |
|  | Amortization |  | Carrying |  | and |  | Net |  | Carrying |  | and |  | Net |
|  | Period |  | Amount |  | Impairment |  | Amount |  | Amount |  | Impairment |  | Amount |
|  | (in years) |  | (in thousands) |
Technology |  | 9.6 |  | $ | 222,358 |  | $ | 106,342 |  | $ | 116,016 |  | $ | 182,408 |  | $ | 97,524 |  | $ | 84,884 |
Customer relationships |  | 13.9 |  | 69,350 |  | 35,549 |  | 33,801 |  | 35,040 |  | 14,721 |  | 20,319 |
Trademarks and tradenames |  | 3.5 |  | 3,050 |  | 1,096 |  | 1,954 |  | 1,970 |  | 763 |  | 1,207 |
Indefinite-lived trademark |  | — |  | 2,900 |  | — |  | 2,900 |  | 2,900 |  | — |  | 2,900 |
IPR&D |  | — |  | 5,070 |  | 5,070 |  | — |  | 5,070 |  | — |  | 5,070 |
Other |  | 1.1 |  | 5,485 |  | 848 |  | 4,637 |  | 765 |  | 429 |  | 336 |
Total |  | 10.2 |  | $ | 308,213 |  | $ | 148,905 |  | $ | 159,308 |  | $ | 228,153 |  | $ | 113,437 |  | $ | 114,716 |
Other intangible assets primarily consist of patents, licenses, customer backlog, and non-compete agreements. For the fiscal years ended December 31, 2014, 2013, and 2012, amortization expense for intangible assets was $13.1 million, $5.5 million, and $4.9 million, respectively. Based on the intangible assets recorded as of December 31, 2014, and assuming no subsequent additions to or impairment of the underlying assets, the remaining estimated annual amortization expense is expected to be as follows:
|  |  | Amortization |
|  |  | (in thousands) |
2015 |  |  | $ | 27,003 |
2016 |  |  | 20,969 |
2017 |  |  | 18,100 |
2018 |  |  | 16,492 |
2019 |  |  | 15,235 |
Thereafter |  |  | 58,609 |
Total |  |  | $ | 156,408 |

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- 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=26713463&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 1 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13816-109267 Reference 3: 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=26713463&loc=d3e16265-109275 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=26713463&loc=d3e16373-109275 Reference 5: 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=35741047&loc=d3e13854-109267 + Details
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