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Balance Sheet Components | 9 Months Ended
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Sep. 29, 2013
Balance Sheet Related Disclosures [Abstract] |
Balance Sheet Components | Balance Sheet Components (in thousands) Short-Term Investments
| As of
| September 29, 2013 |  | December 31, 2012
| Cost |  | Unrealized Gain |  | Unrealized Loss |  | Estimated Fair Value |  | Cost |  | Unrealized Gain |  | Unrealized Loss |  | Estimated Fair Value
U.S. Treasuries | $ | 140,738 |  |  | $ | 31 |  |  | $ | — |  |  | $ | 140,769 |  |  | $ | 225,016 |  |  | $ | 48 |  |  | $ | (2 | ) |  | $ | 225,062 |
Certificates of Deposits | 165 |  |  | — |  |  | — |  |  | 165 |  |  | 2,783 |  |  | — |  |  | — |  |  | 2,783 |
Total | $ | 140,903 |  |  | $ | 31 |  |  | $ | — |  |  | $ | 140,934 |  |  | $ | 227,799 |  |  | $ | 48 |  |  | $ | (2 | ) |  | $ | 227,845 |
All of the Company’s marketable securities are classified as available-for-sale and consist of government securities with an original maturity or remaining maturity at the time of purchase of greater than three months and no more than 12 months. Accordingly, none of the short-term investments have unrealized losses greater than twelve months. Cost Method Investments As of September 29, 2013 and December 31, 2012, the carrying value of the Company's cost method investments was $1.3 million. These investments are included in other non-current assets in the consolidated balance sheets and are carried at cost, adjusted for any impairment, because the Company does not have a controlling interest and does not have the ability to exercise significant influence over these companies. The Company monitors these investments for impairment on a quarterly basis, and adjusts carrying value for any impairment charges recognized. There were no impairments recognized in the three and nine months ended September 29, 2013 and September 30, 2012. Realized gains and losses on these investments are reported in other income, net in the consolidated statements of operations. Accounts receivable, net
| As of
| September 29, 2013 |  | December 31, 2012
Gross accounts receivable | $ | 291,217 |  |  | $ | 276,084 |
Allowance for doubtful accounts | (1,256 | ) |  | (1,256 | )
Allowance for sales returns | (16,879 | ) |  | (17,031 | )
Allowance for price protection | (3,118 | ) |  | (1,783 | )
Total allowances | (21,253 | ) |  | (20,070 | )
Total accounts receivable, net | $ | 269,964 |  |  | $ | 256,014 |
Inventories
| As of
| September 29, 2013 |  | December 31, 2012
Raw materials | $ | 6,869 |  |  | $ | 4,447 |
Work in process | 4,814 |  |  | — |
Finished goods | 199,592 |  |  | 170,456 |
Total inventories | $ | 211,275 |  |  | $ | 174,903 |
The Company records provisions for excess and obsolete inventory based on forecasts of future demand. While management believes the estimates and assumptions underlying its current forecasts are reasonable, there is risk that additional charges may be necessary if current forecasts are greater than actual demand. Property and equipment, net
| As of
| September 29, 2013 |  | December 31, 2012
Computer equipment | $ | 8,088 |  |  | $ | 7,290 |
Furniture, fixtures and leasehold improvements | 13,649 |  |  | 12,761 |
Software | 24,328 |  |  | 21,521 |
Machinery and equipment | 46,546 |  |  | 31,694 |
Construction in progress | 34 |  |  | 385 |
Total property and equipment, gross | 92,645 |  |  | 73,651 |
Accumulated depreciation and amortization | (67,195 | ) |  | (54,626 | )
Total property and equipment, net | $ | 25,450 |  |  | $ | 19,025 |
Depreciation and amortization of leasehold improvements expense was $4.9 million and $12.7 million for the three and nine months ended September 29, 2013, respectively, and $3.2 million and $8.7 million for the three and nine months ended September 30, 2012, respectively. Intangibles, net The following tables present details of the Company’s purchased intangible assets:
| Gross |  | Accumulated Amortization |  | Net
September 29, 2013 |  |  |  |  |
Technology | $ | 60,999 |  |  | $ | (27,114 | ) |  | $ | 33,885 |
Customer contracts and relationships | 56,500 |  |  | (7,349 | ) |  | 49,151 |
Other | 10,545 |  |  | (5,050 | ) |  | 5,495 |
Finite-lived intangibles, net | 128,044 |  |  | (39,513 | ) |  | 88,531 |
Indefinite-lived intangible assets | 100 |  |  | — |  |  | 100 |
Total purchased intangible assets, net | $ | 128,144 |  |  | $ | (39,513 | ) |  | $ | 88,631 |
| Gross |  | Accumulated Amortization |  | Net
