| GOODWILL AND IDENTIFIED INTANGIBLES |
NOTE 6: GOODWILL AND IDENTIFIED INTANGIBLES
The following is a summary of goodwill and intangible assets as of September 30, 2011 and December 31, 2010:
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September 30, 2011 |
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December 31, 2010 |
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Gross Carrying Amount |
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Accumulated Amortization |
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Net Carrying Amount |
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Gross Carrying Amount |
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Accumulated Amortization |
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Net Carrying Amount |
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(In thousands) |
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Identifiable intangibles:
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Existing and core technology
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$ |
136,163 |
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$ |
(76,545 |
) |
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$ |
59,618 |
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$ |
127,146 |
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$ |
(60,453 |
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$ |
66,693 |
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In-process technology
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— |
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— |
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— |
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9,000 |
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— |
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9,000 |
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Customer relationships/contracts
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67,099 |
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(40,637 |
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26,462 |
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67,098 |
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(36,117 |
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30,981 |
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Trademarks and tradenames
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11,364 |
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(7,293 |
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4,071 |
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11,361 |
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(6,060 |
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5,301 |
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Supply agreements
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3,419 |
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(3,419 |
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— |
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3,414 |
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(3,414 |
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— |
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Maintenance agreements and related relationships
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7,100 |
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(1,948 |
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5,152 |
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7,100 |
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(1,008 |
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6,092 |
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Software license, intellectual property and assembled workforce
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309 |
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(309 |
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— |
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309 |
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(306 |
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3 |
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Order backlog
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2,800 |
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(2,800 |
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— |
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2,800 |
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(2,800 |
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— |
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Subtotal of identifiable intangibles
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228,254 |
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(132,951 |
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95,303 |
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228,228 |
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(110,158 |
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118,070 |
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Goodwill
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212,443 |
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— |
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212,443 |
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211,878 |
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— |
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211,878 |
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Total goodwill and other intangibles
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$ |
440,697 |
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$ |
(132,951 |
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$ |
307,746 |
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$ |
440,106 |
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$ |
(110,158 |
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$ |
329,948 |
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The changes in the carrying amount of goodwill for the nine months ended September 30, 2011 are as follows:
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(In thousands) |
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Balance at December 31, 2010
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$ |
211,878 |
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Adjustment to deferred tax asset associated with the acquisition of Omneon
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(527 |
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Adjustment to income tax payable associated with the acquisition of Omneon
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771 |
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Adjustment to fixed assets associated with the acquisition of Omneon
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298 |
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Foreign currency translation adjustment
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23 |
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Balance at September 30, 2011
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$ |
212,443 |
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For the three and nine months ended September 30, 2011, the Company recorded a total of $7.7 million and $22.8 million of
amortization expense for identified intangibles, of which $5.4 million and $16.1 million was included in cost of revenue, respectively. For the three and nine months ended October 1, 2010, the Company recorded a total of $3.7 million and $8.9
million of amortization expense for identified intangibles, of which $2.7 million and $6.9 million was included in cost of revenue, respectively. The estimated future amortization expense of purchased intangible assets with definite lives is as
follows:
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Cost of Revenue |
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Operating Expenses |
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Total |
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(In thousands) |
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Years ending December 31,
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2011 (remaining 3 months)
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$ |
5,423 |
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$ |
2,219 |
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$ |
7,642 |
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2012
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20,504 |
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8,715 |
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29,219 |
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2013
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19,232 |
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8,096 |
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27,328 |
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2014
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13,745 |
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6,775 |
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20,520 |
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2015
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714 |
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5,783 |
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6,497 |
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2016
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— |
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4,097 |
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4,097 |
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Total
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$ |
59,618 |
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$ |
35,685 |
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$ |
95,303 |
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