December 31, 2012 |  |  |  |  |
Technology | $ | 32,259 |  |  | $ | (22,065 | ) |  | $ | 10,194 |
Customer contracts and relationships | 16,000 |  |  | (3,301 | ) |  | 12,699 |
Other | 6,870 |  |  | (3,142 | ) |  | 3,728 |
Finite-lived intangibles, net | 55,129 |  |  | (28,508 | ) |  | 26,621 |
Indefinite-lived intangible assets | 1,000 |  |  | — |  |  | 1,000 |
Total purchased intangible assets, net | $ | 56,129 |  |  | $ | (28,508 | ) |  | $ | 27,621 |
The Company purchased finite-lived intangible assets of $64.2 million and indefinite-lived assets of $9.5 million, as a result of its acquisition of AirCard and Arada during the second quarter of 2013. For further discussion regarding the AirCard and Arada acquisitions, see Note 3, Business Acquisitions. In addition, the Company purchased $0.3 million in patents during the second quarter of 2013. As of September 29, 2013, the Company had $0.1 million in indefinite-lived intangible assets. This balance relates to the remaining IPR&D assets acquired in connection with the Company's acquisition of AirCard. IPR&D assets represent IPR&D projects that have not reached technical feasibility and are required to be classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the date of acquisition, these assets will not be amortized. When the asset reaches technical feasibility, the Company will determine the useful life of the asset, reclassify the asset out of IPR&D, and begin amortization. Development costs incurred after acquisition on acquired IPR&D projects are expensed as incurred. As of September 29, 2013, $7.4 million of the acquired $9.5 million of indefinite-lived assets had reached technical feasibility and as a result, was reclassified from IPR&D to technology. In addition, $2.0 million of IPR&D projects were abandoned during the third quarter of 2013. The Company expects to complete the remaining IPR&D by the second quarter of 2014, for an estimated future cost to complete of $0.4 million. Amortization of purchased intangible assets was $4.5 million and $11.0 million for the three and nine months ended September 29, 2013, respectively, and $1.4 million and $3.4 million for the three and nine months ended September 30, 2012, respectively. In addition, an impairment charge was recorded in the three months ended September 29, 2013, due to the abandonment of IPR&D discussed above, resulting in impairment charges of $2.0 million in the three and nine months ended September 29, 2013. No impairment charges were recognized in the three and nine months ended September 30, 2012. Estimated amortization expense related to intangibles for each of the next five years and thereafter is as follows:
Year Ending December 31 | Amount
2013 (remaining three months) | $ | 4,514 |
2014 | 17,875 |
2015 | 17,258 |
2016 | 16,896 |
2017 | 11,361 |
Thereafter | 20,627 |
Total expected amortization expense | $ | 88,531 |
Goodwill The changes in the carrying amount of goodwill during the nine months ended September 29, 2013 are as follows:
| Retail |  | Commercial |  | Service Provider |  | Total
Goodwill at December 31, 2012 | $ | 45,441 |  |  | $ | 35,084 |  |  | $ | 20,355 |  |  | $ | 100,880 |
Goodwill acquired during the period | — |  |  | 1,195 |  |  | 53,841 |  |  | 55,036 |
Goodwill at September 29, 2013 | $ | 45,441 |  |  | $ | 36,279 |  |  | $ | 74,196 |  |  | $ | 155,916 |
During the nine months ended September 29, 2013, the Company recorded goodwill of $55.0 million, related to its acquisitions of AirCard and Arada, including an adjustment of $0.5 million to goodwill, related to a change in the estimated fair value of inventory acquired in the AirCard acquisition. For further discussion, see Note 3, Business Acquisitions. There were no impairments to goodwill during the three and nine months ended September 29, 2013 and September 30, 2012. Other non-current assets
| As of
| September 29, 2013 |  | December 31, 2012
Non-current deferred income taxes | $ | 18,474 |  |  | $ | 16,856 |
Cost method investment | 1,322 |  |  | 1,322 |
Other | 4,812 |  |  | 4,656 |
Total other non-current assets | $ | 24,608 |  |  | $ | 22,834 |
Other accrued liabilities
| As of
| September 29, 2013 |  | December 31, 2012
Sales and marketing programs | $ | 44,595 |  |  | $ | 43,652 |
Warranty obligation | 45,690 |  |  | 46,659 |
Freight | 7,353 |  |  | 4,457 |
Other | 39,069 |  |  | 31,487 |
Total other accrued liabilities | $ | 136,707 |  |  | $ | 126,255 |

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